Auf Wiedersehen, Klimakanzlerin
Bloomberg Markets|August - September 2021
As she leaves office, Angela Merkel, hailed for her pioneering global leadership on climate change, stands accused at home of not moving fast enough
VANESSA DEZEM and WILLIAM WILKES

Angela Merkel’s slow-motion departure from the German political stage took an ironic turn in April as the chancellor tripped over a climate law she herself had drawn up. In a shock decision, judges on the country’s highest court ruled that Merkel’s faltering attempts to rewire the energy system away from fossil fuels would saddle future generations with the burden of cutting emissions. Merkel—once hailed as a climate leader, now denounced as a straggler—was ordered to speed things up.

Merkel’s cautious approach threatened the fundamental rights of young people “to a human future,” the judges said, ruling in favor of plaintiff Sophie Backsen, a 22-year-old farmer whose island home of Pellworm off Germany’s North Sea coast might disappear because of rising sea levels. Shaken by the decision, Merkel spent the following weekend in quiet contemplation while she pondered a response.

The court ruling goes straight to the heart of Merkel’s handling of the Energiewende, Germany’s multibillion-euro transition to a low-carbon future. Across her 16 years in power, Merkel the scientist—a true believer in fighting climate change—has been forced to give way to Merkel the politician. Even as she oversaw a boom in renewable energy and positioned her country as a world leader on the environment, she made substantial concessions to the coal lobby, to protesters against new wind farms, and to manufacturing, particularly carmakers.

While Merkel is lauded overseas, her stop-and-start approach has seen Germany’s city centers fill with weekly marches by school-age climate demonstrators. After unprecedented flooding hit parts of the country this summer, she inspected the devastation and witnessed the frustration among victims. “We stand by your side, and we will put everything in order, step by step,” she said.

Putting an industrial economy on the path to zero emissions was never going to be easy. Germany is home to such manufacturing titans as Volkswagen and Siemens and chemical company BASF. They go toe-to-toe against Chinese and U.S. companies that benefit from substantially lower energy prices. For a country that renounced its militarist past, prowess in energy-intensive manufacturing is central to its image at home and abroad. Slashing emissions too quickly risks destroying the foundation of blue-collar industrial jobs on which the country’s postwar social order rests.

Germany has committed more than €500 billion ($591 billion) to the Energiewende since the turn of the century, according to the Düsseldorf Institute for Competition Economics. Yet the world’s third-largest exporter after China and the U.S. still gets more than three-quarters of its energy from fossil fuels such as oil, coal, and natural gas. The country has been slow in promoting electric vehicle use and decarbonizing energy-intensive industries like steel, chemical, and food production. Had it not been for the economic crash caused by the Covid-19 pandemic, Germany would have defaulted on its 2020 climate goals.

Meanwhile, voters thinking more and more like Backsen have grown restless at increasingly manifest signs of climate change. Consecutive blistering summers have scorched crops and sparked unprecedented forest fires. At the other extreme, a warming climate has supercharged storms, contributing to catastrophic flash floods that killed at least 180 people in western Germany in mid-July. Germans now view climate change as the greatest threat to the country’s security, according to a survey conducted earlier this year for the Munich Security Conference.

All of this has left its mark on politics. Polling showed the Green party surging from an 8% vote share in the 2017 election to more than 20% in late July, dislodging the center-left Social Democratic Party as the main challenger to the ruling center-right coalition of Merkel’s Christian Democratic Union party and the Christian Social Union. While support for the Greens had slipped in early summer, the party is still in the running to win the chancellorship or enter government in coalition in the Sept. 26 federal election. That’s when Merkel, 67, will stand aside.

BACK AT THE CHANCELLERY after her weekend of reflection, Merkel took action. On Monday, May 3, she assembled a group of the CDU’s most senior politicians. Merkel, daughter of a protestant pastor, takes pride in her political firefighting skills. Elevated to the cabinet in 1991 by Chancellor Helmut Kohl, who patronized his protégé as “my girl,” she spent years puncturing the dreams of men who’ve hoped to topple the country’s first female leader.

Eschewing soaring oratory, Merkel won over voters with a reassuring manner born of a mastery of detail befitting someone with a doctorate in quantum chemistry. Her stamina and a dry, self-deprecating sense of humor helped her weather emergencies from the eurozone sovereign debt crisis that began in 2009 through to the pandemic. Interminable horse-trading became a hallmark of collective decision-making during the four coalition governments under Merkel.

Speaking forcefully to the CDU colleagues she’d summoned to the chancellery, Merkel told them that— “without any ifs or buts”—Germany’s climate law would be revised and the country wouldn’t default on its obligations to future generations.

After leaking plans to the media to steamroller the go-slow voices on her party’s right flank, Merkel’s government agreed on a plan of action on May 12: Germany would aim for climate neutrality in 2045, five years earlier than previously mandated. In doing so, Merkel set the shortest timeline of any Group of Seven country. Once again the chancellor managed to look like a climate champion. And yet her April U-turn was also a symptom of her mixed record on energy.

Although investment in renewable energy boomed during the Merkel years, her controversial decision to quit nuclear power after the 2011 Fukushima Dai-ichi disaster in Japan left Germany reliant on fossil fuel sources or electricity imports when the sun doesn’t shine and the wind won’t blow. Merkel’s critics say the Klimakanzlerin, or climate chancellor, as the media has dubbed her, hasn’t really been as brave as she seems to much of the outside world.

“The problem with Merkel is the gap between targets and actions,” says Sonja Peterson, a senior researcher and professor for climate and energy economics at the Kiel Institute for the World Economy, an economic think tank. “It is like she sets longer-term targets in order to not hurt anyone. We weren’t going in the wrong direction with Merkel; we were just not courageous enough.”

Bas Eickhout, the Dutch vice president for the Green group in the European Parliament, says Merkel has been a “conservative chancellor” who lacked consistency on climate matters and was prone to backtracking. “If you look at her results, what she is leaving behind on environment, it’s limited,” he says.

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