Climate Protection: Who's Footing the Bill? - DER SPIEGEL
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Climate Protection Who's Footing the Bill?

While German Chancellor Angela Merkel lets herself be celebrated as the savior of the world's climate, her cabinet is embroiled in a tense struggle over a planned program to help reduce the greenhouse effect. Under the program, Germany's homeowners, renters and drivers could face billions in additional costs.
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No journey is too far for Angela Merkel when it comes to saving the world's climate. At the Cape of Good Hope, Merkel listened to scientists explain the effects of global warming on species diversity. Addressing the United Nations General Assembly in New York, she called upon the assembled heads of state to take decisive action. In Greenland, enveloped in a bright red parka, she observed the melting of Arctic glaciers firsthand.

The chancellor flies around the globe on an almost weekly basis to bolster her image as a determined crusader against the greenhouse effect. "Climate change threatens the very basis of human existence," she preaches. "And we can only succeed if we stick together and act in unison."

There is one thing Merkel doesn't like to talk about on her ventures into the wide world of climate diplomacy: That the public and political debate over what she calls a "top issue" is decidedly less dignified at home in Germany. Senior government officials at the ministries of economics and environmental affairs meet almost weekly to iron out the details of the so-called Integrated Energy and Climate Program, the framework Merkel wants to establish to implement her ambitious goals. But the news that reaches the chancellor from these sessions doesn't exactly bode well for her plans.

Instead of efficiently implementing the program's key elements, the ministries in Berlin have become entangled in a series of debilitating skirmishes over heating, taxation and rent regulations. Progress has been so painstakingly slow that insiders fear key issues will remain unresolved or not fully addressed by the early December target date. Merkel has piled on the pressure, both for herself and her government. By 2020, she wants to see Germany reduce its CO2 emissions by 40 percent over 1990 levels and increase the share of renewable energy in the energy mix to 20 percent from the current level of 12 percent.

Merkel is hoping to make Germany a global paradigm when it comes to climate protection, to coincide with the United Nations climate summit in Bali, scheduled for early December. To achieve that goal, her administration is seeking to issue a whole new set of regulations that would require the installation of new heating systems in apartment buildings and additional power cables for wind turbines, as well as the production of cars with reduced emissions. There are two sides to the battle. One is represented by Environment Minister Sigmar Gabriel, a member of the Social Democrats (SPD) who, with the support of environmental organizations, hopes to implement drastic changes in regulations, controls and penalties. Gabriel and the environmentalists face off against Economics Minister Michael Glos, a member of Merkel's Christian Democrats (CDU), and Transport Minister Wolfgang Tiefensee (SPD) who, to the applause of industry and tenants rights groups, want to limit government intervention as much as possible.

Keeping the Citizens in the Dark

When it comes to the climate controversy, the conflicting camps within the ruling Grand Coalition are agreed on only one objective: To keep citizens in the dark as much as possible about how much Germany's pioneering role in limiting CO2 emissions will eventually cost them. The chancellor consistently claims that climate protection will pay off in the end. But the truth is that the measures she proposes will lead to billions in additional expenditures for many years to come.

Merkel's cabinet ministers disagree on almost every element of the project. Take heat insulation in buildings, for example. Millions upon millions of tons of CO2 are still being unnecessarily pumped into the atmosphere from German homes and buildings, because many heating systems are outdated and walls, roofs and windows are poorly insulated. Implementing energy-saving measures in buildings across the board could prevent a large share of harmful emissions.

Gabriel wants to impose drastic new rules on homeowners and landlord, rules his counterparts at both the Transport and Economics Ministries oppose. Under his plan, all newly constructed buildings and renovations of existing structures would be required to be heated, at least in part, with environmentally friendly technologies like solar cells, biogas systems and heat pumps. Gabriel also wants to see the energy standards for buildings become far more stringent and an increased emphasis on power production in so-called cogeneration plants, which generate both heat and electricity from the same primary fuel source. He also envisions a system of fines and penalties for violators of these tighter regulations. For example, renters could deduct a portion of their rent if their landlords failed to live up to the new environmental standards.

The plan would pay off in the long term, says Gabriel. Homeowners, for example, would eventually recoup the costs of solar panels and additional insulation through future savings in their heating bills. They would also qualify for government subsidies to help pay for the initial costs of renovations.

Gabriel glosses over the fact that most people do not think in terms of the decades it would take to recoup much of the cost, but are more likely to plan ahead for a few years at best. The project would cost money, a lot of money, for homeowners and renters alike. For example, the cost of installing a new, high-efficiency furnace in a small terraced house can run upwards of €6,000.

Under the current laws, landlords can add the costs of modernization to rent. But this is easier said than done. A landlord who wants to install high-efficiency systems has to obtain the of all tenants, and tenants have the right to pay reduced rent during the renovation work. If one tenant moves out, the landlord must find a new tenant willing to rent the same apartment at a new, higher rate.

A Conflict that Crosses Party Lines

Given these conditions, many building owners fear that they will end up shouldering the lion's share of the cost of modernization. Not surprisingly, they are increasingly resentful of the government's climate-saving plans. When Engelbert Lütke Daldrup, a state secretary at the Transport Ministry, recently spoke to a group of Hamburg building owners about the proposed programs, his comments were met with furious indignation. The owners, many of them past retirement age, wanted to know why, at age 70, they should borrow tens of thousands of euros to modernize their buildings.

Many tenants have similar thoughts. Although renters could expect new, climate-saving equipment to lower their heating costs, experts estimate that if the government's plans come to fruition rents would go up by at least 10 percent.

This has prompted experts at the Economics and Transport Ministries to do their utmost to curtail the plans. While Gabriel sees the proposed new environmental regulations being applied to virtually all construction, Glos and Tiefensee want to limit them to bigger projects. Gabriel wants to see more stringent energy standards for virtually all buildings, while Glos and Tiefensee would have them limited to new construction. Gabriel wants to impose sanctions on owners who resist the environmental upgrades, while Glos and Tiefensee are against such penalties.

The wrangling over the details of the program reflects these deep divisions. Last week, officials working on the plan agreed to a stipulation that a portion of the heating systems in new construction or large-scale renovation be based on renewable energy sources. But the agreement had hardly been reached before lobbyists started pushing for changes. The real estate lobby warned of billions in new costs for tenants and landlords, while manufacturers of solar panels urged the government to make the plan's environmental restrictions even more stringent.

As the conflicts continue, important details are being postponed. It's already clear, for example, that the plans for tightening construction regulations will not be completed by the deadline. To raise energy standards, scores of Germany's DIN industrial standards will have to be modified. This requires meetings among experts, which takes time. Because of delays like this, the government doesn't expect a cabinet decision until August of 2008 at the earliest.

Merkel Stays Above the Fray

It is already clear that it was a mistake for Merkel to have relinquished control over implementation of the program to the individual ministries instead of handling it directly at the chancellery. Only one official from the chancellery attends each of the regular meetings of senior ministry officials, and only in the capacity of an observer. The arrangement is a virtual guarantee of ongoing dispute, and not just when it comes to the emissions-reducing residential modernization program.

Another project that has proven to be particularly challenging is the proposed conversion of the vehicle tax from one based on engine capacity to one based on CO2 emissions. It is unlikely that more than the basic elements of the program will have been determined by the Dec. 5 deadline. In fact, the government does not expect the draft legislation to be completed before February or March of next year. So far the only aspect of the new legislation set in stone is that it will apply exclusively to new vehicles. Existing vehicles will still be taxed under the old engine capacity system.

Both Finance Minister Peer Steinbrück and Tiefensee are anxious to prevent the new legislation from harming the German automobile industry. They are vehemently opposed to the imposition of too heavy a tax on German-made large sedans, sports cars and SUVs. In an effort to satisfy the various constituencies, officials at the Finance Ministry are currently developing various models for the new tax -- a time-consuming process. "Data problems" are officially given as the reason for the delays.

But Gabriel and his cohorts have been relentless. The environment minister knows that without substantial efforts and sanctions, if necessary, the goals the administration has set for Germany will remain unattainable.

In an effort to speed up the process, officials at the Environment Ministry have kept the chancellor informed about the delays and asked her to "add more pressure to the tank."

But whether this will do much good is questionable. As she has done so often in the past, the chancellor is doing her best to keep herself above the fray, limiting her efforts to general appeals. In one cabinet meeting, for example, she reminded the assembled ministers that the climate program is a project for the entire government, and that she expected active participation from all ministers. The ministers nodded, acknowledging Merkel's appeal -- and then the bickering continued.

The issue has seen politicians crossing party lines. For example, Gabriel has found an unlikely ally in his dispute with Economics Minister Glos over the expansion of the power grid: Christian Wulff, the governor of Lower Saxony, who also happens to be a member of the conservative CDU. Gabriel wants to see the government provide massive subsidies to expand huge wind farms in the North Sea. Many new power lines would have to be built in Lower Saxony to bring electricity from the plants to consumers.

Glos, who is responsible for the expansion of the power grid, wants to install aboveground power lines, which are more cost-effective for electricity companies. But citizens' groups in Lower Saxony are vehemently opposed to the proposed power lines, which they consider an eyesore. To placate the groups, Wulff and Gabriel have developed a model that would require utilities to bury all future power lines when they are near residential areas.

The chancellor, for her part, feels that it is her job to address the big picture, and not the nitty-gritty of her domestic climate protection program. She is already planning her next trip abroad. Merkel will be traveling to India on Monday to encourage Prime Minister Manmohan Singh to improve his country's commitment to climate protection.

Translated from the German by Christopher Sultan

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