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With his new book, Das grüne Paradoxon – Plädoyer für eine illusionsfreie Klimapolitik (The Green Paradox – An Argument for Illusion-Free Climate Policies), Ifo President Hans-Werner Sinn exposes the paradoxes of German environmental policies. In his opinion the climate problem cannot be solved by states with green policies going it alone. “These policies are doomed to fail if global economic interactions are neglected”, he explains. A re-thinking is called for. The various green-tinged laws in Germany –eco tax, obligatory ratios for biofuels, and the promotion of renewable energy – must give way to a comprehensive, worldwide trading system for emission certificates. Countries acting on their own can achieve nothing. “If we wish to leave a liveable earth to coming generations we cannot avoid tackling the problem on an international scale”, Mr Sinn emphasises. Germany has the most wind turbines, the most solar cells and the most bio-diesel in the world, but this will not save the climate. Even if Germany’s power requirements could be covered by wind energy and solar cells, this would not mean one ton less of carbon dioxide released into the atmosphere. European CO2 output is fixed by the international emissions trade. What one country saves in CO2, another country consumes. In addition, the use of biofuels is having dire repercussions on a global scale: When energy-bearing plants land in our fuel tanks instead of on our dinner plates this may soothe our green conscience, but that will push food prices upwards and create its own set of problems. “German environmental policies are based on an illusion", Mr Sinn remarks. This illusion consists of our thinking that we can lower the worldwide supply of oil and natural gas by decreasing demand and, as a result, reduce emissions. But what if those who own the resources don’t play along, Mr Sinn asks. “The sheikhs, Hugo Chávez and Russia don’t have to sell their oil and gas to us but could just as easily supply the non-Kyoto countries that produce 70 percent of global CO2”, he explains and adds: “With our energy-saving efforts we depress prices and subsidise the consumption of the Americans and Chinese, who will then drive even more gas guzzlers and build even more environment-polluting factories.” On top of that, by announcing our intention to depress prices to an even greater extent than today we induce the sheikhs to extract even more oil and gas now than they would otherwise do. This accelerates climate change. Das grüne Paradoxon
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Note: This text is the responsibility of the writer (Julio C. Saavedra) and does not necessarily reflect the opinion of either the CESifo Working Paper author(s) cited or of the CESifo Group Munich. Copyright © CESifo GmbH 2004-2008. All rights reserved. |
