© Fotolia.com/contrastwerkstatt.com
On the path to a climate-neutral economy
The German Cabinet has adopted its new 2050 climate change mitigation plan, setting out a strategy that, over the next few decades, will turn Germany into an almost climate-neutral country without compromising the competitiveness of the economy. “We have agreed on a very good and balanced solution,” Federal Ministry for Economic Affairs and Energy Sigmar Gabriel said. In the negotiations for the adoption of the plan, he had pleaded to give realistic prospects to regions that are negatively affected by the decline in coal-fired power generation. “Only if we strike a balance between mitigating climate change and safeguarding jobs in industry – including in energy-intensive industries – will we be able to convince other countries to follow our lead and adopt a very ambitious climate change mitigation programme,” the Minister said. He continued by saying that he was satisfied with the way the negotiations had turned out as the new plan entailed no less than a strategy for the next 30 years and beyond (read the Minister’s full statement here (in German only)).
Federal Minister for the Environment, Nature Conservation, Building and Nuclear Safety Dr Barbara Hendricks led the work for drawing up the 2050 climate change mitigation plan. She called the adoption of the plan the beginning of a new era in Germany’s climate change mitigation policy. In mid-November, Dr Hendricks presented the new plan at the United Nations Climate Change Conference (COP 22) in Marrakesh.
Putting into practice the Paris Climate Agreement
By 2050, Germany’s greenhouse gas emissions are to fall by 80 to 95 percent compared with 1990 levels. This is a decision the German government made in 2010. Only a few days before the beginning of the COP22 meeting, the climate change agreement which was adopted at the COP21 meeting in Paris last year entered into force. In this agreement, the international community has set out ambitious targets for mitigating climate change around the world, with the ultimate goal of reducing carbon emissions down to zero in the second half of this century. The new 2050 climate change mitigation plan focuses on how Germany will put the Paris Agreement into practice.
- Sector-specific targets: Germany has set itself the goal to reduce greenhouse gas emissions by at least 55 per cent by 2030 compared with 1990 levels. Now it has for the first time specified how much individual sectors – namely energy, buildings, transport, industry and agriculture – are to contribute to this goal. The government has managed to negotiate acceptable CO2 reduction plans for the energy and industrial sector. The energy sector is to reduce greenhouse gas emissions by 61 to 62 per cent compared with 1990 levels, the industrial sector by 49 to 51 per cent. With 66 to 67 per cent, buildings are to account for the bulk of CO2 reductions. The German government will carry out a full impact assessment in order to monitor whether the sector-specific targets have been met and to discuss the outcomes with the social partners. Based on the outcomes of the assessment, the sector-specific targets could be adjusted in 2018.
- Regional fund: Transforming Germany’s energy supply by setting Germany onto a path towards more renewables means that the share of energy from conventional coal-fired power plants in the energy mix will fall. To account for this development, a regional fund will be set up. This fund will help create output and jobs in regions affected by structural changes before coal-fired power generation is phased down in these regions. The commission for “growth, structural change and regional development” based at the Federal Ministry for Economic Affairs and Energy will prepare specific proposals for this starting in 2018.
- Emissions trading: The Federal Government believes that an effective emissions trading system is the key element for mitigating climate change in the energy and industrial sector at EU level. By setting price incentives, the EU’s emissions trading system or ETS (click here to learn more) can also help encourage companies to reduce their emissions at the national level. The plan therefore is to strengthen price incentives and increase the effectiveness of the ETS. The solution that was adopted for the industrial sector ensures that companies operating efficient facilities are rewarded instead of punished. These facilities will be allocated emissions allowances (of 100 %) free of charge on the basis of industry-specific benchmarks. The amount of emissions allowances that are allocated free of charge is to be considerably increased.
Open competition for the best ideas and technologies
In order to achieve the goals that have been adopted, the Federal Government is focusing on new innovation: embracing the principle of open competition for the best ideas and technologies is to put Germany on a path towards zero emissions. The climate change mitigation plan provides guidance as Germany continues down this path and helps avoid misallocated investments and sudden structural changes in individual sectors of the economy. In the future, renewables and energy efficiency will serve as the yardstick for new investment. The climate change mitigation plan therefore makes it possible for German companies to remain competitive as they move towards a decarbonised global economy.