“Germany’s planned economy”

New guidelines for the industry in the German government’s Climate Action Plan 2050 bear traces of a planned economy, writes Christoph Eisenring in Neue Zürcher Zeitung. He cites measures such as expanding the area of arable land reserved for ecological agriculture from about six to 20 percent until 2030, or obligations for companies to issue “climate reports”, as examples of a policy approach that favours fixed goals over market mechanisms. Conflicting objectives would simply be quenched with public money – as, for instance, the remuneration for feeding renewable energy into the grid demonstrates, Eisenring writes. Berlin should instead make use of its upcoming G20 presidency to strengthen market-based tools such as the flawed emission trading scheme within the EU, the author says.

Read more on the costs of energy transition in the CLEW dossier Energiewende effects on power prices, costs and industry.