Climate is Germany's top issue no matter who governs after talks

A climate strike in front of the building that houses the German federal Parliament in Berlin on Sept 24, 2021. PHOTO: AFP

BERLIN (BLOOMBERG) - Germany is headed for weeks and maybe even months of uncertainty over who will govern Europe's biggest economy.

But one outcome is already clear: Tackling climate change will top the new ruling coalition's agenda.

While an initial burst of support for the Greens was not enough to to win it the most seats in Parliament, the party still finished with its best-ever result and will likely be part of the next government.

Polls show concern over global warming has become the most important issue for German voters, even ahead of the coronavirus pandemic.

"This was a climate election. All major parties promised more ambitious climate policy during the campaign," said Mr Christoph Bals, policy director at Bonn-based non-profit Germanwatch.

"Whoever will form the next coalition government, voters and civil society will hold them to account for delivering on these promises."

That the Greens managed to shift the conversation so strongly is an encouraging signal to advocates around the world, who have made climate change a top issue in elections from Norway to Canada.

Yet support for the party in opinion polls dropped more than 10 percentage points under leader Annalena Baerbock, a political novice who made several blunders early on, showing the challenges of running a Greens campaign that has mainstream appeal.

The Greens, which finished third in the voting, will probably end up in a coalition with the Social Democratic Party and business-friendly Free Democratic Party (FDP), neither of which is willing to spend aggressively to cut emissions.

The Social Democrats are under pressure from unions to move slowly to avoid job losses in energy-intensive industry.

The FDP would rather leave the green transition to the market than impose regulations.

"We need a coalition for climate protection and energy transition as soon as possible," Ms Kerstin Andreae, chairman of the German Association of Energy and Water Industries, said in a note on Monday (Sept 27).

She called for the new leaders to clear the way for more renewables and the expansion of power grids, and to address high energy prices by eliminating electricity levies.

A coal-fired power station in Garzweiler, Germany, on March 15, 2021. PHOTO: AFP

Leading up to the election, the Greens' early success and a ruling from Germany's highest court prompted Chancellor Angela Merkel to move the nation's target for reaching net-zero emissions five years earlier, to 2045.

How quickly the government moves to meet that target will depend on how successful the Greens are at operating within the new bureaucracy.

There is also a risk that momentum could be blunted in the short term by soaring energy prices in Europe.

"Whenever the new government is formed, the question is really: What can it do?" said Mr Hanns Koenig, the head of Aurora Energy Research's Berlin office.

"High energy prices might benefit renewables, but not much as we might think."

Still, the election is likely to bolster German action on the international stage.

Coalition negotiations will coincide with United Nations-sponsored climate talks in Glasgow in November.

Leaders attending the gathering, known as COP26, are expected to agree on more ambitious policies to keep global warming below 2 deg C, and on a finance mechanism that helps developing nations adapt.

Germany, the world's sixth-largest polluter, traditionally plays a prominent role in these talks.

Its team of veteran negotiators is among the few large enough to be in all meetings and cover the dozens of issues being discussed.

That is expected to remain unchanged even under a caretaker government led by Dr Angela Merkel.

Whatever coalition is eventually formed "will probably lead Germany towards more ambitious positions", said Mr Peter Betts, an associate fellow at London's Chatham House policy institute and an EU lead negotiator at COP meetings from 2010 and 2016.

"German negotiators will know that and this will help them push some positions a bit harder, and major negotiating partners will know that too."

Still, political uncertainty at home might dissuade German negotiators from taking strong positions on more specific issues, such as phasing out internal combustion-engine cars, Mr Betts said.

Next on the agenda after COP26 in Glasgow will be the next round of the Group of Seven (G-7) meetings, to be hosted by Germany.

The country's climate focus will probably solidify the G-7 as an engine for climate action, according to Ms Jennifer Tollmann, a senior policy adviser for climate think-tank E3G in Berlin.

Ultimately, the Greens' influence on the national discourse is here to stay.

It has even prompted fossil-fuel lobby groups to voice support for tackling climate change, while advocating policies that would entrench their businesses, such as speeding up the development of a hydrogen market.

"The voters' decision is a clear mandate for change," said Mr Timm Kehler, chairman of German lobby Zukunft Gas.

"Change means progress and that is good for Germany, because the energy transition also needs progress."

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