German Coal Company Allowed To Clear Cut 12,000 Year Old Forest

Germany has pledged to cut carbon emissions by up to 95 percent by 2050 by virtually ending the use of coal for energy. However, that will not come in time to save the spectacular Hambach Forest, an ancient woodlands in Germany that lies between the cities of Cologne and Aachen. The forest is 12,000-years-old and is irreplaceable. However, the government has given the go ahead to Germany’s second-largest electricity producer RWE to clear cut the ancient trees to extract the coal underneath.

For decades, the coal companies have chopped down the forest — destroying three-fourths of a forest that once covered 5,500 hectares. In a truly horrific decision, the RWE will now be allowed to clear cut part of the remainder of the forest. Environmentalist have chained themselves to tree and built tree houses to try to stop the destruction.

RWE bought the forest in the 1970s for use as an open-pit lignite mine. So, from the companies standpoint, the greens or the government had decades to purchase the property (though the cost would have been exceptionally high given the massive amount of coal that is believed to be under the forest). It is a shame that a compromise with mining shafts that would have preserved much of the surface (though the coal is clearly near the surface).

There will now be a final confrontation between environmentalists and the company. I do not necessarily blame the company which is simply trying to wealth maximize. I fail to see what this forest is not worth a government intervention. There are examples of market failures that require government intervention as stated by Arthur Pigou in The Economics of Welfare (1920):

“In general, industrialists are interested, not in the social, but only in the trade net product of their operations. Clearly, therefore, there is not reason to expect that self-interest will tend to bring about equality between the values of the marginal social net products [national dividend] of investment in different industries, when the values of social net product and of trade net product in those industries diverge.”

Here RWE is focused on trade net product concerns: extracting and selling coal. It is society that must account for disparities between market values and public values in places like Hambach Forest.