Klaus Töpfer, Institute of Advanced Studies on Sustainability (IoS)
Release Date: 2009-11-03
The German model for the development of the renewable energy sector and the support of the green technology industry has gained widespread international recognition. Looking back at the past two decades what have been the critical success factors that enabled Germany to its current position in this field?When analysing Germany’s success in this field, it is necessary to avoid the common mistake of looking only at the ‘supply’ side of renewable energy, the focus must be first and foremost on the topic of ‘demand’. This consists of what can be done to reduce the demand for energy without decreasing the economic potential by focusing on energy efficiency. The push for efficiency started very clearly in Germany with what we call the life-cycle economy, which has also become one of China’s main targets, in order to avoid developing a waste society. Our waste philosophy is typical for a simple capitalistic market economy; creating a life cycle economy is a pre-condition for better market chances. Right now this is a world export article of the highest importance. The European Union has established the 20/20/20 agenda for 2020, and one of the ‘twenties’ is energy efficiency. Turning to questions of energy efficiency, it is pertinent that even very modern coal power plant has an efficiency rate of about 50%: thus 50% of the energy is wasted. The efficiency of a car is even less, while a light bulb has an efficiency rate of less than 5%, since it creates heat as well as light. Therefore, it was decided to phase out the traditional light bulb to increase efficiency, bringing us a step closer to the cycle economy. It is essential to make producers responsible for their products from start to finish so that the producers of waste are also responsible for handling their waste. This change in philosophy will have direct effects on demand. It is notable that business leaders such as Mr. Löscher from Siemens are beginning to concentrate primarily on the demand side, since they recognise that this drives business. We, therefore, must do our utmost not to reduce the discussion of the green economy to an analysis of the supply side alone.
Investing in energy efficiency presents a great opportunity for China, since the return on this investment is very high. Of course, China is extremely interested in energy efficiency specifically with regards to steel production. There is still a huge gap between the energy requirements for steel production in the EU and those of China; but of course the same can be said of India and Russia. Energy rich countries have very low energy efficiency and it is unsustainable for them to go on like that: changing the philosophy must therefore be the starting point. Thus, I repeat, the shift towards a green economy must start from the demand side, once we have created the demand we can ask how to develop the supply.
Who should be driving this process towards energy efficiency, what are the responsibilities of government, business and society?
The driving force behind this process towards energy efficiency must come from government support and political decisions, exemplified in the example above by the phasing out of incandescent light bulbs. For example, even in the most developed countries, 40% of overall CO2 emissions come from buildings, governments need to give clear directions stating that new buildings can only be built according to strict regulations for energy use. the same must be the case for the automotive industry. If governments don’t implement regulations with short term economic interest, then how else will change be achieved? We must combine the decisions of governments on a global and regional level, as we have shown we can do with the EU.
As far as coming up with the solutions is concerned, the wonderful Russian writer Chekhov once stated that scarcity is the mother of creativity. I think this is particularly relevant to this question. During my nearly ten years as a federal minister there were many who said limiting the SO2 emissions from coal fired power stations was nearly impossible because it was too expensive. Up to that point nobody invested any creativity, but if you pass a regulation banning coal powered stations that emit more than 400 grams of SO2 per cubic meter, then new solutions get created, thus scarcity is indeed the mother of creativity. In a market economy technology never comes like manna from heaven, it is always echoing to scarcity and bottlenecks. If you don’t have a bottleneck for CO2 who will invest in research? Who will do something to be better than the other? Wen Jiabao and Hu Jintao are now looking to do exactly that, to take China through the same transformation to develop an ecological and social market economy. It was a mistake to believe that the market could do it by itself, since the market can only echo if there are prices, such as that of CO2. It is clear therefore, that governments and parliaments have the huge responsibility of deciding on regulations which do not destroy economic perspectives but instead stimulate technology development.
What are the lessons that a country like Germany can learn from China in this field?
Germany and other European countries can learn a lot from China in this regard. But first and foremost we have to make much more of an effort to understand the situation and perspective in China. Fortunately we have a Chair at Tianjin University in China, and I am extremely pleased that I have a very good connection to the federal government. I am the deputy chair of the China Council at CCICD. It is easy to understand why a country with 1.3 billion people is facing huge challenges to overcome imbalances in order to eradicate poverty. For example, there are huge challenges concerning water. China’s share of the global population is a little over 20%, but China’s share of available water on this planet is a little over 6%. This helps us to understand why the Chinese must get the most out of their water. It is clear that the northern part of China in particular, is a highly water-stressed region, and that there is a chance to balance the development between Western China and the coastal region in Eastern China. All this is not only a matter for the Chinese; it is a problem for everyone. If China is unable to stabilize this social dimension without overloading the environment, then there will be global repercussions. This is something that many Germans and other Europeans fail to realise. China has huge interests in improving their use of resources and energy, reminding us of the need for global initiatives for saving resources and for all societies to become more energy efficient. This is not lip service; if China wants to realise its economic development ambitions in the future, then the country must take this path. Of course, if this is done with coal as the only available resource, then at the end of the day China will face huge problems and severe limitations. The country must reach higher efficiency levels and invest in renewable energies and this is precisely what China is setting out to do. The government is realistic enough to understand that this is not going to happen overnight, but, that said, China’s leadership has been ameliorating the situation in unprecedented leaps and bounds.
China is becoming one of the most important global economic powers. It is clear that the recovery of the German industry is not driven at all by the consumer expenses in my country, but is driven by the development of industry and economy in China. The main question facing us today, which will be considered at length at COP15 is of course, how can we stabilize the global economic system? How can we avoid repetition of this economic crisis? And most importantly, how can we regain economic stability without overloading the environment? The solution has to be something like a New Green Deal; although not the most inspiring name, could this be enough to handle both the economic crisis and the environmental one, killing two crises with one stone, as it were? Countries can learn from Korea who is putting a lot of effort into ‘greening’ its economy. Although Germany seems to be doing a lot in this field, I don’t feel like we are doing enough. For example, in order to move forward with renewable energy we need to invest in a decentralized structure of supply, considering new transportation requirements for electricity. Our net is constructed for big central power stations, how would we feed the smaller ones in? What would be the smart grid? We need to be able to integrate these solutions into our stimulus package.
What do you believe should be on the top of the agenda of the next German government’s climate strategy to not only combat climate change but also enhance Germany’s economic competitiveness?
I cannot claim to know what will be on the agenda, nor do I like to speculate on such policy decisions, however, I know that the government and the German Scientific Society intend to establish the Institute for Advanced Sustainability Studies which will perform research focused on climate problems and sustainable economics and will be specifically concentrated on systems sustainability. This initiative which I am involed in myself is, however, not isolated to a ministerial or government decision. The Institute for Advanced Sustainability Studies is being established at the request of Germany’s four main scientific associations: Max-Planck Institute, Leibniz Institute, Helmholtz Association, and Fraunhofer Institute. Each institute plays a very specific role. Fraunhofer is very directly linked with implementation topics and works very closely with industry. On the other end, Max-Planck is not implementation oriented but focused on basic research. They all have one problem, which is the growing gap between scientific results and political implementation. We don’t have a structure in place like our friends in the UK, where institutions such as the Chatham House play an important role. I think we have to develop this much more. This is therefore one of the elements which need development, we are focusing on how to create a science outlet centre, and how we can increase the integration of society in the scientific research process. I was also responsible for UNEP, which is a 50% shareholder of IPCC, so I have experience in dealing with such matters. Setting up the intergovernmental panel on climate change has been a major scientific intervention, since it brings government leaders and scientists to the same table to discuss the science behind climate change, its measurement, and its consequences.
This creates the platform for politicians to recognise that time is running short, and that there must be change. Scientists are able to present their findings on the need to reduce emissions and the necessary future peak in the CO2 level; for example there are discussions into how to limit the temperature rise to 2°C. Another topic, which is at the centre of interest, is the question of black carbon on which we are preparing a paper for COP15. Black carbon has very negative consequences for glacial melting, which will have a very drastic impact on the water levels, particularly for China and India. CO2 only accounts for 60% of global warming, but we have to look for chances to gain time by implementing measures that will be able to have fairly rapid impact on carbon emissions. Therefore we have asked one of the leading scientists in the world in this field to become a Scientific Director at the Institute for Advanced Sustainability Studies. This is not duplicating the agenda. It is of course necessary to convince governments to integrate such measures, and black carbon has now been integrated into the G8 agenda. We have the obligation to see what we can do here, it is a must. The same applies to ozone. We all know that there are interrelations between ozone and climate change, therefore we are in contact with the most important people in this field, those who were honoured with a Nobel Prize for their research into the destruction of the ozone layer. Clearly both gaining time and hedging risk are fundamental to our discussions.
More and more people are coming to the conclusion that it may come down to something like a geo-engineering structure. It would not be scientifically prudent to make this taboo. We need to be able to discuss these different and incredibly critical positions rationally with the global community, to determine how to handle the climate emergency. It is a fascinating topic. Ultimately, it must be clear that the Institute for Advanced Sustainability Studies is not in competition with, but serving alongside other research institutions: all have a common interest.
What should be the role of the German business community in the technology development that is necessary to combat climate change? And is the German government giving sufficient support to ensure that your country will remain one of the world leaders in this field?
It is evident that, there is a growing understanding among industry leaders that you can truly make gold by going green. Big companies such as Siemens and General Electric have been reorganising and are increasingly focused on the green economy. More and more people are convinced that this is the market of the future. Similarly, car companies have all learned in a dramatic way, that the days are gone when growth was driven by producing ever-bigger cars which consumed ever increasing amounts of petrol. Petrol is now in increasingly short supply, and getting more expensive by the day. They are changing, otherwise they know they’ll lose their market.
In discussions with the Chinese Minister of Science and Technology the challenge becomes very clear: How can you offer mobility to 1.3 billion people if you are not changing technology? Where are the resources coming from? Whoever is not driving this change is losing the market of the future. I am convinced that with clearly structured policies people act in the right way, at the necessary speed, and in a democratic way. Many people question whether change can be achieved in a democratic society where you have an election term of only four years. They argue that it is difficult to get things done, but I do not agree. If you create a reliable framework, technology will begin to respond and there will be changes in behaviour. We need both efficiency and sufficiency. A country like Germany with a decreasing population can only be socially stable if the GDP per capita increases by at least 2%.This is extremely difficult to achieve, but democracy is the best basis for this process. Recently it has been evident that, in China, people are becoming more and more interested in these topics.
In addition to government ambition and business incentives, technology transfer is destined to be an important driver this process in China and Germany is positioned as an ideal partner. How can we accelerate the dissemination of German technology in other countries while safeguarding Germany’s competitive edge and capacity to invest in new technology development? How can we balance those two?
If there is a clear mandate in China, then there is an incentive for German companies to go there and offer their solutions, which is certainly happening at the moment. However, it is important that this is not just a one way street. It is not only the dissemination of German technology in China, but we also have a lot of wonderful scientific research cooperation with China. The creation of a circular economy requires more than technology implementation, it requires a sound legal system that provides the precondition for implementing those technologies. I am very aware of the discussion of intellectual property rights, but we should broaden our ideas in this field and strive for better cooperation. I maintain that, as one of the world’s leading exporting countries, Germany can only stabilize its economic perspectives, and safeguard our competitive edge, if we enhance our cooperation in modern technologies and in implementing these technologies in other countries as well.
What is the main change or development that you want to contribute to in the coming years?
As far as future development in the fight against climate change is concerned, it is going to be fundamental to change the opinion of many that environment policy is creating costs that society cannot afford. Environmental policy should in fact never be linked to the creation of costs, instead it should be seen as a decision about the distribution of costs. It is a question of who is paying when. We cannot continue to externalize the environmental cost of our economic development and our impact on climate change. If this mentality is not altered, there will be drastic consequences around the world, and tensions as a result of migration. As long as these divisions exist we cannot achieve global stability. This is my main concern and, over the coming years, I think it is important to show that it is in our interests that China, alongside other regions like Africa, can overcome poverty. If people are not aware of the fact that we are hugely subsidising our wellbeing by externalizing the cost to future generations and other regions then this will undoubtedly create new tensions. This ecological equation is the peace policy for the future.
| Company: | Institute of Advanced Studies on Sustainability (IoS) |
| Position: | Founding Director |
| Country: | Germany |