An 80 per cent reduction in greenhouse gas emissions by 2050 is technically and economically feasible. An essential step to achieving this is to release energy-intensive businesses from the extra burdens imposed by climate policy that have no international counterpart.

Climate protection needs a massive investment drive. An 80 percent reduction in greenhouse gas emissions by 2050 against 1990 is technically and economically feasible. An essential step to achieving this is to release energy-intensive businesses from the extra burdens imposed by climate policy that have no international counterpart. In this case, Germany would be able to unilaterally reach the 80 per cent goal without hurting the economy. Under these conditions, industrial enterprises would even benefit from ambitious climate targets, says the new study “Climate paths for Germany” commissioned by the BDI and presented at a climate congress in Berlin on Thursday.

Additional investment of around 1.5 trillion euros would be necessary to cut emissions 80 per cent by 2050, according to the study. This scenario is based on the best possible implementation and policy framework. The study further concludes that as things stand a 95 per cent reduction in emissions would come up against major barriers in terms of acceptance and implementation and is therefore unrealistic. This level of reduction would only be conceivable if all major economic regions undertook comparable climate protection efforts. The future federal government should commission independent monitoring on this front. The level of extra investment required in this 95 per cent reduction scenario would amount to around 2.3 trillion euros by 2050.

“Misguided policy remains the greatest risk for the implementation of climate protection measures,” warned BDI President Dieter Kempf. “Investment, whether in housing, transportation, industry or agriculture, doesn’t happen just like that. The current course of climate protection policy in Germany makes it likely that we will fall far short of the targets set.” Climate protection measures that are beneficial from an overall economic perspective are not necessarily profitable at the business level. The study reveals a significant gap between the set climate targets and the funds available to achieve them. Without additional political efforts, a 61 percent reduction in greenhouse gas emissions by 2050 is realistic. All investment decisions beyond this will only be made with additional incentives as they are not attractive enough on their own merits.

“Sustainable climate protection opens up a wealth of long-term opportunities for our companies to serve the growing global market in climate-friendly products and processes,” underlined Kempf. “If it is done properly, it can support the modernisation process of a national economy.” But the state must set realistic and reliable targets and leave the implementation up to the businesses, said Kempf. “Inflexible targets for industry sectors, banning certain technologies such as combustion engines, or a planned economy approach such as a quota for electric cars, are the wrong course to take.” The study presented by the BDI provides a solid basis for debating the Climate Action Plan 2050 which the federal government will be focusing on this year.

According to the study, there are significant commercial risks involved in some sectors and these are higher the more the industry is exposed to international competition. “German industry is structured into value added networks. It is important to make sure these networks are sustained, at least until reasonable, globally comparable parameters have been set,” urged the BDI president. Otherwise, value added, jobs and emissions would simply be exported – which would be of no help to the climate either.

“German climate protection and energy policy are currently on a dangerous zigzag path. The government must get it back on track,” criticised Kempf. “The electricity costs are still far too high and the snail’s pace of progress in building refurbishment to improve energy efficiency and the lack of a shared vision for future mobility are worrying German industry,” warned the BDI president. “We urgently need a change of strategy in the political management of the energy transition. We need to see it not just as an electricity transition but as an all-encompassing efficiency transition. New incentives and major changes in policy are necessary to cut greenhouse gas emissions as effectively and economically as possible.” Climate protection is a major task for the whole of society. It requires massive investments throughout the economy and should be relevant and visible to all citizens in the immediate future.

The study reveals the enormous potential of disruptive innovations, such as technological breakthroughs in the hydrogen economy or in carbon capture and use processes. “We need technological neutrality in research and support from political decision-makers,” explained the BDI president.   The study “Climate paths for Germany” is a technologically neutral and extensive analysis of all technical and economic options for reducing greenhouse gas emissions in Germany by 2050 in diverse scenarios. It was commissioned by the BDI and compiled by the Boston Consulting Group and Prognos, and involved the participation of almost 200 individuals and 68 associations and companies from all areas of industry.

Source: BDI

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