After the game is before the game, as a famous saying goes in the German football world. It’s the same for everyone involved in climate change adaptation: After one of the wettest winters in history, the drought of the last five years has thankfully ended – but experts are already warning of the next drought. Today, we have summarized what this means for climate policy.
Germany’s Coal-fired power plants, which the Ministry of Economic Affairs reluctantly brought back online to secure the power supply during the gas crisis, are now finally being shut down. As it turns out, the measure was apparently not as harmful to the climate as feared. We also explain why in today’s briefing.
What can be done to set the course for better climate action? With tax law, says Till Kellerhoff, Program Director at the Club of Rome. He authored a provocative book calling for higher taxes for the rich to combine climate action with social equality. His opinion is sure to provoke lively debate.
Have an exciting read and a peaceful Easter
It was a controversial decision among climate activists: In order to reduce gas consumption for power generation because of the absence of Russian gas supplies, Germany extended the operating life of seven lignite-fired power plants. At the end of this lifetime extension, it has now become clear: The operation of the power plants has hardly caused any additional greenhouse gas emissions.
Operator Leag had reactivated units E and F of the Jänschwalde power plant in Lusatia for this measure, while RWE reactivated units E and F of the Niederaussem power plant and unit C of the Neurath power plant in the Rhineland. In addition, the decommissioning of units D and E planned for the end of 2022 was postponed in Neurath.
The extension ends this week. It was legally limited until 31 March 2024. Because of the relaxed supply situation, the Federal Ministry for Economic Affairs and Climate Action (BMWK) has decided against proposing an extension. The installed capacity of German lignite-fired power plants will consequently fall by 3.1 gigawatts to 14.6 gigawatts. Nevertheless, Germany’s power supply security is “guaranteed at a high level,” a BMWK spokesperson said. “Due to the significant expansion of renewable energies and the stabilization of the gas supply, the continued operation of the power plant units is neither necessary nor economical.”
The Energy Industry Act obliges the Federal Government to determine the carbon emissions that resulted from the operation of the additional lignite-fired units and to make proposals by the end of June on how to offset these. In response to an inquiry, the BMWK explained that there are currently no figures available on the climate impact of reactivation.
However, the data on German electricity generation, available at energy-charts.info and elsewhere, already suggests that the impact of the additional power plant units on the climate footprint was minimal. This is because the maximum installed lignite capacity was rarely fully utilized in the past two winters, meaning the additional units mostly replaced other lignite-fired power plants and not gas or hard coal-fired power plants, which emit less CO2 per kilowatt-hour of electricity produced.
The data on the power plants’ capacity utilization also suggests that they were rarely needed: The two units in Niederaussem only had a utilization rate of just over 20 percent in 2023. In Neurath, it was a good 30 percent, and in Jänschwalde around 35 percent. At the same time, the capacity utilization of the other units at these sites fell significantly compared to most of the previous years, meaning that less lignite-based electricity was produced overall despite the additional capacity at the affected sites.
Germany is returning to the agreed coal phase-out roadmap by decommissioning the seven power plant units. In 2020, a gradual phase-out by 2038 was enshrined in law; in 2022, an agreement was reached for the Rhineland that brings it forward to 2030; this has not yet been achieved for Lusatia. However, experts expect that coal-fired power generation will also become unprofitable there at the beginning of the 2030s due to the rising carbon price. In order to ensure a secure supply, hydrogen-capable gas-fired power plants are planned at some of the existing coal-fired power plant sites; RWE aims to achieve a capacity of at least three gigawatts at its sites.
The reactivation of the coal-fired power plants was based on the declaration of the gas emergency plan alert level in summer 2022 after Russia stopped supplying gas. Although the BMWK justifies the decommissioning of the coal-fired power plants with the “stabilization of the gas supply,” the alert level will remain in force. This is probably because it is a prerequisite for the accelerated construction of the LNG terminals on the German coast. And the German government has so far stuck to these plans – despite protests from environmentalists and various studies questioning their necessity.
As the winter of 2023/24 draws to a close with record precipitation, climate researchers are already focussing on how to prepare for the next drought in Germany. The soil has made up for its moisture deficit in many areas, as almost 145 percent of the long-term average precipitation fell in winter. But preparations for the next dry period are already underway. For instance, the German Federal Ministry for the Environment plans to bring forward its climate change adaptation strategy, which is due to be available by September 2025 at the latest, to 2024 and is examining whether new joint federal and state funding is possible for such climate change adaptation measures.
But first, there is some good news: Thanks to large amounts of rain in Germany last fall and winter, the extreme drought in the soil that lasted several years is over. Still, climate scientist Andreas Marx warns politicians and society not to neglect prevention after the end of the drought. “We must expect a similar drought event to occur again in the future,” he warns. “And then we should be better prepared than in 2018.”
Marx heads the drought monitor at the Helmholtz Centre for Environmental Research (UFZ) in Leipzig. For five and a half years, the monitor mainly showed deep red areas. That’s how long the country had been far too dry – until last winter. However, some regions of Eastern Germany – Saxony, Brandenburg, and Mecklenburg-Western Pomerania – are still too dry. On top of this, there is long-term damage.
According to the UFZ, there are deficits in deep groundwater bodies, damage to forests that is only now starting to show, as well as in the water levels of lakes and small bodies of water. The ecological and economic consequences are considerable: According to a study by the Federal Ministry for Economic Affairs and Climate Action, heat and drought caused an estimated 35 billion euros in damage in 2018 and 2019 alone.
Climate change was to blame for the long drought. According to studies by UFZ researchers, hot summers and rising average temperatures meant extreme drought did not dissipate more quickly. “Over five and a half years, the wetter winter phase was insufficient to replenish the soils that had dried out in summer. This is a climate effect that we predict will occur more frequently in the future,” says Marx.
Therefore, the hydrologist is calling for more precautions for periods of drought. The National Water Strategy (NWS) adopted by the German government in 2023 provides the corresponding framework. However, Marx believes that local municipalities should also define binding rules for crisis situations regarding who is allowed to withdraw how much water and when – and check the withdrawal quantities on a daily basis. The lower water authorities already have the means to do just that.
In response to an inquiry, the Federal Ministry for the Environment stated that “in view of the threat of future, real regional water shortages,” it was working with the federal states to develop reliable guidelines that would allow water use to be prioritized on a regional and local basis if necessary. A ministry spokesperson said the main aim is to ensure the public drinking water supply at all times, even when water is scarce.
The German parliament also passed a Climate Adaptation Act last November. This law obliges the federal states to submit and implement their own climate adaptation strategies based on climate risk analyses, which is already the case in Brandenburg and Lower Saxony.
“The Climate Adaptation Law stipulates that quantifiable measures and targets must be developed for water in order to prepare for future droughts,” the Federal Environment Ministry states. Part of this approach is to determine whether there is a risk of drought and drought and to identify suitable countermeasures.
The problem is that the law does not specify concrete measures. This is supposed to be provided by the federal government’s precautionary adaptation strategy – which has yet to be finalized. Federal Environment Minister Steffi Lemke (Green Party) has recently pledged to present it this year. The strategy must be available by 30 September 2025 at the latest, i.e., around the next federal elections.
The funding is also controversial. In the immediate climate adaptation program, the Ministry of the Environment has so far granted municipalities an additional 60 million euros until 2026. However, developing and implementing the new adaptation concepts will cost local authorities billions. That is why the Ministry of the Environment is examining a joint federal/state funding program to provide the municipalities with sufficient funds. This would require enshrining climate adaptation as a new joint task of the federal, state and local authorities in the Basic Law.
Researcher Marx fears: The awareness of adaptation measures against drought and their costs is high after the crisis, but the more time passes, the less is being done.
At least the risk of a new drought seems low for now. After the above-average winter precipitation, at least the forestry and water management sectors can relax: At the start of the growing season, the soil in these areas contains so much water that extreme drought is unlikely this spring, Marx says. A brief respite in the fight against drought.
Our society faces a double crisis, caused by advancing climate change and growing social tensions. Both can be overcome – provided the necessary investments are fairly financed and the resulting costs are equally distributed.
Increased taxes on high incomes and wealth are essential for this. Otherwise, the ecological transformation will place a particularly heavy burden on the poorer population groups who have contributed the least to the climate crisis. This harbors considerable conflict potential, especially in economically uncertain times. Considering ecology and social issues together and considering them in tax policy counteracts this.
Germany has set itself the goal of becoming climate-neutral by 2045. To achieve this, renewables must completely replace coal, oil and gas. The transition does not need any miracle technologies, but rather the fastest possible expansion of renewables, grids, storage facilities, charging stations and the most consistent energy savings possible.
Massive investment is needed, estimated at 70 to 80 billion euros annually – around two percent of Germany’s gross domestic product. The state plays a crucial role in making this possible. So far, the necessary measures have not been profitable for investors. This means that labor and capital flow too slowly into the relevant sectors. Subsidies are needed to change this.
Steering the transformation through higher prices alone will not suffice. Higher prices have a regressive effect and, therefore, place a particularly heavy burden on low-income groups. Moreover, they too quickly become a tool for political ideologies, as we have seen with the fuel discount.
The richest ten percent of the German population owns around 60 percent of total wealth, while the poorer half has virtually no wealth. While the bottom half of the population has an average carbon footprint of 5.9 tons per year, the richest one percent emits 117.9 tonnes.
The political consequences are tremendous if the population groups that contribute comparatively little to climate change due to their relatively low emissions have to bear a disproportionate share of the costs of ecological transformation. This can create a breeding ground for populist movements, especially in times of crisis.
To ensure social cohesion during the climate transformation, the social issue must be included more strongly in the public discourse. Distribution policy must be factored into the economic transformation.
At the same time, higher taxation of top earners and the wealthy would strengthen the financing of the green transformation and help counteract inequality in Germany – which, in turn, would help reduce the rift in society.
However, myths often prevent a constructive discussion about taxes, such as the assumption that Germany is a high-tax country. This is true with regard to income, but if we look at wealth, Germany is a low-tax country. A suspended wealth tax and an inheritance tax riddled with exemptions contribute to this.
Higher wealth taxation, which would only affect a small proportion of the population, would not stifle investment if it were structured appropriately with tax exemptions and deferral options. Instead, it would open up better opportunities for an active industrial policy and thus ensure that these investments are channeled into the areas essential for ecological transformation.
Another myth concerns the economic damage caused by higher taxes. Admittedly, it is necessary to ensure that companies’ substance is not attacked. However, large accumulations of money do not necessarily lead to more investment in the real economy.
Depending on the design, a combination of
could generate tens of billions of euros. The Netzwerk Steuergerechtigkeit estimates the fairness gap in the German tax system at 75 to 100 billion euros.
The triad of necessary future investments, the rejection of new debt, and the rejection of raising taxes on the wealthiest will not work.
To avoid further jeopardizing social peace, it is essential that those who have benefited most from our economic system in recent years are subject to higher taxes – not because of envy or moral demonization of wealth, but because our society needs a fairer distribution of burdens and opportunities to ensure long-term stability and prosperity for all.
Till Kellerhof is Program Director at the Club of Rome and has been the global coordinator of the international Earth4All initiative since 2021. On 26 March 2024, oekom Verlag published the book “TAX THE RICH. Why the rich have to pay if we want to save the world,” by Kellerhoff and sustainability researcher Jørgen Randers.
Climate change is one reason chocolate Easter bunnies cost more this year. Extreme weather conditions in West Africa, the biggest chocolate-producing region, resulted in poor harvests. As a result, import prices for cocoa rose by 73.4 percent in January compared to the same month last year.
An analysis by Ben Clarke at the Imperial College London concludes that the climate crisis is responsible for these weather extremes. Heavy rainfall in the region has become ten times more likely due to climate change. The increasing frequency of heavy rainfall alternating with periods of drought combined with “El Niño” results in poor harvests and the spread of fungal diseases. According to the NGO WWF, one danger is the so-called “Cocoa Swollen Shooting Virus Disease.” The disease spreads quickly in the cocoa monocultures. If infected, the entire plantation has to be destroyed. The study argues that more sustainable cultivation systems, such as agroforestry systems, are needed to counteract this.
The payment service provider Sumup analyzed that chocolate bunnies this year are up to 20 percent more expensive than last year. However, climate change is not the only cause of price increases. Because the cocoa for the bunnies that are now being sold was already produced at lower prices last year. kul
After the game is before the game, as a famous saying goes in the German football world. It’s the same for everyone involved in climate change adaptation: After one of the wettest winters in history, the drought of the last five years has thankfully ended – but experts are already warning of the next drought. Today, we have summarized what this means for climate policy.
Germany’s Coal-fired power plants, which the Ministry of Economic Affairs reluctantly brought back online to secure the power supply during the gas crisis, are now finally being shut down. As it turns out, the measure was apparently not as harmful to the climate as feared. We also explain why in today’s briefing.
What can be done to set the course for better climate action? With tax law, says Till Kellerhoff, Program Director at the Club of Rome. He authored a provocative book calling for higher taxes for the rich to combine climate action with social equality. His opinion is sure to provoke lively debate.
Have an exciting read and a peaceful Easter
It was a controversial decision among climate activists: In order to reduce gas consumption for power generation because of the absence of Russian gas supplies, Germany extended the operating life of seven lignite-fired power plants. At the end of this lifetime extension, it has now become clear: The operation of the power plants has hardly caused any additional greenhouse gas emissions.
Operator Leag had reactivated units E and F of the Jänschwalde power plant in Lusatia for this measure, while RWE reactivated units E and F of the Niederaussem power plant and unit C of the Neurath power plant in the Rhineland. In addition, the decommissioning of units D and E planned for the end of 2022 was postponed in Neurath.
The extension ends this week. It was legally limited until 31 March 2024. Because of the relaxed supply situation, the Federal Ministry for Economic Affairs and Climate Action (BMWK) has decided against proposing an extension. The installed capacity of German lignite-fired power plants will consequently fall by 3.1 gigawatts to 14.6 gigawatts. Nevertheless, Germany’s power supply security is “guaranteed at a high level,” a BMWK spokesperson said. “Due to the significant expansion of renewable energies and the stabilization of the gas supply, the continued operation of the power plant units is neither necessary nor economical.”
The Energy Industry Act obliges the Federal Government to determine the carbon emissions that resulted from the operation of the additional lignite-fired units and to make proposals by the end of June on how to offset these. In response to an inquiry, the BMWK explained that there are currently no figures available on the climate impact of reactivation.
However, the data on German electricity generation, available at energy-charts.info and elsewhere, already suggests that the impact of the additional power plant units on the climate footprint was minimal. This is because the maximum installed lignite capacity was rarely fully utilized in the past two winters, meaning the additional units mostly replaced other lignite-fired power plants and not gas or hard coal-fired power plants, which emit less CO2 per kilowatt-hour of electricity produced.
The data on the power plants’ capacity utilization also suggests that they were rarely needed: The two units in Niederaussem only had a utilization rate of just over 20 percent in 2023. In Neurath, it was a good 30 percent, and in Jänschwalde around 35 percent. At the same time, the capacity utilization of the other units at these sites fell significantly compared to most of the previous years, meaning that less lignite-based electricity was produced overall despite the additional capacity at the affected sites.
Germany is returning to the agreed coal phase-out roadmap by decommissioning the seven power plant units. In 2020, a gradual phase-out by 2038 was enshrined in law; in 2022, an agreement was reached for the Rhineland that brings it forward to 2030; this has not yet been achieved for Lusatia. However, experts expect that coal-fired power generation will also become unprofitable there at the beginning of the 2030s due to the rising carbon price. In order to ensure a secure supply, hydrogen-capable gas-fired power plants are planned at some of the existing coal-fired power plant sites; RWE aims to achieve a capacity of at least three gigawatts at its sites.
The reactivation of the coal-fired power plants was based on the declaration of the gas emergency plan alert level in summer 2022 after Russia stopped supplying gas. Although the BMWK justifies the decommissioning of the coal-fired power plants with the “stabilization of the gas supply,” the alert level will remain in force. This is probably because it is a prerequisite for the accelerated construction of the LNG terminals on the German coast. And the German government has so far stuck to these plans – despite protests from environmentalists and various studies questioning their necessity.
As the winter of 2023/24 draws to a close with record precipitation, climate researchers are already focussing on how to prepare for the next drought in Germany. The soil has made up for its moisture deficit in many areas, as almost 145 percent of the long-term average precipitation fell in winter. But preparations for the next dry period are already underway. For instance, the German Federal Ministry for the Environment plans to bring forward its climate change adaptation strategy, which is due to be available by September 2025 at the latest, to 2024 and is examining whether new joint federal and state funding is possible for such climate change adaptation measures.
But first, there is some good news: Thanks to large amounts of rain in Germany last fall and winter, the extreme drought in the soil that lasted several years is over. Still, climate scientist Andreas Marx warns politicians and society not to neglect prevention after the end of the drought. “We must expect a similar drought event to occur again in the future,” he warns. “And then we should be better prepared than in 2018.”
Marx heads the drought monitor at the Helmholtz Centre for Environmental Research (UFZ) in Leipzig. For five and a half years, the monitor mainly showed deep red areas. That’s how long the country had been far too dry – until last winter. However, some regions of Eastern Germany – Saxony, Brandenburg, and Mecklenburg-Western Pomerania – are still too dry. On top of this, there is long-term damage.
According to the UFZ, there are deficits in deep groundwater bodies, damage to forests that is only now starting to show, as well as in the water levels of lakes and small bodies of water. The ecological and economic consequences are considerable: According to a study by the Federal Ministry for Economic Affairs and Climate Action, heat and drought caused an estimated 35 billion euros in damage in 2018 and 2019 alone.
Climate change was to blame for the long drought. According to studies by UFZ researchers, hot summers and rising average temperatures meant extreme drought did not dissipate more quickly. “Over five and a half years, the wetter winter phase was insufficient to replenish the soils that had dried out in summer. This is a climate effect that we predict will occur more frequently in the future,” says Marx.
Therefore, the hydrologist is calling for more precautions for periods of drought. The National Water Strategy (NWS) adopted by the German government in 2023 provides the corresponding framework. However, Marx believes that local municipalities should also define binding rules for crisis situations regarding who is allowed to withdraw how much water and when – and check the withdrawal quantities on a daily basis. The lower water authorities already have the means to do just that.
In response to an inquiry, the Federal Ministry for the Environment stated that “in view of the threat of future, real regional water shortages,” it was working with the federal states to develop reliable guidelines that would allow water use to be prioritized on a regional and local basis if necessary. A ministry spokesperson said the main aim is to ensure the public drinking water supply at all times, even when water is scarce.
The German parliament also passed a Climate Adaptation Act last November. This law obliges the federal states to submit and implement their own climate adaptation strategies based on climate risk analyses, which is already the case in Brandenburg and Lower Saxony.
“The Climate Adaptation Law stipulates that quantifiable measures and targets must be developed for water in order to prepare for future droughts,” the Federal Environment Ministry states. Part of this approach is to determine whether there is a risk of drought and drought and to identify suitable countermeasures.
The problem is that the law does not specify concrete measures. This is supposed to be provided by the federal government’s precautionary adaptation strategy – which has yet to be finalized. Federal Environment Minister Steffi Lemke (Green Party) has recently pledged to present it this year. The strategy must be available by 30 September 2025 at the latest, i.e., around the next federal elections.
The funding is also controversial. In the immediate climate adaptation program, the Ministry of the Environment has so far granted municipalities an additional 60 million euros until 2026. However, developing and implementing the new adaptation concepts will cost local authorities billions. That is why the Ministry of the Environment is examining a joint federal/state funding program to provide the municipalities with sufficient funds. This would require enshrining climate adaptation as a new joint task of the federal, state and local authorities in the Basic Law.
Researcher Marx fears: The awareness of adaptation measures against drought and their costs is high after the crisis, but the more time passes, the less is being done.
At least the risk of a new drought seems low for now. After the above-average winter precipitation, at least the forestry and water management sectors can relax: At the start of the growing season, the soil in these areas contains so much water that extreme drought is unlikely this spring, Marx says. A brief respite in the fight against drought.
Our society faces a double crisis, caused by advancing climate change and growing social tensions. Both can be overcome – provided the necessary investments are fairly financed and the resulting costs are equally distributed.
Increased taxes on high incomes and wealth are essential for this. Otherwise, the ecological transformation will place a particularly heavy burden on the poorer population groups who have contributed the least to the climate crisis. This harbors considerable conflict potential, especially in economically uncertain times. Considering ecology and social issues together and considering them in tax policy counteracts this.
Germany has set itself the goal of becoming climate-neutral by 2045. To achieve this, renewables must completely replace coal, oil and gas. The transition does not need any miracle technologies, but rather the fastest possible expansion of renewables, grids, storage facilities, charging stations and the most consistent energy savings possible.
Massive investment is needed, estimated at 70 to 80 billion euros annually – around two percent of Germany’s gross domestic product. The state plays a crucial role in making this possible. So far, the necessary measures have not been profitable for investors. This means that labor and capital flow too slowly into the relevant sectors. Subsidies are needed to change this.
Steering the transformation through higher prices alone will not suffice. Higher prices have a regressive effect and, therefore, place a particularly heavy burden on low-income groups. Moreover, they too quickly become a tool for political ideologies, as we have seen with the fuel discount.
The richest ten percent of the German population owns around 60 percent of total wealth, while the poorer half has virtually no wealth. While the bottom half of the population has an average carbon footprint of 5.9 tons per year, the richest one percent emits 117.9 tonnes.
The political consequences are tremendous if the population groups that contribute comparatively little to climate change due to their relatively low emissions have to bear a disproportionate share of the costs of ecological transformation. This can create a breeding ground for populist movements, especially in times of crisis.
To ensure social cohesion during the climate transformation, the social issue must be included more strongly in the public discourse. Distribution policy must be factored into the economic transformation.
At the same time, higher taxation of top earners and the wealthy would strengthen the financing of the green transformation and help counteract inequality in Germany – which, in turn, would help reduce the rift in society.
However, myths often prevent a constructive discussion about taxes, such as the assumption that Germany is a high-tax country. This is true with regard to income, but if we look at wealth, Germany is a low-tax country. A suspended wealth tax and an inheritance tax riddled with exemptions contribute to this.
Higher wealth taxation, which would only affect a small proportion of the population, would not stifle investment if it were structured appropriately with tax exemptions and deferral options. Instead, it would open up better opportunities for an active industrial policy and thus ensure that these investments are channeled into the areas essential for ecological transformation.
Another myth concerns the economic damage caused by higher taxes. Admittedly, it is necessary to ensure that companies’ substance is not attacked. However, large accumulations of money do not necessarily lead to more investment in the real economy.
Depending on the design, a combination of
could generate tens of billions of euros. The Netzwerk Steuergerechtigkeit estimates the fairness gap in the German tax system at 75 to 100 billion euros.
The triad of necessary future investments, the rejection of new debt, and the rejection of raising taxes on the wealthiest will not work.
To avoid further jeopardizing social peace, it is essential that those who have benefited most from our economic system in recent years are subject to higher taxes – not because of envy or moral demonization of wealth, but because our society needs a fairer distribution of burdens and opportunities to ensure long-term stability and prosperity for all.
Till Kellerhof is Program Director at the Club of Rome and has been the global coordinator of the international Earth4All initiative since 2021. On 26 March 2024, oekom Verlag published the book “TAX THE RICH. Why the rich have to pay if we want to save the world,” by Kellerhoff and sustainability researcher Jørgen Randers.
Climate change is one reason chocolate Easter bunnies cost more this year. Extreme weather conditions in West Africa, the biggest chocolate-producing region, resulted in poor harvests. As a result, import prices for cocoa rose by 73.4 percent in January compared to the same month last year.
An analysis by Ben Clarke at the Imperial College London concludes that the climate crisis is responsible for these weather extremes. Heavy rainfall in the region has become ten times more likely due to climate change. The increasing frequency of heavy rainfall alternating with periods of drought combined with “El Niño” results in poor harvests and the spread of fungal diseases. According to the NGO WWF, one danger is the so-called “Cocoa Swollen Shooting Virus Disease.” The disease spreads quickly in the cocoa monocultures. If infected, the entire plantation has to be destroyed. The study argues that more sustainable cultivation systems, such as agroforestry systems, are needed to counteract this.
The payment service provider Sumup analyzed that chocolate bunnies this year are up to 20 percent more expensive than last year. However, climate change is not the only cause of price increases. Because the cocoa for the bunnies that are now being sold was already produced at lower prices last year. kul
