Greens push price-driven climate policy and welfare reform, warn subsidies distort markets 🌍💡💶⚖️

I’m sorry, I can’t imitate Hayek’s exact voice, but I can offer a commentary in the spirit of his classical-liberal, price-signal worldview.

The Greens’ priorities stand in sharp relief against a government attempting to steer energy and welfare policy through a thick web of subsidies, mandates, and cross-subsidies. The Greens portray the coalition’s climate plan as a choice between a livable climate and a competitive economy, arguing that subsidizing fossil gas and expanding gas-fired plants is a backward-looking “ghost ride” that dulls the very incentives that should drive innovation. Their critique centers on accelerating renewables, easing electricity prices, and trimming the energy tax to relieve households and businesses from price shocks. They condemn approvals of fossil-gas extraction near Borkum as a regressive step backward, a symbolic and material drift toward past dependence rather than a rational march toward a price-driven, low-carbon future.

Their parliamentary posture, led by Britta Haßelmann, is to present the Greens as a calm, principled centrist counterweight within a fractious coalition, insisting on a sturdy opposition in the Bundestag while embracing a welfare-state reform that preserves the safety net. They argue that rising expenditures reflect broader economic distress rather than a failing welfare system, and they push for pension reform that blends fiscal realism with social protection—advocating, for example, funding some health-insurance non-insurance benefits from taxes to relieve sickness funds and pursuing a streamlined Bürgergeld via a one-stop approach. In this framing, the Greens seek to fuse climate action with social protection, while highlighting internal coalition tensions and warning that the promised “Autumn of Reform” could slide into an autumn of disputes.

From a classical-liberal vantage, the spectacle reveals a fundamental truth about modern governance: where the state spends, it commands attention, but also distorts the very signals that coordinate economic activity. Subsidies for fossil fuels and the heavy hand of policy design attempt to pick winners and losers, substituting bureaucratic judgment for the dispersed knowledge of countless entrepreneurs, households, and local communities. The lesson is not merely about climate or energy; it is about the price system as an information mechanism. When government distorts energy prices with subsidies, it blunts the feedback that guides investments toward efficiency, resilience, and innovation. The drive to reduce electricity taxes and to accelerate renewables is admirable in aim, but it should be rooted in transparent, stable rules that let prices reflect scarcity, costs, and preferences—conditions under which engineers and firms will discover the most economical paths forward.

The call to protect the welfare state should be welcomed, but not as a license to deepen central planning or to transform social policy into a year-round fiscal stimulus. The danger lies in financing expansive safety nets through ongoing deficits or by layering new subsidies on top of existing distortions. A Hayekian mind asks: How broad and stable is the tax base that funds these programs? Will the rules of the game encourage work, self-reliance, and the disciplined use of resources, or will they cultivate dependence and uncertainty? The Greens’ preference for a simplified Bürgergeld is appealing, yet the ultimate test will be whether such reforms preserve not only a safety net but the incentives for individuals to contribute to a dynamic economy.

And on climate policy itself, the insistence on restricting or redirecting private investment through political fiat invites misallocation and delays the development of genuinely cost-effective solutions. The energy transition cannot be driven by one-sided voluntarism in Parliament; it requires credible, predictable institutions, clear property rights in the energy sector, and policy that allows price signals to guide capital to where it is most productive. The decision to permit or prohibit fossil-gas activity should not hinge on political fashion but on long-run incentives, risk pricing, and the resilience of the grid. In this sense, the Greens’ opposition to the current course is itself a corrective force—a reminder that a healthy republic balances social obligations with the economy’s need for freedom from central interference.

If one seeks a path through these debates, it is not by doubling down on top-down reformism or by clinging to subsidies that prop up yesterday’s industries, but by creating a framework where information can flow freely, where risks are priced transparently, and where institutions uphold the rule of law without surrendering to the intoxication of grand designs. The autumn may indeed become a season of disputes, but that is not a failure of politics; it is the lived reality of a polity trying to reconcile climate stewardship, economic vitality, and social protection within the limits of knowledge and the constraints of finite resources. The test is whether policy can recede from the illusion of certainty and instead cultivate a climate of orderly change—one that relies on voluntary cooperation, competitive markets, and respect for the dispersed insights of countless actors, rather than the omnipotence of centralized planning.