AOC’s green deal isn’t new — it’s been a flop in Germany

Sorry, Rep. Alexandria Ocasio-Cortez (D-N.Y.), that Green New Deal of yours isn’t really very new after all. It’s actually an “Old Green Deal,” a rehash of the environmental platform called Energiewende, or “energy transition,” adopted in Germany in 2010.

And, in Germany, the Old Green Deal has been something of a flop. 

{mosads}Similarities abound between the German program and the resolution proposed by House freshman Alexandria Ocasio-Cortez (AOC) and Sen. Ed Markey (D-Mass.). Like the Green New Deal (GND), Germany’s Energiewende called for a shift to 100 percent renewable energy by 2050.  

Energiewende built upon Germany’s Renewable Sources Act of 2000, which encouraged the use of wind, biofuels, hydropower and solar energy through a system of feed-in tariffs and also grid priority for renewable energy.

It was funded by a surcharge on electricity, which cost consumers more than $20 billion per year. The build-up of renewables also benefited from more than $800 billion in subsidies. 

Like the GND, the Energiewende also included an ambitious roll-out of a national energy grid to facilitate the mandated increase in solar, hydroelectric and wind energy. The German program, like that of AOC, called for a “public bank” to finance the large-scale investment needed to facilitate the plan.

Also, the plan demanded that houses and factories be refitted to achieve greater energy efficiency; between 2006 and 2014, some 3.5 million homes were refurbished or built according to new efficiency standards at a cost approaching $200 billion.

Like AOC’s plan, the German program also demanded enormous spending on energy research and development. With the Energiewende well underway, and with so many similar features, its progress might prove instructive for the backers of the GND.

The bottom line is that despite a significant jump in the use of renewable energy (30 percent in 2016 from 7 percent in 2008), Germany has embarrassingly fallen short of its own climate goals. Carbon emissions have not declined meaningfully.

The main reason is that in its zeal to appease Green Party voters, the country went overboard, pushing out carbon-based fuels at the same time that it moved to eliminate nuclear power.  

As a result, though there is theoretically enough capacity to supply the nation’s total electricity needs through the use of renewables, Germany has had to rely on coal-burning power plants to supplement intermittent (and finicky) wind and solar power.  

In 2016, for instance, growth in solar and wind production stagnated despite growth in both sectors’ capacities. In 2017, coal still produced 37 percent of the country’s power.

The country has not just been burning coal; it has been burning lignite, one of the dirtiest fuels on the planet. In fact, in 2016, seven of the 10 worst polluting facilities in Europe were German lignite plants.

The most recent report from the government concludes that Germany will likely miss its 2020 climate goals, which called for a 40-percent reduction in carbon emissions compared to 1990 levels. The problem is not just the lignite mess, but also the continued use of petroleum products to fuel cars and airplanes and ongoing emissions from buildings.

To address the damaging use of gasoline in cars and trucks, a government commission considered instituting an 80 mile-per-hour speed limit on Germany’s autobahns, which currently have no restrictions. The proposal leaked, prompting outrage. Car-happy Germans may embrace reducing carbon emissions, but many were not ready to slam on the brakes.

An alternative proposal was launched in October 2016 by the country’s upper legislative chamber, which demanded a total phasing out of gasoline-powered vehicles by 2030.

However, given the need for additional electricity (from coal or gas) to fuel an all-electric fleet, studies showed the change would actually increase carbon emissions, at least in the short term.

Germany’s Energiewende may have failed to bring down emissions, but it has significantly boosted electricity prices.

Germans pay more for electricity than almost any other people on earth at a cost of $0.33 per kilowatt hour, compared to $0.19 in France and $0.13 in the U.S., for instance. The cost of electricity for an average family of four in Germany has doubled since 2000.  

As for the mammoth retrofitting of buildings for energy conservation, the government proudly reported in 2017 that, “Primary energy consumption has been considerably reduced in the last few years, falling by 15.9 per cent between 2008 and 2015 alone.” 

{mossecondads}However, that period included the years following the financial crisis, when energy consumption declined around the world in response to a slowdown in growth and income. Not even the most committed environmentalists are proposing the government engineer another recession to curb emissions — or at least, not yet.

The Energiewende, in comparison to the GND, aims low. It does not presume to remedy the so-called “gender gap,” close the country’s “racial wealth divide,” reverse the erosion of union power, stem the decline in life expectancy, end wage stagnation and drooping “socioeconomic mobility” — all of which the GND purports to address.

Even so, the program has disappointed. One authority bemoaned last year, “Germany as a pioneering country is on the brink of failure.”  Maybe the Energiewende’s shortcomings will give advocates for the GND pause before rushing headlong to overturn our wildly productive economy. I wouldn’t count on it.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. For 15 years, she has been a columnist for The Fiscal Times, Fox News, the New York Sun and numerous other organizations.