Renewables in Germany: a "catastrophe" or a misunderstanding

In Germany's Renewable Energy Experiment: a Made-to-Order Catastrophe [1] Morey and Kirsch make several interesting observation about the cost of greenhouse gas (GHG) emission abatement through feed-in-tariffs (FITs) for solar and wind energy in Germany. They estimate the costs of these tariffs to end-use consumers at $21.0 billion in 2002. They also estimate that renewable energy saved some 81 mln tons of CO2 equivalent, which results in some $259 per a ton of GHG reduction. This is an extremely high cost compared to the cost of a certified GHG reduction credits which could be purchased for $0.3 bln in 2012 (p.14).

We agree that reducing GHG emissions through subsidizing renewable energy does not make much economic sense. Indeed, if Germany was switching to renewable energy primarily to save the climate, one could argue that there are many more efficient ways to invest such large money. This poses a crucial question to the political economy of renewable energy. If it is not introduced for climate reasons, why then?

[1] Morey, Mathew, and Laurence Kirsch. 2014. “Germany's Renewable Energy Experiment: a Made-to-Order Catastrophe.” The Electricity Journal 27 (5): 6–20. .