“A lot of blah, blah, but too little action.” This statement by Professor Mariana Mazucatto of University College London briefly summarizes what was the common thread during the Berlin Energy Transition Dialogue held on Tuesday and Wednesday.
Economics professor Mazucatto strongly criticized the political policy of recent years. As far as she is concerned, the corona pandemic is a perfect example of “how to waste a good crisis”. According to her, only a fraction of the corona trillions are spent on a sustainable inclusive society. Meanwhile, the billions of subsidies continued to flow towards fossil fuel projects. “That is bad crisis management.”
Fatih Birol, the president of the international energy agency IEA, was equally critical. “Clearly, climate change and energy security is the most important global issue of our time…. But the truth is also that greenhouse gas emissions in 2021 have never been higher.”
According to him, this is due to an increased use of coal and lignite, and what is worse, due to the Ukraine crisis and high energy prices, there is a high risk that Asian countries in particular will be tempted to invest in new coal mines. Then the CO . emissions2 increase even further, concludes Birol.
End of old style globalization
Robert Habeck, the German minister of economic affairs and climate protection, raised his hand. According to him, Germany and Europe have been burying their heads in the sand for years. Even after the annexation of Crimea, dependence on Russian oil and gas imports has increased. Too little attention was paid to this in the decision to stop nuclear energy and coal-fired power stations. In addition, too little has been invested in green alternatives.
The Ukraine crisis can be seen as a “watershed”, according to Habeck. The time of globalization in which politicians kept aloof as much as possible is over. “Politics will have to reinvent itself.” Climate and energy policy will become much more intertwined with foreign policy. Even apart from Russia, difficult decisions will have to be made. “Energy policy is always linked to power politics and national interests.”
On gas ration at code red
Germany’s dependence on Russian gas is an acute problem. Habeck therefore announced a crisis procedure on Wednesday if gas shortages threaten. There will be three warning levels: a state of increased alertness, an alarm phase and an emergency. Germany is now right in the first phase.
A crisis team must ensure that measures are taken during each of those three phases that guarantee energy security. This varies from replenishing gas reserves to agreements with countries for extra supplies and rationing of companies and encouraging sparing use.
The two-day energy transition conference in Berlin was organized by the German Ministry of Foreign Affairs. No wonder, then, that there were many foreign ministers from Indonesia and Morocco to the UK and Japan. The German Minister of BuZa could of course not be missed.
Like Habeck, Annalena Baerbock called the energy transition “the greatest geopolitical challenge of our time”. The pace at which green energy is being expanded is also far below par, she says. It is, among other things, a question of planning. “A seven-year procedure for a wind farm is unacceptable.” In the coming years, she says, we will have “a technology race for the cheapest hydrogen, the cleanest cars and the best transport and storage of electrical energy”.
Baerbock also emphasizes the importance of cooperation. National solo performances should be avoided. Without close international cooperation, the energy transition will be nothing. This was endorsed by Kwasi Kwarteng, the British secretary of state for economic affairs and energy policy, who announced that additional investments will be made in the production of offshore wind and international power connections with countries such as Germany and the Netherlands.
Baerbock expects a difficult balancing act for Germany and Europe in the coming years between switching to green energy as quickly as possible, without creating new dependencies – think, for example, of raw materials such as cobalt, lithium and rare earths that are indispensable for wind turbines, solar panels and electric cars. .
Energy imports from Russia will be reduced to zero as soon as possible, but even then it is inevitable that Europe will do business with countries that have different social norms and values. It is therefore important that the energy transition is linked to social transition objectives.
Western countries must finally fulfill their promise to invest $100 billion in the climate policy of poor countries, but economic cooperation and support should be subject to conditions.
That is also what Professor Mazucatto advocates. Financing must be subject to conditions. With “conditionality” you can give direction. This applies to countries as well as companies. The economics professor gave an example of a loan from the German state bank KfW, which recently gave a loan to steel producer ThyssenKrupp with very strict environmental targets attached to it. That should become the rule in the future. “We must walk the talk of stakeholder value.”