There are great opportunities in solving the climate issue

There are great opportunities in solving the climate issue

This is an opportunity for humanity, ” said former US Secretary of State John Kerry and now President Joe Biden’s climate envoy at the beginning of a meeting in Berlin a few days ago. He meant climate protection. He sees climate neutrality as a”market with almost nine billion participants”. Cutting-edge technologies are needed all over the world. With an efficient private banking sector, emerging markets could also be offered financing.

What a statement, I thought. While in Germany the ban on domestic flights and internal combustion engines is being discussed and people’s single-family homes are being made mad, the planned economic requirements are becoming more and more fragmented and expensive and we are increasingly taking refuge in national solo ventures, the United States is discovering “Greentech” as the next major investment and growth cycle – in a global perspective. Isn’t it time to rethink Germany?

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So far, climate protection has too often been thought of as an instrument of left – wing social reconstruction-including anti-democratic aberrations or the “degrowth”ideology, which in an aging society is synonymous with an impoverishment perspective. Decarbonization is a fascinating topic of progress that can combine ecological responsibility with cutting-edge technologies to create a new growth model. We have no time to lose if we do not want to lose the connection.

There is no doubt that climate change is one of the greatest challenges facing humanity. And, except for some notorious climate deniers, no one disputes the need to stop global warming in the next three decades. However, the path to a climate-neutral future is in dispute. Almost reflexively, parties on the left of the center are demanding waivers and bans. Should the world recover from German asceticism? John Kerry seemed to have only a mild smile for these German debates.

In fact, solving the climate issue offers great opportunities for thousands of companies in the US, Germany and Europe. And thus opportunities for hundreds of thousands of new, future-proof jobs. The components that are needed worldwide in the transformation process towards a CO2-free economic cycle include in particular innovative plants, new chemical products, emission-free mobility and highly efficient energy networks and energy storage systems. Mechanical and automotive engineering, chemistry, energy – four areas in which huge demand will develop in the coming years. Four areas in which German companies are already leading today.

Reduce bureaucratic hurdles

So this is a plea for a wise balance between state and market. In order to develop innovative solutions to the climate issue, we need a strong state on the one hand: efficient administration, the reduction of bureaucratic hurdles, the promotion of investment in the development of new technologies and much faster approval procedures for new plants.

It will certainly also be necessary to support investments in technological change, which are in the interests of all of us, but which would not be economically feasible without solidarity; I am thinking of the decarbonisation of domestic steel production, which should be preserved as the basis of many value chains. With such narrow exceptions, however, we should be wary of new subsidies.

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On the other hand, we should focus much more than before on decentralised competition for ideas, a spirit of research and private capital. A policy that wants to dictate en détail to people and businesses how they live and what they have to produce, and that enforces this with taxes, subsidies and prohibitions, is even counterproductive. This is because it limits the method of discovering new solutions to problems offered by the market economy.

Instead, let us ensure that the state does not get bogged down in micromanagement. One key requirement is sufficient: how much CO2 may be emitted per year in order to meet the Paris climate targets. This target will be gradually reduced to zero by 2050. If you want to emit CO2, you have to purchase permits in CO2 emissions trading, which are becoming less and therefore more expensive from year to year. On the other hand, those who save a lot of CO2 have to buy fewer certificates and save money. Anyone who takes CO2 out of the cycle, for example by reforestation of forests or industrial storage, can even earn money.

The state should therefore only determine how much CO2 can still be emitted by 2050; we want to leave the way to the inventive spirit of engineers, technicians, scientists and entrepreneurs.

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The great advantage of CO2 emissions trading: it has already been tried and tested. Energy companies, industry or airlines in Europe already have to buy permits for their CO2 emissions. The result is a market price for CO2 emissions that has a steering effect. For example, coal-fired power generation has declined significantly in the last two years because it is no longer worthwhile for energy companies. In return, industry investments in low-emission processes are becoming increasingly economical.

With BASF and RWE, for example, two large German companies now want to build one of the largest wind farms in the world in the North Sea. They do not demand tax money, but only fair framework conditions. Including the release of land that the state has so far only earmarked for use after 2030. Again, the question of what we are waiting for?

An open procurement procedure (also for other interested parties) should be opened immediately. That would be a sensible part of an emergency climate programme – instead of the symbolic speed limit on motorways, which is currently being debated in the federal government.

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It is true that climate protection does not exist for free. However, decarbonisation must not lead to social division. Climate neutrality must also remain affordable for people with low incomes. On the one hand, I am convinced that a market economy model reduces the avoidance costs per ton of CO2 through higher efficiency. In dealing with scarce resources, the liberal economic order has always been superior to the central administrative economy or socialism.

On the other hand, we should pay back revenue from the state sale of CO2 permits to people as a “climate dividend” per capita. Firstly, this protects families and low-income earners from being overwhelmed. Secondly, an incentive system will be created: those who consume little CO2 could have a plus in the end. And thirdly, it precludes politics from opening up a new source of income that will be used for whatever.

Relaunching climate policy

John Kerry’s visit to Berlin has shown that Germany and Europe once again have a reliable partner in climate protection in the USA. With the new Biden administration, there is a window of opportunities in global climate protection. The federal government must take this ball. In Germany, we need a market-based restart of climate policy – and fewer national solo efforts and fewer technological bans on thinking. Because there is now perhaps a historic opportunity to build a transatlantic emissions trading system between the US and the EU.

It could be the core of a future global emissions trading scheme. This would trigger a global competition for the best ideas in climate protection. It would also give value to the storage of CO2 and thus serve, for example, the preservation of rainforests. When I proposed a connected carbon market to Kerry, he did not seem averse. What are we waiting for?

The author is federal chairman of the FDP and chairman of the FDP parliamentary group in the German Bundestag

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