Power Switch: Last in a series about the German energy transition.

Inside a council building on Brussels’ Rue de la Loi, a landmark climate deal was hanging in the balance. Angela Merkel was in her element.

It was past midnight, the negotiations extended into the early hours of Dec. 11. By the time the sun rose, Merkel and the other European Union leaders emerged to say they had an agreement to cut carbon dioxide emissions in their countries 55 percent from 1990 levels by 2030.

“It was worth missing a night’s sleep over,” Merkel said to reporters covering the summit.

For Merkel, long ago nicknamed the “climate chancellor” by the German media, the agreement was a capstone to an uncommonly long stretch at the helm of a Western democracy, one that will end when she steps down next year.

She has played a vital role in putting climate change high on the agenda, both globally and in her own country. 

On the international stage, Merkel persuaded other world leaders, including President George W. Bush, to accept the conclusion of the Intergovernmental Panel on Climate Change that global warming was caused largely by human activity, and she was a key architect of the Paris climate accord.

Domestically, she led the 2019 passage of the most substantial climate law in German history, which set challenging targets for emissions reductions and imposed a carbon tax. And she shepherded a plan to close Germany’s coal-fired power plants and coal mines.

Yet many people in Germany view Merkel as an enigma when it comes to the climate crisis. Her critics in the environmental movement see a disconnect between the decisive chancellor who helped to lead the world’s fight against global warming and the much more cautious politician who has been slow to take aggressive action at home.

And while her government’s climate achievements in Germany dwarf anything Congress has accomplished in the United States, in Germany, references to Merkel’s climate record often meet with a sneer from those in the country’s environmental movement, who see a tragedy in years of missed opportunities.

Merkel took office in 2005 when grassroots enthusiasm was high for Germany’s Energiewende, or energy transition, which had begun in earnest five years earlier. The country had shown the world how to unleash rapid development of clean energy, and do it in a way that engaged the public and allowed regular people to benefit through locally owned power cooperatives. Germany’s renewable energy industries sprouted up from almost nothing, and the country’s grid operators showed how the system could remain reliable even with large amounts of intermittent sources like wind and solar.

But then, with Merkel leading a center-right government, the rapid rise of the energy transition faded, its boldness replaced with pragmatism and special interest concerns about the costs of subsidies powering the new renewable energy. While Merkel was leading on climate change in international settings, environmental advocates often felt sidelined in debates within Germany, and utilities and autos and other big industries were increasingly able to shape legislation to their liking.

It was only in the last two years that climate change rose to near the top of Merkel’s agenda within Germany, and that was largely in response to the young protesters of the Fridays for Future movement, and to public concern that the country was failing to meet its goals for cutting emissions.

Merkel has said the protesters are inspiring, but many of them are deeply disappointed in her leadership.

“We keep celebrating these little wins which are not true wins, while we are still facing a catastrophe,” said Line Niedeggen, a Fridays for Future organizer and college student in Heidelberg.

Merkel’s defenders say that she has done about as much as she could and deserves credit for Germany’s sweeping new climate legislation, considering the limits of German politics and the need to keep hold of the leadership of her center-right party.

And they say her leadership on climate in international settings should not be viewed in isolation from her actions within Germany, because international agreements are pushing Germany to take politically difficult actions at home.

Merkel’s office declined to comment on her legacy or respond to the criticism of her domestic record on climate change, but pointed to several speeches she had given about climate change policies and politics. In one of them, at the World Economic Forum in January 2020, Merkel said achieving the goals of the Paris Agreement “could be about no less than the survival of our continent.”

At the same time, the criticism of Merkel is difficult to comprehend from the perspective of the United States, as she has accomplished much more in advancing domestic climate policies than the combined efforts of the three of the U.S. presidents whose tenures have overlapped with hers—George W. Bush, Barack Obama and Donald Trump.

Merkel and Trump have had an almost comically chilly relationship. At their first Oval Office meeting in 2017, when photographers asked for them to shake hands, she said to Trump, “They want to have a handshake.” He either did not hear her, or ignored what she said, and did not extend his hand. And things did not get better as time went on.

The United States under Trump has withdrawn from the Paris accord and largely abdicated its role as a leader of international organizations, leaving Merkel and others to fill the void, and adding to her clout as one of the key players in the world’s fight against climate change.

Merkel has now warmly acknowledged the victory of President-elect Joe Biden, citing her “good memories of fruitful meetings and talks with him.”

She has known Biden both as a senator and as vice president and they share a worldview that international organizations and alliances can be used to help solve the world’s greatest problems.

In 2013, when Biden visited Berlin, they held a joint news conference and chatted together like old friends, with Merkel stressing the importance of the close ties between their two countries.

“We would like to thank you for this friendship,” she said.

Their shared interest in climate change—Biden has made climate a central part of his presidential agenda—suggests that they will work together to realize the Paris Agreement goals, perhaps in time to get the ambitious agenda back on track.

“It is an opportunity for a new start,” said Sascha Müller-Kraenner, executive director of Deutsche Umwelthilfe, a leading German environmental group. “There is a lot of hope that we now have a trans-Atlantic partner with whom we can engage more strongly.”

Merkel Set the Agenda for the EU Agreement 

Once it is approved by the European Parliament, the climate plan crafted that night in Brussels will put the EU in a better position to meet the Paris Agreement targets of quickly reducing greenhouse gas emissions and getting to net-zero emissions by mid-century. But the plan is also a disappointment to advocates who wanted more.

During the final negotiations, there were moments when it seemed there could be no deal, but Merkel’s presence at the table helped overcome the inevitable stumbling blocks.

“Building unity among the 27 member states on this issue took up much of the night,” said Charles Michel of Belgium, president of the European Council, one of the governing bodies of the EU. “Was it easy? No, it was not.”

Michel made the comments at a morning news conference following the talks, with Merkel at the dais to his left. She was the most recognizable face, the longtime leader of Europe’s largest economy. And, she had set the agenda, since Germany held the rotating presidency of the EU.

Merkel and other leaders had spent the previous day and night trying to get support for the plan from three countries that rely heavily on fossil fuels: Poland, Hungary and the Czech Republic.

But environmental advocates had wanted to see much more, including an emissions cut of at least 65 percent by 2030 and a more stringent approach to counting emissions and other details.

“Governments will no doubt call it historic, but the evidence shows that this deal is only a small improvement,” said Sebastian Mang, EU climate policy adviser for Greenpeace, in a statement.

Müller-Kraenner said the agreement is merely “an OK deal” which will only be a major accomplishment if it ends up being a stepping stone to something better. One of the missing elements, he said, are rules that encourage governments to make more climate-friendly decisions about land use and forestry.

“We just need to keep up the pressure to get an even more ambitious deal in three or four years’ time,” he said.

Supporters of the plan say it is inevitable that people will be frustrated by aspects of a compromise like this one. But the larger point, they insist, is that EU members were able to come together despite being in the middle of a pandemic, a crisis that countries could have used to delay or weaken their commitments. 

And, the deal affirms the EU’s commitment to the Paris Agreement at time when failing to do so would have sent a harmful message to other Paris signatories.

Merkel seemed to be expressing pride and relief in the EU plan, saying at the news conference, “I don’t know what would have happened if we had been unable to reach that result.”

Merkel and the Energiewende 

In 1998, a center-left coalition took power in Germany with a pledge to launch an energy revolution, and little patience for the old ways of doing things.

Merkel’s Christian Democrats were the losers in that election. She was a physicist from the former East Germany who had risen from obscurity to become a member of the cabinet in the 1990s, and now had to get used to being in the opposition.

People in the new coalition, made up of the Social Democrats and Alliance 90/The Greens, spoke of “energy democracy” and “citizen energy.” The idea was that people should have greater control over the energy sources in their communities, and that the financial benefits of energy should stay local.

To make it happen, the parliament passed the Renewable Energy Act in 2000, which included a new version of a policy called the “feed-in tariff.” The landmark legislation gave developers of renewable energy a guarantee that they could sell their electricity to the grid for a set price that would virtually guarantee a profit.

The result was a boom in renewable energy unlike anything the world had seen. Wind turbines popped up on rural landscapes, with each turn giving electricity to the grid, and money to the owners and their communities. Germany went from being a small player in solar photovoltaic power to the global leader.

Local entrepreneurs were building the kinds of projects that Germany’s big energy companies had mostly been unwilling to do, helping to prove that there was an appetite for local control and for clean energy.

“The energy transition was a bottom-up project,” said Eveline Lemke, a member of Alliance 90/The Greens who was her party’s leader in the rural state of Rhineland-Palatinate from 2006 to 2016.

The tangible benefits were on display in Lemke’s village, where wind turbines poked out from between the forested hills, part of a local boom in renewable energy that was largely initiated by residents.

As the center-left coalition unfurled its energy agenda, Merkel continued to rise in her party. She became its leader in parliament and the public face of the opposition.

And then, in 2005, her party narrowly won the federal election following a campaign in which energy and environmental issues were secondary to questions about tax policy and spending levels. Merkel was Germany’s first female chancellor.

When she took office, the energy transition was going strong and her government did little to change the major policies behind the renewable energy boom.

In 2007, her government adopted rules that said Germany needed to cut emissions 40 percent from 1990s levels by 2020, which a top official called the most ambitious climate policy in the world. But the policy was more like an executive order than a law, and it lacked a strong enforcement mechanism. 

Big issues, like the auto industry’s unwillingness to cut emissions and the coal industry’s plans for additional coal-fired power plants, were mostly unaddressed. The government updated and expanded the rules in 2010, but did little to deal with the major problems.

Rather than build on the 2007 and 2010 rules, what followed was a long period when climate change seemed to fall down, or even fall off, of Merkel’s domestic agenda.

Wind, solar and other energy projects continued to grow, but the rising costs of government incentives led to a backlash. The money for the feed-in tariff came from a charge in utility bills, and that charge had more than tripled from 2010 to 2014, leading some industry groups to argue that the policy had become financially unsustainable.

Some of the criticism was warranted. The incentive had no cap, so it was the equivalent of a blank check. But environmental advocates say that Merkel’s government ended up gutting the policy rather than repairing it.

In a series of changes in the 2010s, the government rewrote the feed-in tariff, shifting it from an incentive open to just about everyone to one that picked projects based on a competitive process. The new system favored large companies that could better compete on price.

What might sound like an obscure policy debate was in many ways a battle over the meaning of the energy transition. The Greens and others who had supported the 2000 law saw “citizen energy” as an essential part of what Germany was doing, while Merkel’s government saw the social benefits as secondary to the larger goal of finding the most effective way to increase renewable energy.

The policy change was followed by a reduction in new projects, and that hit hard in places like Wildpoldsried, a small village in Bavaria that has used renewable energy as an economic development tool, generating eight times more electricity than the residents use.

Now, new projects are much more difficult to get financed and built, said Günter Mögele, the deputy mayor.

“We could have much more renewable energy in Germany if the government regulations and restrictions hadn’t slowed us down,” he said.

But he doesn’t blame Merkel. He said he remains confident that her intentions are good, and that her shortcomings on energy policy were more a product of a system that gives too much influence to large industries.

“I still think she is, and was, a good chancellor for Germany and Europe,” he said.

‘She Just Likes to Get Things Done’ 

The assertion that the Energiewende had lost its way might have been on target two years ago. But since then, Merkel has taken action on climate change with an urgency she previously reserved for the international stage.

In 2019, ahead of a scorchingly hot summer, she said the country must stop its “easy-peasy” approach to climate change and vowed that substantial action would follow. The government released its proposal in September 2019, with emissions-reduction goals for each major sector of the economy, new incentives to encourage a shift to clean energy and Germany’s first-ever carbon tax for transportation and buildings.

By the end of the year, Germany’s parliament had passed the law. During the debate, environmental groups had objected that the carbon tax—set at 10 euros per ton of carbon dioxide (or about $12) in the government proposal—was too low. In response, lawmakers increased the level to 25 euros (about $30).

The level of ambition in the climate law becomes clear when you compare it to the rules adopted in 2007. One of the big differences is that the 2019 law has an emissions budget for each of six sectors and requirements that government offices take action if sectors fall behind. For example, the transportation sector must go from the equivalent of 150 million tons of carbon dioxide in 2020, to 95 million tons in 2030.

If something like this had been in place in the 2010s, it might have helped to avoid one of the greatest climate policy failures of Merkel’s tenure, which was the country’s inability to cut emissions from the politically powerful auto industry.

Close on the heels of the climate law, Merkel’s government pushed for the passage of a separate law mandating the closure of all the country’s coal-fired power plants and coal mines by 2038. The law includes tens of billions of euros in aid to the communities, companies and workers who would be negatively affected.

Camilla Bausch, scientific and executive director of Ecologic Institute, a Berlin-based research group, said the 2019 climate law provided much-needed clarity about the direction of German climate policy, with guidance for what specific sectors of the economy needed to do.

The law works in tandem with an existing policy that calls for the country to get to 65 percent renewable energy by 2030, up from about 45 percent in 2019. To help get to that level, the parliament this month passed a measure that increases targets for developing solar, offshore wind and biomass power. But those changes largely do not address concerns about the lack of incentives for building small, locally owned projects.

Bausch sees substantial progress in the 2019 climate law, although she can understand the frustration of people who wanted something more aggressive. Indeed, the law was heavily criticized by environmental groups that wanted stricter rules.

“I think it’s actually going in the right direction, but I do understand that people are not satisfied,” Bausch said.

Some of the pressure on German lawmakers to pass the climate law came from the necessity to keep up with the rules set by the EU and the promises Germany had made by signing onto the Paris Agreement in 2015. 

Both were commitments that Merkel had a strong role in shaping, and this was probably no coincidence, said Jennifer Morgan, the executive director of Greenpeace International. Morgan, an American who is a longtime resident of Berlin, worked with Merkel in the 1990s, when Morgan was a fellow at the German environment ministry and Merkel was environment minister.

“It was almost as if, in her international role, she’s a bit liberated from the pure domestic party politics that exist in Germany,” Morgan said of Merkel, ”and is able to then use the platform that she has in working with other countries to try to drive the global, and also try to accelerate the pace of change in Germany.”

She added that she has seen a similar dynamic with other national leaders—former United Kingdom Prime Minister David Cameron is one example—who want to do more on climate than is politically feasible at home, so they support international agreements that will put pressure on their countries.

Greenpeace has been harshly critical of Merkel for not taking more decisive action on energy and climate in Germany. And yet, Morgan admires Merkel.

“Her ego is not a big part of who she is,” Morgan said, describing Merkel as a problem-solver with a dry sense of humor. “She’s a scientist and she just likes to get things done.”

And Merkel’s approach has worked in a purely political sense, helping her to maintain control of her party and take charge of four governing coalitions. If not for her success with German voters, she would not have been at the table in the international talks where she played a key role.

A New Trans-Atlantic Partnership on Climate?

In the summer of 2019, when I started my reporting in Germany, Merkel’s government was drafting the new climate law and alarm about climate change was as hot as the August weather.

The underlying questions I was trying to answer were: Where does the Energiewende stand today, and what are the lessons for the United States?

The prevailing view of environmental advocates and many analysts was that the energy transition had lost its way and Merkel’s government deserved much of the blame.

In the time since, the government passed the climate law and the coal phaseout, and the leaders of the EU agreed to sharply increase their climate ambitions. And Merkel was a central figure, if not the central figure, in all of it.

The energy transition had clearly gained momentum, and Merkel’s legacy as a leader on climate change, internationally and within Germany, was increasingly difficult to dispute.

But some of the most important findings from this reporting were in the failures of Germany and Merkel and the struggles to solve the thorniest problems, which may say as much about the complexity of politics in Western democracies as it does about Merkel and the Christian Democrats.

Germany was unable to hold onto the initial enthusiasm that followed the 2000 feed-in tariff law. The lesson drawn by environmentalists was that leaders need to nourish a sense of buy-in and shared purpose when pursuing generational change, and Germany fell short of that in the 2010s.

Germany had blind spots that harmed its ability to cut emissions, the largest of which was an inability to get the auto industry to change its polluting ways. Only recently, with Vokswagen and other automakers committing to a transition to electric vehicles, are there signs of real progress.

Germany’s experience with its coal phaseout plan shows the importance of framing the changes as a phase-in of new industries and economic aid, and making the case to affected communities and workers that the future can be better than an unsustainable present.

And now, having learned lessons through decades of trial and error, Germany is poised to again be an example for other large economies of how to manage the energy transition.

Germany also has clearly established itself as a vital player in international climate talks. The next year is a time when Merkel, on her way out, and Biden, on his way in, will have an opportunity to set the tone for what will follow, opening the possibility of a new trans-Atlantic partnership on climate, in which Germany is bound to play a central role.

The United States and Germany, working in concert, could act as a counterweight to the growing power of China and help to shape a new and more robust push to cut emissions, said Müller-Kraenner. 

Bausch of Ecologic noted that there are several major international summits in 2021 in which the United States, Germany and others have a chance to set a new framework for working together. For Merkel, her final act may be her most consequential, given the “climate chancellor” sobriquet she’s carried throughout much of her tenure and the existential threat posed by climate change.

“It is,” said Bausch, “a time of opportunity.”