synergy logo.png

New Era in Germany - Ali Berk Bilir


On December 6, Germany's Olaf Scholz of Social Democratic Party (SDP) will swear as the new Chancellor and effectively end Merkel, and her Christian Democratic Union of Germany (CDU)'s 16 years of rule. Coalition governments are a norm in German politics. Olaf Scholz's government is not an exception to that norm, as his government will be a coalition government made up of SDP, Greens, and liberal Free Democrats. The prospective government parties agreed on a treaty and announced it as a guide to their policies. The agreement consists of ambitious economic, foreign, civil, climate and energy policies and will likely affect all over Europe and possibly the globe.


During the election process, climate and energy were two of the crucial topics that parties and the public focused on. Even so that, Greens, whose main platform is based on environment and climate, enjoyed a high poll record until CDU and SDP struck back. After the election, where SDP came as the leading party with a narrow margin, energy and climate issues were significant topics to make or break coalition talks between parties. Two months after the election, a coalition agreement was announced named "Daring more progress-Alliance for Freedom, Justice, and Sustainability." The agreement has strong climate and energy goals. The agreement foresees reforms and policy changes in renewable energies, natural gas, CO2 pricing, negative emissions, industry, and so on. The coalition predicts to phase out coal by 2030, 8 years before the previous plan. Accordingly, natural gas is viewed as a bridge during the transition process. They also support an increasing CO2 price along with support for low-income households. Regardless, gas prices are already high due to every crisis. Therefore, the agreement mentions that there will be no increase in CO2 price on heating and transport fuel. The coalition also aims to power 80% of the electricity grid with renewables within ten years. Furthermore, the deal proposes phasing out gas for power by 2040.


Additionally, the coalition promises to reform the federal Climate Action Law in 2022 and implement an immediate action program for climate protection. Accordingly, ministries are now required to check its law proposal's effect on climate impact and its compatibility with the national climate targets. This shows the government's seriousness to institutionalize pro-climate policies. I believe it is further enhanced that the new government establishes a new climate and Economy Ministry, which will be headed by Green's Robert Habeck, who is also the co-chair of the Green party. Furthermore, the coalition aims to develop an industrial strategy that prevents carbon leakage. There are also proposed changes and aims in many other areas, such as reaching electrolysis capacity of 10 gigawatts by 2030 or sustainable mobility transition that makes Germany a lead market for e-mobility.


More can be written for the agreement's climate and energy focus and aims as it basically includes every sector and even day-to-day issues. However, the coalition agreement has bigger implications. Germany is the biggest economy in Europe and the 4th bigger in the world. Also, it is one of the, if not the most, important actors in the European Union. COP26 was not a huge success for climate politics. The new German government's commitment and its reform promises seem revolutionary. Germany also has the means to influence European politics and institutions. For example, the coalition aims to push for an EU-wide carbon floor price under the energy trading system (ETS). Moreover, the government will support the creation of a European Union for green hydrogen and initiate an International Climate Club with a uniform CO2 minimum price and a common carbon border adjustment.


The EU and Germany themselves face energy insecurity, especially this winter as gas prices skyrocketed and Russia leveraged its natural resources to deal with the EU countries. Regardless, the coalition agreement does not mention Nord Stream 2, ultimately increasing Germany's dependence on Russia and Russian influence. However, the coalition is critical towards Russia on the topics of Belarus and Ukraine which Russia's aims alarmed many in the West. Being critical towards Russia and promises of "pushing back" against authoritarian developments needs to be conducted carefully if the new German government does not want to alienate Russia, which the Merkel Government was very careful in its dealing. On the other hand, the promises and aims on the energy and climate policies would decrease Germany's dependence on fossil fuel, and apart from helping the Globe in its struggle against climate change, it would also strengthen Germany's energy security.