Q7 How did Germany build consensus for phasing out coal by the 2030s?
The development of renewable energy alone is not sufficient for rapidly reducing greenhouse gas emissions. Additional measures are required to actively phase down coal-fired power generation. To meet its climate targets, Germany adopted legislation in 2020 with the objective to phase out coal power by 2038. The current government has vowed to end the fossil fuel era and phase out coal ideally by 2030.
Coal Commission: setting the stage for the phase-out of coal
Coal has played a prominent role in the German economy for over 120 years. It has had a lasting impact on the country’s regions and industrial sectors and remains deeply anchored in its culture and political traditions. The combustion of hard coal and lignite for generating electricity, on the other hand, has historically been the largest single source of greenhouse gas emissions in Germany.
Phasing out coal in Germany is, therefore, a multidimensional endeavour that brings together not only energy and climate issues but also labour and regional policies. Taking into account the possible effects that a coal phase-out could have on coal-related workers, companies, and regions has led to the adoption of a ‘just transition’ strategy. Given the challenge that the phase-out represents, in 2018, the German federal government created the Commission for Growth, Structural Change and Employment, known informally as the Coal Commission. The Commission created a plan for the gradual reduction and termination of coal-fired power generation in Germany and submitted concrete proposals for growth and employment in the affected regions. It published its final report in January 2019.
Coal Commission: lessons learned for negotiating the phase-out of coal
The Coal Commission emerged from the German political culture of consensus building. It was set up by the government to define a clear end-date and intermediate steps for the phase-out of coal whilst considering economic development, structural change, social justice, and climate action. It consisted of ministerial representatives, officials from impacted federal states, and experts from non-governmental organisations, labour unions, academia, industry associations, and party members. Several conclusions can be drawn from the experience.
The regions affected will inevitably undergo structural change, which is why the transition should be actively managed and involve all relevant stakeholders early on. Detailed coal exit pathways and strategies should be decided by the regions themselves, as only they fully understand the barriers and opportunities on the ground. A distinct exit timetable that leads to significant changes in manageable periods of time is a central element of a comprehensive phase-out strategy.
It must be noted that changing framework conditions and the real-world implementation of phase-out plans have created political tensions. But they also have been reflecting economic realities: the economic profitability of coal mining and coal power plants has rapidly deteriorated, which likely played a role in bringing the phase-out year forward from 2038 to 2030. Additionally, while some jobs in the coal industry will be lost, other jobs will be created in other sectors or regions. Regional development concepts must be combined with large-scale financing models at the national (or European) level. The development of new sources of financing supports the transformation process and increases incentives for the switchover (e.g., via CO2 pricing).
Overall, it is important to keep in mind that adaptative processes such as the coal phase-out never just affect industry. They also make differences between metropolitan and rural regions particularly visible. Accordingly, the government needs to tackle not only the transformation of jobs in regions affected by the coal phase-out. It must also invest in infrastructure, educational opportunities, economic development, and the cultural environment to increase the attractiveness of regions, particularly those that are already structurally disadvantaged.