Experienced power broker Fischer isn't the only one who senses that something is in the works. Could it be because commerce and environmentalism are no longer pursuing mutually exclusive goals on the issue of climate protection? After all, Germany already derives close to 7 percent of its electricity from the renewable sources of wind, solar and biomass. Despite falling subsidies, that number is expected to increase, so much so that the alternative energy sector plans to invest about €200 billion in Germany between now and 2020. Its ambitious goal is to eventually derive one-fifth of German electricity production from green sources.
Windmills are already producing electricity at a cost only a few cents above that of coal-fired power plants. German-made windmills have even become a successful export item, to the astonishment of many former skeptics. "We are regularly sending four ships from Århus to Houston these days," says Andreas Nauen, the head of German electronics giant Siemens's wind power division.
There has also been a noticeable shift in the public consciousness on a second front. For many years, politicians, environmentalists and climate researchers would accept only one solution to global warming: radical reductions in CO emissions. "All other proposals were seen as something akin to treason," complains climate modeler Hans von Storch.
But the heretics' ideas are also gaining gradual acceptance. Humanity, they argue, must develop ways to cope with climate change, ways that would include constructing dikes, building desalination plants and developing drought-resistant plants.
Politicians and scientists alike are even beginning to put a more positive spin on the issue. In an article published in the journal Nature, Dutch environmental experts Pavel Kabat and Pier Vellinga argue that the debate should not be shaped by "fear of the negative effects of climate change." Instead, they write, the adjustment to change ought to be "driven by opportunities for technological, institutional and societal innovations."
Planning for global warming
Kabat and Vellinga know what they're talking about. Sixty percent of the Netherlands is already below sea level. Only a sophisticated system of dikes and dams separates the Dutch from a watery burial in the North Sea. In 2000, the country also implemented a new "Living with Water" strategy, under which it plans to avert damage from future floods by opening up large swathes of the hinterlands to flooding and not relying purely on its dikes to keep the water out.
Kabat and Vellinga envision large "hydro-metropolises,"-- floating cities in other words -- that could one day provide an environment for 15 million people to live and work "on and surrounded by water." As futuristic as the idea may seem, it is consistent with reality. After all, we are no longer capable of preventing the consequences of global warming. The challenge now is to minimize the costs of change.
In many cases, it is easy to predict whether a timely adjustment to change will be worthwhile. The North Sea island of Sylt is a case in point. A study titled "Climate Consequences for Man and the Coast" paints a scenario of what would happen if sea levels in the North Sea rose by 25 centimeters (about 10 inches). According to the authors' calculations, building sand breakwaters off the coast of Sylt that could withstand the fury of the North Sea would cost about €33 million. They also estimate that the benefits of the wall of sand, in terms of protecting property, houses, beaches and dunes, would be worth €381 million, or about twelve times the cost of the project.
But how far are human beings willing and able to go to protect their ancestral territory against climate change? What is the right balance between avoidance and adjustment? Hans-Joachim Schellnhuber, the director of the Potsdam Institute for Climate Impact Research, summarizes what he sees as the optimal strategy as follows: "The goal is to avoid the uncontrollable and control the unavoidable."
British economist Stern concludes that the balance between adjustment and avoidance is ultimately a question of money. The faster we reduce CO2 emissions, the more expensive it will be for the global economy. Stern's recommendation is to avoid setting overly ambitious goals. In the long term, according to his report, it will be sufficient if we can prevent the carbon dioxide content of the atmosphere, currently at 380 parts per million (ppm), from exceeding 550 ppm. According to Stern's analysis, this would cost humanity about 1 percent of world GDP -- an amount he considers "significant" but also "fully consistent with continued growth and development, in contrast with unabated climate change, which will eventually pose significant threats to growth."
According to the Stern study, this would avert the most serious consequences of global warming, sparing the earth a heat shock of 5 degrees Celsius (9 degrees Fahrenheit) or more. Instead, the world would get off lightly with only 2-3 degrees Celsius (3.6-5.4 degrees Fahrenheit) rise in global temperature. Efforts to prevent even that from happening would lead to exploding costs, the Stern report concludes.
Even limiting the CO2 concentration in the atmosphere to 550 ppm won't be easy. It would require a 25 percent reduction in greenhouse gas emissions by 2050 -- and that in a period in which the planet's economic output is expected to more than double.
Stern has calculated the tremendous effort this would entail. A 25 percent reduction target could only be reached, according to Stern, if mankind managed to reduce its energy consumption to 25 percent of current usage as compared with unbridled growth.
Would this mean that the average German would only be permitted to drive 5,000 instead of 20,000 kilometers a year? And instead of consuming 2,000 liters of heating oil, would he be forced to make do with 500 liters to keep his home warm throughout the winter? Even Stern knows that expecting these kinds of sacrifices is hardly realistic. Instead, man will be forced to resort to inventiveness as a way of defending his beloved comforts. Inventiveness is something than can be encouraged -- and this is where Stern reveals his bias as an economist -- with the help of the market.
Luring industry
One approach is to impose draconic taxes on carbon dioxide emissions. But the more intelligent solution, many scientists believe, is to balance man's climatic checkbook not with the instruments of politics but with those offered by the capitalist system. The trick is to define carbon dioxide as an economic good -- not unlike wheat, automobiles or athletic shoes -- which would be traded on a market for emissions.
The EU already operates such a market, and more than 100 US companies have established a system on the new Chicago Climate Exchange whereby a limited number of emissions reduction certificates is issued for sale each year. This suddenly makes it economically attractive for companies to invest in climate protection, either by promoting greater energy efficiency within their own operations or supporting projects to reduce CO2 emissions elsewhere in the world. UN Climate Secretary Yvo de Boer estimates that the latter approach could generate €100 billion in annual subsidies for the Third World, money that would be spent on modern power plants, solar stoves and low-energy light bulbs.
The Stern report also favors emissions trading and recommends expanding this tool globally. Stern already sees the emergence of a sort of new industrial era on the horizon. It could signal the advent of CO2-free coal power plants of the sort German energy giant Vattenfall plans to build in the Niederlausitz region southeast of Berlin. CO2 sequestration, another potential approach reducing CO2 emissions, is currently being tested near the eastern German town of Ketzin.
The fuel of the future could also come from crops. After accounting for the amount of agricultural land needed for food production, Germany would have about 3.5 million hectares (8.64 million acres) of farmland left over to grow corn and other energy-rich plant species in 2020. The biomass produced on this farmland would be enough to replace a quarter of German fuel consumption, according to estimates by Germany's Agency of Renewable Resources.
Human beings, in other words, will have to come up with the necessary inventive and entrepreneurial spirit to meet the challenge. Only the scientific and business communities have the power to ensure that humanity can adjust to its changing environment. But have business leaders gotten the message yet?
Strange things are happening in the business world. BP, for example, is now saying that its name no longer stands for British Petroleum but "Beyond Petroleum," and its Web site greets visitors with images of windmills and lots of green. HSBC has declared its intention to be the world's first major bank to become carbon neutral by offsetting its 500,000 tons in annual CO2 emissions with the construction of wind farms in New Zealand.
But are these nothing but marketing tricks? Or could we be seeing a new breed of corporate executive, the pinstriped environmentalist? Nowadays, environmental organizations like Greenpeace are no longer the only ones defining corporations as good or bad environmental citizens.
Analysts at financial service provider Dow Jones have now developed something they call a sustainability index, which values the major, publicly traded companies on the basis of their contribution to environmental sustainability. "Companies are clamoring to get in," says Sven Bode, a climate expert with the Hamburg-based World Economic Archive, "it's the only way to gain the confidence of investors."
Indeed, CO2 emissions have become a barometer of corporate performance. If a company's emissions are higher than those of the competition, investors are likely to believe that its production is less efficient.
Inefficiency being such a dirty word among analysts and investors, there just might be something to the saying that's currently making the rounds on Wall Street trading floors: "Green, now that's the color of money!"
By Philip Bethge, Jörg Blech, Rüdiger Falksohn, Thomas Hüetlin, Jürgen Kremb, Roland Nelles, and Gerald Traufetter
Translated from the German by Christopher Sultan
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