The fumes are billowing thick and hot in Berlin. The two parties that make up Germany’s governing coalition are at a standoff. J?rgen Trittin, the Green environment minister, plans to introduce emissions trading, and wants to achieve an initial reduction in emissions by 2007. Economics minister Wolfgang Clement of the SPD wants no reduction in emissions.
This is shaping up to be an ugly intra-coalition squabble. Chancellor Gerhard Schr?der is going to have to make a decision, and whichever way he goes, it’s not likely to have a happy ending for him. If he backs Clement, he risks by far the most serious crisis his coalition has yet faced. If he backs Trittin, Clement may walk. (You can read more about this, if you can read German, in this Spiegel article and on the pages it links to.)
If I may lapse into editorial mode, I must say I’m with Trittin on this one. I’m far from an environmental extremist, but I like to breathe clean air as much as anybody does. And trading in emission rights seems a sound way to get the air a bit cleaner.
Indeed this sort of scheme is much loved by economists who otherwise cast a gimlet eye on state intervention. Tradeable emissions rights shove the ‘externalities’ back where they belong: with those who create them. Firms that can’t reduce their emissions will be penalised; firms that can will earn money by doing so. And that’s as things should be.
I will confess, though, that I am less excited by the plan itself than by the fact that the Greens are pushing it. You see, many years ago I belonged to the Greens. (How many? Let us say only that it was well before Gerd Bastian topped himself and took Petra Kelly with him, but well after the party’s posters had begun to look professionally-done.) I wasn’t privy to the leadership’s thoughts on the matter; but among the rank and file with whom I ate tofu and marched against the Wackersdorf reprocessing plant, tradeable emissions rights would have been seen on a par with tradeable rights to eat babies.
There’s been much (sparkly crystal-clear all-natural mountain spring) water under the bridge since then, and there’s little these days on which I see eye to eye with the Greens. But clearly they have come a long way. Not only are they backing emissions rights trading, they’re taking the plan seriously enough to go the mattresses over it. What’s more, Trittin is making angry noises about state subsidies for the energy branch, especially the indefensible subventions to the indefensible brown coal industry.
It would be un petit peu exaggerated to claim that the Greens were on the verge of a liberal renaissance. But in recent days there have been some heartening glimmers of liberalism in the party. Exciting stuff, and I for one will cheer if the Greens move in that direction. After all, Germany sorely needs a liberal party.