The greenest of the green

Note: A superhelpful reader suggested I add audio or video versions of the stories here for those of you who don’t have the time to read them. That reader has my eternal gratitude. Audio version of the article, read by yours truly, below.

It has been quite an eventful week on the transition front. In case you haven’t noticed, good for you but if you’re reading this, things are about to change.

First, the bad news. It is with a heavy heart that I must inform you that after we boiled/baked/roasted and got cooked in every other manner in July, we have seen cooler than usual temperatures in August. It seems the month that is traditionally at least as hot as July has got in cahoots with climate deniers to undermine increasingly urgent calls to “stop climate change”.

Now for the good news. Germany this week approved a green investment plan worth 57.6 billion euro for 2024. That’s about $63 billion and the money will be used to subsidise a whole lot of things.

Among these things are building renovations and new construction, wind and solar, and expanding the country’s EV charging infrastructure. That last part is an especially smart move. Germans can’t have drivers ditch their EVs halfway through their journey just because there was no working charger in the vicinity.

That’s exactly what happened to one unfortunate Canadian owner of a Ford F-150 Lightning who tried to get from Manitoba to Wisconsin and couldn’t. The man’s total EV investment came in at $131,000. Oh, well.

Anyway, back to Germany, whose 2024 green subsidy budget is part of a bigger four-year budget of 212 billion euro. Called the Climate and Transformation Fund, the war chest also includes financial support for local semiconductor manufacturing capacity, “raw materials and transformation technology such as solar power components.” And now we’ve all learned a new euphemism for wind and solar.

Faced with such substantial sums, one might reasonably wonder where the money will come from. If one has already spent some time in the transition bog, one will not wonder because one would know. The money will come from taxes, direct and indirect.

Local carbon emission prices will be hiked, from which the government expects to pocket some 10.93 billion euro, and higher expected revenues from the European Emission Trading Scheme should bring in another 8.19 billion euro.

Higher carbon emission prices mean higher bills for people with the bad luck of having fuel oil or gas heating systems in their houses as well as higher bills for drivers. Not too high, though. Reuters says that, per industry calculations, the higher carbon price (40 euro, up from a current 30 euro per tonne) will only add 0.04 euro per litre of fuel. Small price to pay for a greener Germany.

"We have to proceed with a sense of proportion when pricing CO2, especially in view of the current weakness in growth," Finance Minister Christian Lindner said in a rare moment of lucidity from a member of the German political class.

That sense of proportion should see revenues from CO2 taxes rise 27% in 2024 from this year, which, to me, translates into “Everyone who generates CO2 in any way other than breathing will see their related bills rise 27%”.

But where is the rest of the money going to come from, then? Even if the above two figures for CO2 and from the ETS are expected income for next year alone, this leaves another 40 billion euro to find, as it were. Well, the Reuters report detailing the plans does not mention that and I don’t speak German, so it shall remain a mystery for now.

What’s not a mystery is this report from Handelsblatt, which tells me, thanks to Google Translate, that bankruptcies in Germany last month were 23.8% higher than in July 2022. And not only are companies declaring bankruptcy, some are simply closing down. A”weakness in growth” indeed.

Against this background, the sheer size of that transition budget for one single year becomes even more impressive. It’s even more impressive when you learn that it’s a 60% increase from this year’s budget.

Germany does not play around with the transition. Germany will have a transition if it has to die for it. Well, die may be too strong a word. Let’s go with stagnate, as the IMF expects the country’s GDP to shrink by 0.3% this year.

While Germany works hard to solve its energy conundrum while pretending there is no conundrum at all, its ruling coalition has another problem. The greenlash that is gripping the whole of Europe. Also the U.S., apparently.

Per Reuters, “as policymakers seek to translate net-zero targets into measures that extend beyond power generation to areas such as buildings and transport, they face increasing resistance as citizens struggle with a cost of living crisis.”

Well, isn’t that absolutely unexpected, shocking, and unbelievable? I mean, it’s not like there are people who have been warning for years that Europeans will have to pay for the transition through the nose and maybe other orifices, too. It’s not like it was a simple forecast to make in light of the supply and demand balance in raw materials, the intermittency problem of wind and solar, and other minor details.

But what’s really scaring the powers that be is the fact that anti-transition parties are coming for their positions. The media, of course, does its bit calling these parties far-right, but that might not be enough this time.

Sweden’s and Italy’s new conservative governments are rethinking net-zero commitments. Poland, which already has a conservative government, is suing the EU for its car ban, and here, in my little piece of the world, there are calls from liberal groups to ban the only conservative party in parliament. Why? Because many suspect it’s two snap elections away from a full majority and we can’t have that.

Lots of other national elections are due across Europe next year as well as an EP election. It will be interesting. It will also likely be even more hysterical than this year, and I mean that in both senses of the word.

Take this headline, for instance: Opinion: as Europe burns, the centre-right is backing away from climate action. Why? It’s basically a one-man complaint about the greenlash in Europe and why are people so stupid to worry about their electricity bills “as Europe burns”. You have to give it to him — the guy can beat Guterres on unsubstantiated claims blown out of any proportion any day.

Essentially, however, what both greenlash articles are saying is that, feeling their wallets get thinner, people are starting to ask questions. Conservative parties don’t gain popularity in the fortress of liberalism that is Europe by some fluke. They gain popularity because of, well, growing popular support. The tide in Europe may well be turning.

Reality seems to be reasserting itself in the U.S. as well. Per Reuters, “U.S. power plant owners warned the Biden administration on Tuesday that its sweeping plan to slash carbon emissions from the electricity sector is unworkable, relying too heavily on costly technologies that are not yet proven at scale.”

I know, right? Who’d a thunk it and all that. Well, the ones who thunk it are the ones that know what they’re talking about and the ones that know if the Biden plan is implemented many of them might just go under as their electricity becomes prohibitively expensive because it is being punished as dirty while the “clean” alternatives get all the financial love they can swallow.

I leave with the best news this week. Siemens Gamesa has fixed its turbine problem and the new turbines it is selling to clients will not fail. Now all that’s left is to fix the ones already installed. It will only cost it 1.6 billion euro.