Welcome Speech by Mayor Christian Ude, Lord Mayor of the City of Munich, on the occasion of the Opening Lunch of the VIII. Munich Economic Summit:
“Climate and Energy: Right Goals, Wrong Approach?”
Ladies and Gentlemen,
As Mayor of Munich, it is my pleasure to greet and welcome the participants of the 8th Munich Economic Summit to the Bavarian capital City! Let me say that I am pleased that you selected the subject: “Climate and Energy: Right Goals, Wrong Approach?"
Although the global finance and economic crisis is in focus these days, we must not forget
that the climate change is here to stay, at best with a lower impact perhaps. Due to a lower demand for products and services there is also less demand for energy. However, the solution for a favourable development of the world climate cannot be that the economy is going down the drain.
Because this would lead to very critical social problems, in particular for poorer countries and countries like Brazil, China and India which cannot be denied to be looking for a similar level as the so-called industrialized countries.
The subject of climate change is a global problem as we know, but even the German cities can make a contribution, no doubt. I am Mayor of a city, which has committed itself to promote environmental and climate protection a long time ago and which is proud of its leadership position here in Germany.
Being a board member of the German Association of Cities, the umbrella organisation of German cities, I plead to anchor the subject of climate protection in the work of the cities even more.
As in previous years, the Munich Economic Summit has featured top-level scientists and experts from industry and politics. Climate and energy is in focus this time. Nevertheless, I would like to share with you some thoughts and expectations along these lines before the forum starts:
1. Meanwhile, there is no Question in scientific and public circles that the climate change caused by humanity is already happening.
2. And the development is more dynamic than originally predicted.
3. The main cause of the man-made climate change is the climate-relevant gas: carbon dioxide, in short CO2, which is released due to the combustion of fossil energies. The next climate-killer is methane, which is largely released in agriculture and cattle breeding.
4. We, that means all mankind, have to take action to prevent it from getting worse! The
certainly provoking theme "Adapt, Mitigate or Die!" of the initial debates is only showing
alternatives at first glance however. As we do not want to die as a result of climate
change, we cannot continue as before. Avoiding or adapting are no alternatives but
must be done in addition.
The Inter Governmental Panel on Climate Change is showing us the way. All of the
world’s countries have to make their contribution to limit the ongoing climate change to
a maximum of 2 degrees Celsius. A higher warming of average temperatures of the
earth would bring about incalculable risks. In addition, measures will have to be taken
to adapt to the already unavoidable consequences of climate change.
5. Furthermore, many scientists are pointing out that the financial means to limit climate
change are at hand and that it is even more economical than taking adaptive measures
to buffer the growing consequences.
I am thinking of the expert opinion by Sir Nicholas Stern or even the calculations of the
German Institute of Economic Research, which will be presented to you by
Prof. Kemfert.
6. In the area of climate researchers and many political circles, there is a consensus
about the goals and partly even about the Instruments to be applied in climate policy.
For once, the developed countries in particular are under the obligation to strongly reduce
their consumption and emissions of fossil resources. This would even have to be
done in the so-called developing or threshold countries. There is a certain consensus
here that these countries are entitled to a "belated development” in the reduction of
their emissions and to a lower level than the industrialized countries. To make sure that
the so-called threshold or developing countries are not forced to follow the same path
as industrialized countries, which would cause unnecessary emissions on the basis of
out-dated technology, the industrialized countries should supply to the threshold and
developing countries the latest technologies available; whether free of charge, against
loans or in cash - the opinions are bound to differ here. Countries like China have considerable foreign exchange reserves and could thus be paying the bill even for the latest
technologies.
At the same time, a further deforestation of the rain forest or other forests must be
stopped to preserve the benefits in CO2 reductions. There is no alternative here for two
reasons at least. According to calculations by Professor Sinn, for example, even under
the aspect of climate protection it does not make sense to cut down jungle forests just
to gain raw materials for the production of biofuels. Because the ongoing deforestation
would considerably lessen the diversity of species - with enormous damage to the environment.
7. And, there is certainly a consensus about the fact that the Kyoto process was a step in
the right direction. However, the goals were not ambitious enough, the instruments
were insufficient and above all important carbon-emitting nations have not joined the
agreement. An important cause was certainly the fact that the United States of America
have advanced the enacting of the protocol under President Clinton, it is true, but then
failed to ratify it. The reason was that the rising costs of the consumption of fossil energy
would put the local industry at a disadvantage, whereas other countries like China
or India were not willing to respect corresponding regulations.
These countries, however, pointed out that their per-capita emission of CO2 was lower
and, in addition, they claimed to be less wealthy than the United States of America who
thought they could not afford corresponding measures. As already mentioned in the
Program of this Munich Economic Summit, the OPEC countries are showing only little
interest to produce smaller quantities of oil and risk lower incomes from oil sales. So, it
seams that we are in for a stalemate.
8. The Situation is serious but not hopeless. For once, the European Union with its climate
protection goals has taken a lead so to speak.
Important instruments of the European and national climate protection policy is the
trading of emission certificates and the promotion of measures to improve energy efficiency
as well as the share of renewable energies. The German Act of Renewable Energies
is a success model in this respect, which serves as an example all over the
world.
Furthermore, important arguments are speaking for the reduction of consumption of
fossil energies, the increase of energy efficiency and promotion of renewable energy
quite apart from climate protection itself: Fossil energies are limited, no doubt. The
peak of oil and gas production is already reached, respectively round the corner. At the
same time it is expected that the worldwide demand for energy will go up after we will
have overcome the global economic crisis. And this will mean rising prices too, which
means, the dependency of the consumer countries from oil and gas and partly instable
world regions - from where we are getting them - is expected to grow even further.
These countries, which were the first and foremost to become independent from oil and
gas are better off, no doubt. If these countries are developing technologies for better
energy efficiency and the use of more renewable energies, they and their citizens and
companies could save a lot of money. In addition, they could make a lot of money with
the worldwide sales of corresponding facilities. Environmental technologies are considered
to be a real growth sector.
Well, these two reasons have led to a reduction of the dependency from fossil fuels
from instable regions, or to put it differently, a higher security of supply in combination
with the profitability of "green industries" has brought about a change of thinking since
the change of the U.S. Government. However, it is far from certain, whether there will
be a majority for it in Congress or in the Senate in particular, as the delegates from "old
industrialized US States" might oppose the agreement.
9. Well, what would be happening, if the Europeans and some other countries would set a
good example and then the US and China, India and other countries would not follow?
Here there is also the thesis that such an endeavour from Europe might not be successful
at all. If the Europeans are making the use of fossil energies in Europe more expensive through a tighter commercial system of emission trading and if they improve their energy efficiency, overall consumption in Europe would drop, no doubt. If the offer is considered as a permanent factor, other consumers like China could consume more fossil energy at lower prices - which means, the sum total on a global level would not change at all.
However, this may be a lesson from the schoolbook. In reality however, it
shows that even countries like China are improving their energy efficiency - and are
willing to conserve energy - and are prepared to buy the latest technology, because
they can foresee the end of the resources. Here substantial capital investments are
needed to be able to construct corresponding facilities and to export them at a later
stage, if possible.
10. And what is the position of the OPEC now? Is it really true that in the end the OPEC
will suffer, if Kyoto wins - and Kyoto will suffer if the OPEC wins? This may be so in the
short term, but in the long run it can only be in the interest of the OPEC countries that
their oil reserves will continue to provide their basis of income for a very long time. Because
the wealth of many of these countries is almost exclusively based on oil. With
the gas producing countries it is similar.
Ladies and Gentlemen,
Let me say that I am slightly optimistic that there will be progress in Copenhagen and that the
Kyoto climate protection agreement will be followed by a further step in the right direction. It is an absolute necessity to focus on binding targets for the individual regions, to achieve a transfer of technologies to poorer countries and to recognize the need to provide additional funds for these countries to provide for avoidance and adaptation. In this sense, please accept my best wishes for stimulating discussions and great success for your conference. I hope you will share my optimism and identify instruments to demonstrate and implement an effective climate protection policy. It would be most desirable that the results of this conference will also provide a further impetus to the delegates in Copenhagen.”
