Germany Gets Honest About What Net Zero Will Cost

A court forces Germans to debate what they’re willing to sacrifice for climate. Answer: Maybe not much.

By Joseph C. Sternberg of The WSJ. Excerpts:

"Germany’s highest constitutional court, which ruled in mid-November that Berlin’s favorite budget gimmick violates the balanced-budget amendment. The amendment, known as the debt brake, limits the federal general-budget deficit to 0.35% of gross domestic product in any year unless Parliament declares an emergency."

"By establishing special funds—called Sondervermögen—with their own revenue streams and borrowing authority, the government could shift a portion of its expenditures off its balance sheet.

A big portion. There now are 29 special funds, with the largest among them allowed to borrow and spend over multiyear periods up to €869 billion, all of it backstopped by taxpayers but none of it folded into the general budget, where it would be subject to the debt brake."

"The specific target of November’s ruling was €60 billion in unused borrowing authority left over from the pandemic emergency. Since that money wasn’t borrowed and spent for Covid-related purposes three years ago, Mr. Scholz’s administration planned to borrow and spend it on the net-zero transition in the future. The court ruled such “emergency” funds can’t be repurposed in this way."

"Renewable power hasn’t been capable of reliably meeting the energy needs of any advanced industrial economy, and certainly hasn’t been able to replace the nuclear capacity Berlin took off line starting in 2011. The disruption of cheap imports of Russian fossil fuels since last year’s Ukraine invasion has made matters considerably worse.

Industry is fleeing Germany. The new green jobs the net-zero left promised require enormous subsidies. And Berlin must offer generous handouts, probably permanent, to individual households to shield them from the crippling energy-price consequences of decades of accumulated policy errors."