The German energy crisis is pushing the government to consider ending green energy subsidies because they do little to fight global warming and only serve to make electricity more expensive.
A recent government report is urging the complete abolition of the country’s Renewable Energy Sources Act (EEG), which imposes hefty taxes on families and businesses to subsidize green energy production.
The annual report from the Expert Commission on Research and Innovation (ECRI) concluded that Germany’s green energy law is not a cost-effective way to fight global warming and does nothing to stimulate technological innovation.
“For both reasons, therefore, there is no justification for the continuation of the EEG,” reads the commission’s report, which will be shown to Chancellor Angela Merkel on Wednesday.
The German newspaper Frankfurter Allgemeine Zeitung (FAZ) reports that the ECRI lists a number of reasons for their wanting to abolish the country’s green subsidies: “There is the spiraling cost of 22 billion euros in green energy subsidies last year; there is also the over-estimated impact of climate change and especially the threat posed by the promotion ‘very low technology-specific innovation impact in Germany’.”
Germany’s green energy law subsidizes the sale of electricity from renewable energy sources, like wind and solar, by levying a tax on people’s power bills. The idea is to help spur innovation in the green energy sector, but such subsidies incentivize companies to “exploit market potential rather than invest in research and development” reports FAZ.
”The EEG can not be justified in its current form, not least from the perspective of innovation policy,” ECRI notes. “The Renewables Energy Sources Act does not produce any additional climate protection but it makes it much more expensive.”
Germany’s emissions are already capped by the European Union’s cap-and-trade scheme, which forces large industrial facilities and power plants to buy carbon dioxide permits in order to operate. The ECRI concluded that Germany’s rapid expansion of green energy would “not avoid any additional CO2 emissions, but only shift them” reports FAZ.
The fight against global warming in Europe has been costing countries like Germany and Spain dearly. Germany has been suffering through high green energy taxes — costing consumers $26 billion last year alone — which have recently raised energy prices for about 15 million homes across the country.