NCPA - National Center for Policy Analysis

The Truth about Germany and the "Clean Energy Economy"

June 21, 2012

President Obama has repeatedly appealed to the European model as a justification for his environmental agenda, say Wolfgang Müller, executive director of the Berlin Manhattan Institute for Free Enterprise in Germany, and Christopher Horner, a senior fellow at the Competitive Enterprise Institute.

  • On the campaign trail and early in his administration, President Obama gave eight speeches touting Spain as the model for his "clean energy economy."
  • This became a modest embarrassment when that country's clean energy sector eventually tanked and hemorrhaged jobs.
  • The Spanish government has since rescinded much of its financial support for renewables, shutting down programs that represented President Obama's ideal public policies.

Recognizing that Spain's economic decline would not be a good representative of government support for the development of renewables, Obama then turned to Germany as the poster child of government support for clean energy.

This backup model, however, is also failing the Obama administration.

  • Germany's establishment media have chronicled that country's "green energy" collapse.
  • Germany's energy sector is under the most stress of any sector in the country and is cutting jobs rapidly.
  • "Green" manufacturing companies are routinely going bankrupt while many others have valuations that have plummeted in recent months.
  • Still others have fled to China in an attempt to lower costs.

What did Germany's failed experiment with renewables yield?  It brought them electricity rates that are roughly three times the rates in the United States.  Additionally, because energy costs are a crucial consideration for growing an economy, it bears mention that these high rates likely contributed to Germany's paltry 0.7 percent annual economic growth rate.

Nevertheless, President Obama remains steadfast in his advocacy of broad government support for renewables.  In his 2012 State of the Union, the president said he would "double down" on his agenda.  Yet the examples provided by Spain and Germany lend credence to the belief that this agenda will fulfill few of the president's promised rewards.

Source: Wolfgang Müller and Christopher Horner, "Sunday Reflection: The Truth about Germany and the 'Clean Energy Economy,'" Washington Examiner, June 9, 2012.

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