How Science Can Better Contribute to Climate Protection

Opinion

Opinion by ZEW President Achim Wambach and Axel Ockenfels, Professor at the University of Cologne

Science can contribute to climate protection with its progress in knowledge - and at the same time be a role model for rational and effective climate measures.

Science should be a role model for rational and effective climate protection measures. In this context, science and politics should focus their efforts on innovation. Climate and energy technologies in particular need a massive boost, not cuts. Economists Achim Wambach and Axel Ockenfels explain why a global approach is necessary.

Europe, and particularly Germany, are making significant contributions to the fight against climate change. Climate protection means reducing harmful emissions. However, for technologically advanced countries, it’s not just a question of whether they meet their reduction targets, but how they do so. Climate policy will only be successful if it also manages to encourage poorer countries, and more countries in general, to adopt ambitious climate policies. If these countries do not participate, the world will fail in addressing this global challenge and fall short of its own climate goals. Therefore, Germany’s and Europe’s most important contribution to combating climate change is research and technological advancement that reduces the costs of transformation for the world – especially for the less affluent parts of the world with limited financial capacity and willingness to pay for climate policy.

The progress made by science in recent years in areas such as renewable energy and storage technologies is remarkable. For example, photovoltaic systems are now 95 per cent cheaper than they were 15 years ago; wind power is 38 per cent cheaper than a decade ago, and batteries have seen a cost reduction by 82 per cent in the same period. However, much more innovation is needed, and at a much faster pace, to meet ambitious climate targets. Europe has a key role to play: Europe’s share of global scientific output per capita is three times higher than its share of emissions. This alone shows that it would be a mistake to limit our responsibility and focus solely on national emission targets. The task is clear: Europe must consistently invest in research to protect the climate and support poorer countries. Europe is on the right path – judging by the number of patent applications, the EU is the leading economic region in environmental technologies. Our research institutions are doing a lot, investing in battery research, carbon capture, climate-friendly aviation, and many other areas.

However, in addition to their research agenda, scientific institutions often have their own climate change agenda to reduce CO2 emissions. This is partly driven by public expectations regarding the carbon footprint of research institutions. The Max Planck Society aims to be carbon neutral by 2035, the Fraunhofer Society and the Helmholtz Association by 2030. Universities have similar climate goals, often focusing on green electricity, building renovations and similar measures. The German Research Foundation (DFG) allows CO2 compensation payments for air travel. Institutions have appointed “climate neutrality and sustainability officers” to oversee and communicate such programmes. But is this a scientifically rational strategy to best promote climate protection?

Unfortunately, the answer is partly negative. Some measures have no real impact on the climate because they ignore the interplay with other climate policy instruments. One such instrument is the European Emissions Trading System (ETS): Those who produce harmful emissions in the energy sector, such as coal or gas-fired power stations, have to buy allowances. If a university reduces its use of fossil fuel-generated electricity, for example by renovating buildings or installing solar panels, its demand for allowances decreases. These allowances are then used elsewhere. Therefore, such measures cannot reduce European CO2 emissions beyond the level already set by the ETS. Experts call this the “waterbed effect”: pressing down on the mattress in one place causes it to rise in another.

In other words, the electricity that comes out of the socket is already compensated because the power producer had to buy emission rights from other emitters for climate-damaging electricity.

Some measures may be cost-effective and therefore advisable in their own right: Solar panels, for example, are subsidised, and self-consumption can help avoid high grid charges. However, they do not contribute to European emission reductions. Research institutions should therefore always underpin their climate protection measures with a serious analysis of the climate impacts and costs. Such analyses are rare though. How much CO2 is actually saved in Europe and globally, and what could have been done with the funds instead? Acting responsibly and rationally means using limited resources to achieve the greatest possible impact in the fight against climate change.

Other measures can sometimes have undesirable effects. For example, the German Research Foundation offers compensation for intra-European flights whose emissions are already accounted for in the ETS. The additional compensation may even make flying more climate friendly than not flying, as it effectively doubles the compensation for each flight. This could also lead to undesirable changes in behaviour: more flights might be taken if the compensation makes people feel less guilty. It is no coincidence that carbon-emitting companies have popularised the idea of individual responsibility and personal carbon footprints to serve their goals.

Climate targets that focus on an individual carbon footprint rather than addressing global climate change can backfire, especially if they hinder research into solutions for a sustainable society. For example, if energy-intensive infrastructure such as data centres and large experimental facilities are prevented, or if investment in green electricity or building retrofits ultimately leaves less money for research and teaching, leading to less scientific progress – which could have a far greater global impact than local emission reductions, regardless of the waterbed effect.

So what should be done? Science and politics should focus their efforts on innovation – research, teaching and knowledge transfer. Climate and energy technologies in particular need a massive boost. Materials science, engineering, natural and social sciences are all important for the sustainable development of the economy and society through innovation. It is therefore incomprehensible that the federal government is cutting funding in these areas. Funding for battery cell research has been reduced, as has funding for the “Raw materials for the sustainability transformation” programme. Programmes to promote the development and production of renewable fuels and propulsion technologies for aviation, as well as the “Climate-neutral shipping” programme, have been severely cut. Further cuts are planned for other programmes, such as the promotion of sustainable fuels. At the same time, public spending on education relative to GDP in Germany is below the OECD average.

However, it is also true that the incentives for researchers to act in a climate-friendly way are not always ideal. Air travel for networking and exchange is usually funded by third parties, so there may be an incentive not to switch to virtual meetings when they would be just as effective. So what are sensible climate measures for research institutions? A positive example, in our view, is the University of Mannheim. It imposes an internal CO2 levy on intercontinental flights, as these are not yet covered by the ETS. The annual revenues are then redistributed to the faculties and can be used for research and teaching. This is an elegant solution that explicitly takes into account the interplay with other climate policy instruments, creates incentives for more climate-friendly behaviour, and does so without diverting funds from research. The University of Konstanz has adopted a similar approach for those who wish to participate voluntarily.

This idea can be extended to other expenditures of research institutions. It’s a good idea because the CO2 price is not only a particularly effective and efficient behavioural measure, but also a profoundly altruistic one. It forces us to consider the costs that our decisions impose on others around the world. If the interaction with other climate policy instruments, such as the EU ETS, is taken into account when setting an (internal) CO2 price, undesirable behavioural changes and waterbed effects can be avoided. The revenues from this pricing can be used for the necessary research.

Germany, the land of ideas and inventors, is more challenged than ever by the climate crisis. With its advances, science can make a real difference and serve as a model for rational and effective climate action.

This opinion piece first appeared at Table Media (in German language).