Opinion: Op-Eds

Sunday Reflection: The truth about Germany and the 'clean energy economy'


President Obama recently came under fire for referring to "Polish death camps" in a prepared speech, reflecting a certain lack of awareness of matters European. This episode reminded us of something else, of greater concern to U.S. voters: Obama's speechwriters appear to also be unaware that the German media is available online. In English.

It is hard to explain otherwise how they continue sending Mr. Obama out to cite Germany's energy sector as a model for driving America's economic recovery.

Look back to when the candidate and then the new President Obama gave eight speeches touting Spain as the model for his "clean energy economy." As Spanish experts quickly pointed out, Spain's clean energy reality was in fact a disaster, even if this detail was ultimately lost amid a flood of news about the country's broader economic collapse.

This proved terribly embarrassing, and President Obama stopped giving that speech. He did not, however, stop pushing those policies that he claimed were an imitation of Spain's. Apparently assuming yet again that no one would look more closely, Obama now points to Germany as his success story.

Germany seemed a somewhat safe bet for the White House because it is widely perceived as the healthy man of Europe. And it is, in relative terms. But that is not the same as actually being healthy.

Germany's establishment media have chronicled that country's "green energy" collapse, and these stories are all available online, in English. Spiegel Online International, among others, has reported it in painful detail. Germany's energy sector is under the most stress of any in the country. It is hemorrhaging jobs.

Its "green" manufacturing companies are serially going bankrupt. Others now have valuations near penny-stock levels, and many have fled high-cost Germany for China -- a nation whose own English-language media also recently admitted was giving up the green-jobs ghost as well, now that its best customers for the costly gadgets have gone broke.

Germany's staggering electricity costs are three times what Americans pay, and rising.

This is all due to the same energy transformation law that Obama heralds as America's way out of economic malaise. Since that law was first adopted in 2000, Germany's GDP has regularly grown at half the pace of America's. It is presently growing at 0.7 percent annually -- quite a model.

Germany's green bubble was as illusory as Spain's. It came into being thanks to government mandates and wealth transfers. It was therefore inherently temporary, and its inevitable end has come.

In Obama's 2012 State of the Union speech, and in his subsequent road show, he vowed to "double down" on this agenda, which was made famous by Solyndra, citing the fear that it would be Germans who invent some more efficient windmill or solar panel.

Since then, Germany's "green" collapse has accelerated, yet Obama clings more furiously to the argument that the "clean energy economy" is really America's path back to prosperity.

This is a risky bet. Possibly the president and his advisers believe that only resolute defiance will do to confront Solyndra and other taxpayer-funded bankruptcies which are expected to continue, and to dog him continually. Maybe they really do think no one will check, or that it is too late to turn course. Possibly they believe that, somehow, this time it really will be different.

The "why" does not matter. America's president invites voters to look around the 21st century world and find countries succeeding with renewable energy sources from the late 19th century, which are being politically marketed as "new." That Mr. Obama is not running from his agenda simply because of its political vulnerabilities is healthy tonic. This is a teachable moment.

The facts are these. The "clean energy economy" is code for hobbling reliable energy sources while propping up unsustainable, politically selected energy sources that have failed in competition for more than a century. Taxpayers around the developed world have subsidized this agenda for decades -- Jimmy Carter famously increased the subsidies -- so it is not "time we began investing in" it, as goes one fashionable talking point.

Energy prices are a major factor in economic vitality. America's policy of maintaining low prices has been key to its economic advantage. An increase in electricity costs through "renewable" energy requirements will harm America's economy, as Obama's model Germany has learned. Even if the state hides the higher costs from the ratepayer, the debt it incurs will kill many more jobs and place the national economy at risk. This is what Obama's erstwhile model, Spain, proved.

For whatever reason, President Obama is wedding himself to a failed European agenda. This debate over America's energy and economic future is one worth having.

Wolfgang Müller is Executive Director of the Berlin Manhattan Institute for Free Enterprise in Germany. Christopher Horner is Senior Fellow of the Competitive Enterprise Institute in Washington, D.C.

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