Friday, June 19, 2015

The Pope on climate and muted criticism by German industry

Unlike the GOP's unconvincing impression of Atlas Shrugged - even congressman Sixpack Paul can't come to the rescue because is is a Catholic - many conservative German politicians have come forward in support of the Pope's overall message, if not all the details.

A very nifty line of attack in the US media has been that economists stay away from moral issues, preferring "efficiency" instead. 
This argument is hilarious because if comes from the same folks who point to Adam Smith as the founding father of modern economics.

Of course, German Catholic business people don't warm up to a philosophy of "less" and insist on the "necessity for growth" but they did state that unfettered profit making is undesirable.

You can argue that Germany is an eco friendly country and point to the subsidized alternative energy initiatives for which it is known around the world. You can argue Germany has had a Green party in a federal government in the early 2000s and currently in various state governments. If you feel particularly uncharitable, you can regurgitate the oft heard statement that Germany pours billions of subsidies into renewables only to have some of the highest electricity rates of the Western World.

And we'd say, no, none of this is as simple as it is made out to be.

After all, German demand for solar panels helped bring down production costs for you, too. Your panels in California or Texas would probably still cost more than you pay, were it not for the Germans. The standard consumer electricity rate of about 30 cents/KWh only contains 5 cents that go into subsidies. These 5 cents are caused mostly by the fact that huge power users like aluminum and steel plants are exempt from the "eco surcharge". One summer day in 2014, renewables provided a total of 75% of Germany's electricity supply. Most of the price hikes in recent years are due to straight up taxes and fees for grid use and such.
Wholesale prices were down by 12% in 2014, making Germany's wholesale prices the lowest in Europe according to this study.
The German Green party is not your anti everything blockaders - any more at least - and competed with conservative tree huggers and social democratic coal aficionados.

Despite some free market laisser faire gains, most people still remember that is was "liberal conservative" or "conservative liberal" chancellor Bismarck who ushered in the world's first social security system in part because the Catholic Church was siding with socialists to organize the industrial masses.

By size, Germany is small, so you cannot build huge power stations in the middle of nowhere and truck the ash another 500 miles to some more nowhere. Open pit mining even the tiniest deposit of coal means moving whole towns out of the way. And if people earn enough money to be able to afford double or triple pane windows, guess what, they buy them.

No, Germany is not eco heaven. Just look at the car industry that is only now catching on to hybrids or all electrics. Stagnating wages mean many individual house owners forgo energy efficiency measures or - like us - do them ourselves. The latter comes with an unbeatable return on investment, by the way - if you stay in the same house for five years or so.

We should probably point out there is one other reason for the muted criticism: some of it will blow over. It has in the past.

For our hippie readers out there: isn't is great how many hippie concepts have been shown by science to be correct?

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