Germany is Deindustrializing Right Before Our Eyes…and there is nothing anybody can do about it

The international press has maintained near-total silence on the escalating insanity of what is happening in Germany. Media outlets that routinely celebrate German progress towards energy transition don’t want you to know that Europe’s dominant industrial power has entered a deeply destructive political and administrative spiral from which it may never recover. The fault lies with the self-defeating and unworkable energy policies that have a death grip not merely on the Scholz government, but on the entire administrative state. Since completing the nuclear phase-out in the midst of an ongoing energy crisis and avoiding winter catastrophe thanks only to the accident of mild weather, our rulers are now forcing devastating changes to the so-called Gebäudeenergiegesetz, or the Building Energy Act, which regulates energy consumption in residential and commercial structures.

That sounds bland and boring, but it’s not. This latest turning of the screws aims to phase out traditional gas and oil heating, by mandating that all new heating systems installed after 2024 use no less than 65% renewable energy. In most cases, this can only be achieved by installing electric-powered heat pumps. Particularly in the case of many older buildings, the associated renovation costs will prove catastrophic, and unless they’re drastically revised, the rules will simply upset the housing market and destroy a great deal of personal wealth. Nor does the grid have any hope of powering these new heat sources, now or in the future.

In the midst of growing alarm and the seeming futility of all opposition, even some German establishment media have begun to voice unease. Today, Der Spiegel (of all magazines) published a lengthy piece on the origins, funding and rise to power of the “Eco Network” currently controlling German energy policy, and I want to discuss it in detail, because it is so revealing about so many things. It pulls together many separate threads, to show how policy behemoths originate and are set in motion in modern managerial states, and how they can remain impervious and even contrary to popular opinion even in allegedly democratic systems.

The Spiegel reporting takes a close look at the careers of several key characters behind the energy transition, among them the Green politician Rainer Baake, and Robert Habeck’s scandal-riddled right-hand man Patrick Graichen, who is the policy brains driving most of the current insanity.

The rise of the environmentalists in the Ministry of Economics began a full decade ago. For a long time, the view was that the state should impose as few rules as possible on the corporate sector … According to this logic, environmentalism and economic policy were seen as nearly mutually exclusive. It was not until 2013 that the dominance of free-market civil servants began to crumble.

At this time, Sigmar Gabriel of the SPD became Minister of Economics, and appointed an unusual state-secretary for energy

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: Rainer Baake … The move was a surprise, because Baake is not a Social Democrat, but a Green. … As State Secretary in the Ministry of the Environment … Baake helped orchestrate the first legislation on Germany’s nuclear phase-out. …

In 2012, Baake founded Agora Energiewende, probably the most influential think-tank advocating a carbon-neutral society in German politics. Patrick Graichen was at that time already Baake’s protegé. …

As the old-guard industry-friendly civil servants in the German bureaucracy began to retire, Baake filled their posts with Green technocrats wherever possible, such that when control of the Ministry passed to the centre-right CDU in 2018, the damage was done. The institutional momentum had already shifted towards climate change and begun to gather strength under its own power. The catchword for Baake’s political vision was the so-called “All Electric World,” one in which a grid powered entirely by renewables drives cars (electrical vehicles), heats buildings (heat pumps) and even powers industry (though here the solutions are much vaguer).

During his five-year tenure as state secretary, Baake appointed Graichen to head the Agora think-tank, which began churning out policy papers, sponsoring Green scientific research, and gathering an ever-growing crowd of loyal advocates and technocrats. This paid off:

Whenever energy and climate were discussed in Berlin [in the years after Baake’s resignation from the Ministry of Economics in 2018], Graichen’s name came up, often peddling unwieldy terms that only experts understand. The “merit order principle”, for example, or the “locked-in effect”. The red-haired man with the sonorous voice knew his way around this specialist world like no other. …

The ability appears to have come naturally to him. His mother worked in the Ministry of Development, his father for a while in the Ministry of Transport. He himself became involved in environmental issues as a schoolboy, initially in the youth organisation of BUND. In 1993, he began studying at the University of Heidelberg. In 1996, he joined the Green Party. In 2001, he became a consultant for international climate protection … and helped draft the Kyoto Protocol.

Graichen is straight from the German political establishment, and his was the first generation that saw significant Green penetration in the years around the turn of the millennium. We are witnessing the fruition of long-term environmentalist activism, stretching back to the 1970s.

In 2020, Baake … founded the Climate Neutrality Foundation (Stiftung Klimaneutralität) and began producing studies on the energy transition. In their papers, Baake and Graichen touch on almost every climate issue. They talk about the restructuring of industry, the expansion of wind power, and the heating transition.

Their work was financed in the background by two men: Bernhard Lorentz, who as head of the Mercator Foundation helped to bring the Agora think-tank to life. And Hal Harvey, an American lobbyist who has funded environmentalist and climate organisations around the world for almost three decades, helped among other things by the philanthropic billions of families like the Hewletts.

This is not the first time we’ve found unlikely American activists and philanthropists behind European – and specifically German – climate activism. Spiegel explains, ominously, that “Harvey sees Europe as the key to preparing a climate-neutral future” and that this reason “he directs millions … to support the likes of Baake and Graichen.” This man, who hardly appears in Anglophone media and doesn’t even have an English-language Wikipedia page, has been christened by Die Zeit as “the most powerful Green politician in the world.”

Harvey relies particularly upon think tanks to develop policy and warehouse political candidates when they’re out of power, and his immensely well-funded lobbying efforts can easily overwhelm the political discourse in smaller countries, which is probably one reason he’s so interested in Europe.

German think tanks such as Agora … or the Climate Neutrality Foundation … recruit researchers with the millions donated by their sponsors and steadily build expert influence. They shape the way politics and society think about environmental and climate protection – and fill their studies with legal proposals which include their favoured solutions. …

The influence of the Green support organisations is undisputed. They have given the party a great knowledge advantage in matters of climate protection. And with this knowledge, the party’s attractiveness as a problem-solver for one of the greatest crises of our time grew. … Other parties have neglected this area for a long time.

“Knowledge” is of course the wrong term to use here. “Policy prescriptions” is much better, and if Der Spiegel weren’t so addled by their own ideological preconceptions, they could write about this more clearly. It’s a three-step process. 1) Activists and regime-approved scientists identify and make noise about looming problems, and then 2) think tanks write pages and pages of legislative and regulatory solutions for them. All of this happens largely out of sight, until 3) politicians respond to the demand stirred up the activist arm, and having no real expertise or understanding of anything themselves, they have no choice but to enact the proposals that people like Graichen feed them.

Here, then, is the explanation for Robert Habeck’s stubborn idiocy since last Fall. As soon as the Greens entered government, he made Graichen his state secretary for energy, and it is Graichen and the army of technocrats he commands who have been behind every political disaster since. The farcical response to the energy crisis, where these people were actually forced to work contrary to their principles and buy enormous quantities of coal (from Russia no less); the botched but nevertheless completed nuclear phase-out; and, finally, the catastrophic changes to the Building Energy Act, which will immiserate millions of Germans and do absolutely nothing to change the temperature of Earth.

Graichen’s failures have made him many enemies, which is one reason he’s currently mired in a nepotism scandal. Yet all the negative headlines are powerless to change any of the insanity that is coming for us, for the simple reason that there are no other policies to implement and no other scientific or technocratic solution to turn to. Graichen and his wealthy backers have spent ten years filling all the political and intellectual pipelines with their preferred problems and their preferred solutions.

This is how you realise an agenda from the top down, and it is a key point on which Corona can be differentiated from the climate change farce. Over many years, the climate brigade have worked to fill academia and the bureaucracy with their ideas and their supporters. They took advantage of generational change and retirements to position their people, and they waited for an election to bring the right politicians to power and complete the circuit. The pandemicists of course followed the same path, but their mild mostly self-serving solutions were abandoned at the last moment in favour of much harsher, vastly more dangerous mass containment measures. The zeal for the novel response originated not with philanthropic lunatics and think-tanks over decades, but from within the bureaucracy itself. This lent the Corona coup much more power in the moment, but without any broader institutional or ideological support, the worst aspects of the virus suppression regime crumbled just as quickly and are now quietly repudiated everywhere.

The Green fanatics never had that level of insane messianic enthusiasm, but for the same reason, they’re going to prove much, much harder to drive out.