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IG BCE on the critical response to the coal subsidy scheme – the debate gets personal

The IG BCE rejects the RWI’s (North Rhine Westphalian Institute for Economic Research) renewed criticism of coal industry aid.

Coal miners

Mineworkers. Even if the RWI has now organised the support of the Hamburg Institute of International Economics (HWWA), this does not make their attack on the coal industry any more valid. And if the RWI und HWWA – for want of reasonable arguments – are now resorting to attacks on coal-industry and mineworkers’ lobbyists then they are yet again simply demonstrating their dwindling scientific credibility. They are ruling themselves out as serious consultants on political decision making.

Anyone who seriously advocates that security of energy supply is not the responsibility of the state but can be left up to market forces has completely lost grip on reality. In its Green Paper the EU has highlighted the priority of security of supply, while even NATO regards energy supply security as a key strategic objective. And Chancellor Merkel has already organised an Energy Summit to help safeguard energy supplies in the long term. All this deserves support.

The RWI, which is 80% funded from the public purse, not only fails to recognise the full value added by the coal industry, its importance for the job market and its unparalleled efforts at reducing subsidy levels, but is also attempting to mask a number of key energy-policy facts. There is no other way to explain the allegation that Germany would be able to supply itself cheaply and permanently with imported coal obtained from the world market, and that in today’s economy our companies should themselves take all the risks associated with supply shortages and price fluctuations. Coal demand is growing worldwide and the major coal exporting countries are now requiring more and more of this resource for their own consumption. At the same time the global coal market is becoming increasingly concentrated around a few giant trading groups. If Germany and the EU were to abandon their own coal production base they would be at the mercy of a handful of suppliers, not just in terms of tonnage but also as far as pricing is concerned. Shutting down the indigenous coal industry would therefore be a fatal error.

A responsible energy policy should never rely on the market alone, for an energy crisis will pose great risks for our entire national economy. And it is the workers who will suffer most, for they will lose their jobs. Those under threat are clearly far more aware of this than the economists in their ivory tower. The mineworkers will not have the wool pulled over their eyes by privileged officials, as the RWI and HWWA would like to assume. Miners are proud of the contribution they make to energy security and they have faith in their representatives. Otherwise 95% of them would hardly be members of the IG BCE.