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And a tough winter is coming. 

I left Germany in 1990 as a long haired, smoking, bearded hippie with a guitar in one hand and a bag full of dreams of a better world. 

I had just read the recently deceased Jim Lovelock’s collected works, which put me in a better mood after having spent two years thinking I needed to like the existentialists . 32 years later, the Auffhammers just returned from a glorious few weeks in Europe. Here’s a picture. I mean, come on. 

If you have read my posts, you know that I like good economics and food. So let’s recap. A gallon of gas in Germany is $10 on a good day. Check. There is a tradable permit market, with a serious price on carbon ($100 yesterday!). Check. Homes are well built, insulated, and public transportation works (it’s not on time, but I am a patient person) and the place is serious about doing something about getting to net zero. Check Yes, there’s not a speed limit on the Autobahn, which is where I learned that an empty Prius xB with the AC turned off, downhill goes 120mph. Also, the food. While gas is expensive, good wine is cheap and $10 buys you a plate of food that makes you want to cry from happiness. So in the long run, things in my home continent along these two dimensions are good. 

But then there are some odd things. And I am not talking about Documenta (most of which I did enjoy a lot), but energy policy. The main conversations I had over dinner in Europe were about energy policy. As we all know from reading this blog, economics-free spaces can result in some seriously misguided policy. Let me pick three European examples:

So in short, I am really worried about my European friends and family. This winter is going to be tough. Ed Rubin and I have shown that low income folks in winter cut back their consumption the most. An equitable energy policy portfolio would keep the lights on, issue them a check so they can make it through the winter and make sure they have a way to get from place A to place B.

Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas.

Suggested citation: Auffhammer, Maximilian. “It’s Still Hot, But Summer is Over in Europe.”  Energy Institute Blog, UC Berkeley, August 22,  2022, https://energyathaas.wordpress.com/2022/08/22/its-still-hot-but-summer-is-over-in-europe/

carbon pricing , featured , gasoline , transportation

Maximilian Auffhammer is the George Pardee Professor of International Sustainable Development at the University of California Berkeley. His fields of expertise are environmental and energy economics, with a specific focus on the impacts and regulation of climate change and air pollution.

I share your concern for my family in Germany this winter.

Given German dependency on natural gas, and the lack thereof, is there any movement to increase domestic production? I have a faint recollection that Germany decided to forego gas field expansion via hydraulic fracturing some years ago, and wondered if the current crisis had caused that decision to be revisited.

FYI, 32 years later neither the Deutsche Bundesbahn (West) nor Deutsche Reichsbahn (East) are in operations any longer, it was renamed Deutsche Bahn.

Nuclear policy: please also consider supply of uranium (you don’t buy it from supermarket shelves and requirements/design differ between plants), waste storage and also the limitations of the grid capacity

Mostly good points. However, one question is what are the incremental capital addition costs of essentially forestalling nuclear decommissioning? For example, for Diablo Canyon, these costs could be substantial as PG&E mothballed those efforts in 2018 (and forget being able to transport and convey hydrogen and/or desalinated water out of the Central Coast due to the astronomical costs.) What has the German utilities deferred that will now have to be restarted? There are lots of hidden costs in nuclear power, and the incremental costs of new plants have been rising to well above renewables + storage. In addition, baseloaded nuclear needs just as much variable generation support as renewables (just the mirror image) and load following nuclear is extremely expensive because the overall capacity factor is reduced with high capital costs.

Wait! You write as if everyone doesn’t get it. Yeah, there are troglodytes that read this blog, but I assumed they were in the minority. I really hope my assumption is wrong.

What about ramping up renewables to make up any energy shortages — I thought that was the point of the ‘Energy Transition’ to begin with.

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