In Bali, Germany takes dramatic step on climate change

The country adopts legislation Wednesday to cut emissions 36 percent as delegates hammer out a post-Kyoto treaty.

from the December 5, 2007 edition

Page 2 of 2

Page 1 | 2

What's more, the climate package is expected to save industry and consumers more than $7 billion by 2020, largely by weaning them from costly fossil fuels, according to a government-commissioned study. Germany hopes this will influence the debate in Bali, since in past treaty negotiations, a key sticking point has been fears that setting binding targets for greenhouse gases could hamper economic growth, particularly in developing countries.

But the Ministry of Economics, which has close links to industry, found earlier this year that the draft plan would cost $98 billion, nearly double the official $50 billion tally.

These initiatives have been hailed by Sigmar Gabriel, federal minister for the environment, as a "quantum leap" forward. But while goals of the program enjoy wide support among the German public, the contents have gotten mixed reviews from experts.

Mixed reviews from experts, industry

Environmental groups and climate scientists say there are crucial gaps, particularly when it comes to coal-fired power plants. The plan makes no effort to address Germany's growing dependency on them, though they're a major source of heat-trapping gases.

At the moment, at least 20 coal-fired plants are in the works here.

"If all of those plants are actually completed, the measures introduced in the climate plan will have been completely in vain," says Hermann Ott, a policy expert at the Wuppertal Institute for Climate, Environment and Energy.

Another criticism is that the plan doesn't set a blanket speed limit on the autobahn. Environmental groups and EU officials have proposed this as a way of cutting emissions, but the idea has touched off heated debate in a country where driving at top speed is a cherished national pastime.

Industry groups are also skeptical of the new climate plan, which they worry may increase costs, especially for heavy industry.

"The biggest danger is that energy-intensive sectors, like steel, won't be able to compete on the global market," says Dieter Kreikenbaum, an energy specialist at the Association of German Chambers of Industry and Commerce.

He adds that this could create a ripple effect as other industries that rely on steel – among them Germany's legendary automakers – are forced to look abroad for materials.

Lobbying groups in Germany managed to loosen certain restrictions since the Ministry of Economics report came out.

Now, Germany's auto industry, which wields enormous clout, is fighting draft EU emissions regulations. To be unveiled Dec. 19, the new rules would require high-performance cars to reduce per-kilometer emissions by more than half.

Need for post-Kyoto plan by 2009

Most world leaders agree that climate change is an urgent issue, but are divided over how to address it. The EU wants binding targets on emissions, while developing countries argue this approach would stymie growth. The US is pushing for a piecemeal plan, where individual nations set their own goals.

This week, the search for common ground is playing out most visibly in Bali, where delegates have 11 days to forge a blueprint and a timeline for treaty negotiations. The accord will have to be worked out by late 2009 in order for it to take effect when Kyoto expires in 2012.

1 | Page 2