One more point in advance: Climate change is a symptom of an unsustainable society and its economy. Loss of biodiversity or plastic in the oceans or even our lungs are other symptoms. A sustainable economy would ensure a social minimum for all people without exceeding ecological limits. Today not all people manage to secure this social minimum. Although we are breaking ecological boundaries! 

One of the main reasons is the sometimes extreme economic inequality. The Club of Rome takes stock: Currently, the richest billion people consume 72% of global resources. In contrast, the poorest 1.2 billion people have just 2% of the resources. 

Climate change is just one symptom of an unsustainable society.

On the first point. Where do we stand?

Science warns: We must not allow the average temperature to rise by more than 1.5 degrees Celsius. Because 1.5 degrees marks a limit. Beyond this mark, the most profound effects of climate change threaten to become reality. 

It is already the case that heat waves, storms and heavy rainfall are on the increase. These phenomena increase significantly with every tenth of a degree of warming. If we continue, we are heading for tipping points. In other words, a condition that will once again accelerate climate change. You know the examples: 

• Thawing permafrost and ice sheets,  
• Disturbances of the Atlantic overturning circulation,
• Destabilization of the Amazon rainforest ... 

... these are all effects whose interaction and cumulative results are very difficult to assess.

For some, these continue to be spatially and temporally distant developments. Therefore briefly something of our here and now: Precipitation is rare, we are experiencing a dry spell – now in February. France: 32 days for precipitation, Alps >60% less precipitation. That will come again you say? Then something about heat: you know that many regions around the world suffered from heat waves. Did you also know that the German pension insurance assumes that expenses will grow less: because of Covid/Corona and because of extreme hot summers!

Meanwhile, we have also realized the benefits of an economy built on renewable energy. 

• It increases independence from geopolitical upheavals. Can therefore contribute to our security.
• And it strengthens competitiveness. Because renewable energies are significantly cheaper than fossil fuels.

What has happened so far is insufficient. Let's assume that all the countries that signed the Paris Agreement deliver what they promised to protect the climate by 2030. Then climate gas emissions would just be stabilized over the next ten years.

What is needed, however, is to reduce greenhouse gas emissions by 35% to 60% by 2030. 

And even the stabilization of emissions just mentioned is a mere hopeful figure. After all, almost all countries are on track to miss their ambitious Paris climate targets. Germany, too. 

There are, however, a number of developments that give cause for optimism: Humanity can achieve the great transformation. This brings me to the second point of my speech. 

So what gives us hope? I enumerate:

1. The USA and Europe have already passed the tipping point. Emissions are falling there. Absolutely. 

2. China, which today emits about one-third of all global emissions, is shifting. The additional wind and solar electricity generated is expected to be 359TW this year. In 2021, it was 255TW. The total electricity generated from renewables in 2023 is thus expected to be nearly equal to India's total electricity consumption. Or twice the electricity consumption of Brazil and Canada combined. So we are talking about significant numbers here. If other countries were to invest as much as China in green electricity, their supply would already be decarbonized today.

3. a) For the first time, investments in wind and solar plants exceeded the investment budget that went into oil and gas drilling, at $490 billion. In the previous year, $357 billion went into green power plants. 

b) Governments, households and companies invested heavily in energy efficiency. 2022: $560 billion, primarily for electromobility and heat pumps.

4. a) Politicians are taking up the issue with much more commitment than before. This can already be seen by comparing the 2017 and 2021 federal election campaigns. Friday-for-Future is particularly moving.

b) The public sector sets effective incentives to drive transformation. 

• In the USA, green technologies are subsidized to the tune of $369 billion via the Inflation Reduction Act.
• The EU Commission wants to provide $270 billion for clean technology through the Net-Zero Industry Act. 

5. Geopolitical tensions, including of course the invasion of Ukraine, as terrible as it is, are giving the issue a boost. The Economist calculates that the war has accelerated ecological change by five to ten years. 

• That's because skyrocketing fossil fuel prices have reduced energy consumption – albeit by only 2%.

6. Relevant countries are also shifting into the next gear in formulating their eco-targets. 

• The doubling of installed solar capacity in the EU is now expected to take place as early as 2025 instead of 2030.
• The share of renewable energies in electricity generation in Germany is expected to be 80% by 2030, not 65%.
• For the first time, China has set a target for the share of renewables in electricity generation. They are to account for 33% in 2025. 

7. a) PACE (Planetory Health Action Survey, Uni Erfurt), 7 out of 10 generally support climate action moderately to strongly.

b) Reduction of VAT (Feb 2023, survey) for plant-based food is supported, just increase to plant-based (7 -> 0%) and meat (7 -> 19%)!

• Another reason for hope: Companies are changing a lot, too. Sometimes their climate commitment is even more ambitious than in politics. The public demands it. Employees want it.

There are networks in which companies are working together to achieve net zero because they are implementing the new control together. One example is the Net Zero Asset Owner Alliance, whose Steering Group I chair. More than 80 institutional investors have joined forces here. Together, they manage around 11 trillion in assets. We have already set ourselves an ambitious target for 2025. Namely, a 25% reduction in emissions in our investment portfolios. And we continuously report on where we stand.

• Integration of sustainability information with financial information ("2-hands" policy).

And last but not least: The technologies exist. We have to convert, just to known technologies. No waiting for inventions is necessary!

A brief interim assessment: Yes, a lot has been done to protect the climate. One of the consequences is that we no longer have to fear that the average temperature of the atmosphere will rise by 5 degrees Celsius. Just a few years ago, that was one of the scenarios, albeit the most negative one. And now it is off the table. 

But there is still a lot to do. How should we move forward? I have summarized this third part of my speech into three theses. 

Thesis number one: The transformation must involve everyone. 

Individual actions by industry, requirements from politicians, bans and coercion .  . all this will not be sufficient. If it is not embedded in the broadly supported consensus of a society, which could be: 

"We want to live differently than before." Behind this is also the statement, the knowledge: "Only on a healthy planet, in a healthy environment, can we humans live, survive."

Are we ready to change our behavior? Are we ready to question our values? 

The equation "success = earning a lot of money" regardless of what resources are needed is no longer convincing.

"What is a good life?" is something everyone must now answer for themselves anew.

Too much? Simple examples of what each individual can contribute abound.

1. Food: 

a) One third of all food produced ends up in the trash or spoils. This third represents 10% of all greenhouse gas emissions. Buying and producing what we can and actually want to eat?

b) Meat consumption is responsible for 14.5% of emissions. The climate-damaging CO2, methane and nitrous oxide go hand in hand with meat production. Wouldn't it make us happier if we reduced our meat consumption step by step? It would be beneficial for our personal health – and would help to slow down climate change.

2. Mobility:

Why not use rail and local public transport more often, supplemented by rental cars? Instead of always driving private cars that weigh tons. Which, despite all the technical progress, still produce high emissions.

Not amazingly, the University of Erfurt researched: 70% want to effectively support climate protection.

As an aside, SUVs produce about 1 Gt of CO2. After electricity, SUVs are the second largest contributor to emissions increases 2010 to 2020! 

What can policymakers do to ensure that the transformation gains momentum?

 1. It sets a framework that aligns price mechanisms more closely with CO2 emissions. Ideal: price CO2; but no US support, so not implementable globally. These frameworks (like CBAM) ensure that climate is integrated into decision-making and that companies that transform are protected, i.e. do not lose out to "free-rider" business?

2. Subsidy – but targeted. 

Policymakers must provide compensation for poorer households to offset the impositions of transformation. Subsidies could be the means of choice here. However, they must be redirected in such a way that they no longer benefit fossil energy sources across the board. And yet help "transformation losers" and the needy more than before.

3. Together with our governments, we must also ensure that the availability, reliability and security of energy supply do not suffer on the way to net zero.

If there are breaks here, there is a great risk that ambitious climate protection will be abandoned - possibly with irreversible consequences. It is therefore essential for economies to have buffers to cushion volatility, scarcity or unavailability. I will come back to this.

Thesis number two: The industry cannot wait. 

Nothing less is called for than the complete transformation of the energy system, the industrial production apparatus and transportation. This can result in a very competitive economy. If it succeeds in electrifying large parts!

The companies must set themselves targets with regard to net zero. And thus give politics the opportunity to communicate target states; what does an electricity world look like in 2030? What must be implemented to achieve this (see Easter package on BMWK 2022). And continuously report on comprehensible stage successes. This creates trust - which they urgently need in view of an increasingly critical workforce and public.

It is about enabling cyclical production or setting up a national economy that curbs the need for resources. Many experts and companies confirm that the technology exists.

The financial sector is crucial for the development of the ecological industrial society. Only with its participation can the huge investment requirements be financed. The transition to net zero by 2030 will probably consume 30 trillion U.S. dollars worldwide. In order to raise these sums, annual investments up to 2025 will have to be four times the amount invested between 2016 and 2022. 

These are big numbers. But still "only" 2% to 4% of the gross domestic product per year!

The money will always be well spent. 

Thesis number three: The courageous switch to net zero is a geopolitical act.

The conversion to net zero is a Herculean act. The investment requirements up to 2050 are huge - as I have already mentioned. The transition will be fraught with ups and downs for countries, economies and companies.

Cooperation - This does not only apply to smaller states. Germany and the EU would do well to seek partnerships, especially with the USA. Even if this partnership is not likely to be free of obstacles. It is already clear that the United States and China will be winners in an ecological transformation. Is Russia on the losing track?

Who wins, who loses in the net-zero race? Will there be "clean-energy superpowers" that determine developments over time with cheap capital and innovative strength? 

The prerequisite for this is that one has special know-how, technologies, raw materials or cost advantages. Setting standards can also secure advantages!

• One example is know-how and operation of nuclear energy. Without it, net zero will hardly succeed. Those who do without it will in the future only be able to accept what others agree. As of March 2018, 56 nuclear reactors were under construction in 15 countries. These included 18 in China alone, six each in India and Russia, and four each in the United Arab Emirates and Korea. More than 150 additional reactors in about 25 countries are in the planning stage. In the EU, 13 of the 27 member states currently operate nuclear power plants. Currently, a nuclear power plant is being built in Slovakia, Finland and France.
  
  Nuclear power is a growth sector - even if we don't like to hear it. China and Russia will be able to define and enforce the standards for this technology. Including the strategically and security-politically significant question of how treaties on the non-proliferation of nuclear weapons will be formulated in the future. 
• Hydrogen and ammonia as low-emission fuels are another example of how forces are shifting in the wake of international climate policy. Australia, Chile, Japan and Saudi Arabia, for example, have begun cross-border trade early. The International Energy Agency expects: These fuels will account for about 30% of future energy-related trade. It stands to reason: These countries will set the standards in the future and lead in the analytical processing of corresponding data. 
• Copper, cobalt, lithium, nickel and rare earths will also experience an enormous increase in importance during the transition to an ecological industrial society. The International Energy Agency estimates that the volume of these substances required will increase sixfold in the course of the transformation. Whoever has them at their disposal will gain power in the global economy.
  
  And how are the cards distributed here? 50% of cobalt comes from the Republic of Congo, 50% of lithium from Australia, 50% rare earths from China. China also concentrates a large part of the processing and enrichment processes. By comparison, the current largest oil suppliers - the USA, Russia and Saudi Arabia - each hold only a 10% market share. This makes it clear how important it will be in the future to shift to a circular, recycling-oriented organization of the economy in order to mitigate dependencies.
• Furthermore, geopolitical power shifts could occur due to the ability to produce climate-strategic components at unbeatable cost. China, for example, produces 75% of the world's polysilicon crystals, which are crucial for photovoltaic solar systems and for the electrical industry. And 90% of the wafers for solar cells.
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• This will fuel global trade. It could happen that way. But the opposite is also possible. The International Energy Agency expects energy trade to decline. This is because electricity demand is rising substantially. In the United States, for example, electricity production will have to double or even quadruple. And since electricity is very difficult to store and cannot be transported over long distances, countries will tend to promote their own development and become independent. In other words, to act in a protectionist manner.
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• And what will happen to the petrostates on the way to an ecological industrial society? First of all, their main raw material will still be needed in a net-zero world. Not to the same extent as today, and even in much smaller quantities. But about half, or at least a quarter, of the volume of oil and gas consumed today will still be in demand. Writes the International Energy Agency 2021. 
•  
• There is likely to be crowding out and, as a result, more pronounced oligopoly structures. Individual suppliers will benefit greatly from this. This development will be accelerated by the decision of individual countries to withdraw completely from the oil and gas industry. It is expected that there will be recurring shortages on the market and thus price jumps for these - despite everything - indispensable raw materials.

I'm coming to the conclusion. I believe we can do it.

Leadership is needed. Leadership must

• Negotiate climate agreement,
• Write commitments to decarbonization,
• Control progress and publish reports on this,

but must not limit itself to this.

Leadership must address the economic and geopolitical risks of transformation. And work to ensure that these are minimized. 

The threat to our security, starting with energy security, could grow into an existential threat that overturns all efforts to achieve a sustainable climate. 

That is why balancing geopolitical and supply risks is so important. At the outset, I mentioned that sustainability promotes equity and that economic balance is important to achieve sustainability. Admittedly, this is a difficult walk for politicians. Politicians have become a difficult task.

Policymakers should be sure of support from business leaders. Commitments, implementation plans and reports from the corporate world are a good start to making progress in building a climate-friendly industrial society. It takes many companies, all of them?, to drive their own and collective transformation.

Everyone who has the privilege of knowing the interrelationships and risks now has the duty to act. There are now a great many of them. Essential facts I have explained here. Individually or in the group . . it must be acted now absolutely!

A great opportunity that we can and, I believe, will use!

I look forward to a lively discussion!