http://www.economist.com/news/europe/21594336-germanys-new-super-minister-energy-and-economy-has-his-work-cut-out-sunny-windy-costly
The article from The Economist talks about Germany's ambitious energy industry transformation project. Dubbed the Energiewende, the project is a series of timetables to switch the German electricity grid to at least 60% renewable sources of energy by 2050, with an accompanying drop of nearly 90% in greenhouse gas emissions compared to 1990. The new Super Minister of Energy and the Economy Sigmar Gabriel is financing this massive transformation by guaranteeing " not only 20 years of fixed high prices for solar and wind producers but also preferred access to the electricity grid." As a consequence the price of energy in Germany is rising yearly, unlike the United States where energy prices are falling due to the fracking boom.
What the article really does is underline the vastly different approaches that Germany and the United States have to their economies, the energy industry, and the future. The German people believe in the Energiewende but are less than pleased with the continually increasing cost of energy that accompanies it. The project overall reveals the LONG TERM nature of the thinking of the German government and its people. I believe that any kind of similar project would fail dismally in the United States. This is due mainly to the unwillingness of the American people to endure the unpleasantness of high energy prices for the long term goal of independence from nuclear and fossil fuels as a primary source of energy.
A project like the one Germany has undertaken requires a huge amount of organization and consistent enforcement by the government over a long period of time. While both the United States and Germany are successful capitalist countries with representative democracies, it is clear that the disposition and desires of the people serve as a constraint on what the government can or is willing to undertake. Will America's desire for short-term profit and cheap energy come back to hurt it in 40 years when Germany is almost entirely energy independent?
5 comments:
Although I agree with the fact that planning ahead for sustainability in the long run is indispensable, I am not sure whether the renewable energy technology that we have right now is efficient and sufficient enough to completely replace our current energy sources. As mentioned in the article, "the Energiewende has increased, not decreased, emissions of greenhouse gases," due to people switching to cheaper and less efficient form of electricity source. While a long-term goal of reducing non-renewable energy sources is necessary and important, we must also keep track of its short-term losses and make sure the negatives do not over-weight or prevent the long-run benefits.
I also agree that it is important for an economy to plan for sustainability and energy efficiency in the long run. I also agree with Thin Nu Yee’s point that it is unclear if the renewable energy technology today is ready to replace the current system. Research and development for energy efficiency is continuously evolving and so it is hard for an economy to make a long term plan for this because it is impossible to predict what developments will be made in the future and when substantial developments will happen. The points out that the term Energiewende means energy “turn” or “revolution”, but is now the time for an energy revolution? The increase in energy cost, an extra €260 ($355) a year for average households, is substantial and a government shouldn’t impose this raise in cost on its economy unless it truly is the best option—not just a trial. It is also worrisome that costs are also going up for companies, which negatively affects their position in competitive industries. The fracking boom has cut energy prices in America and I think it is a good program, if executed correctly, to use new energy technology without imposing a program that affects individuals so drastically.
What about the oil reserves in Wyoming, Utah, Texas, and North Dakota? I believe the oil produced in those states will affect how energy efficient the U.S. becomes.
Germany and the US are clearly taking very different paths. I think that this shows really well the difference in people's attitude towards the issue of energy efficiency and also towards long-term vs short-term goals. The development of renewable sources of energy is significantly more expensive and therefore puts significant economic burden on the country. The United States' economic situation makes it very difficult to switch to renewable sources of energy because of the cost and inability for it to provide enough energy to sustain the whole country. Germany on the other hand is taking a significant hit in cost but will likely benefit in a long-run when it can become completely self-sustainable. Long-term is not an attractive word in today's challenging economic environment.
I think it is great that Germany is dedicated to becoming more green. I definitely think that Europe in general is more green then the U.S. America seems to care much more about the environment. Germany and France even have green political parties but in the U.S. we do not. What is the difference between the U.S. and Germany why do their consumers want their products environmentally friendly? Is it a different education view point that we ignore?
But the rise in prices of energy is hurting companies. Too bad Germany does not invest in human capital as much as the U.S. does because they need another solution to keep their markets competitive.
This is hard for the economy right now in Germany but in the future I believe it will pay off. Pollution will not be as heavy as in the U.S. and maybe Europe will become more desirable for that reason.
At the end of the article I was confused how Energiewende was able to keep up the use of brown coal for a decade. If it is the dirtiest type of coal how are they able to do this? Are there ways around the government to increase the emissions of greenhouse gases?
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