Economy

The availability of renewable energy is an important factor for future investment decisions in the chemical and steel industry. This is a key finding of our survey of 300 decision-makers from the chemical and steel industry. 92 per cent of the respondents anticipate that their company will relocate facilities as it seeks to decarbonize production. In addition to low-cost renewable energies, the respondents identify political support as a key factor in investment location decisions.

On 1 October 2023, the EU’s Carbon Border Adjustment Mechanism (CBAM) entered into effect, beginning with a transitional phase that will run through to 2026. This provides a two-year learning phase during which stakeholders, including the European Commission, can gradually adjust to the new terms of trading established by the CBAM, a cross-border carbon pricing mechanism targeting imports of carbon-intensive products.

In their decarbonisation journey, European countries have so far focused on policies to dramatically increase the share of renewables and improve energy efficiency across diverse sectors, including industry, construction and housing. However, it has become clear that renewables alone will not enable the industrial sector to achieve its decarbonisation goals, as a large share of the carbon dioxide emissions from industry are emitted during manufacturing processes. Emerging technologies for carbon capture and storage (CCS) and carbon capture and utilisation (CCU) as well as hydrogen (H2) are currently being explored as the most promising solutions.

As governments across the world decarbonize their economies, the shift toward clean energy is highlighting new geopolitical tensions, supply chain vulnerabilities, and sustainability challenges associated with raw material extraction. With electrification as the main pathway to achieving decarbonization, one key technology—the battery—plays an outsize role in this shift. As the lithium-ion battery is currently the dominant technology for electric vehicles and stationary energy storage, exponential growth in critical mineral mining is required to meet demand. The International Energy Agency projects that the metals industry would need to build 50 new lithium mines, 60 nickel mines, and 17 cobalt mines by 2030 to meet global demand in line with national emissions-reduction pledges.

A visit to the ACHEMA 2022 trade fair for process industries has strengthened my conviction that dialogue between the business sector, science, politics and society will be crucial to achieving our climate goals.

Russia’s invasion of Ukraine has intensified European policymakers’ interest in developing energy trade relations with Canada, as the former is seeking to identify reliable partners to swiftly diversify its fossil fuel imports.

To take stock of industry’s real-world experience with digitalization to date and the expectations that exist with regard to sustainability impacts, the research group “Digitalisation and Sustainability Transformations” conducted an international study in China, Brazil, and Germany. Their results clearly show that the moderate gains made thanks to digitalization lag far behind the high hopes that many hold for it.

The EU's pending Batteries Regulation is an ambitious framework to impose strict sustainability standards on the technology most important to electrification. To secure access to the lucrative EU market, global battery manufacturers will need to clean up their supply chains. US policymakers should take heed.

The Covid-19 pandemic gives us a glimpse of what climate change has in store for us concerning our globalized economic system. More research is needed to help us better understand these complex interconnections and to translate such insights into instruments to support decision-making.

On November 17, the European Commission proposed a regulation on deforestation-free products. This initiative is groundbreaking in that it tackles legal deforestation next to illegal. What does this legislative proposal mean for commodity-producing countries? In the case of Brazil, effective regulations will depend on a combination of trade, financial, technological, and cooperative measures.

The Nigerian government and German energy company Siemens AG signed the Nigerian Electrification Roadmap (NER) partnership, also known as the Presidential Power Initiative (PPI) in 2019. The Roadmap contains technical and commercial proposals for financing, implementing, and executing projects to revive the Nigerian power sector and manage Nigeria’s future electricity requirements.

It may sound like a paradox but it is possible to grow the economy without raising GDP, if we widen the definition of the economy to take account of human wellbeing and nature, says IASS Affiliate Scholar Christian Felber, the founder of the Economy for the Common Good.

The digital transformation is in full swing, touching economies around the world. This far-reaching transformation is distinguished by three change processes affecting value creation models, information flows and resource flows – the latter two will be examined more closely in this post.

"The Packaging Act of 2019 is already having an effect here [on recycling]. But there is still far too much packaging waste in Germany. More than half of all plastic waste is disposable packaging, and that really bothers many citizens, and it really bothers me personally", remarked Minister of the Environment Svenja Schulze on the latest amendment to Germany’s Packaging Act (the Verpackungsgesetz).

Brazilian geographer Bertha Becker referred to the Amazon region as the oldest periphery of the capitalist world system. Its colonial occupation, or 'frontier economy', is based on the continuous incorporation of available land and the exploitation of their resources – both of which are regarded as infinite. This perspective on the Amazon has existed for centuries and continues to loom large in Brazil today. To meet its growing demand for raw materials, the outside world assumed the rainforest to be of little value, discounting the services that it provides to humankind. This view encourages the rainforest’s destruction and is not sustainable. A model for the sustainable development of the Amazon region is feasible however and could play an important role in Brazil's post-pandemic economic recovery efforts.

Countries have responded differently to the large societal and economic impacts of the Covid-19 pandemic. While some view the crisis as a window of opportunity for new technologies and approaches to achieve climate neutrality, others will be tempted to reinforce their dependence on old technologies, leading to a carbon lock-in. Israel’s response as a start-up nation is promising, but further measures are needed to support a green transition.

In the European Commission’s “Coronavirus response”, President von der Leyen recently announced the aim of building “a modern, clean and healthy economy, which secures the livelihoods of the next generation”. But what does that mean for high emitting industrial sectors such as cement production? Are they part of “yesterday’s economy”, or will they successfully transition to more sustainable modes of production? Over half of all the materials that humans use on Earth are “cementitious” – including concrete, cement and other building materials – and it is difficult to imagine a life without cement.

According to a recent report, German households are producing 15% more waste compared to before the pandemic as concerns around hygiene and safety overshadow the public's interest in sustainability. Additionally, with people enjoying outdoor spaces in the summer, plastic packaging waste is even more starkly noticeable in the environment. With common plastic items, and particularly to-go food packaging, constituting 10-20% of the waste found in parks, public places and streets in Germany, the urgent need to regulate these products cannot be understated. Long-term measures to avoid the excessive production and consumption of plastic in its various forms are clearly needed.

Socio-environmental governance is not an area of exclusive government action. Corporations, investors, civil and consumer organizations are reinventing themselves as political players in an increasing number of self-regulatory arrangements. Private environmental governance covers a wide-range of schemes such as Corporate Social Responsibility (CSR), Environmental, Social and Governance (ESG) criteria; Voluntary Sustainability Standards (VSSs) and certifications. Private initiatives have been praised for their potential to contribute to the goals of the Paris Agreement. Nonetheless, the current situation in Brazil shows that the private sector has a role to play not only in making its own environmental commitments, but in demanding that governments respond.

How is the coronavirus crisis affecting the research and development of sustainable technologies? We spoke with the leaders of research projects funded under the CO2WIN programme.

In May 2020 I was a guest on an episode of the TV show “Planet Wissen” dedicated to “Pathways out of the Plastic Flood”. It was an opportunity for me to talk about the preliminary results of our work in the ENSURE project on “Plastic: Social Perception and Behaviour Patterns”. The journalist Andrea Wojtkowiak had sent me a few questions in advance, but – as is so often the case – there wasn’t enough time to discuss everything in detail during the programme itself. So for all those interested in the issue of plastic, here are the more in-depth answers.

Crises create the space and time for us to question long-held beliefs and to debate new possibilities. The current crisis shows more clearly than ever before the need for new and previously unimagined – or seemingly impossible – solutions to advance the transformation of our societies towards sustainability. And it needs people with the ability to make these new ideas reality. Little has been made of the potential benefits of cooperation between science and business in such vital areas as mobility and energy transitions. Pooling expertise from science and business, and involving political decision-makers, non-governmental organizations, and the public in relevant debates, could unlock previously untapped potentials for sustainability transformations.

Worldwide over one billion people are on coronavirus lockdown. Overnight, the frantic economies of the twenty-first century ground to a halt. All of the sudden, an invisible organism became our number one enemy, demonstrating the fragility of an über-connected planet. The coronavirus pandemic is an unprecedented event and will leave a much changed world in its wake. The question of global cooperation looms large in thinking about the post-pandemic world. Are we entering a world that is less free and open? A world of more authoritarian states? Or is this pandemic an opportunity to “unlearn” mistakes and build our societies based on trust, knowledge and cooperation?

We have already surpassed the known limits to growth, so degrowth is our only option.

The German naturalist, writer, and statesman Alexander von Humboldt taught that all things are truly connected to everything else; that our entire world is an interwoven tapestry. The only way to ensure a dignified life for all, without poverty and hardship, is to make climate change and the limits of global resources central criteria in all political and economic decisions. One proposed solution to the growing problem of poverty is unconditional basic income (UBI).

In the upcoming days Japan will hosts its first ever G20 Summit. As the main contributers to global warming, the G20 states agreed 2009 on a phase out plan of fossil fuel subsidies. Ten years later the failure of the G20 to act on global warming is evident: around $63.9 billion was spent by G20 countries this year to develop coal industries in the global south.