World - Strategies for Green Growth

Sigmar Gabriel

Conflicts over energy and water will shape the decades to come and an efficient use of resources will become one of the dominating issues.

Long-term energy and resource security are increasingly becoming the focus of political and economic debate worldwide. Industrialised and developing countries are looking for new ways to ensure long-term supply security for their energy- and resource-intensive economies. At the same time, many newly industrialising and developing countries are already suffering dramatic shortages in supply.

These trends will worsen: according to estimates by the International Energy Agency (IEA), energy demand in newly industrialising and developing countries will double by 2020. Over the past two years growing demand for energy resources, combined with a decrease in production in the U.S. and Europe, have led to significant price rises for fossil fuels. The debate on alternative ways to cover energy demand has thus become increasingly significant.

Conflicts over energy and water will shape the decades to come. The efficient use of resources will become one of the dominating issues.

If we want to retain our current prosperity and do not want to deny people their right to development, if we want to live in global peace and protect our planet and nature, we have to make a radical cut between growth and resource consumption. We need a new industrial revolution. Scientists give us not more than a decade to limit the impacts of climate change. This is very little time.

At the start of 2007 the EU, under German Presidency, adopted a far-reaching decision: the goal of a 30 per cent reduction in greenhouse gas emissions by 2020, if other industrialised countries make comparable commitments. Unilaterally we Europeans have already committed to a reduction of at least 20 per cent.

In international climate negotiations we want to reach an agreement in Copenhagen in December 2009 that sets the world onto a low carbon growth pathway and allows for emission reductions of at least 50 per cent by 2050 compared to 1990 and economic development at the same time. In order to achieve this, industrialised countries should commit themselves to emission reductions of 25 to 40 per cent by 2020 compared to 1990. By 2050 emission reductions in the order of 80 to 95 per cent will be required. But this will not be enough as emissions in major developing countries are raising fast. Those countries have to contribute to the global effort by decoupling economic growth and emissions. In Bali we agreed that developing countries action should be supported by technology and finance from developed countries. The Copenhagen agreement further needs to include support for the poorest and most vulnerable countries by adapting to climate change.

Ambitious targets


Germany has set itself ambitious targets: a 40 per cent reduction by 2020 compared with 1990; this is 10 per cent more than the EU target. With our recently adopted energy and climate package, which is unique worldwide, we have moved a big step closer to our target. All key CO{-2}-relevant areas will be addressed by this package of measures, and climate protection will be advanced.

Germany is in a particularly good position to make a major contribution to the modernisation of resource-intensive economies. Almost no other country has succeeded as well as Germany in decoupling economic growth and the consumption of natural resources: although economic power in Germany is continuing to grow and people are consuming more than ever before, resource consumption and environmental pollution are now only increasing moderately.

Closed cycle management and environmental technologies have become key economic factors in Germany. According to studies by economic research institutes, the environmental industry in Germany will overtake the automobile industry as the most important sector within the next 10 to 15 years. Even though the environmental industry currently only accounts for around 4 per cent of total industry turnover in Germany, this share is set to rise to around 16 per cent by 2030 — a well above average growth potential.

According to a study by Roland Berger Strategy Consultants, turnover on green markets today is around €1000 billion and could more than double by 2020. Potential for growth is particularly high in the energy sector. Roland Berger Strategy Consultants estimates the global market volume for “clean” electricity production at around €100 billion in 2005 and €280 billion by 2020. This equals an average growth rate of around 7 per cent. Although it has a slightly less dynamic growth rate of 5 per cent on average, in terms of absolute volume the field of energy efficiency is even more significant. With the key technologies of process, measuring and control technology and electric motors, predicted growth rises from 450 to around €900 billion by 2020.

The new interplay between economy and ecology makes it possible to overcome pending environmental policy challenges. There is an economic solution to ecological problems and vice versa. We will therefore strengthen innovation and ensure our products and our industries make their mark on the global markets of the future.

India in particular has become an important and interesting market for German companies and investors. Indo-German trade volume totalled €12 billion in 2006/07. German investments in India are thriving and at the same time more and more Indian companies are investing in the German market. This is creating partnerships and networks that link both societies in their essential interests and that are mutually beneficial.

This has brought a new dynamic to the field of environmental technologies and technology transfer. Interesting opportunities for cooperation and investment are opening up in India, particularly regarding the Kyoto Protocol’s Clean Development Mechanism. India is a very important player in the global CDM regime. The Indian government has already approved more than 835 CDM projects (as at January 2008); 315 of these projects have already been registered by the CDM Executive Board, which is one third of all registered CDM projects worldwide. With 29 CDM projects of German companies, India is one of our most important CDM partner countries.

India’s industry is increasingly looking for climate-friendly alternatives to secure its energy needs. As a consequence, increasing the use of renewable energies and measures to improve energy efficiency are now being broadly and seriously discussed for the first time. The prospect of generating financial returns through carbon trading, energy-saving measures and increased use of renewable energies has given rise to greater research and development in India and to investments in environmental technologies.

The German government has been successfully cooperating with the Indian government in the fields of environmental protection and energy for many years. Against this background, I will travel to New Delhi from 16 to 19 November 2008 to hold talks with the Indian government on climate protection and resource efficiency.


Environment Forum


During this visit, a two-day Indo-German Environment Forum will be held for the first time on 18 and 19 November 2008. The forum will address a broad range of issues in the field of climate, energy, water and waste policies. This event aims to make a visible and sustainable contribution to exchanges and cooperation between India and Germany on energy and environmental issues that are so crucial to global structural policy. Policy development and technology transfer are supporting elements of this bilateral cooperation. The Indo-German Environment Forum is thus part of international efforts to introduce environment- and resource-friendly technologies and sustainable growth also to newly industrialising and developing countries.

From the funds available to the German Environment Ministry in 2008 from the auctioning of allowances from emissions trading, Germany is providing an additional €120 million a year for international climate protection projects in developing and newly industrialising countries — on top of funding for development cooperation. The focus of this international part of the German Environment Ministry’s climate protection initiative is on financing measures to reduce greenhouse gas emissions, for example by promoting sustainable energy systems, on measures for adapting to climate change and on projects to conserve biological diversity. This enables cooperation with India to be further expanded. The transfer of know-how and technology is in both our interests.

(Sigmar Gabriel is German Federal Minister for the Environment, Nature Conservation and Nuclear Safety, Germany.)