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14.02.2019

Rede von Svenja Schulze bei der Founders’ Day Lecture

Im Anschluss an die Vorstandssitzung der Deutsch-Indischen Handelskammer hielt Bundesministerin Schulze den Vortrag der Founders‘ Day Lecture vor deutschen und indischen Unternehmensvertreterinnen und -vertretern.

– Check against delivery –

Ladies and gentlemen,

At the World Economic Forum in Davos this year, the importance of environment and
climate policy for the economy was much discussed. This is just one example of how
last year’s extended heat waves, forest fires and storms, which hit many regions of
the world, have focussed the spotlight on the problem of climate change.

Growing air and water pollution in countries like China, or here in India, shows that
the global economy in its current form is reaching its limits more and more. Basing
the economy on growth alone leads to unbearable conditions.

Business needs to adjust the environmental and social impacts of investments in line
with the 2030 Agenda catalogue of goals. By keeping the Agenda in mind,
companies will make better decisions and avoid many risks.

Joe Kaeser, the CEO of Siemens, recently made a statement on social investments
of private companies, stating that average Corporate Social Responsibility measures
are not enough. It would be positive if a change in thinking could set in, at least in
some large corporations so that they go beyond the status quo.

In light of the enormous ecological and social challenges facing humankind, we are
no longer dealing with small course corrections. Taking a little action for the
environment and the climate, doing a little bit for society here and there just won’t cut
it. The transformation that we need will affect and change all areas of society.

The Paris Agreement and the 2030 Agenda for Sustainable Development provide the
framework for this transformation. They describe the goals that we must reach.

The adoption of these agreements was not without difficulty, with politics in some
parts of the world once again characterised by stronger national self-interest.

We had to muster immense and energetic multilateral efforts that were only
successful thanks to the constructive positions of countries like India and China.

Perhaps the agreements were only possible because no single country was
ultimately able to push through its wishes in full. Indeed, what came through at the
end was, firstly, the conviction that our joint goals make a better, more just life
possible for everyone.

And secondly, the conviction that the world will no longer live at the cost of future
generations if we stay within the ecological limits of our planet.

The 2030 goals are fuelling us on our journey to more sustainable development.
They lay a good foundation for a quick and socially just change of course. We are
talking about a fast and fair transition. It is about ensuring within only a decade that
people and the environment are doing better in 2030 than today.

Time is running short and that is exactly why I want us to get started. The longer we
wait, the more it will cost. It will be more costly for industry, for workers and for
society overall. Trends in many areas are headed toward a point of no return – for
example in global warming and species loss.

A stable climate, clean air, clean drinking water – these are vital for all life and every
economy. This is why ecological common sense demands that production and
consumption become more sustainable.

I believe companies will reap significant rewards if they weigh the likely ecological
and social consequences of their decision-making against the target catalogue of the
2030 Agenda.

A good example for this can be found in finance, where more and more actors are
changing their ways. Ecological risks are receiving more and more scrutiny in
investment decisions. Ideas like fossil fuel divestment and green bonds are no longer
foreign. We addressed this at the Indo-German Environment Forum yesterday.

But this is not solely about avoiding investments and economic decisions that lead to
more environmental impacts or carbon dioxide emissions. Business models and production
processes that raise the standard of living worldwide without destructive exploitation
of our planet’s natural resources hold the key to the future.

This applies especially to countries with strong industrial sectors like India and
Germany.

Both of our countries face the challenge of sharply reducing emissions, especially in
energy-intensive industry, while also maintaining a competitive edge, for example in
the steel, cement, aluminium and chemical sectors. This requires investments in
research and pilot projects to make powerful decarbonisation steps possible when it
comes to industrial emissions.

My ministry has just set up this kind of support programme for the decarbonisation of
industry. It promotes pilot projects for the industrial transition to largely greenhouse
gas-neutral production. The intention is to avoid shortsighted investments, capital
losses and expensive retrofitting. We primarily want to help companies to position
themselves as pioneers in environmental and climate technologies.

There is great potential for cooperation between India and Germany in this area, not
only at political level but also at the level of individual companies.

Modern environmental policy is counting on ecological innovations. Modern
environmental policy can and will create additional and, above all, future-proof jobs.
Megatrends like digitalisation and the use of artificial intelligence also play a role in
this.

In Germany, green tech accounted for 15% of the GDP in 2016 and was on the
increase. Moreover, one and a half million people work in environmental technology
and resource efficiency today in Germany alone.

Here in India, the expansion of renewable energy has also led to a boom in
employment and created many well-paid jobs. The expansion has enabled access to
affordable energy for all in rural regions.

These developments are encouraging and show us the way forward.
Experience in Germany and in many other countries has shown that countries are
only able to successfully mould this kind of transformation process if they are
confident enough to intervene in the market. Some innovations only reach the
breakthrough point with a boost from outside. Countries have to be in the position to
lay down stable framework conditions and ensure planning certainty.

In Germany, we plan to put a climate change act in motion during this legislative
period. The legislation will establish binding mitigation targets for individual sectors
that are drawn from our climate target for 2030. In this way, we are setting out clear
requirements and areas of responsibility.

The Indian government has also set ambitious objectives – for the climate, clean air
and the transition from combustion engines to electric transport. This is an area
where Germany is still catching up and has things to learn from countries like China
and India.

In addition to binding targets, it is important that governments create the right
investment incentives. The key here is to look at true environmental costs. This
means, for example, putting an end to subsidies that sweeten investments in old
fossil fuel-based technologies. Generally, environmentally harmful practices must
cost more.

Pricing carbon dioxide emissions has an important role in this context. The EU
Emissions Trading Scheme sets a price on emissions from industrial production.
Since the last reform, the price is now high enough that it actually creates an
incentive to invest in mitigation. Price incentives will become more and more
important in other areas in future.

I already mentioned the many jobs that have emerged in the green sector in the last
few years.

But it is also true that there are losers in any structural change. This is why success
depends on making the transformation as fair as possible.

In Germany, just a few weeks ago, the last hard coal mine stopped operation. This
was the endpoint of a fifty-year structural change, over the course of which the
number of jobs went from 500,000 to nearly zero. The next step is to phase-out opencast
lignite mining.

A commission set up by the German government and composed of different social
stakeholders, including industry associations, trade unions and environmental
groups, has presented a roadmap setting out how Germany will phase out lignite coal
by 2038 at the latest.

The coal phase-out will go hand in hand with extensive measures aimed at improving
the economic future of the affected regions. The commission has also drawn up a
series of proposals to avoid social conflicts.

The commission’s work in Germany has shown that we will only be able to achieve
an economy in line with the Paris Agreement and the 2030 Agenda if we work
together and search for common solutions.

This requires partnerships that bridge the age-old divides between environmentalists,
businesses and unions.

We also need cross-boundary partnerships.

No country can tackle serious environmental and climate issues on its own.
International cooperation must be strengthened. Unfortunately, this is not a matter of
course today due to populism and nationalism.

The past has shown us that progress comes when the international community sticks
together. Against this background, we should deepen our cooperation and build on
the dialogue between India and Germany, ideally in the form of partnerships that
enable exchange.

This is precisely why we have come to India to talk about the most pressing issues –
clean air, waste management and circular economy. Impressive potential for Indo-
German cooperation emerged at the Indo-German Environment Forum yesterday.
Germany has achieved significant progress on these topics in the past decades. Up
until the 1970s, we had a serious air pollution problem, mainly in industrial regions.

The Environment Forum discussed this in depth and considered how Germany's
experience could be of benefit to India, especially with regard to air pollution caused
by industrial plants.

Our countries have worked together successfully for many years on waste
management. I commend India’s aim to develop a circular economy. Yesterday in
Delhi, we talked about how our experience with the German Circular Economy Act
could be useful here.

Our countries also are working together in the UN Partnership for Action on Green
Economy.

I am very pleased that India became a PAGE country in 2018.

What makes PAGE extraordinary is the fact that the partnership can tap into the
expertise of five very different UN agencies. Beyond this, PAGE deliberately takes a
macroeconomic approach and addresses not just environment ministries, but also
whole governments.

In addition, the partnership’s work incorporates other stakeholders such as business,
representatives of civil society and unions.

This enables solutions that integrate the interests of all affected and leave no one
behind, as intended in the 2030 Agenda.

PAGE exemplifies what we need to achieve the SDGs and the targets of the Paris
Agreement – more partnerships between countries, between organisations and
between other stakeholders.

Business is a key player here as well. The 2030 goals and the climate targets can
only be achieved by working with companies that see sustainable development as a
competitive advantage.

I am counting on you. Let’s work together on this.

Thank you for your attention.

14.02.2019 | Rede Nachhaltige Entwicklung