Obama’s Race Against Time: The Climate Action Plan, and its impact on biofuels

The Climate Action Plan Deficiencies

The President’s plan provides little specificity as to the policies and regulations that will ultimately be adopted in the U.S. Without such specificity, it is hard to be prescient as to what the consequences will be on renewable energy, on biofuels, and in particular, on bio-coal, in the U.S. and abroad.

Germany’s “Energiewende” Objectives

Other countries, especially those in Europe, have been pro-active in undertaking measures to mitigate the adverse impacts of climate change on the environment. As suggested in the introduction, we have examined the record of GHG reduction policies that had been tried in Germany, known as “Energiewende”. In examining Energiewende policies and programs, we have also included in some detail, the unforeseen consequences have occurred.

Even though mistakes have been made in implementing Energiewende, German policy makers have tried to correct their mistakes by undertaking a number of imaginative schemes. And they appear to have a better understanding of what works and what does not.

Because of our particular interest in the use of renewable energy and in the potential use of bio-coal, we have focused on what has occurred in Germany as a consequence of implementing Energiewende’s policies and regulations, specifically those designed to reduce greenhouse gas emissions in existing coal fired power plants.

We have included documentation of some of the adverse unforeseen consequences that has ensued from implementing certain Energiewende policies, programs and rules, in order to gain insights as to how to avoid repeating some of their mistakes that had been made.

The lessons learned should help those involved in renewable energy in the U.S. as well as our energy policy makers,  in avoiding some of the same mistakes that had been made. Hopefully, our government will be smart enough to implement policies and regulations that creating a climate of economic certainty. Clearly a reduction in regulatory uncertainty will lower the perceived high investment risk for renewable energy projects.

Observation: If this is not done, it may prove impossible to develop renewable energy capacity that will be needed if The Climate Action Plan is implemented that will be needed for developing needed production capacity. 

Energiewende was established approximately 10 years ago, under Gerhard Schroeder and his party, the SPD in a coalition with the Greens.

This program had three main objectives: 1) To stimulate the generation and use of renewable energy by providing high “feed-in-tariffs” to those that could generate power using wind, solar or other renewal sources; 2) To phase out Germany’s nuclear power plants by Year 2022, and 3) To limit carbon emissions being generated by coal fired power stations and other large industrial users of thermal coal.

At that time a renewable energy law was passed that provided high “guaranteed rates” for solar and wind energy that utilities would be required to pay which they hoped could be passed through to their customers a surcharge. The loss of power generation that would occur as a result of the phase-out of nuclear power plants was expected to be replaced by power generated using renewable energy.

Additional carbon emissions reductions were also expected to take place as a result of “taxing carbon”, using a carbon credit-trading scheme tied to specific levels of carbon emissions to be allowed at specific coal using plants. This scheme was not only to be undertaken in Germany, as it was adopted by a number of other countries in the EU as well.