A bimonthly magazine on international affairs, edited in Germany's capital

A Green Industrial Revolution


To stop climate change, growth needs to be decoupled from environmental pollution. Europe should lead the way, both as a model for others and to secure its own economic future.

© REUTERS/Yves Herman

Climate change has entered a new phase. The alarm signals of an ever more rapid change in the biosphere are increasing. At the same time, it is becoming a decisive political factor. Hundreds of thousands of young people are pioneering a new extra-parliamentary climate opposition. The young bring the old along with them. Climate protection was already a central motivation for voters in the recent European elections.

The issue has what it takes to reshape the political landscape, and not only in Germany. If the gap between the climate policy impatience of growing sections of society and the climate policy inertia of politics and business deepens, it could lead to a legitimacy crisis of the market economy and liberalism. Those who want to make both institutions future-proof must face up to the ecological challenge.

The modern industrial age has up to now been based on the seemingly unlimited availability of fossil fuels. They have propelled a tremendous increase in production and consumption and encouraged ever more extensive mobility. Globalization has helped free more than a billion people from extreme poverty. At the same time, the industrialization of the former “Third World” and the expansive lifestyle of the growing global middle class have led to a dramatic increase in energy consumption. About half of the fossil energy ever consumed since the beginning of industrialization was burned in the last 30 years.

Historically speaking, the pioneers of industrial modernity—Europe and the United States—are responsible for the lion’s share of the rising carbon-dioxide (CO2) concentration in the atmosphere. The populous new industrial nations of Asia have started to overtake them. China now accounts for around 28 percent of global CO2 emissions, with India ranking third after the US.

Germany is the only country among the six largest climate sinners whose CO2 emissions have remained roughly the same during this period. Compared to the base year 1990, they have even fallen by around 30 percent. Germany’s share of global economic output is about 3.2 percent, its share of greenhouse gas emissions 2 percent. Nevertheless, per capita CO2 emissions in Germany are above the European average. This is mainly due to the high share of coal in the energy mix. Sweden, with its combination of hydropower and nuclear energy, only emits half as much per capita.

Over the last 200 years, the average global temperature has risen by 1.1 degrees and the trend is a steep upward one. The Arctic waters are ice-free this summer, the melting of Greenland’s ice has reached dramatic proportions, and we have one hot summer after another. We have to fear for the living conditions on our home planet.

It’s Hard to Change

Now that the burning of coal, oil, and gas is throwing the earth’s climate out of whack, the hedonism of modernity is also being criticized. In affluent countries—especially in Germany—there’s a growing movement calling for a radical change in individual lifestyles. The joy of driving a car, the flight abroad for vacations, the large apartment, the permanent online communication, the annually changing fashions, the availability of food from all over the world regardless of season, and the high consumption of meat are regarded as ecological sins. For the followers of a new eco-puritanism, our quest for “more and more” is ruining the planet. “Repent and turn back” is therefore the new categorical imperative.

So far, however, the effect of all these sermons of penance has been very limited. Admittedly, the consumption of meat among the young and educated is decreasing, as is the urge to own a car. But at the same time, the registration figures for SUVs are increasing as is the power consumption of digital communications—and there’s no sign of a slump in the tourism industry. The number of those who have drastically reduced their personal carbon footprint remains modest.

This is not only due to the power of old habits and individual comfort. Our personal carbon footprint depends heavily on structures that individuals can only change to a very limited extent: the way we generate energy; the buildings in which we live; the alternatives available to the automobile; and the professions in which we work. For business people, scientists, members of the international cultural scene, politicians, and the elites of global civil society, flying is not a question of individual morality but rather of everyday professional life. Even where it would be sensible and reasonable to take the train instead of the plane, a lack of capacity and time-consuming connections all too often get in the way.

Just so there’s no misunderstanding: there is no freedom without personal responsibility. It is good and right to ride a bike or take a train, and not to buy products for which people are maltreated or animals suffer. Everyone is free to seek the “good life” that comes from having more free time and social relationships rather than from an increase in income and consumption. But a sober look at the magnitude of the environmental challenge shows that it cannot be solved by appealing to frugality. We will not win the race against climate change without a green industrial revolution, one that decouples wealth production and nature consumption. This is ambitious, but it’s also possible.

The Authoritarian Temptation

The criticism of the slowness of democracy, of its eternal compromises, has a long tradition. In light of the alarming information about melting Arctic glaciers, burning forests and thawing permafrost soils, the calls to take drastic measures here and now are getting louder. For some, democracy is becoming a luxury that we can no longer afford; ecological necessity demands the restriction of freedom.

To argue against this authoritarian temptation doesn’t mean playing down the ecological crisis. If global warming gets out of control and heats up the seas beyond their tipping point, humanity will be facing great upheavals, from economic collapses to global migration. In this respect, the environmental crisis also threatens democracy. We must therefore do everything we can to press ahead with the ecological transformation of industrial society and prevent the climate crisis from destroying liberal democracy.

The ecology of renunciation is based on a static view of the relationship between man and nature. It understands the earth as a fixed space that offers only a limited potential of resources in which humans must settle. If humans exceed the limits set by nature, the species risks self-destruction. An early proponent of this thinking was the British theologian and economist Thomas Malthus (1749-1832). With his famous “population theory,” he came to the conclusion that the earth can only feed about one billion people. Crossing this threshold would lead to catastrophic famines and the collapse of human civilization.

Malthus, however, couldn’t foresee the enormous increase in agricultural productivity through chemical fertilizers, pesticides, modern machinery, and the breeding of higher-yielding plants and livestock. Today, more than seven billion people live on earth, their life expectancy has doubled since then, and the amount of calories available per capita has increased by more than 50 percent. A miracle? Yes, but a miracle based on science and technology. What Malthus did not take into account was human ingenuity.

We cannot override the laws of nature. But technical progress make it possible to push the “natural boundaries” further and further. The “limits of growth” are not fixed. Solar power offers an almost inexhaustible source of energy for an ecological industrial society, one based on the combination of natural and technical photosynthesis, bio-economy, and hydrogen.

Voluntarily going without this and that will at best slow climate change down, but not stop it. This is particularly true in view of the billions of people on our planet who want nothing more than access to a modern life: well-equipped homes, education and professional health care, the opportunity to travel, a rich diet. For the vast majority of the world’s population, “zero growth” is not an alternative. For them, economic growth is still the key to higher living standards, better education, and better health care.

Green Industrial Revolution

The ecological renewal of industry, our cities, and public infrastructure requires increasing investment in alternative energy systems and new production facilities, the expansion of public transport, and the ecological modernization of existing buildings. If we do it right, we will create a new economic dynamic—a long wave of environmentally friendly growth in the global economy.

Rationally speaking, the question is not whether the global economy will continue to grow. With the world’s population rising to ten billion, the countries of the South becoming increasingly industrialized, and cities continuing to grow, the key question is whether we can decouple value creation from environmental pollution. At an annual growth rate of three percent, global economic output will roughly double in the next 20 years. Over the same period, greenhouse gas emissions will have to fall dramatically in order to keep the rise in temperature in check.

This requires nothing less than a green industrial revolution with an impact similar to the invention of the steam engine, electrification, or the triumph of the automobile. In essence, it is about a threefold transformation of the old industrial society: first, from fossil energy sources to renewable energies; second, a continuous increase in resource efficiency (generating more wealth from fewer raw materials and energy); and third, the transition to a modern circular economy in which every residual material is returned to biological or industrial production.

Prices Must Tell the Ecological Truth

A market economy only works if prices tell the ecological truth. An ecological tax reform that gradually makes greenhouse gas emissions and the consumption of scarce natural resources more expensive would have a far greater effect than more and more new bans. The additional burdens arising from environmental taxes can be refunded to all citizens in the form of a flat-rate eco-bonus. This would even have a socially redistributive effect because low-wage earners generally have a smaller CO2 footprint than the wealthy.

A successively rising CO2 price would unleash measures to reduce carbon dioxide emissions that can achieve the most favorable cost-benefit ratio. The second major advantage over state-controlled production and consumption is that it steers the initiative of companies and consumers in a sustainable direction without prescribing exactly what they should or should not do. At the same time, it provides incentives for producers and consumers to make environmentally friendly investments and purchases.

However, it is not a silver bullet. A CO2 price that adequately reflects the costs of climate change would have to be so high that it could only be implemented gradually. Climate economists say a carbon price could start at around €60 per ton, before being increased to a three-digit figure. In Sweden, which introduced a national CO2 tax back at the beginning of the 1990s, the price is currently €115 per ton. It applies to economic activities that are not covered by European CO2 emissions trading, and companies competing internationally pay lower rates.

Germany, Be a Pioneer

The Paris Climate Conference of 2015 didn’t prove to be the major breakthrough that many had hoped for. Global greenhouse gas emissions continue to rise, with most countries lagging behind their declarations of intent. The inertia of politics and business, and everyday habits are slowing progress. The conflicts of interest between economy and ecology cannot be overcome overnight. CO2-intensive industries are resisting the devaluation of their capital. Many developing countries continue to rely on coal to sate their hunger for energy. In key countries such as the US and Brazil, a climate policy rollback is underway. The Russian leadership is focusing on increasing oil, gas, and coal exports. CO2 emissions also continue to rise in China despite the impressive expansion of renewable energies and electric mobility.

Despite all the warnings that we are on the brink of catastrophe, economic growth is prioritized over climate protection everywhere in the world, even though the predominant, resource-guzzling and fossil energy-fired growth model destroys more wealth than it creates if its ecological effects are taken into account.

The only real chance of stopping climate change lies in a new model for economic prosperity and social progress: a shift from overexploitation of nature to cooperation with nature, from fossil fuels to renewable energies, from waste of resources to networked cycles, from old-style industrial agricultural to high-tech eco-agriculture. Highly industrialized countries should lead the way.

In many countries today, solar and wind energy are cheaper than new coal and nuclear power plants. Countries like Germany should also play a pioneering role in electricity storage and intelligent grids, hydrogen technology, electromobility, and environmentally friendly chemistry. This would enable us to make an effective contribution to steering the economic catch-up of Asia and Africa in a sustainable direction. If we show that climate protection and economic success are two sides of the same coin, Europe can become a model for others. And, at the same time, we would secure our own economic future.