Germany closes its last hard-coal mine
bloomberg.com
bloomberg.com
Keeping coal mining on life support makes no sense. In the Ruhr area, the consequences of coal mining will still be felt for a very long time. It is necessary to run pumps for centuries to come so that the toxic mine water does not reach the groundwater level.
In contrast, the coal subsidies propped up a well-established industry with few players, with no end in sight and little oversight (as stated upthread: "No one really knows how much money exactly went in there").
Killing people can be a net savings for health services. The dead consume no services.
Yeah, sure, and I'm not saying something that kills people early always saves health system money. Just that it can (a lot of analysis of cigarette smoking have showed that reducing smoking in many countries has a net public cost, considering the aggregate of health and public pension payments, and I think in some cases that was true of health costs alone.
> Not to mention the fact that unhealthy levels of pollution can lower the quality of life for a great many citizens, something most people think that governments should care about.
Sure, quality of life is another important concern aside from health costs. I'm definitely not saying deadly pollution is a net good, even if it might save public health costs.
Setting up wind power plants will necessarily also have the building phase as the highest cost, but then direct running costs will be much lower as there's no raw material and much less personnel.
The subsidies that you are looking at currently for coal are essentially spent to avoid the mining operations and coal plants from making a loss.
The subsidies for wind power are primarily to finance new turbines to be built (& infrastructure). But you don't actually subsidise the operations.
In other words, if you look at current wind subsidies they are mainly to add capacity, if you look at coal subsidies they are to ensure the previously built capacity is used/available.
In addition, you have to remember previous subsidies- those of building, renovating, etc the coal mines and plants. If you do count those and calculate them eg per year of lifetime you get much higher amounts of 'real' subsidies, it's just that that money has already been spent.
A big downside of it all though is that Germany lost most (all?) of its wind & solar power manufacturers - so it's buying stuff from China, rather than supporting local industry. That is an element the government urgently needs to address ..
The companies that built solar power generation in 2004 got a guarantee of a certain price for x years, and a guarantee that the people who built in 2005 would get a lower price. IIRC the price decrease was set in advance. In effect a market introduction price, for a limited time. The sums are low/high until the market introduction ends, and the producers knew that as long as they could innovate 10%/year they'd make a profit. (Except that the actual number wasn't 10%.)
The companies that ran coal mines got a subsidy with no defined end-by date, and one cannot by any stretch of the imagination call it "market introduction aid" or "conditional on 10%/year innovation".
It's good that they pushed solar and wind tech forward, but Germany just doesn't seem like a good place to deploy solar. Natural gas power is the cleanest fossil fuel and probably the best short term option (although without LNG it's still exposed to Russia), with renewables and Europe-wide grid ties in the longer term. Natural gas also has a 20-40 year lifespan for plants, so replacing coal with gas now and then replacing gas with even better renewables down the line seems like a good strategy.
Disable labels and look at the beige patches on right center (south of Berlin). The vast majority seem to be open mines, presumably coal.
Switch to satellite View.
They also relocated entire towns.
Also: this isn’t really about environmental concerns. Those just weren’t part of the story when this was decided in the 90s, at least not in terms of global warming. Acid rain, and the local trouble with large cities built on top of the mines grappling with more and more geological disturbances were a concern, but the real reasons were simply economics: German coal had become too expensive (around two decades ago). Shutting down it’s heavily-subsidized mining is also consistent with the stated goals of reducing CO_2, because buying on the world market will (slightly) raise prices.
There’s also the minor inaccuracy that Germany will continue mining lignite for a few years, although I guess that’s an acceptable simplification within the constraints of a headline.
The winding down of the coal industry is actually somewhat of a model for such processes. This used to be a hugely influential industry, both in economic powers, as well as cultural. Growing up in the 90s, I remember strikes, protests, and other events around the mining industry and its original boom towns featuring in the news about every second day.
To find compromises that did not satisfy any stakeholders, but succeeded in keeping the peace and, at long last, lead to an environmentally responsible energy strategy was quite a feat.
Civilization, released in 1991, features global warming whenever the amount of pollution in the world exceeds a threshold. (There's no distinction between one kind of pollution and another, so a common way to produce that much pollution would be detonating nuclear weapons, but coal is definitely implicated too.)
The 90s are when people worried about global warming. According to Google Books Ngram Search, "climate change" overtook "global warming" in 1994, crippling its steep upward trend.
It's the Protestant work ethic, I guess: work is inherently virtuous and deserving of reward even if it serves no purpose, and not working deserves punishment even if there's nothing useful for you to do.
If it was that, the same people wouldn't oppose solar subsidies that support jobs in that industry.
For example, caring for the needy, many forms of art, and a large portion of journalism are among such jobs; where there's some demand but not much willingness to pay, while the job grants fulfilment and is a net positive for society - though not enough to pay a liveable wage, often because it gives fulfilment, so some people are willing to do it for near-free.
Apparently mining coal is also such a job - it's not economically worth it to pay people to go down a mine and dig out coal. In that regard, why not pay people basic income and let them choose whether they want to find fulfilment by spending their time doing gov't subsidized (by paying them liveable income for activities that aren't worth it) coal mining, or spend that time in a similarly subsidized alternative rock band? Both of these activities have some benefit to the people themselves and the potential customers, but aren't economically needed anyway, both of them literally aren't worth their time, so why is one better than the other?
What confuses me is that many of the people calling for the government to help unemployed coal miners are the same people who sneer and spit if you say the government should help unemployed people in general.
What you describe does happen, and I won't pretend that I don't do it too, despite my best efforts. But don't imagine that there aren't powerful legislators working from the position of "coal good, welfare bad".
I know the politics of countries outside the US are quite different, but I'm a huge fan of things like this statement. I truly think the best place for that money is to never leave the taxpayer's pocket.
2. Be angry that government is inefficient.
3. Goto step 1.
Have you been to (the equivalent of) DMV in other countries?
So let's say that the government produces one driver's license per $100, and I'm angry that it costs that much. Your proposal is that I will be happy if I instead spend $120 per license?
In that case the GP would be talking about appropriating more money for more DMV employees so that people could be done with their business their more expeditiously.
In your case, you're talking about monetary efficiency which is a different thing and might be better served by less employees serving the people.
And I guess it's up to society to decide where that line should be drawn in terms of both monetary efficiency for the tax payer and temporal efficiency for the person waiting in line.
1. Recognize "government is inefficient"
2. Use as an excuse to give the inefficient more with which to be inefficient
3. Goto step 1
Recognizing people are bad at some things doesn't mean it's a money problem nor does it mean that comparing different environments is apt.
2. Remove a stick of RAM from your computer to teach it a lesson
3. Get mad that your computer didn't magically do more with less
Far too often the solution is to continue removing RAM in the hopes that the inefficient process magically fixes itself. It rarely does.
There are certainly ways they could make the DMV more efficient, but don't mistake the almost universal unpleasantness of DMVs for inefficiency.
My experience tells me entity-scale is the main variable that determines efficient use of resources (all other things being equal), rather than private/public sector divide.
Which makes sense if you think about it: once you get away from small groups and sole individuals being able to give all things their attention, a private company has to effectively re-implement a form of government to operate internally.
While it may arguably be the main variable, and definitely the main variable within a sector, it shouldn't be used to discount the importance of goals/motivations/incentives. Although there are plenty of examples to the contrary in either direction, I think most also with experience would agree there is more waste and less accountability on one side compared to the other.
I can't really agree with the "more waste and less accountability on one side compared to the other", but that's primarily because the terms/measurements are so poorly defined and they differ so much country to country, state to state and with subject matter, and as I said, I believe that as institutions grow/mature, private industry must implement government anyway.
I guess what i'd rail against most is the idea that its the private/public idea itself that plays the significant part in efficiency and productivity: the idea that subsidising private industry, public-private partnerships, or privatising certain public roles or firms/industries somehow magically, by itself, makes things "more efficient".
If i were to reflect back on my own career, of the three top efficient organizations, two were medium-sized government departments, and the third was a small team non-profit of about 5 on a small government funding arrangement. Worst three were all private industry: big corp, big consultancy, little firm (although, admittedly, funded by government). Private industry had a huge problem with people being motivated by profits, rather than doing the job: hence directly incentivizing a seeking of inefficiency if not in a fully competitive market (which in the real world, is most markets these days, and certainly most markets with players of any scale).
There's a couple of throw-away populist lines I could give about the secret of efficiency I've observed, but i'll chose three: motivation/incentives, devolve responsibility down to the person best able to make the decision, and preference hands off and less work over more (which, to me, is almost the secret success of efficient free-market economies, the ability to just step back and use organic structures to just let things happen).
The comment about size is spot on. Two things going on.
Management at scale means trying to get 10,000 monkey's pointed mostly in the same direction[1]. There are huge governance issues with that. Private public does not matter[2]. Large organizations without these controls will eventually lose coherence and flame out.
However that mass has a quality of it it's own is in play. 10,000 monkeys can manage extremely large 'streams' of effort and punch way above the weight of the sum of all monkeys. In spite of the lack of efficiency.
[1] If you wonder why management isn't interested in your shiny new idea and wants you to to get back to work, that's why.
[2] If anything your local government is more interested in your complaints than say the cable company.
The problem is these "temporary" gov programs never end. And then eventually they live long past their prime.
Furthermore, as the become the new normal they tend to create unintended consequence. For example, farm subsidies for corn drove down the price of high fructose corn syrup. That made the sweetener ubiquitous.
Similar can be said for home loans and student loans. Once these programs take on a life of their own, the market becomes distorted and eventually bad - unforeseen - things happen.
I wish everyone competed in a free market (for the most part), but the energy market is not that.
They encourage different short term effects but they're both contributing to the same effect.
All that said, the subsidies in this case far outweighed the effect the tax would have had.
For example, you can make electric cars more appealing by increaing the tax on gas.
Where things get ugly is when the incentives are in conflict. Again, oil is subsidized and then taxed. Big Oil wins. Gov wins. Consumers - who pay the subsidy and the tax - lose.
Without a strong hand in regulation, dominant companies get fat and lazy, destroying anything in their path. Imagine the potential that would have been lost had the original AT&T not been under the yoke of regulation. The internet and the immense wealth it has created would never had existed. You’d be paying $300/mo for some ISDN style Western Electric modem to access AT&T’s version of AOL.
Look no further than the shitshow that is Facebook and Twitter for what happens when you let the free market run. We’ve brought back white supremacy and god knows what else in pursuit of user engagement.
Any idea what the energy market in Germany would have looked like absent subsidies entirely?
For those employed by the inefficient business that will no longer be subsidized, well, it may not be better for them, at least not in the short run.
Tragedy of the commons is an issue, but subsidizing a coal mine doesn't seem much like a tragedy of the commons issue to me. It seems more like your last words: a "political optimum", that is, something that produced votes, because the mine owners and workers want the subsidies much more strongly than the taxpayers want to not have to pay. That may be politically optimum, but it's not morally, socially, or economically optimum.
Nations have other motives than economic efficiency. The state should lead the market to meet national goals like clean energy infrastructure.
Coal subsidies are a way to increase military strength, or at least they used to be. War needs steel needs coal. That may no longer be the case with more advanced ways of creating steel without coal.
In a parallel comment (https://news.ycombinator.com/item?id=18736465), I said that giving money to those unable to compete "seems almost certain to be wasteful". I chose those words very carefully. I was thinking about food security rather than steel for war, but I was very deliberately leaving an escape hatch that, yes, sometimes you actually do want the inefficiency for other reasons.
Perhaps not for you, I feel like the augment about "hey we shouldn't subside that" is often tied to if someone likes it or not. But other subsides are ok...
* Coal is the main local energy source. Other sources have to be imported. Having coal mining gives some degree of independence from Arab Oil, Russian gas and Nigerian Uranium. * By subsadies over some time the economic change can be controlled to see degree instead of setting free about half a million mine workers, of which many had low qualifications, and a bunch of people in dependent industries free at once. The Ruhr area was fully dependent on coal mines as reason for the area's growth and hand hardly any non-coal related industry.
The idea of not subsidizing things is attractive, but the people pushing those ideas usually are really rooting for market instability, which benefits them directly at a cost to society.
For example, much of the hoohah behind current US government trade policy is about eliminating domestic competition. In agriculture, for example, small/medium dairy is in the process of being erased.
Can the political right please choose: either dump govt handouts across the board for energy or dump the exclusive love of fossil fuel jobs? Meanwhile, renewable energy makes 5-10X more employment opportunities and we hear no complaints about these jobs being affected by government cutbacks by anyone on the right.
From the article: "Wind, solar and other renewable sources, which account for 55 percent of German electricity capacity, are even more subsidized than coal mining, adding about 25 billion euros to power bills last year."
In the US I want to see these industries kept alive even with skeleton crews. A few billion in subsidies (tax breaks) is a pittance compared to allowing a local fuel source to atrophy.
[1] https://www.worldcoal.org/coal/uses-coal/how-steel-produced
[2] https://coalaction.org.nz/carbon-emissions/can-we-make-steel...
[1]: https://www.midrex.com/news-literature/news-releases/world-d...
Central Europe has 70 years of peace thanks to the European Union. There is currently little realistic reason to believe this will change anytime soon.
There is no scenario which require steel sovereignity on standby. The only realistic scenarios (e.g. Russia being stupid) ends in a global inferno.