Najib Saab, December 2021

Transition to a Green Economy is the broad motto of Germany's new three-party coalition, led by Social Democrats, which takes the helm next week. The groundbreaking plan, coming shortly on the heels of the Glasgow Climate Summit, constituted a concrete embodiment of the summit's conclusions. Such a commitment, coming from Europe's biggest economy, will have global repercussions.

The agreement reflects the growing influence of the Green Party, and the younger generation in general, on German politics. It equally shows a radical shift in people's views on climate, affecting all major parties. The coalition's environment and climate plan essentially builds on the policies of the outgoing Angela Merkel's Christian Democrats.

While many feared a rollback on the environment and climate commitments that characterized the Merkel era, the new alliance reinforced these commitments, with an explicit popular mandate. It is clear that with the decline in popularity of extremist parties, on the left and the right, a cross-party understanding has been forged, based on moderate values, striving to establish a delicate balance between development requirements and environmental controls. After winning the largest number of seats, the Social Democrats formed a coalition with the Green Party, which puts the environment at the forefront of its platform, and the Free Democrats, which prioritizes economic growth. The Social Democrats are seen as the common denominator that gives balance to the alliance.

The program of the new German government reveals significant indicators that other countries, in Europe and the rest of the world, should pay attention to, because of their anticipated repercussions on European and international policies. Describing the government program as transition to a green economy was not in vain, as it was rather based on plans attached to figures and a timeline. When this comes from a country like Germany, the world should listen carefully.

The German coalition has pledged to achieve climate neutrality by 2045, which means reaching zero carbon emissions 5 years earlier than most developed countries. To implement its pledge, the coalition committed to a package of concrete measures, including phasing out coal use by 2030, 8 years earlier than what was previously planned. It also committed to producing 80% of electricity from renewable sources by 2030. That is why 2% of total German land will be allocated to wind farms, besides mandating the installation of solar photovoltaic panels on the roofs of all public and private buildings, whether governmental, residential, commercial or industrial, as a condition for granting permits. Moreover, the plan includes measures to rationalize consumption and reduce waste, as well as enhance reuse and recycling, in an effort to achieve near-zero waste, essentially embracing a circular economy. The plan also included ambitious programs to protect and develop nature.

The plan sets a specific goal to have 15 million electric cars on German roads by 2030, in line with the EU's decision to stop manufacturing and selling cars working on internal combustion engines by 2035. This target will certainly send strong signals to car manufacturers and users in Europe and the world at large, coming from a country that is a leader in automotive technology and manufacturing. This means that car companies and policy makers in other countries will take the matter seriously, and acknowledge that internal combustion engines will soon be a thing of the past. Electric car prices are expected to drop drastically as German companies enter serious competition.

One remark though is that the compromise required succumbing to the demands of the Free Democrats to keep German highways free of speed limits, a rare situation shared only by the Isle of Man. While this reflects an entrenched pride that Germans take in their fast car brands, it defies concerns about climate change, as emissions exponentially increase with higher speeds.

To emphasize the significance of the German proposals, the new coalition allocated vast budgets to produce hydrogen, mainly to be used as an alternative to natural gas in heating, as well as in the transport sector and to generate electricity. The plan envisaged the production of hydrogen from water, using electricity generated from sun and wind, so that it would store and transmit energy, at the same time. Hydrogen is also suitable for use as fuel for vehicles, which can be readily filled from modified pumps at gas stations. Hydrogen is also considered as the prime alternative fuel for sea and air transport. One of the indications that Europe is seriously turning to hydrogen is a pilot project successfully implemented by the Dutch Delft University for the past two years, to pump hydrogen into the same networks used to distribute natural gas to end-users. Manufacturers of gas heating boilers are also expected to soon put on the market affordable replacement parts to modify old gas burners to run on hydrogen.

The Germans have presented a plan with specific goals supplemented by an implementation schedule. This will become an example and put pressure on other developed countries in the post-Glasgow era. In turn, developing countries must prepare to engage in the new era, by developing their own capabilities and adopting the principles of sound governance on one hand, while seeking to attract more sustainable investments and foreign aid on the other.

While some expected the new government coalition to reconsider the decision to halt construction of new nuclear reactors and phase out the existing ones, the decision was clear in choosing renewable energy, hydrogen and reinforced efficiency as the path to achieve Germany's zero emissions goal. On the other hand, some countries, such as France, chose nuclear energy for electricity production as the fastest option to achieve radical reduction in carbon emissions, based on the country's capabilities and priorities.

Can Germany's coalition government ensure continued support for its environmental and climate policies? The partners undoubtedly understand the challenge, and realize that investing in the future alone is not enough if policy makers ignore investing in people's present. Therefore, the government must maintain a delicate balance, which will not be easy to secure with the continued challenges posed by coronavirus, on the economy and society in general.

The coalition seems to have been aware of this, as it included in its plan the lowering of voting age to 16 years, as demanded by the Green Party. This puts Germany among a handful of countries in the world that grant the right to vote to people that young. In most countries the voting age is 18, with few setting it at 21, apparently out of fear of younger voices. Will this group of young voters, who are most interested in protecting the environment and more concerned about the dangers of climate change, be the future advocates and protectors of the green German policies?