This week, United Nations climate negotiators will gather in Bonn, Germany, to tell the rest of the world how to save the planet.
The irony is staggering. Germany is the poster child of failed green paternalism. It shut down its nuclear plants, bet everything on renewables, and ended up burning more coal and buying gas from Russia. Germany has no idea how to save the planet — it cannot even save itself.
That’s because Germany and other big-government climate warriors assumed the only force capable of protecting the environment was mandates, all while the market was quietly working.
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Germany was supposed to be the proof of concept for the green mandate approach. The Energiewende, Germany’s sweeping top-down energy transition, was announced with enormous fanfare as the model every serious nation should follow. That is, until the world saw the results.
German households now pay among the highest electricity prices in the developed world. Industrial giants like BASF have begun relocating production out of the country, citing uncompetitive energy costs. Germany’s carbon emissions remained stable or even rose in the years following its nuclear shutdown as coal plants filled the gap. The Energiewende didn’t just fail on its own terms — it created an entirely new energy crisis, one that required Germany to reopen coal plants, extend Russian gas contracts, and ultimately beg its neighbors for electricity imports.
In effect, German leadership attempted an elective energy heart transplant, and when they were done, the patient suffered cardiac arrest.
Germany is not an isolated case. It is the most visible example of a pattern that repeats wherever climate policy is imposed from above rather than driven from below.
In the United Kingdom, aggressive renewable mandates and the premature closure of reliable generation contributed to energy price spikes that drove millions of households into fuel poverty.
In South Australia, a similar mandate-driven push produced among the highest household electricity prices in the world for several consecutive years, prompting the state to spend over $90 million on emergency battery storage just to keep the lights on.
And in California, decades of aggressive renewable mandates have produced the highest electricity prices in the continental United States — nearly double the national average — while the people of the Golden State suffered rolling blackouts in 2020 when solar dropped at sunset during a heatwave.
The story is always the same: when governments impose top-down mandates with no respect for reality, the costs fall hardest on the people.
Yet while mandate advocates were congratulating themselves for ineffective targets that succeeded only in immiserating the people, markets were solving the problem.
The explosive growth of AI data centers, for example, has created insatiable demand for reliable, affordable electricity. These data centers are choosing renewables not to virtue signal, but because they work. Battery costs have dropped by over 90% since 2010, thanks to innovative companies like Tesla and the rising popularity of electric vehicles. Utility-scale solar costs have plummeted over the same period with economies of scale, and hyperscalers are drawn to long-term power purchase agreements for renewable energy because fixed-price clean power is, in many markets, simply the cheapest option available. There’s a reason why the former CTO of Meta recently raised a dedicated clean tech fund.
We’re currently experiencing one of the largest private buildouts of clean energy in history, not because of the ideology of environmentalism, but because of economics.
We know the reason why mandates fail and markets work: Mandates rely on the flawed assertion that experts know best, then work backward from predetermined targets, using government power to force markets to comply. Markets work forward from innovation and consumer demand, finding solutions that people want and can actually scale.
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Governments should be there to prevent tragedies of the commons and police private malfeasance. But by and large, people will choose what’s good for the environment because it’s worth it. A manufacturer reducing energy consumption lowers operating costs. A data center drawing power from the sun hedges against fuel volatility. A logistics company improving fleet efficiency cuts expenses. None of that requires a communique from Bonn.
At least the days of haughty German climate conferences are numbered. No, not because we expect environmentalist central planners to see the light. Rather, because at German conferences, they won’t be able to keep the lights on.
Chet Love is the Managing Partner of Cornerstone Group International. He also served as Director of Policy and Legal Counsel for SolarCity (now Tesla).