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Monday, Oct. 27, 2008

GERMAN JOURNALIST SYMPOSIUM

Germany struggles to strike economy-environment balance


Staff writer

Germany's ambitious targets for reducing carbon dioxide emissions — coupled with its policy of phasing out nuclear power generation — pose a very serious challenge for the competitiveness of German industries, Daniel Goffart, a senior editor for politics and the economy at Handelsblatt, told the Oct. 10 symposium.

News photo
Daniel Goffart SATOKO KAWASAKI PHOTOS

As a country lacking in sufficient natural resources just like Japan, Germany relies on its technology on the one hand and energy imports on the other to sustain its economy, said the journalist from the Dusseldorf-based business daily. Therefore, the nation should have an energy policy that ensures competitiveness for its firms, as well as safety and a stable supply for its consumers and industries, he said.

Energy demand is rising worldwide while resources are becoming increasingly scarce, causing prices to shoot up. Meanwhile, Germany's dependence on energy imports is on the rise, he noted.

Goffart said strong growth in emerging powers like China and India, which pushes up energy demand and subsequently prices, is something that exporters like Germany must accommodate because they rely on the markets of those economies, he said. The question is how the industrialized powers will cope with the rising energy costs, he added.

Germany is particularly vulnerable to high electricity prices, Goffart said. Compared with other European nations that rely more on finance and other service sectors, Germany depends heavily on power-intensive industries like chemicals, steel, cement and aluminum that are directly affected by higher energy costs, he said.

Meanwhile, the European Union's ambitious goals to reduce carbon dioxide emissions — while having only small effects on worldwide emissions levels — will result in extensive costs for the competitiveness of EU firms, Goffart told the audience.

Germany's goals even go far beyond those of the EU, including a 30 percent to 40 percent cut in greenhouse gases, he added.

News photo
Heike Goebel

The decision by the German government in 2000 to phase out nuclear power generation remains controversial even today, partly because the phaseout is estimated to increase the country's carbon dioxide emissions by up to 130 million tons, Goffart said.

Given that the construction of more coal power plants will face difficulties because of concerns over emissions, phasing out nuclear power will likely expand the future gap in domestic power supply capacity and lead to greater dependency on electricity imports, he said.

Goffart pointed out that even among EU members, there are huge gaps in the starting point of each country's efforts to tackle the challenges of climate change and at the same time maintain their competitiveness.

While France relies on nuclear power — considered "clean" in terms of carbon dioxide emissions — for about 70 percent of its power supply, new EU members like Poland and Hungary will bear higher burdens because of a high share of coal in their power production mix, he said. And phasing out nuclear power will be a further handicap to Germany because it takes away one option in reducing carbon dioxide emissions, he added.

As part of its ambitious climate protection initiatives, Germany has set goals to secure 17 percent of fuel and 14 percent of heat from renewable energies. But Goffart noted that Germany and its industries need to remain competitive enough to invest in renewable energy because it is an area that still requires heavy spending on research and development.

Reconciling its economic and ecological challenges will pose an enormous problem for Germany, especially as the nation expects to be hit hard by the global financial crisis, said Heike Goebel, an editor at Frankfurter Allgemeine Zeitung.

The government of Chancellor Angela Merkel has tried to push the climate agenda as something that would contribute to accelerating EU unity as skepticism emerged in recent years over the region's integration, said Goebel, who is in charge of economic policy, the editorial pages and commentaries on economic issues at the daily.

The German public also recognizes that climate change is not an issue that can be tackled by any single country, no matter what ambitious goals it may set for cutting its emissions, she said. But the German people are also aware that the region's climate protection policy could put Germany at a disadvantage in terms of competitiveness, and in that sense, the climate agenda — although it has long been an issue of high public interest in the country — still does not have unanimous public support, Goebel said.



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