The so-called Uncertainty Index, which researchers at Stanford University have developed, states that Corona has increased uncertainty among the population by 300 percent. According to the May 2020 survey of the German news magazine “Der Spiegel”, less than 40 percent of those surveyed see globalization as an opportunity; almost 60 percent see it as a risk. In 2017 the reverse was true.
So the time is right for a consistent energy turnaround towards decentralized self-sufficiency in renewable energies: everyone is considering how to increase their resilience in times of crisis. Self-sufficient spaces will be created that can also take a few weeks off; this trend is foreseeable. More regional production and less just-in-time dependencies are the answers to global risks.
A missed opportunity
The German government’s 130 billion-euro economic stimulus package is not sustainable. There are some lukewarm green blobs, but without the miserable merit-order effect and the “special equalisation scheme”, which spares 2,000 energy-intensive companies, there would be no high Renewable Energies Act levy (EEG-Umlage) at all. Nine billion are to flow into a centrally planned hydrogen strategy. Hydrogen as an energy storage medium is versatile and the technologies could become a German export hit. Hydrogen is ecological if it is produced from surplus electricity, i.e. if more than 100 percent of other energy consumption is already produced from renewable sources. We are still a long way from achieving this. Brown hydrogen from natural gas is currently 95 percent locally produced. For on-site electricity, photovoltaics and wind power are best and cheapest. Of course, locally produced green hydrogen from renewable energies would be decentralized. Expensive offshore wind power in particular and the countries of North Africa are therefore envisaged as production locations where there are no customers for the heat produced during the conversion process. In Germany, on the other hand, the grand coalition wants to invest in the construction of LNG (liquefied natural gas) plants to import American fracking gas, the most climate-damaging fuel of all.
Considering the high coal subsidies in the 1970s were justified by the need to get rid of oil import dependency, it is surprising that the future is not seen in domestic energy production on the sufficiently available space on roofs and facades in the country, but that Germany relies on the reliability of foreign partners. There is no talk of an initiative for decentralised battery storage or even of forests and moors as CO2 storage facilities.
The economic stimulus package will also help to boost the already unsustainable economy. The scrapping premium comes with 2.2 billion euros. At least it is no longer to be paid for pure combustion engines, but as a pure exchange project it is a clear commitment to even more vehicles on the road. There are no plans to increase the number of cyclists and pedestrians on the roads. German car manufacturers have lied and cheated in organized crime in accordance with the Federal Motor Transport Authority. Now they are being helped again. The German Environmental Aid assumes that in 2025, every second new car will be an SUV with a small alibi electric engine. Therefore, the conservatives in Germany also want to cancel the CO2 fleet limits that have already been decided.
Now is the time for conversion
A subsidy for electric cars should at least be linked to investments by car manufacturers in renewable energy plants on the scale of the energy balance of the electric cars produced and in the construction of their own electricity storage facilities. This would turn the car companies into battery and electricity producers. The same applies to the promised two billion passenger car research grants, the 1.2 billion euros for the conversion of truck engines, the billions for shipping and air traffic, and the nine billion without environmental requirements to Lufthansa. It is not sustainable to build more and more cars, ships and aircraft. 20 billion euros are being spent on a VAT reduction according to the watering can principle. There are no incentives for less environmental consumption, closed loop recycling management, recycling or ecological agriculture.
Central bank: Climate bailout as a rescue operation
Extraordinary situations require extraordinary measures: In 2008, the German government created a rescue package for banks that amounted to almost 500 billion – the most expensive law in German history. From 2010, the financial crisis slid into the euro crisis. When the global financial system was on the brink of the abyss, central banks prevented a total crash. Mario Draghi, former president of the European Central Bank (ECB) pulled out the monetary policy bazooka in 2012 and assured that he would do everything necessary – whatever it takes to preserve the euro with unlimited government bond purchases. Between 2015 and 2018, the European Central Bank drew 2,600 billion euros, a quarter of Europe’s total economic output, from nothing to buy up stranded securities or government bonds under quantitative easing. The environment did not benefit. In 2020, Corona will be the next Black Swan. And once again the ECB will use the PEPP (Pandemic Emergency Purchase Programme) to create 1,400 billion to buy up broken bonds. And the environment? No chance again!
With the inevitable energy transition approaching, the raw material reserves already on the balance sheets of energy companies and the entire fossil infrastructure such as power plants and refineries will become virtually worthless. As a consequence, the prices of the shares of fossil energy companies will collapse accordingly. But it could be even more severe: If global warming cannot be halted by a strongly accelerated conversion from fossil to renewable energy sources, climate-related damage such as forest fires, flood damage, crop failures and heat waves can be expected to explode. Some of these losses are covered by insurers who are overburdened by this. Unpredictable credit defaults at the banks are another factor. Here, too, massive instability on the financial markets threatens.
Not all costs can be left to future generations. The global economy is facing an enormous global threat. In the financial crises, as in the case of Corona, we have seen how quickly the state is able to take consistent action out of its duty of care for its citizens. A climate bail-out would enable energy companies to convert their de facto lost fossil assets into new, sustainable renewable energy assets. A large-scale bail-out could break the resistance of the corporations and thus also of the trade unions and politicians against a rapid energy transition and instead trigger a rapid momentum towards a rapid energy turnaround. We would have a reversal of the incentive system: While energy and automobile companies today have a strong interest in keeping their fossil business models running as long as possible, a climate bail-out would make it attractive for them to invest in the development of renewable energies as quickly as possible.