Skip to content

Climate Targets Threaten Germany’s Prosperity, Ministry of Economy Warns

Jan Dams, Die Welt

Germany will miss its 2030 climate targets by a mile. This emerges from calculations by the Federal Ministry of Economics. Trying to do so would risk Germany’s economic prosperity.

Experts at the Federal Ministry of Economics have written an eight-page briefing paper for  participants at the exploratory coalition talks currently underway in Berlin. The paper’s main conclusion: Germany will miss its climate targets by a mile. From an economic point of view, it is impossible to achieve the 2030 goals which were promised by the outgoing CDU-SPD coalition government. Trying to do so would risk the economic prosperity of the country.

The paper, a copy of which WELT has obtained, states:

“According to the current estimate for the year 2016 the level of greenhouse gas emissions since 1990 – i.e. in more than 25 years – has been reduced by about 28 percent.” For the remaining 13 years until 2030, Germany has set itself the goal of reducing emissions by further 27 percent. “In order to achieve this target, the level of reduction per year would have to be almost twice as high as in the past 26 years.” This is an “extremely ambitious – more precisely – not realisable goal”.

Worse still, the experts warn against accelerating the implementation of the 2030 targets to the detriment of Germany’s industry which has already had done a lot. When it comes to policies in the industrial sector the fact should be taken into account that German industry, unlike other sectors, is particularly exposed to international competition and that any additional costs for CO2 reduction directly undermine the competitiveness of industry. There is a risk that important industries will migrate to countries where there are fewer environmental regulations. A significantly stronger reduction of CO2 emissions “by 2020 would only be possible by partial de-industrialisation of Germany.”

This is a prospect feared particularly by the Liberal Party (FDP) and the Christian Democrats (CDU) in the coalition talks. All parties must budge now, Michael Theurer of the Liberals is demanding. “The climate targets of the grand coalition government are unrealistic.” The CDU must acknowledge that. The Greens, on the other hand, should realise that unilateralism would not help the climate but endanger Germany’s prosperity. And his party would have to acknowledge that ambitious climate targets are needed.

All the same, the Green Party is showing willingness to compromise. Among other issues, the Greens so far had demanded a rigorous closure of coal-fired power plants and a fixed time for the end of the internal combustion engine. The latter, at least, has been abandoned by party leader Cem Özdemir.

Which is good, because the briefing paper by the outgoing Federal Government does not only warn of the consequences for the industry, if the climate targets should be achieved at any price. According to recent forecasts, the Federal Republic misses will miss its 2020 climate targets by five to six percent. And there is hardly any realistic chance to change that. A quick exit from coal-fired power generation, as demanded by the Greens, would result in social problems. First of all, an economic perspective for affected mining regions would have to be developed.

Not least because coal-fired power plants are also an important factor for stable electricity supply to the economy. Carsten Linnemann, Chairman of the CDU’s Business Association, is therefore calling for the Federal Network Agency to be included in the coalition talks. “They are the only ones who can calculate the consequences of individual measures for base-load electricity and energy prices,” he says. “The implementation of climate targets must not lead to a decline of the industrial share in Germany’s economy.”

The German Industry Association (BDI) is even more drastic in its demands: To be sure, the government has formulated the goal of reducing national greenhouse gas emissions by 80 to 95 percent by 2050 compared to 1990. “The national 95-percent target must be abandoned if no comparably ambitious target can be achieved at global level,” a BDI paper concludes. The financing of investment would have to be on the political agenda. Additional investments of at least 1.5 trillion euros would be necessary for the 80% target alone.

Translation GWPF

Full story (in German)