Climate change is probably the most pressing global challenge of our time. Nevertheless, the international community is not achieving the planned progress in reducing greenhouse gases. Why is that? Is humanity not capable of recognizing the obvious, or is it too slow to draw the right conclusions? Is politics too shortsighted, focused on votes? Is the switch from fossil fuels to clean energy too expensive for industry and business? How can we effect change?

Anita Fribergh
Author
Anita Fribergh
Sustainability Manager
Stefan Becker
Author
Stefan Becker
Manager Political Affairs

Paris 2015 must be implemented

The fact that politicians know the doomsday clock is right at 12 is shown by the results of recent UN climate conferences, especially those held in Paris in 2015, where the international community made clear declarations of intent to slow down global warming and to massively reduce emissions of environmentally harmful gases such as CO2. Hardly anything has been implemented since then, with the announcements followed by virtually no action.

Survey: Climate change is the biggest problem

It is clear to Europeans that action must be taken as soon as possible. A recent survey by E.ON revealed that Germans consider climate change the greatest social challenge – before even poverty, environmental pollution and war.

Lake

Ecofriendly electricity is too expensive

A closer look at the current pricing of energy sources shows that people who use climate-friendly energy are being punished. For example, the mineral oil tax has not risen since the early 2000s, while the cost of electricity is constantly rising due to new taxes, charges and levies. Buying climate-friendly electricity today means paying for every kilowatt hour of EEG, CHP, StromNEV, offshore, liability, switch-off and electricity tax. Those who purchase climate-friendly electricity today have to pay a steep price. Those still using harmful energy sources such as mineral oil pay the same price per liter that they did 10 years ago. This is paradoxical.

Field of action

1990

in million tons of

CO2 equiv.

2014

in million tons of

CO2 equiv.

Power industry

466

358

Buildings

209

119

Traffic

163

160

Industry

283

181

Agriculture

88

72

Other

39

12

Total amount

1,248

902

Making CO2 more expensive creates incentives

This is exactly where legislature has to begin. Only if environmentally harmful energies become more expensive and environmentally friendly electricity cheaper will there be an incentive to use it for heating, transport and more. It would replace oil, gasoline and natural gas. If CO2 emissions were made more expensive across sectors, politics, business and private households would be equally willing to change their behavior. The same principle applies to climate-neutral and renewable energies. When the price is lowered through fewer and lower taxes, charges and levies, the change becomes worthwhile.

E.ON calls for cross-sector CO2 pricing

E.ON has long called for cross-sector CO2 pricing. This would set the conditions needed for positive change.

In light of that conviction, we added our signature this week to a joint call for CO2 pricing from 16 companies with different interests. What unites us is the conviction that more must be done to protect the climate and that CO2 pricing as a market-based instrument offers the right incentive. We want to reduce emissions of environmentally harmful CO2 to incentivize more expensive fossil fuels in all sectors. This would also compensate for unjustified price distortions, such as those between natural gas, heating oil and electricity used in heat pumps.

Once the legal framework conditions are in place, German industry and business can develop their full potential. After all, many companies are already prepared. As are we at E.ON. We have a clear sustainability strategy with concrete objectives.

Survey

Source: Share of different sectors in energy-related greenhouse gas emissions in Germany in 2014 (Data: [UBA16b])

To make an effective contribution, we adopted a new climate strategy in 2017. Our concrete goal is to reduce our absolute CO2 footprint by 30 percent by 2030 compared with 2016. We are also working to reduce the CO2 intensity of the electricity we sell by 50 percent. We know that there is still much to do. So we at E.ON will continue to promote sustainable action and thinking for the future, and inspire our customers with innovative ideas for the new energy world.

E.ON CEO Johannes Teyssen

Teyssen

The entire E.ON Board of Management has also committed itself to the United Nations’ goals for sustainable development, with a focus on Goal No. 7 “Affordable and Clean Energy,” Goal No. 11 “Sustainable Cities and Communities” and Goal No. 13 “Climate Protection. In concrete terms, this means that we want to reduce CO2 and other greenhouse gases by reducing emissions through greater efficiency, using renewable energy and further developing and expanding our smart grids to enable the widespread generation of volatile decentralized green energy.

Essentially, our entire behavior and actions are subject to specifying how we can decarbonize the energy world and reduce or completely eschew emissions for ourselves and our customers in the best possible way. We are committed to this. In our view, cross-sector CO2 pricing is an important political signal and a necessary regulatory course-setting that not only supports our plan of action, but also has an impact on the entire economy and thus directly on climate protection.

Win-win situation

In the end, the state has the opportunity to offset the revenue lost in the climate-neutral energy sector with additional revenue from harmful energy sources. End consumers and industry alike stand to save money by making the switch. The bottom line is that they, too, will ultimately benefit. The time has come to draw the necessary conclusions. The COP24 is the right time to do that.

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