A dividend for climate and people

Why do we need climate protection? What role do private investors play in renewable energies? In advance of the panel discussion “Climate-friendly Investments – Structure, Drivers, Caveats” at the Allianz Forum in Berlin, Maximilian Zimmerer, Allianz Board Member in charge of investments, offers answers to these questions.

 

Mr. Zimmerer, the European Commission has just unveiled its agenda for climate and energy policy. It aims to have cut CO2 emissions by 40 percent and to have increased the proportion of renewable energies in the energy mix to at least 27 percent by 2030. Will this allow Europe to make a sufficient contribution to climate protection?

 

The agenda puts Europe on the right track. But one milestone will be a challenge: achieving the necessary 80-95 percent reduction in CO2 emissions by 2050. In order to make headway, we now have to breathe new life into emissions trading, because an EU-wide CO2 price promotes the use of cost-efficient solutions. We also believe that there is still political potential as far as energy efficiency is concerned.

 

We want to see more being done in terms of climate protection, because our insurance customers are directly affected by the impact of climate change, something that weather and natural catastrophes continue to bear testimony to. But as an investor, too, we need a certain degree of regulatory security to make plans for our customers, also looking ahead to the long term. This applies, in particular, to newer technologies like renewable energy. As a result, we expect policymakers to make a clear commitment to climate protection and welcome the Commission's proposals.

 

At the same time, the German Renewable Energy Sources Act (EEG) and, therefore, the subsidy levels for individual forms of renewable energy are now up for debate. Where should the political focus of climate protection lie in Germany in the future?

 

The current approach of distributing subsidies indiscriminately will push consumer electricity prices up. We need someone to take control and steer our power generation so that it focuses on the regions and production forms that are particularly efficient. We also need to see storage technology being developed to back up the rapid expansion in regenerative energies - otherwise, we're bound to run into capacity problems. Grid expansion has also been neglected up to now.

 

The reform proposals provide for far-reaching cuts in renewable energy subsidies, as well as in the rate of expansion. What role can and should private investors play in the future?

 

With public funds as tight as they are right now, climate-friendly infrastructure expansion measures can only be realized by attracting private investors. This can actually be a win-win situation if we can manage to combine climate protection requirements with those relating to demographic change: the demand for long-term investment opportunities for retirement provision is on the rise as the proportion of older people in the population grows. At the same time, there is a huge and similarly long-term need for capital to finance the energy transformation. If both aspects could be combined, both the climate and the people would benefit.

 

The initial proposals released by the new German government are headed in the right direction. The protection of legitimate expectations, for example, is respected. This should, in principle, cover both investments that have already been made but also investments that are currently being made. This is where we need a clear statement from policymakers, for example regarding the cut-off date regulations for new subsidy rates and the personal consumption of renewable electricity. It still makes sense to constantly adjust subsidies for marketable, competitive technologies. Subsidy policy has to keep an eye on the costs without choking the market for renewable energy.

Maximilian Zimmerer, Allianz Board Member in charge of investments: "We want to see more being done in terms of climate protection, because our insurance customers are directly affected by the impact of climate change, something that weather and natural catastrophes continue to bear testimony to."
Maximilian Zimmerer, Allianz Board Member in charge of investments: "We want to see more being done in terms of climate protection, because our insurance customers are directly affected by the impact of climate change, something that weather and natural catastrophes continue to bear testimony to."

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Nicolai Tewes
Allianz SE
Phone +49.89.3800-4511
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