Panel VII:

Policies and Programs for CO2 Reduction

Claudia Kemfert
Head of the Energy, Transportation, and Environment Department
German Institute for Economic Research (DIW Berlin)

Dr. Kemfert, who was scheduled to introduce Panel VII, was not able to attend the symposium because a volcanic eruption in Iceland had disrupted air travel. She was replaced by her colleague Dr. Frauke Braun, who introduced herself as a researcher in the Department of Energy, Transportation, and the Environment at the DIW.

“This is a topic that is at the core of our interest and research,” she began. She summarized the EU roadmap for moving to a low-carbon society by 2050, including 2020 targets of reducing greenhouse gas emissions by 20 percent compared to 1990 levels and cutting primary energy use by 20 percent through efficiencies and the use of renewables. The targets for 2050 are far more ambitious, and very close to a low-carbon economy. The call for an 80 percent reduction in greenhouse gas emissions that, she said, could be accomplished through substantial investments in renewable energy and smart grids, and greater focus on energy efficiency, and transportation, especially electromobility. Additional gains can be made by reducing CO2 emissions in agriculture and other sectors. “To reach these ambitious targets,” she said, “requires innovation and technological change.” With no changes in current policy, GHG emissions would decrease only 40 percent, not 80 percent.

More broadly, Dr. Braun summarized an EU White Paper on Sustainable mobility, which recommended the following measures to hasten progress toward 2050 goals:

•     CO2 standards and smart taxation systems.

•     Improved efficiency.

•     Better demand-side management pricing schemes to tackle congestion and air pollution, infrastructure.

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PROCEEDINGS 127 Panel VII Policies and Programs for CO2 Reduction Moderator: Claudia Kemfert Head of the Energy, Transportation, and Environment Department German Institute for Economic Research (DIW Berlin) Dr. Kemfert, who was scheduled to introduce Panel VII, was not able to attend the symposium because a volcanic eruption in Iceland had disrupted air travel. She was replaced by her colleague Dr. Frauke Braun, who introduced herself as a researcher in the Department of Energy, Transportation, and the Environment at the DIW. “This is a topic that is at the core of our interest and research,” she began. She summarized the EU roadmap for moving to a low-carbon society by 2050, including 2020 targets of reducing greenhouse gas emissions by 20 percent compared to 1990 levels and cutting primary energy use by 20 percent through efficiencies and the use of renewables. The targets for 2050 are far more ambitious, and very close to a low-carbon economy. The call for an 80 percent reduction in greenhouse gas emissions that, she said, could be accomplished through substantial investments in renewable energy and smart grids, and greater focus on energy efficiency, and transportation, especially electromobility. Additional gains can be made by reducing CO2 emissions in agriculture and other sectors. “To reach these ambitious targets,” she said, “requires innovation and technological change.” With no changes in current policy, GHG emissions would decrease only 40 percent, not 80 percent. More broadly, Dr. Braun summarized an EU White Paper on Sustainable mobility, which recommended the following measures to hasten progress toward 2050 goals: • CO2 standards and smart taxation systems. • Improved efficiency. • Better demand-side management pricing schemes to tackle congestion and air pollution, infrastructure.

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128 MEETING GLOBAL CHALLENGES • Intelligent city planning and improving public transport (more charging). • Hybrid engine technologies. • Sustainable biofuels. • Gradual transition toward large-scale penetration of cleaner vehicles in all transport modes, including plug-in hybrids and electric vehicles (powered by batteries or fuel cells) at a later stage. A major part of the strategy, she said, is promotion of more energy efficient buildings. New buildings constructed from 2021 onward will have to be nearly zero-energy buildings. To attain this, existing building stock will need energy-saving building components and equipment costing up to 200 billion Euros over 10 years, along with low-carbon electricity and heating. The EU Commission had estimated the need for public and private investments of about 270 billion Euros annually for 40 years to reach this low- carbon future by 2050, she said. At the same time, decarbonizing would bring benefits. Energy efficiency can reduce the EU’s average fuel costs by between 175 and 320 billion Euros per year. This would be accompanied by substantial creation of new jobs in deploying renewables, low-carbon technologies, investments, and especially energy efficiency. Already the work force of the renewable energy industry has increased by about 230,000 to 500,000 persons EU-wide in the past five years. Germany’s own Roadmap 2050, she said, was aligned with that of the EU, sharing the major goals. In addition to the 80 percent reduction in GHGs, it envisions an 80 percent share of renewable energy in electricity generation and a 50 percent reduction in primary energy consumption by 2050. A particular priority area has always been energy efficiency in buildings, where most EU countries currently lag. Dr. Braun concluded by summarizing some of the estimated impacts of the energy efficiency strategy. The minimum required investments in efficiency by 2020 are estimated at 100 billion Euros for smart grids, 25 billion Euros for insulation, and 50 billion Euros for sustainable mobility. Public spending will be divided among R&D, an energy and climate fund, and financial support for new building. The price of electricity is estimated to rise slightly, by 1 to 5 percent, and total emissions to rise by some 25 million tons, or about 9 percent. On the positive side, 20 million Euros per year in energy savings are anticipated, along with many new.

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PROCEEDINGS 129 THE “MORGENSTADT” CONCEPT Frauke Lohr Senior Partner, Grolman.Result GmbH39 Dr. Lohr introduced herself by saying that she was responsible for designing and facilitating the planning of the Morgenstadt Concept, to be executed in partnership by the federal government and the private sector. Morgenstadt can be translated as “Tomorrow-town,” a concept that incorporates many of the features we might expect in the living environment of the coming decades. The High-Tech Strategy for Germany40, of which the Morgenstadt Concept is a part, has been developed primarily by the federal government, she began. Its goal is to help create and nurture markets, deepen and broaden the cooperation between science and industry, and foster innovation as a basis for national health and well-being. The high-tech strategy is a mission-oriented approach designed to establish Germany as a pioneer in science- and technology-based solutions in five areas: climate and energy, health and nutrition, mobility, safety, and communication. As part of the High-Tech Strategy, 11 “forward looking projects” have also been identified as fields of activity. The task for the planners of Tomorrow-town was to develop a visionary concept for illustration purposes—not only for Morgenstadt, but also for other forward-looking projects that might cumulatively create a picture of the future as well as a communication tool. The project seeks to “have something in writing” as the starting point of “a big dream” that can help society reach desirable but challenging goals. The basic idea behind Tomorrow-town, she continued, is to prepare for challenges already known, beginning with patterns of living. While cities cover only about 1 percent of the earth’s surface, for example, they generate 75 percent of global energy demand and about 80 percent of greenhouse gas emissions, primarily carbon dioxide. By the year 2050, approximately 70 percent of the world population will live in cities. Because cities will be the first areas to confront the major challenges anticipated by scientists—climate changes, shortage of resources, population growth—the decision was made to focus on a German city which has an unusually a long history rather than using a green-field approach of building something from scratch, which is sometimes much easier. 39 Grolman.Result is a private consulting firm that specializes in the development and implementation of strategies within an organization. 40 The High-Tech Strategy 2020 for Germany is a major planning document of the DIW, first produced in 2006 and updated in 2010. The aim of the High-Tech Strategy (HTS) is “to create lead markets, intensify cooperation between science and industry, and continue to improve the general conditions for innovation.” .

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130 MEETING GLOBAL CHALLENGES Achieving a Carbon-dioxide-neutral City There are many ways to achieve the goal of a carbon-dioxide neutral city, she said. The visionary concept of Tomorrow-town is a normative scenario chosen by a diverse group from the federal government. Some 20 experts, including electrical engineers, city planners, transportation engineers, and sociologists, worked for three months with political decision makers and experts from industry and presented their result to the public in November 2010. It was published in the leading German newspaper, Frankfurt Allgemeine Zeitung, where it was called “a green dream.” The Tomorrow-town vision addressed major features of city life, including energy, transportation, city planning, spaces, and decision making. She began to look at these features in the year 2030. By then, new houses will be zero-energy buildings, required to produce at least as much energy as they consume. Many older buildings will have been rehabilitated through new, thin thermal insulations that do not conflict with preservation. Every fifth house has reached passive house standards. Hybrid solar collectors on the roof produce not only solar energy but also heat. Renters can buy share certificates with their rental agreements. The heating system is carbon-neutral. In 2010, heating has caused almost half of carbon dioxide emissions, and these have been reduced to near zero. This aspect of Tomorrow-town won an award from the German Solar League, a body that tracks carbon dioxide emissions per inhabitant. The energy scenario for Tomorrow-town combines heating and power generation. Waste heat from electricity production is distributed through a network of tubes and, in some areas, heat pumps and solar collectors are used. Biomass is the main energy source for public heating plants, and this is also distributed through the gas tube network. These systems are complemented by decentralized renewable sources, such as solar panels on houses and hydraulic power plants. Such renewable electricity is imported via highly efficient grids, mainly from wind and solar energy. Tomorrow-town’s energy supply is both safe and cheap, she continued. Utility companies are the service providers, acting as agents to balance supply and demand and as managers integrating centralized and decentralized networks. The population must learn that there are fluctuations in supply and rates, depending on when production abundances or shortages are imminent. New technologies of energy storage have reduced these fluctuations, with electric cars playing a major role in load compensation. Excess electricity is stored electro-chemically in hydrogen and used in fuel cells. Smart grids include intelligent control of building heating and cooling. Sensors ensure that electricity for light and temperature control is used only when necessary and that washing machines and dishwashers are run when energy is cheapest. Most inhabitants have become “pro-sumers,” both producing and consuming energy. Technical progress has made the necessary investments affordable.

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PROCEEDINGS 131 Transportation in Tomorrow-town will feature smart traffic management systems that enable smooth flows despite increased volume; part of the increase will be caused by the increase in one- and two- person households. Vehicles are capable of communicating with each other and with the infrastructure. Electric cars will predominate, thanks to incentives like free tolls and parking; this lowers pollution and noise levels. Public transportation is optimized and extended, and tariffs are subsidized. The system is convenient, clean, safe, and user-friendly, providing real-time information on connections, schedules, and events. Transportation is further enhanced through a variety of mobility concepts. For example, an e-car or e-bike can be rented by mobile phone. Rentals as well as public transportation at flexible rates is paid for with mobility cards. These conveniences induce more people to do without their own car, or second car. An advanced system of foot and bike paths complements the mobility infrastructure. New cargo concepts allow for a more efficient distribution of goods. These goods include cargo trams, e-vehicles, cargo tubes, barges, and special cargo transport centers on the urban fringes. “In Tomorrow- town,” she said, “the traffic flows smoothly despite increased volumes.” As cities have evolved over time, planning has been complicated by the mixing of residential and commercial quarters, especially in cities of eastern Germany. This mixing of quarters, each with a strong identity, will continue, complemented by a mixture of social strata, cultures, and generations. Examples are seen in Munich, where one sees collaboratively used infrastructure, such as shared greenhouses on the roof, solar panels, and car sharing. Other forms of cooperation will be needed to overcome social conflicts. Urban spaces have been redesigned. With more travel by foot or bicycle, less space is needed for cars. Residential areas that cannot be made energy-efficient have been dismantled. Green corridors, community gardens, and vegetation along bike paths and sidewalks provide better air quality. Heat is generated from sewage water, and biogas from sewage treatment produces electricity; gray water irrigates community gardens. The city is a place of short distances and higher quality of living. Creating Tomorrow-town will depend on cooperative and interdisciplinary decision making by engineers, consultants, service providers, and technology suppliers. Communities must have autonomy in addressing local planning and energy issues. Development will make use of intensive data analysis and management to analyze and optimize the flows of people and vehicles, and to optimize energy and water use. For traffic systems, cost- transparency must be explicit and clear to the public. People are encouraged— beginning in school years—to understand the need for new systems and to participate fully. Energy and resource efficiency become part of school curricula, as do climate and energy management and many other new fields of study.

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132 MEETING GLOBAL CHALLENGES Tomorrow-town, she summarized, is a city of participatory decision- making and consequent action, and ongoing dialogue between all parties. “We must integrate everything in order to make the big dream happen,” she said. Dr. Lohr summarized the characteristics of Tomorrow-town as follows: • The heat supply is almost carbon dioxide neutral. • Energy cost-savings are significant. • Traffic flow is optimized with fewer perturbations. • The quality of life is high. • Success depends on participatory decision-making and cooperative action. “Tomorrow-town has a chance to become an economically prospering and livable city,” she concluded. “I’ve just presented a challenging big green dream.” The dream, she acknowledged, is ambitious, but has the support of the Industry-Science Research Alliance41 and many others. She also acknowledged a truth she had learned during the development of the concept: The real challenge of reaching Tomorrow-town lies not so much in developing technical details as in integrating existing solutions and winning the support and participation of the public. “Our real task,” she concluded, is to make the people aware that the cities of the past will no longer be possible in the 21st century, and that “there is no other way to move forward into the cities of the future.” U.S. CARBON REDUCTION POLICIES Charles Ebinger Director, Energy Security Initiative The Brookings Institution Dr. Ebinger began by “setting the stage” on a paramount feature of any discussion of energy, which is very rapid global change. According to the International Energy Agency, the world will need $30 trillion of investment in energy production, transmission, and distribution by 2030. “That is totally prodigious,” he said. Also, as planners discuss shifting away from fossil fuels toward renewable fuels and energy efficiency, they need to keep sight of the 1.5 billion people in the world today who have no electricity—not even enough for a light bulb or a fan. “Clearly,” he said, “if we’re going to have an equitable society at the global level, we have to find a way to bring those people into the modern era at the same time we transform our existing energy infrastructure.” 41 The Industry-Science Research Alliance was initiated by the Federal Research Ministry in 2006. It is a forum in which leading representatives from science and industry propose strategies for strengthening Germany as a high-tech location. .

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PROCEEDINGS 133 Finally, he said, as countries ponder the use of less coal, they need to remember that coal accounts for 80 percent of China’s energy use, and 50 percent of the energy of the United States’ energy use. “Coal,” he said, “is not going away any time soon. If you think it might or wish it might, keep in mind that countries where coal is a major energy source, such as India, also depend on it as one of the biggest employers of people. So to take on the coal industry is to venture into very dangerous political ground.” Dr. Ebinger gave the Obama administration credit for “moving much farther on energy efficiency and renewable energy than any previous administration—at least since the Carter administration’s early efforts.” From a climate perspective, he said, President Obama in Copenhagen committed in late 2009 to cutting U.S. CO2 emissions by 17 percent by 2020—below 2005 levels—and by 80 percent by 2050. Although many people, particularly in Europe, criticized the administration for not setting higher goals sooner, “the President was, I think, very lucky to get even that degree of commitment.” That commitment, however, was tied to the passage of climate change legislation in the U.S. Congress, and both bills died in committee. Since the country’s failure to attack CO2 emissions through legislation, the president has turned to a different narrative, focusing on the economy and the way renewable energy and energy efficiency create new jobs. Such environmental policies have little support from U.S. voters, however, if they raise energy prices. “Voters are more concerned in the current economic crisis with job creation and economic recovery,” he said. “The Obama administration as a result has largely abandoned its climate change efforts and has instead tried to attack the problem from an economic view. Environmental and clean energy policies are now recast as policies for economic growth and for U.S. competitiveness, while energy security has become a larger priority. He sought to lower expectations that the United States would achieve ‘energy independence.’ This is something we can’t do, and I’m not even sure it would be good if we tried.” Given the amount of energy the U.S. imports, he said, it probably cannot be replaced before the end of the century. Turning to the Obama administration’s policies, Dr. Ebinger said that in 2011 the administration had announced a number of clean energy initiatives. The president reduced his support for renewable portfolio standards, by which state legislatures mandate a proportion of their energy portfolio to be produced by renewable sources by a certain date. Instead, the president supported a national clean energy standard that focuses almost exclusively on renewables, particularly wind, solar, and biomass. The National Clean Energy Standard takes a much broader view of energy and includes not only renewables, but also nuclear energy, hydropower, natural gas, and clean coal. The president also called for cleaner transportation, proposing new additional standards that would go into effect by 2014 and 2015. He also called for one million electric vehicles by 2015, a target Mr. Ebinger regarded with caution. “In the United States, even the most optimistic projections I’ve seen predict 10 million electric vehicles by 2030, and I think most people would

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134 MEETING GLOBAL CHALLENGES consider that bold.” There are about 260 million vehicles on the road today, so while a goal of 1 million or even more is vital, he said, “it means that in the transportation sector we are going to remain dependent on imported oil for a significant time.” Dr. Ebinger mentioned several bills before Congress that promote the use of natural gas in heavy trucks, but noted that this would require a new refueling infrastructure along interstate highways that would cost billions of dollars. Infrastructure in general is a major challenge, he said, one that many in Congress seem not to understand. While the country has abundant wind and solar resources, most of the wind blows on the Great Plains, and the most of the sunshine falls on the desert Southwest. Both resources are far from major load centers; optimizing would require replacement of the national grid system with a high-voltage, direct transmission/direct current (DC) grid. In a DC grid, he said, power can travel much larger distances with much lower line losses. But the lowest cost estimate from the Federal Energy Regulatory Commission for installing a DC grid is $350 billion, and estimates from McKenzie and Company, he said, are $500 or $600 billion. In addition to financing, such a project would require reconciling the regulatory rules of all 50 states, including the diverse interests of investor-owned utilities, municipal utilities, some federal utilities, and regional transmission organizations. In addition, about half the states have regulated markets and the rest have deregulated markets, and this divide will impede institutional change as well. Continuing with Obama administration policies, Dr. Ebinger reviewed the major investments in energy under the stimulus program of 2009. Energy efficiency was the largest single component; the others were carbon capture and storage, efficient vehicles, renewables, energy innovation, and environmental cleanup. In 2012 the administration asked for significant additional funds for all of these energy initiatives. One of the most controversial government measures was to allow the Environmental Protection Administration authority to regulate greenhouse gas emissions under the Clean Air Act. “This was anathema to many Republicans in Congress, and it will probably end up going to the Supreme Court,” he said. “It will undoubtedly be challenged when the EPA actually embarks on this. The EPA has been accused of overstepping its regulatory authority, but it’s generally seen as a possible way of reducing emissions without having to pass climate change legislation.” Regarding the future of the U.S. carbon reduction efforts Dr. Ebinger said that “sweeping changes are unlikely,” and will be restricted to an “economic” agenda by strong political opposition. Energy security will continue to be the focus, especially domestic oil and gas production, and the increased use of natural gas for electricity generation. He said that the discovery of shale gas is “far more transformative than anyone realizes,” bringing the “very real prospect of expanding she share of natural gas in electricity generation from the 20 percent today to 30 or 35 percent, and remaining there for 50 to 100 years.” Shale gas, he said, can be developed for $4.50 to $5.50 per million BTU, with

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PROCEEDINGS 135 the upper range of those figures equivalent to $40 or less per barrel of oil. “And shale gas I think will have a rippling effect throughout the world, as the United States no longer needs to import liquefied natural gas.” Nuclear power, he said, is not popular in the United States, “but the president continues to talk about it as part of the energy mix. While only one new plant is under construction, the administration continues to say that nuclear energy is important to meeting its goal.” What is likely to happen, Dr. Ebinger said, is change at the state and local levels “where we’re seeing a lot of activity.” Some 30 states already have renewable portfolio standards, while the federal government does not, and many more are studying them. “On balance,” he concluded, “we have an administration deeply committed to reducing climate change. It may not sound that way at formal international meetings, such as those in Cancun and Copenhagen, but behind the scenes, through the EPA and through bold initiatives that we’ll hear more about today, I think you should be optimistic. You can take solace that this administration is deeply committed to action on climate change and deeply concerned about the threat it poses to the planet. If this administration has a second term, I think you’ll see even more bold initiatives in the future.” CLIMATE CHANGE AND INNOVATION: MITIGATION AND ADAPTATION MEASURES Reinhard F. Hüttl Scientific Executive Director, Helmholtz Centre Potsdam/GFZ and President, acatech, the German Academy of Science and Engineering Despite Germany’s long tradition in science and the world of academia, Dr. Hüttl began, it has only recently established two national academies—the National Academy of Science and Engineering and the National Academy of Sciences (acatech). Both are funded by the 16 federated states, the federal government, and industry. The mission of the academies, in addition to providing a platform for exchanging knowledge between science and society and promoting the careers of young scientists and engineers, is to provide fact- based advice to the general public and to politicians involved in policymaking. Dr. Hüttl serves as acatech president, and is also a member of the academy’s ethics commission for a secure energy supply; that commission was scheduled to give its recommendations to the chancellor during the week following the symposium. He began his discussion of climate change with a paradox: Even as nations face many challenges in deciding which technologies, innovations, and policies might be most useful in addressing climate change, climate change itself is an important driver of new technologies and innovation. Other drivers include global knowledge, customers and users, and the challenge of promoting a public

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136 MEETING GLOBAL CHALLENGES understanding of science. He described a “long-term interrelation” between innovation and sustainability, with innovation enabling sustainability through new products and processes, and sustainability in turn driving innovation through global challenges. Dr. Hüttl also serves as director of Germany’s national laboratory on geosciences, in Potsdam, where the research framework is titled “System Earth.” He said that System Earth is understood as a complex entity consisting of the geosphere, hydrosphere, cryosphere, biosphere, and atmosphere. Climate is a subsystem related to all five “spheres.” The significant change in climate in recent times is the increased concentration of so-called greenhouse gases (GHGs), especially CO2, in the atmosphere. To understand this increase and what it means for the future, he said, the laboratory looks to the past and the natural dynamics recorded in various geological records. “Only when we understand natural dynamics,” he said, “can we have a better understand of how the activities of humans have an impact on climate.” Since about 600 million years ago, when “life exploded on our planet earth,” first under marine conditions and then on land, there have been four great ice ages, alternating with four warm periods when there was no ice. During the earliest periods, we have few records to help understand the causes of fluctuations. More recently, we can see correlations with such earth parameters as its elliptical orbit and tilted axis. The best-known era began about 130,000 years ago, when Earth entered a long period of glaciation and then emerged into the current warming phase about 11,000 years ago. “To give an idea of the extent of this change,” Dr. Hüttl said, “where we are sitting in Berlin was covered about 15,000 years ago with ice about 1,000 meters thick. Then, all of a sudden, it became warmer, the ice melted, and we moved to pleasant conditions. If you go back 50 million years and dig down into the crust where we are sitting, you would find brown coal. This means we had subtropical climate conditions and it was very warm, humid, and good for vegetation.” We have now been living for about 10,000 years under conditions of warming, although still with fluctuations. During the Roman Empire, some 2,000 years ago, the climate was warm enough to allow Hannibal to lead elephants across the Alps. This period was followed more recently by a “Little Ice Age” which lasted about 400 years, bottoming out around 1600 C.E. After that, human activities began to influence climate dynamics, chiefly by releasing fossil carbons. “What we clearly can see,” he said, “is that GHGs related to human activity, especially from fossil fuels, is relevant to climate dynamics. But there are also natural factors that we cannot omit. So the idea that man really can control climate dynamics is not scientifically backed. This is an important message. When I was responsible for coordinating climate research standards for our government, we said yes, we have to reduce CO2 in the atmosphere, and certainly much of the CO2 would not be there if humans had not been active. But to conclude form this that we can control climate, we said no.”

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PROCEEDINGS 137 Dr. Hüttl said there were two responses to climate change: mitigation and adaptation. Mitigation has been studied by many people at different scales. Proposals have included the Kyoto Protocol, the Integrated Energy and Climate Program, use of renewable energy sources, and carbon capture and sequestration. Germany’s national target for 2020 is to reduce carbon emissions by 40 percent relative to 1990. A central strategy of mitigation, he said, is to capture CO2 from waste emissions. Germany is the largest producer of lignite, or soft coal, which accounts for about 30 percent of electricity production. “This is a very bad source in terms of energy production and high level of CO2 emission,” he said. Therefore carbon capture is important for Germany, and geologists have recommended storing it below cap rock in a saline aquifer near Potsdam—near where lignite is mined. “But the people don’t like it,” he said. “We have no acceptance for this technology here in Germany. Some people think that CO2 is dangerous, like nuclear waste. Of course this is not true, but this is the perception.” Adaptation, he said, included the need to adapt to specific regional effects of global climate change. “We see this as an innovation pathway, to develop resilience to potential damages.” Germany released a National Adaptation Strategy in 2008 and was drafting a National Adaptation Plan. It describes implementation for different industrial sectors, including energy, water, transport, and communication. Required, he said, were more research, advocacy, and capacity building. To illustrate the consequences of climate change locally, Dr. Hüttl said that even in a small country such as Germany, modest changes in precipitation and temperature over the past century had brought notable changes, both positive and negative. At higher elevations, such as the Black Forest, higher temperatures and more precipitation had brought longer growth periods and healthier forests with more species. In the lowlands of Brandenburg, around Berlin, longer periods of higher temperatures had brought a transition from mostly pine forests to mixed pine-deciduous forests and more species competition. This more stable ecosystem is important for not only wood production, he said, but also for better water resources, biodiversity, clean air, and recreation. On the other hand, more wood production is associated with mobilization of humus and release of CO2 from the soil. “This is important in terms of CO2 balances and budgets when we compute them,” he said. Overall, Dr. Hüttl concluded, “when you look at System Earth you have to say, yes, man has become a geofactor. Man is influencing our planet. So both concepts, mitigation and adaptation to climate change, are important. And more effort is necessary to understand everything that is happening. Of course changing the energy supply is important, but it will not solve the whole problem.”

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138 MEETING GLOBAL CHALLENGES DISCUSSION A questioner asked about financing renewable energy systems, such as rooftop photovoltaics. Dr. Lohr said that most financing goes into the development of technology, with only a small amount going into actual electricity supply infrastructure. “There is a clear imbalance between investments in technology,” she said, “versus what you get out in terms of renewable energy.” She said that while people are generating electricity for their houses, they don’t use the electricity they generate, which is transferred into the public net from the house owners, who then buy it back. “This is not a very convincing situation in the long run,” she said. Dr. Wessner asked about the process of phasing out nuclear power in Germany. Dr. Hüttl said that Germany had previously decided to exit the nuclear sector, and the Fukushima disaster in Japan provided the stimulus to do so “faster than expected.” He said that the decision was settled, and the change would occur over about a decade. “You cannot set a clear time limit,” he said. “It’s more of a corridor. You can only let go of the existing supply system when you have a substitute ready. This is the challenge, to organize the substitute.” The substitutes on the menu, he said, include the renewables—wind, sun, water, perhaps geothermal power—and other sources. Germany will use more natural gas, and examine clean shale gas and clean coal. It will address not just the question of carbon capture and sequestration, but also whether CO2 can be used as a raw material for methanol. “For instance, when you have an oversupply of wind power, we may use it for electrolysis of water to produce hydrogen, combine it with captured CO2 to make methane or methanol, and maybe store it.” There are more concepts, he said, including “research maybe far down the road on artificial photosynthesis, and production of algae. There will be some storage, maybe some in the sea, in gas hydrates to replace methane for CO2. There will be enhanced oil recovery using CO2 to increase pressure in the ground and force more oil from reservoirs that are depleted only to 40 or 50 percent today.” “Getting out of nuclear,” he said, “doesn’t mean just shutting down the power plants. It means to answer the question of what to do with the nuclear waste. Are there processes to reduce half-lives significantly? We will probably need reservoirs to store nuclear waste, but then we want to get it back once we have technologies to treat. Once you really secure this end of the technology, and you have inherently secure nuclear power plants, you have a secure technology. This is from my point of view the focus of our challenge today. It’s not as simple as to say wind will solve the problem.” A participant commented on Minister Hoyer’s description of values shared across the Atlantic, saying that there were actually quite different views of nuclear energy. For the United States, it remains a key part of the core portfolio; in Germany it is “way over on the other side.” He moved to another question, asking whether Germany might not get a much bigger “bang for the

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PROCEEDINGS 139 buck” by “paying our poor American friends to lower their carbon footprint to our German level” rather than trying to lower the level in Germany to zero. The moderator responded that when Germany has “such an ambitious goal” as to lower its emissions to zero, it can help foster innovation through new technological solutions; these can then be exported to other parts of the world. She agreed that the financial aspect was “definitely not solved. At the end, price and demand will be the key in whether it’s accepted by the population. Only if you can pay for it will people be willing to do it.”