A new study released today by Climate Policy Initiative (CPI) is the first comprehensive overview of how German businesses and households financed their renewable energy and energy efficiency efforts.
The Climate Policy Initiative (CPI) is an advocacy organization for alternative energy financed by billionaire hedge-fund manager George Soros.
The cost for Germany in the report: 37 billion euros, 1.5% of their GDP in 2010. German companies are running from alternative energy now so the German government is scrambling to call prior subsidies an investment. Therefore, they say private capital invested 22 billion euros while individuals invested 14 billion, but all those investments were due to subsidies by the government. When is a tax that becomes a subsidy to line the pockets of corporations an investment? When the government needs to explain what happened.
Even without the subsidies, over half of all private climate investments, 16.5 billion euros, were due to low-interest loans guaranteed by the government.
The German government has simultaneously committed to reducing greenhouse gas emissions 80-95% by 2050 and phasing out the only current viable carbon-free clean energy, nuclear power, by 2022. While the goals make Germany look like a world leader in climate mitigation efforts, realization will take something else entirely. Renewable energy generation, like solar power, accounted for the bulk of Germany's spending, 26.6 billion euros. Small-scale renewable energy projects, like residential solar photovoltaic installations, were 75% of that while large-scale projects accounted for the remaining 25%. The best short-term solution to reducing energy use and therefore greenhouse gas emissions are energy efficiency modifications to existing buildings, but those only amounted to 7.2 billion euros.
"The task of the government is to create the conditions for businesses and households to invest in renewable energy and energy efficiency. And indeed, government-backed low-interest loans and policies such as the feed-in-tariff seem to have played an important role in encouraging these private investments," says Barbara Buchner, Director, CPI Europe.
The "German Landscape of Climate Finance" is part of Climate Policy Initiative's work to track climate finance around the world. Another CPI study "The Global Climate Finance Landscape 2012" presents a comprehensive assessment of global climate finance flows and will be released next week.