Climate change caused by human activity is responsible for droughts, flooding, hurricanes and other extreme weather events. Per capita resource consumption in the industrialised countries has increased twentyfold since the industrial revolution. Human intervention in ecological, geological and atmospheric processes has reached a point where scientists speak of an Anthropocene era.

Our future depends on the ongoing viability of the earth’s natural systems. Sustainability is the lever for securing the primacy of democracy and politics. Sustainability means more than environmentalism. It is relevant to every aspect of politics and society and represents the exact opposite of short-term profit maximisation. It is the responsibility of politics, in Germany and Europe, to modernise our understanding of model of prosperity. The market cannot do this. At stake is a fairer relationship between private profit and socialised costs.

We will only be able to transform our economy and society towards more climate protection if we strengthen social cohesion. Social Democracy is the only political force that brings together the environmental and the social dimension as the basis for its politics. One must never forget that we are dealing not only with the physical limits of our planet, but also the social limits of our societies. Great transformations require coalitions that bring together the widest possible range of interests, also internationally. We need to make the social-ecological transformation our central project for a better life in a better future. To achieve a future in unity rather than in division we will require a strong state.

The social-ecological New Deal

To tackle the challenge facing humanity we need a social-ecological New Deal now. What does that mean? Massive investment led and managed by an active state, an investment policy that leaves no-one behind. We need strong social and environmental regulations gziding  markets to create new solutions through technical and social innovations – and thus protect and modernise jobs and generate secure income and perspectives for everyone in Europe. This will require infrastructure renewal and investment in economic and social modernisation, placing social and ecological interests at the heart of the economy. In this process Social Democracy must be the advocate and protector of the less fortunate. We must work for a good life for all while responding to the everyday concerns of ordinary people. Only then can we bridge the gap between the achievements of the welfare state and the pressing needs of the environment.

Paving the way to phase out coal

One example of a successful intervention generating a public consensus on a deeply controversial issue is the German Coal Commission (Kommission Wachstum, Strukturwandel und Beschäftigung). Together with Stephan Weil, I was responsible for the Coal Commission’s inclusion into the national coalition agreement negotiated in 2018. The point was to reconcile the interests of the regions, the workers and the economy, to make “victims” into participants and to achieve a broad public consensus through direct, critical discussion amongst all stakeholders. That is the best way to resolve the great challenges faced by a democratic society in a rational and socially acceptable manner. All the groups involved worked together constructively and refrained from populism, and we were able to achieve a historic compromise that serves as a model for many of our European partners. This is a very promising political approach for other sectors facing the great challenges of decarbonisation with a great diversity of actors and widely differing interests.

CO2 pricing is no cure-all

European and national pricing instruments play an important role in the discussion about how best to bring about the transformation. Many scientists and environmentalists call for an “effective” CO2 price with a “steering effect”. As a Social Democrat, my first question is what that would mean for millions of ordinary people. Seeking climate protection solely by raising the price of CO2 would force those with less money to change their behaviour and do without, as long as affordable climate-neutral alternatives are lacking. Ordinary people cannot just go out and buy a new electric car or a state-of-the-art green central heating boiler. Of course it is right to put a price on resource consumption. But we cannot force climate protection by pricing carbon. That would shatter our societies. As Social Democrats, our climate policy builds on a mix of active social-ecological economic and industrial policy, public investment in sustainable technological innovation and infrastructure, regulation, and incentives. In a first major step for Germany we agreed such a mix in the 2019 climate protection package negotiated between CDU and SPD. Before the CO2 price can rise to levels where it has real effects we need to make climate-friendly alternatives available across the board.

It was therefore very important that the June 2020 stimulus package addressed both the pandemic and the climate crisis. The stimulus package promotes ecological and social modernisation with more than €40 billion for environmental modernisation programmes, including €7 billion for hydrogen technologies, €2.5 billion for electro-mobility infrastructure and €2.5 billion for energy-efficient refurbishment. At the European level the European Green Deal launches a modern growth strategy with a comprehensive recovery framework to support the economy in a sustainable and innovative manner. Climate protection and the environment have arrived where they belong: at the heart of European politics.

International climate policy

The Paris Agreement is the basis for German and European climate policy. The signatories agreed to restrict global warming to a maximum of 2 degrees (if possible under 1.5 degrees), and achieve global greenhouse gas neutrality by the second half of the century. The Paris Agreement represents a clear call for fundamental change and promotes an economic model that respects the planet’s natural limits. Another important aspect of the Agreement is financial support for poorer countries, to help them implement climate protection measures through knowledge and technology transfers. But one central element is unfortunately often overlooked: a key objective of the Paris Agreement is to make global financial flows compatible with an economic development model low in greenhouse gas emissions and resilient to climate change. Global warming can only be restricted to a maximum of 2 degrees (better 1.5 degrees) if global financial flows are redirected. Both public and private investments need to support implementation of agreed climate targets. The European Commission’s announcement of a renewed Sustainable Finance Strategy in the scope of its Green Deal is a step in the right direction. But we need to push this approach much more strongly in the public discussion.

Unlike the Kyoto Protocol that proceeded it, the Paris Agreement requires states to set their own national climate targets. And they are required to present new and more ambitious targets every five years. A compliance committee and transparency rules ensure that states keep their promises. This mechanism builds on the insight that the international community wants to proceed incrementally and collectively. Nothing is gained for the global climate if a handful of states observe internationally stipulated targets while the others ignore them (as was the case with the Kyoto Protocol). Now the states set their own targets, observe each other, negotiate, learn from one another and then set new higher targets. The drawback of this approach is that one can never be sure that the target will be achieved. There is currently a significant gap between the sum of national climate targets and the 2 (or 1.5) degree objective. The advantage is that action of some sort is being taken, that pathways are being established and economy-changing momentum generated. In fact, change is occurring more rapidly than many people realise! Another sign of changing times is the public announcement of support for a 55 percent EU reduction target by 170 chief executives from across Europe, including many German business leaders. Raising the European target sends an important message to other major emitters, encouraging them to substantially improve their own climate targets, and creates many economic opportunities. Europe needs a clear vision climate neutrality by 2050!

Climate protection needs a legal framework

A climate protection law is the ideal instrument for ensuring we remain on course to meet our targets. It creates planning security by setting legally binding climate targets and defines monitoring arrangements to identify where we risk missing targets and initiate corrective action. The SPD group in the German Bundestag proposed a climate protection law in 2010, but found no parliamentary majority at that juncture. After tough negotiations with our coalition partner we were finally able to pass the German climate protection law in autumn 2019. It obliges the government and individual ministries to achieve concrete annual reduction targets in their fields of responsibility. If targets are missed, they are required to present proposals to achieve them within three months. With European Union fines in the billions also possible, I am confident that we have now, for the first time, created a fundamentally effective climate protection mechanism. Of course that does not in itself guarantee that the targets will be met. That will depend on the measures adopted if a ministry misses its targets, which the Bundestag will have to discuss as required on a year-by-year basis. As well as the Paris Agreement, implementation of the seventeen UN Sustainable Development Goals also offers openings for such measures. Central fields for action are decarbonisation of the energy system, sustainable urban development and mobility, healthy and sustainable food and nutritional systems, and equitably sustainable economic models (for example conversion of coal mining regions, conversion of the automotive sector, digitalisation). In light of highly integrated economies and value chains within Europe we face a challenge shared with our European partners. We must not permit structural change and the transformation of entire economic sectors to lead to a further polarisation of the member states of the European Union.

Complete the energy transition

The decision to end coal mining in Germany was a historical turning point. For many decades coal provided good incomes and a strong identity to the mining regions and the people who lived and worked there. In light of those considerations, the legislation phasing out coal was passed in conjunction with a Structural Development Act, as proposed by the Coal Commission. Over the next twenty years the affected regions will receive €40 billion to invest in their future. The adjustment funds will protect workers’ interests. Coal- and lignite-fired power stations will be phased out as proposed by the Coal Commission, with milestones in 2022 and 2030, and the last remaining power stations shutting down in 2038 – although the dates could yet be brought forward. Reviews in 2022, 2026, 2029 and 2032 will consider whether adjustments are required in the interests of security of supply or climate protection. If the phasing out of coal is to succeed, 65 percent of our electricity will have to come from renewables by 2030. So now we need to concentrate on expanding renewables on the ground and advancing the integration of European electricity grids.

The generational conflict over the right form of energy has been decided, at least in Germany. Germany is phasing out coal and nuclear power. In future all our electricity will come from renewables. The task for politics now is to develop the renewable energy systems. This offers enormous opportunities for a climate-friendly and affordable energy supply, creates jobs and promotes innovation and value creation across Europe, and strengthens the export sector in the field of cutting-edge technologies. Local participation and value creation are crucial. I proposed some months ago that residents living close to wind turbines should receive compensation and expressed my support for residents and local authorities participating financially in new renewable energy facilities. I would like to see citizens participating actively in the energy transition. Reforms to improve conditions for citizens’ and tenants’ participation in green energy are very important in this connection. We can also learn from our European neighbours, although I am not referring to capitals and national governments here. At local government level in particular there are very many unknown pioneers of a decentralised and accessible energy transition, who are forging ahead with great courage, commitment and innovative ideas. The role of national and European politics will be to create the statutory framework for a “grassroots” energy transition.

In recent months we have achieved important progress shaping the renewable energy system. We have abolished the cap on photovoltaic, prevented strict national distancing rules for wind turbines, improved the terms for CHP (which we need as a transitional technology) in the legislation phasing out coal, and laid the groundwork for rapid market development of hydrogen (in the stimulus package and the hydrogen strategy). At the EU level the economic and social consequences of the Covid-19 pandemic need to be addressed through a sustainable and inclusive growth strategy on the basis of the European Green Deal. In climate policy the EU needs to adopt a road map for achieving climate neutrality by 2050. The decision to raise the EU’s climate target for 2030 to at least 55 percent is an important milestone. We are on the right track. But there is still a lot of work before us.


(Translated from the German)
 

The views expressed in this article are not necessarily those of Friedrich-Ebert-Stiftung.