As Germany navigates the complex terrain of climate action, Vice Chancellor Robert Habeck’s candid declaration, “Not enough, too slow, too late,” echoes the sentiments of a nation grappling with the stark realities of its climate policy. At the launch of the 2023 OECD Environmental Performance Review and the OECD Economic Survey, Habeck underscored the formidable hurdles hindering Germany’s quest to accelerate climate action. Despite the nation’s ambitious goal of achieving climate neutrality by 2045 and pursuing negative greenhouse gas emissions post-2050, there exists a profound dissonance between policy aspirations and tangible outcomes.

Germany’s accomplishments, such as a 41.3% reduction in emissions by 2020, underscore its commitment compared to many industrialized nations. However, the OECD Environmental Performance Review paints a stark picture, revealing that Germany still stands among the top ten global greenhouse gas emitters. The intricacies of climate policy implementation and the struggle for political consensus, as exemplified by the contentious debate over a new heating law, illuminate the challenges that impede the nation’s progress.

The Tricky Path of Decarbonizing the Heating Sector

The heating sector, responsible for one-third of Germany’s total final energy consumption, poses a significant challenge. The introduction of a new heating law aimed at transitioning to climate-friendly alternatives faced public backlash and legal obstacles. The law, requiring at least 65% renewable energy for new heating systems from 2024, highlights the difficulty of societal change. The debate underscores the importance of creating an enabling environment and considering social implications. To accelerate the transition, Germany needs clearer long-term policies and consistent support measures, learning from successful models in countries like Denmark and Norway.

Unlocking Opportunities in the Transport Sector

Transport, contributing to 19% of Germany’s greenhouse gas emissions, lags in emission reductions. Despite opportunities such as speed limits and tolls, progress has been slow. Public support for a general speed limit of 130 km/h is high, offering potential emissions savings. However, government measures fall short, maintaining counterproductive subsidies like the company car privilege. The Council of Experts on Climate Change deems these measures insufficient, emphasizing the need for bold actions, including prioritizing public transport and addressing car dependency.

Clearer Price Signals for a Net-Zero Transition

High fossil fuel subsidies and environmentally harmful tax expenditures hinder Germany’s climate goals, providing mixed signals for investments. Fossil fuel support, totaling 1.9% of GDP, contrasts with only 1% supporting green investments. The OECD recommends a systematic review of subsidies to identify inefficiencies and reallocate resources in line with climate and environmental objectives. Phasing out unjustified long-term subsidies is crucial to achieving a balance that supports the transition to a net-zero economy.

Addressing Fossil Fuel Support and Tax Expenditures

Environmental subsidies and tax expenditures, totaling EUR 65 billion in 2018, present a challenge to Germany’s climate ambitions. The cost of supporting fossil fuels outweighs support for green investment by households and firms. The OECD calls for a thorough review of existing and proposed subsidies to align them with climate and environmental goals, emphasizing the potential for additional revenues to drive Germany’s transition to net zero.

Commendation for Swift Response to the Global Energy Crisis

The OECD review acknowledges Germany’s swift response to the global energy crisis, citing historic measures to accelerate the green energy transition. Legislative and funding programs targeting a shift from fossil fuels, coupled with an expedited coal phase-out in North Rhine-Westphalia, demonstrate the country’s commitment. The review urges Germany to build on this momentum, daring to make more progress across all sectors of climate action.

Call for Ambitious Climate Action Across All Sectors

The imperative for Germany to transcend existing boundaries and embark on a bolder trajectory towards ambitious climate action is resonant and urgent. The clarion call to “Dare More Progress” reverberates not only as a national rallying cry but as a crucial global responsibility in the face of escalating climate challenges. The clarion call emanates from the realization that the status quo falls short of the transformative change required to secure a sustainable, low-carbon future.

The review underscores the need for Germany to draw inspiration from its recent swift response to the global energy crisis, viewing it not as an isolated incident but as a template for expedited progress across diverse sectors. The urgency and unity displayed during the energy crisis should be harnessed as a catalyst for bold, innovative measures. Germany, already lauded for its historic measures to accelerate the green energy transition, now stands at a pivotal juncture where it can extend this momentum to all facets of its economy.

In a world grappling with the existential threats posed by climate change, Germany is uniquely positioned to be a vanguard of change. The call for leadership goes beyond mere rhetoric; it demands concrete, transformative actions that set benchmarks for other nations. By navigating uncharted territories and embracing ambitious initiatives, Germany can not only mitigate its own carbon footprint but also inspire a global paradigm shift towards sustainable practices. The review’s message is clear: Germany’s role as a leader necessitates courageous strides in climate action across all sectors, ushering in an era of unparalleled environmental stewardship and innovation.