Governments around the West are currently scrambling toward adopting more and more renewable, environmentally healthy energy sources—with the notable and regrettable exception of nuclear energy—and to set a path for a world of zero emissions in the coming decades. There is no doubt that the goal of reaching a greener and cleaner future is laudable and something conservatives and free marketeers should support. But the top-down, heavy-handed approach by governments is the wrong one and has already caused havoc.
Let’s look to Germany as an example. Europe’s largest economy hastily implemented its Energiewende, that is, its transition to green energy, a little more than over a decade ago. It was done hastily since it was a sudden decision made by the country’s then-chancellor, Angela Merkel, who irrationally decided after the 2011 Fukushima nuclear power plant disaster that it was time to get rid of nuclear. Thus, the Energiewende toward a cleaner future started by abandoning what is perhaps one of the best energy sources for getting us to that future.
While this major government-led project was off to a suboptimal start then, it has hardly become better since. The catastrophic consequences, the back-and-forth in policy decision-making, and the economic and social damage of the Energiewende (for instance the European Commission already estimated in 2014 that the transition would cost a staggering 137 billion euros) have been documented at other points already.
Instead, I would like to highlight the geopolitical effect of Germany having become more dependent on fossil fuels from other countries since the start of the transition. Or, put differently, rather than producing energy itself, Germany has opted to import fossil fuel-based energy from other countries—and Russia in particular.
As the news website Clean Energy Wire has shown, Germany imported 63.7% of its energy from Russia in 2020. Ever since President Vladimir Putin’s invasion of Ukraine, Germany had to completely outsource that to other countries, which has led to skyrocketing energy prices.
There would have been a way even after the invasion, of course, to slow down the increase in energy prices and to actually make Germany more independent again in its energy security. But the German government, which includes the Green Party, opted nevertheless to shut off all nuclear power plants in the spring of 2023. Energy security has thus been a practical impossibility.
To secure their energy supply at least to a minimum extent, certain states in Germany have started setting up new power plants based on natural gas. For instance, Bavaria, the southern state in which most land is owned by farmers and that is nestled in mountains that are protected for their unique ecosystems (that is, not good places for windmills and solar panels farms), set up a new gas plant in 2021 to ensure a reliable energy supply after the federal government in Berlin had decided to shut down all of the state’s nuclear plants.
And after Russia’s invasion of Ukraine, the federal government ordered the restart of coal-fired power plants, too. Yet still, the fuels for these gas and coal plants are coming from foreign suppliers.
Thus, in its irrationality against fossil fuel energy sources and in favor of forcing through an immediate transition to green energy, Germany has instead made itself more dependent on fossil fuels, but now from other countries in the world (and primarily from countries that could not be considered friends of the West). It is merely one example of how government-led environmental policy has actually done very little for the environment but has hurt the people and businesses on the ground while also funding adversaries.
There is a different way, of course, and that is a more hands-off, pro-market approach toward protecting the environment. A regulatory approach will always be needed—it could be potentially disastrous if businesses simply set up nuclear plants without an already existing regulatory framework.
If the government wanted to truly help the environment, however, it would look to free enterprise to find solutions and use those resources that are abundantly available—for example, hydropower in the Alpine regions or the rivers.
In the end, it will always be environmental entrepreneurs—or enviropreneurs—who will truly help the environment. Industrial policy has never been effective. Until governments realize this, they will merely virtue-signal themselves into more and more disastrous policies.
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