4.2 Germany
4.2.1 Introduction
Like the rest of the world, Germany faces the consequences of global warming. Germany has been one of the leaders in battling carbon emissions. One of the efforts of Germany involves increasing the efficiency of the use of resources. The government has set a goal trying to use less resources but maintaining the same amount of prosperity, (Smith, 2015). Germany is a pioneer in green growth policies. The country was one of the first to cut greenhouse gas emissions; in 2009, it decreased 23 percent of its CO2 emission and had its energy consumption from renewables shot up fivefold from 1990 to 2010, besides this, it has the largest solar capacity in the world. Germany helps shaping the debate on sustainable growth in Europe and will be at the heart of any serious multilateral effort to address environmental issues, (The World Bank). When then 2011 radioactive meltdown happened in Fukushima, Japan, it drew global attention to the risks of atomic energy. Within two months of the Fukushima disaster, Germany had deactivated eight of its 17 nuclear plants and vowed to phase out the other nine by 2022, (Goossen, 2013). Germany also leveraged upon green technology to promote job creation and economic growth with the aim of energy policy being to contribute to exports and value added as well as sustainable living, (The World Bank).
4.2.2 Environmental policies in Germany
In the early 2000s, Germany had established an ambitious policy framework. The environmental policy was shaped to a large extent by EU environmental directives. But Germany also played an proactive role in anticipating and shaping some of EU environmental initiatives. Because of Germany’s proactive role, it extended to the broader international community. Among other things, Germany hosted conferences of the parties to the UN conventions on climate change in 1999 and biodiversity in 2008. Besides this, Germany also hosted a conference on water-energy-food security nexus in 2011 with a view to contributing to discussions at the Rio+20 Conference of June 2012. Together with the European Commission, Germany launched a project on the Economics of Ecosystems and Biodiversity (TEEB).
Since 2000, Germany has continued to play a proactive role in environmental policies. These policies have become more comprehensive and cross-cutting. A major step was the adoption of National Sustainable Development Strategy (NHS) in April of 2002. The NHS changed the policy and institutional framework for environmental protection significantly. The NHS established an institutional framework and management mechanism, incorporated goals, targets indicators, and management rules. Its main goals are inter-generational equity (including climate protection, resource protection, land use, renewable energy, species diversity, and innovation), a good quality of life (including farming, mobility, and air quality), social cohesion and responsibility. To achieve these goals, 35 medium- and long-term objectives in 21 fields of action were identified. The Federal Statistical Office publishes monitoring reports on progress towards the objectives every two years, (OECD, 2012).
In November 2007, the German government adopted a national strategy on biological diversity. It contains 330 concrete targets about 430 measures which call upon various non-governmental and government actors to take action. Germany also consolidated its legislative framework with the revision of the Federal Nature Conservation Act in 2010. Resource efficiency is also a major sustainable and environmental development initiative that Germany has undertaken in the last ten years. It has been changed in the last years because of the increasing environmental impacts of resource use and the volatility of raw material prices.
The transposition of the EU water Framework Directive in 2002, its subsequent and implantation, and the adoption the 2010 Water Act led to strengthening and re-orientation of Germany’s water policy. A river basin management plan was developed for ten of Germany’s river basins, with ambitious targets and stronger institutional arrangements, including more effective stakeholder involvement. The plans include measures to reduce diffuse and point-source water pollution and to improve ecological and chemical status of the surface water and the chemical and quantitative status of groundwater, (OECD, 2012).
4.2.3 Taxes
Energy pricing through taxes and other fiscal instruments has held a prominent position in the German energy policy mix. The gasoline prices are significantly higher in Germany than in most other countries of Europe. These differences in prices is due to higher tax rates on oil and other fuels, (Buehler, Jungjohann, Keeley, & Mehling, 2011). Germany has made major steps in extending the use of taxes to improve pricing of environmental externalities. These steps include the 1999-2003 ecological tax reform and the 2009 restructuring of vehicle taxation on the basis of vehicles’ CO2 emission performance. These taxations measures can be seen as a part of a bigger package including other market incentives for environmental policy, such as participation in the EU Emission Trading System (EU ETS), the removal of some environmentally harmful subsidies, the use of emission-based road tolls for heavy good vehicles, and the introduction of feed-in tariffs to support electricity generated from renewable sources. In 2009, In Germany most environmentally related tax revenue came from taxation (84,5%). This includes transport fuels, besides this 15% was generated by the motor vehicle tax and about 0.5% by other taxes, such as hunting and fishing taxes, (OECD, 2012).
4.2.4 Encouraging Green infrastructure
Over the past decades, Germany has been a hotbed for innovation and application of green technologies to enhance the urban environment. These technologies also referred sometimes as green infrastructure or low-impact development, include innovations such as green roofs, green facades, and permeable pavements, (Buehler, Jungjohann, Keeley, & Mehling, 2011). Germany has earned wide recognition for its successful alignment of prosperous and sustainable growth. Germany has a dominant market share in multiple and various green technologies as well as a substantial part of its workforce employed in the environmental sector. The greenhouse gas emissions have fallen in absolute terms, effectively decoupling economic growth from Germany’s environmental footprint. Policies related to environmental protection and resource conservation have been mainstreamed in all areas of economic activity, (Buehler, Jungjohann, Keeley, & Mehling, 2011).
4.2.5 Promoting renewable energy
As a member of the EU, Germany’s energy policies are driven by national as well as European legislation. In 2009, a major piece of renewable energy legislation was passed as a part of overall climate energy package. The European Union’s renewable Energy Directive requires each member state of the EU to increase the use of renewable energy. This renewable energy includes solar, wind power, biomass, or hydroelectric. Germany has had a remarkable expansion of renewable energy in the last decade. The share of renewable energy has risen from 6 percent in 2000 to 16 percent in 2009. The German government has revised its targets twice over this time, because the targets have been exceeded ahead of the schedule. The government of Germany is expecting a share op 38 percent of renewable power by 2020 and continues to drive towards an energy system completely based on renewable energy. The benefits for the economy from this development are impressive. By 2010, the jobs employed related to the field of renewable energy are around 340,000, and most of them in biomass, solar, and wind power. The key policy responsible for this enormous success is the Renewable Energy Sources Act. This feed-in tariff policy is embedded in an energy and climate policy framework that promotes renewable energy and efficiency technologies. This includes laws to encourage combined-heat-and-power plants, a cap trade system, the energy tax reform, and several additional measures. The next planned revision to this law will aim to incentivize gird access and improvement, offshore wind power, and technologies for peak management and storage power, (Buehler, Jungjohann, Keeley, & Mehling, 2011).
4.2.6 Implanting sustainable transportation
The government of Germany determine the sustainability of the transportation system at federal, state and local level. Gasoline taxes, sales taxes, and regulations make the use of an automobile and ownership expensive and encourage demand for less polluting and smaller cars. The taxes on automobiles were for example three times higher than in the United States, and the gasoline prices were even nine times higher than the U.S. Therefore, the German federal government provides dedicated matching funds for investments in local public transportation. The federal matching funds are also used for investments in local public transportation, walking, and cycling projects. Besides, the German states distribute federal funds for regional rail systems, and coordinate public transportation services statewide, (Buehler, Jungjohann, Keeley, & Mehling, 2011).
4.2.7 Future (energy supply)
One of the largest economies is pursuing an ambitious goal; switching to renewable energy. With a complete transformation of its energy infrastructure, Germany energy market is entering a new era. Since the early 1990s, companies and citizens have been investing in solar, wind and bio-energy power plants. These investments are supported by an stable legal framework. Germany energy revolution is well under way and moving forward with great momentum. More than 1.5 million renewable power plants have been installed in Germany over the past 25 years, which is a world record. Renewables produced in 2014 over 27 percent of the electricity consumption in Germany.
But this is just the beginning. After a lot of political debate, the federal government adopted in 2010 its new Energy Concept document and setting out a broad framework for German energy policy until 2050. This energy policy defines ambitious targets for medium and long-term, (Buehler, Jungjohann, Keeley, & Mehling, 2011). Germany’s energy transition is perusing ambitious goals; it is planned that by 2050 the initiative greenhouse gasses have been reduced by 80 to 95 percent. To achieve this, energy consumption will be reduced by 50 percent and at least 80 percent of the electricity will come from renewables. Off-shore wind, on-shore wind and solar are the future pillars of Germany’s energy supplies. Sun and wind are fluctuating energy sources. Variations caused by the weather must be balanced out. This means integrating renewable energy into the energy infrastructure is the main challenge. The existing electricity grid needs to be adapted and grid participants need to be able to communicate in an intelligent network; a smart grid. More storage capacity for renewable energy needs to be built, and large investments will be needed to improve energy efficiency further. The fluctuating supply for electricity from renewables requires upgrades to be made in the entire power grid. An investment of over 35 billion euros is planned for the construction of high voltage transmission lines, and electricity autobahns from the north to major industrial regions. Large investments are also planned for a local distribution grids as well as new communication technologies that will quickly identify any bottlenecks, (Germany Trade & Invest (GTAI) , 2015).