washingtonpost.com
In Germany, the high price of going green

By Anthony Faiola
Sunday, November 22, 2009

GELSENKIRCHEN, GERMANY -- In this nation that embraced one of the world's most aggressive campaigns against global warming, the Pokropp family can almost hear the cha-ching when switching off their lights.

A kilowatt of electricity costs three times as much here as it does in the United States, supercharged with high taxes to discourage use and to help fund renewable energy development. Meanwhile, a 50 percent "eco-tax" has sent the price of gasoline soaring to $8 a gallon. To manage costs, the family of three unplugs all their appliances but the refrigerator at night, avoids driving and limits steam baths -- a favorite German custom.

"We have no choice," said Andreas Pokropp, a former coal refinery worker. "We have to be green, even if we can't afford it."

Yet the Pokropps have also reaped rewards from Germany's fight against global warming. After years of looking for steady work in this moribund coal region, Mariola Pokropp found it in 2006 at Eickhoff, a 145-year-old manufacturer of mining equipment that has reinvented itself in green times, retooling its assembly lines to make 30-ton gearboxes for wind power generation. It is part of a heavily subsidized industry that has generated hundreds of thousands of jobs, paid for by consumers through higher energy bills.

With a major climate summit in Copenhagen just weeks away, Europe's most populous nation represents a test case for what happens when a major economy sets down a greener path. In the United States, two significant bills pending in Congress would adopt some of the tactics employed by Germany and other European nations to reduce emissions. They include tighter building codes, more support for renewable energies and a carbon trading system requiring companies to buy permits to pollute above certain levels.

There are also some key differences. Rather than taxing consumers directly, as the Germans have done, the United States would place the financial burden of cleaner energy on utility companies. By 2020, U.S. power companies would be required to increase the share of electricity they produce from renewable resources from 9 percent to 15 percent, equal to the current level in Germany.

Supporters of the bills argue that such an approach -- coupled with rebates and other incentives for consumers -- would minimize price increases while creating plenty of new jobs as the United States builds renewable-energy grids. Critics insist otherwise, saying such measures will drive up energy bills as utilities pass on their extra costs to consumers. They also warn of major job losses as industry copes with stricter emissions standards.

Germany's experience has been one of trade-offs, with higher energy prices but substantial job creation in green industries. The country has cut its carbon dioxide emissions today to roughly the same level they were in 1990, while emissions in the United States have risen 6 percent over the same period. The biggest reductions in Germany came years ago, from the upgrading or demolition of old East German factories after the fall of the Berlin Wall. But especially since 2000, environmental and energy policies have been credited with new emission cuts and with laying the groundwork for more in the years ahead.

Germany, which exports more than China and climbed out of the global recession faster than the United States, has been able to cut emissions without damaging its overall economy. Concerns are mounting that stricter measures coming into effect in 2013 may yet force an exodus of jobs. But as new markets have emerged for efficient building materials and renewable energy, even some of the harshest critics of Germany's green policies concede that they have created more jobs than they have cost. The renewable sector alone, including one of the world's largest solar industries (in a nation where the sun often hides), employs 260,000, one-quarter the size of the country's auto workforce.

For families such as the Pokropps, Germany's battle against climate change has touched all aspects of their lives, from the way they earn their living to the number of trips they make to the supermarket each week.

Andreas Pokropp was born in this industrial city, which has lost a quarter of its population since the 1980s, when Berlin began slashing support for the coal industry. Gelsenkirchen's last coal mine closed in December. Yet as Germany has ramped up alternative energy generation, Gelsenkirchen and surrounding cities have witnessed a rebound in jobs, with thousands coming from companies that started building solar panels at old steel mills and churning out $15,000 heat pumps in industrial parks on the city's edge.

Many companies, including Eickhoff, reinvented themselves. Though its 1,300-person workforce is still smaller than its peak of 2,000 employees in 1987, demand for new wind farms in Germany and beyond has led the company to double its workforce since 1995. In 2004, Eickhoff hired Mariola Pokropp, 38, to work in the administration office.

"If you ask if environmental laws have helped or hurt, I would say they have helped," said Paul Rheinlaender, Eickhoff's president. "We have been forced to adapt, be more efficient and produce a better product because of environmental realities. In the end, that has made us -- and Germany -- more competitive, not less."

But it hasn't been easy for Andreas Pokropp. He lost his job at a coal refinery in the early 1990s because of the policy switch. Most experts say the falloff of support for domestic coal was inevitable, based less on environmentalism than on economics: German coal could not compete with cheaper imports.

Though Andreas Pokropp found work as a technician at a nearby Nokia factory, it closed last year, relocating to Romania. Experts say the search for cheaper labor and tax incentives has played a key role in shipping jobs out of Germany in recent years. But higher energy prices have not helped.

In addition, ThyssenKrupp, the last major steelmaker in Gelsenkirchen, is now building factories in Alabama and Brazil, a decision the company attributed partly to stricter environmental standards coming into effect across Europe in 2013.

The Pokropps are reminded of their trade-offs every time the power bill comes. Model German families are using solar panels or heat pumps to generate most of their own power, with many saving so much on energy bills that they can recoup their investment in less than 10 years. But the Pokropps can't afford the initial cost, which runs between $8,000 to $20,000 even after generous government rebates. Instead, they must depend on Germany's general grid, which now serves up some of the most expensive electricity in the world.

Prices are high for several reasons. German power companies enjoy limited competition, and the nation imports much of its oil, natural gas and coal. The government builds in taxes to motivate consumers to conserve energy and to fund alternative energy development. And German utilities have started passing on to consumers the costs of the European carbon trading system -- to the tune of $10.5 billion a year, according to the Freiburg-based Oeko-Institute for Applied Ecology.

The cost of going green gets higher when Mariola Pokropp climbs into the family's 1998 Mitsubishi sedan for her drive to work. The 50 percent eco-tax on gasoline has driven up the family's weekly gas bill to $100. Though the Pokropps try to cut back on road trips as much as possible, studies here show that Germans have made only minor cuts in their driving habits. The Pokropps also pay an annual tax on their car's engine emissions -- $180 a year, more than many Germans because they do not own a hybrid or a more efficient late-model car.

"I am all in favor of fighting climate change," Mariola Pokropp said. "But I often feel we are paying a high price."

Anthony Faiola is the London bureau chief of The Washington Post.

Post a Comment


Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.

© 2009 The Washington Post Company