Decreasing German Climate Ambitiousness: Simply Due to Economic Problems, or Do Politics Matter?

FNI Report 8/2006. Lysaker, FNI, 2006, 82 p.

Germany has been known as a climate policy leader. Looking at emissions data, Germany is indeed the leader among OECD countries in reducing emissions of the Kyoto greenhouse gases by over 18% between 1990 and 2000. The 2000 national climate program was the first systematic expression of German climate policy after the Kyoto Protocol and the EU burden-sharing arrangement. This climate program was regarded as ambitious. However, when the 2005 climate program commenced the government was confronted with accusations of a climate policy slow-down. Many studies have shown that a sizeable amount of German emissions reductions were due to “wall fall profits”. Can changing economic conditions such as increasing abatement costs explain a potential slow-down? Or must political and institutional factors also be taken into account? For instance, the EU Emissions Trading Scheme, the world’s largest emission trading scheme covering around 12,000 installations in 25 countries, was introduced in this period. This report seeks to measure and explain whether there has been a change in German climate policy strength during the period 2000-2005. By doing this it also contributes on how to measure and explain changes in national climate policy strength. Climate policy strength is seen as a function of ambitiousness of climate targets and strength of policy instruments. It is found that while the climate targets have decreased, the policy instrument strength has increased due to the introduction of the EU emissions trading scheme. Since the strengthening of policy instruments already has been explained by other researchers, this thesis seeks to explain the more puzzling decrease in climate targets. The study follows a complementary theory strategy: explanatory factors derived from different theories are chosen to give a comprehensive understanding of the changes. It is found that the economic situation has played a role, as has EU policy developments. However, EU changes have mostly had unintended impacts due to vagueness’s in directives. The case illustrates the EUs problem in a nut shell: vagueness’s in directives enables directives to be adopted and adopted quickly, but it also gives room for interpretation and “gaming” within and between EU countries, and this reduces the climate ambitiousness. Moreover, grey societal pressure groups have gained strength and a slight preference change of German decision-makers has taken place in the period. Based on the empirical analysis, an explanatory model is suggested focusing on the interplay of explanatory factors.