Can Germany signal the beginning of the end for coal investment in Europe?

This question gained prominent media attention last week amid competing protests staged on opposite sides of the country.

One, a human chain of 6,000 citizen protesters linking arms in front of the RWE Garzweiler mine in the state of North Rhein-Westphalia, was, at the same time, being countered by more than 15,000 miners bused into Berlin by union organizers intent on pressuring the government into shelving a controversial climate change tax.

Rhine

The tax would shut down older coal-fired power plants and lead to an estimated savings of 22 million tons of carbon -- the same amount needed for the government of Chancellor Angela Merkel to hold good on its international climate change commitments.

For environmentalists, the coal phaseout plan -- focused on gradually removing the most polluting lignite plants -- is viewed with skepticism. Coal, the engine of Germany's economy for more than a century, is still firmly entrenched, accounting for upward of 40 percent of all electricity generated. That's a number that doesn't include exports or investments made by German industry in overseas mining operations. Subsidies for coal mining will be phased out in 2018, and yet domestically produced lignite is such a cheap source of local energy that its use in power production will likely not be reduced before the mid-2020s, according to the Heinrich Böll Foundation.

Meanwhile, so strong is the socio-economic grip in coal states like Brandenburg, Saxony and North Rhein-Westphalia that when coal miners turn out in force in the city capital, the show of numbers on one side can trump the message of the other. In the war of media imaging, unions continue to win.

Fossil-free campaigners vs. miners

If there is a weak underbelly for anti-coal protesters to exploit, it may reside in persuading German investors to properly account for the long-term risks of carbon assets. Utilities like RWE have large ownership shares controlled by local municipalities such as Münster, a city of 300,000 residents which in late 2014 became the first German city to pass a resolution calling for divestment.


Persuade other cities to follow along and suddenly there's real pressure on the company to move toward a renewable energy future, said Tine Langkamp, 350.org's Fossil Free campaign coordinator for Germany.

"Municipalities in North Rhein-Westphalia and other states hold 25 percent of RWE stock," Langkamp added. "They really have the power to move the company toward a renewable energy future."

Major civil society actors such as BUND (Friends of the Earth Germany) and Klima Allianz have joined together with 350.org in helping link the long-standing effort to close mines and power plants with a campaign aimed at training young grass-roots activists in the language of stranded assets and carbon bubble concepts. Divestment activities are now ongoing in eight German cities, including Aachen, Bochum and Cologne, according to Langkamp.

Elsewhere, local groups have succeeded in pressuring small cities like Boxtel in the Netherlands and Örebro in Sweden to make the commitment. This past October, a Glasgow, Scotland, university became the first academic institution in Europe to begin withdrawing fossil fuel investments, with another hurdle crossed in February with the Norwegian sovereign wealth fund dumping dozens of coal stocks.

Greens prepare to pressure banks

"It was not easy. We had to fight every word in our proposal to the government," said Otto Reiners, who, as head of the Green Party in Münster, negotiated the city council's divestment pledge together with leaders from the more centrist Social Democratic Party.

The motion calls on the mayor to sell those investments in the city's €10 million employee pension fund that are linked to "climate unfriendly" businesses. It includes fracking and potentially targets three companies, among them Enel, Italy's largest power company, and RWE, which owns coal-mining facilities in the region.

Reiners said the Green Party made divestment a campaign issue in the local elections in May 2014 by connecting an increase in lignite mining to rising carbon emissions. Initially, the campaign faced considerable resistance. But by fashioning together a strong financial argument -- linked to both economic necessity and opportunity -- local Greens were able to prevail.

Speaking recently at a strategy session convened by the national Greens in Berlin, Reiners presented the Münster experience as an instructive model for others to follow.

The challenge, said those in attendance, lies in rousing an uninformed investor to demand transparency in the banking and corporate systems.

"The pressure from the ultimate retail investor -- the private person -- is just not there because he does not understand these links," said Susan Deyer of the Carbon Disclosure Project.

Germany's retirement system is almost entirely state-managed. German universities are also mostly state-run. They do have small endowments, but thus far there's been very little dialogue exchanged between students and administrators. As for the German business class, many continue to rely on personal dealings with bank managers to whom they entrust a great deal of financial decisionmaking.

Independent capital markets aren't that strong, said Deyer, and so most insurance is sold via retail banks. The same is true for investment funds.

The retail bank clerk becomes the point of contact and, consequently, the client would not think of writing a letter to Allianz or Deutsche Bank, two German companies that are among the global pillars of coal financing and investment.

That's left the divestment movement in Germany little choice but to focus most of its efforts on city councils. That strategy may soon change, however, as a national directive on environmental disclosure passed by Greens in the European Parliament gives their German counterparts the impetus to carry forward with new environmental reporting requirements.

Pushing divestment onto the national agenda

Forcing these companies into a dialogue is the next step in the campaign, confirmed Gerhard Schick, a Green Party member of the German Bundestag present at the meeting.

"Action is needed at the federal level because there is a lack of transparency on emissions and the link between what enterprises actually do with their investment funds and carbon impact," Schick said.

The Greens plan to introduce new disclosure regulations, but beyond that, they also want to use divestment to reinsert themselves onto the national stage.

"In the '80s and '90s, it was clear we had to push for bringing climate change and nuclear waste onto the political agenda," Schick said.

"The setting is now different," he continued, "as it's more difficult to campaign where the political parties are not so different, the headlines say similar things, and all politicians view climate change to be extremely important."

Divestment could be a direct way to mass action in the same way it served the Greens in leading anti-nuclear protests of the 1970s. With coal, there are many more jobs at stake than there ever were with nuclear energy. That's one glaring difference: The other lies in being able to frame the issue.

"You need some expert knowledge to find out if behind the headlines of Angela Merkel there is a good climate policy or not," Schick said. "Is she really doing something about it? Or is it just cheap green talk?"