How the energy transition can succeed without jeopardizing Germany as an industrial location

Munich, 08 October 2024

Germany is currently facing major challenges. One of these is the goal of making the economy climate-neutral. At a virtual cooperation event with vhs.wissen live on 2 October, acatech Vice President Christoph M. Schmidt spoke about how the energy transition can be advanced without jeopardising our prosperity. Over 500 guests joined the event. 

Christoph M. Schmidt, President of the RWI Leibniz Institute for Economic Research, began his presentation by pointing out a global dilemma: despite a massive increase in the world’s population, not only has the proportion of people living in abject poverty decreased over the past two centuries, but their absolute number has even fallen. However, this success story has been accompanied by a rapid increase in environmental pollution over the same period. Massive global efforts are needed to limit environmental damage and preserve the planet’s carrying capacity, while at the same time continuing humanity’s path out of poverty and misery: On a global scale, it is about defossilisation without blocking development; on a national level here in Germany, it is about defossilisation without deindustrialisation, said Christoph M. Schmidt. In this context, he referred to the study “Scenarios for a climate-neutral Germany. Technology transformation, consumption reduction and carbon management” (in German) from the Energy Systems of the Future (ESYS) publication series from 2023.

With regard to Germany, Christoph M. Schmidt said that a rapid reduction in greenhouse gas emissions is the top priority if the overarching goal of climate neutrality is to be achieved. A triad is important for this: on the supply side, renewable energies and electricity grids must be expanded in Germany, as must the infrastructure for importing (green) hydrogen. It is also important to curb the demand for energy and stimulate the race for technical progress. Consistent pricing of fossil fuel emissions should be at the centre of all these projects and it should be supplemented by additional support measures in certain areas. When restructuring the energy system, however, the attractiveness of Germany as a business location must also be safeguarded, said Christoph M. Schmidt. Conflicting objectives must be recognised and pragmatic solutions sought. Overall, he called for more trust in market-based solutions.

Christoph M. Schmidt’s conclusion: Germany needs to end its narrowing of climate policy and focus much more consistently on European emissions trading (which will also include transport and heating in the future). Instead of continuing to pursue sectoral compartmentalisation, politicians should create framework conditions that provide better incentives for investment in Germany as a business location.

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