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Germany´s contribution to the solution of the world climate problem: What can be achieved?

Sigmar Gabriel, Till Requate, Alfred Endres, Lutz Wicke, Rüdiger Pethig
ifo Institut für Wirtschaftsforschung, München, 2007

ifo Schnelldienst, 2007, 60, Nr. 07, 03-18

The Stern Review on the Economics of Climate Change, the IPCC 4th Assessment Report and also the extremely warm winter of 2006/07 moved global warming to the centre of public attention. What contribution can and should Germany make to the solution of the world climate problem? The answer of Sigmar Gabriel, Federal Minister for the Environment, Nature Conservation and Reactor Safety, is: a massive increase of energy efficiency and a clearly stepped-up expansion of the use of renewable energy. Gabriel points out that comprehensive climate protection is the only sensible economic alternative; the federal government has thus identified 20 project areas in which it will become more strongly involved or will initiate new measures. Till Requate, University of Kiel, is sceptical. To be sure, the recently formulated EU goal of lowering CO2 emissions by 20 percent by 2020 is indeed ambitious, but a 20 percent reduction in Europe does not necessarily mean a similar reduction worldwide. Alfred Endres, University of Hagen, is rather pessimistic. According to traditional game theory, because of the precarious distribution of benefits and costs it is completely hopeless to practise national climate policies since the individual states are faced with a prisoner’s dilemma. Lutz Wicke, European Scholl of Management, Berlin, advocates a Kyoto PLUS programme, which contains a global emissions market for a future, effective world climate policy. In the opinion of Rüdiger Pethig, University of Siegen, in order to make a major contribution to the solution of the world climate problem, Germany must be willing to take on greater emission reduction obligations that it has already assumed in the EU agreement.

JEL Classification: Q200

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ifo Institut für Wirtschaftsforschung, München, 2007