Binding Climate Change Targets and Economic Growth: North Rhine-Westphalia Shows How

The climate negotiations in Copenhagen and Cancun have shown the difficulty of negotiating binding climate targets that are nevertheless ambitious. True to the motto “think globally, act locally,” the German state of North Rhine-Westphalia (NRW) is injecting a new pace and energy into the slow progress of international climate policy. In the coming months, it will, for the first time, pass a climate change bill that prescribes binding targets: By 2020, greenhouse gas emissions are to be reduced by 25%, and by 2050 by 80% to 95% compared to 1990 levels.

At first sight, these goals may not seem very ambitious compared to those of the German Federal Government (reduction of 40% by 2020 and 80% to 95% by 2050). However, given its traditionally fossil-based power generation infrastructure and its many energy-intensive businesses, NRW, similar to Michigan, Ohio, or Pennsylvania, has a long way to go in terms of achieving a turning point in its energy policy. Per capita GHG emissions in NRW are comparable to those of the Midwest of the United States, and nearly twice as high as the German average. Implementing an effective climate policy in NRW is therefore a daunting challenge.

Of interest is that the climate policy of this German state is in fact much more global than it might seem. NRW is roughly the size of Maryland. However, as Germany’s cradle of industry, NRW emits 44% of the country’s greenhouse gas emissions. If the state was a country of its own, it would rank, based on its GDP, as the 7th largest economy in the EU and the 20th largest in the world. NRW thus deserves to be recognized as a model and example with regard to its successful climate policy, especially for heavily industrialized regions with high per-capita emissions.

In addition to its binding reduction targets, the climate change bill mandates the establishment of an action plan, the annual evaluation of those actions, an annual monitoring exercise to ensure the meeting of the targets and measures, and the creation of a climate protection board. The bill’s climate protection targets are also incorporated into land use planning policies, thereby ensuring the long-term protection of investments in new projects in relevant areas. Further provisions of the bill concern energy efficiency, energy savings, renewable energies, and adaptation to climate change.

The new bill will also give NRW the legal basis for mandating concrete and sector-specific measures contained in the state’s climate protection plan. Together, the state’s climate change bill and climate protection plan thus constitute a forceful and efficient instrument for achieving effective climate protection.

Meanwhile, most other countries are only paying lip service to the goal of reaching ambitious GHG reductions or to expand the renewables sector. Although more than 70 countries worldwide have pledged to reach reduction targets, global emissions continue to rise. One reason for this is the high degree of intervention in domestic affairs which emissions reductions call for. In the past, international agreements were restricted more so to matters concerning foreign relations, such as agreements over customs duties, standards, or security matters. Climate protection, on the other hand, requires radical changes in areas that have traditionally been hardly affected by international regulations. For example, it requires a massive restructuring of the economy, in particular with regard to energy supply, a core area of national sovereignty.

The magnitude of this challenge often overshadows the considerable positive spinoffs offered by such a restructuring. Once an ecologic structural change is introduced, the competitiveness of modern economies grows, as do investment rates, and major opportunities arise for the development and marketing of so-called “cleantech.” Germany’s wind energy sector today constitutes the second largest client of the country’s steel industry, and Germany’s renewables sector as a whole now employs more than 340,000 people. Especially in times of economic crisis, cleantech and renewable energy technologies have proven to be a stabilizing factor for the German economy.

This applies not only to formerly structurally weak regions. Especially for an industrial basin such as NRW, a rigorous climate policy offers the opportunity to realize a true structural change spanning aging industrial sectors to modern growth sectors. From 2001 to 2009, employment dropped by 32% in NRW’s manufacturing industry, yet rose by 6%, on average, in the renewables sector. In 2008, the renewables sector in NRW achieved sales in the order of €6.6 billion. These trends can be expected to enjoy even stronger growth through the measures of the climate change bill and further efforts in support of renewables. Many municipalities that were heavily affected by the closing down of aging industries are now able to compensate a part of their revenues with the operation of new wind power plants. Moreover, Germany’s building modernization programs designed to insulate homes and reduce energy consumption also create jobs and relieve households from the so-called “second rent,” namely, energy costs. Universities and research institutions in NRW are leaders in the development of smartgrid technologies such as SmartMeter systems, that optimize the supply and demand of power once implemented.

The case of the state of North Rhine-Westphalia shows: Protecting the environment doesn’t have to be a trade-off between a climate policy on the one hand and economic competitiveness on the other hand. Rather, to be successful, climate change bills simply have to address the most emissions-intensive sectors and regions. Savings potentials as well as the responsibility for climate change are here the biggest incentives. NRW is facing up to this challenge with binding targets and concrete measures that strengthen the value and potential of this industrial region. Because one thing is sure: Lip service creates neither climate protection nor jobs!

Wibke Brems, born 1981, studied electrical engineering from 2000 bis 2004 and worked until 2010 in energy consulting for municipalities and photovoltaics. Since May 2010, she is Member of the NRW Parliament and Spokeswoman for Climate and Energy Politics of the Green parliamentary party.