Reinhard Panse's Perspectives
Reinhard Panse's Perspectives
Podcast
1.9.2021
Let's start on a small scale: If you want to convert Thyssen Krupp's Duisburg steelworks to hydrogen as an energy source, you have to add another 12,000 wind turbines to the 30,000 that have already been erected in Germany. Now it can certainly be argued that 12,000 wind turbines is rather a large number - but it is nothing if we want to combat climate change globally.
This is only possible if we raise large financial resources. And the "we" includes the state, companies and citizens. The leading candidates in the election campaign should also be this honest. The promises of the Paris Climate Agreement will only lead to a reduction in temperature by 0.03 degrees Celsius in 2100. If we want to permanently limit global warming to a maximum of 2 degrees Celsius, the costs would be many times higher.
Achieving global climate neutrality is technically possible, but will only succeed financially if a very large number of countries find the courage to make the necessary changes to the framework conditions. Even then, however, the costs seem so high that it is unlikely that the majority of voters will be prepared to bear these costs in the long term.
The impartial Energy Modeling Forum of the prestigious US university Stanford brings together over 30 studies on the costs of the intended climate policy. The switch to emission-free energy sources will massively increase energy costs. According to the calculations, they will amount to 924 billion US dollars at best in 2030. This corresponds to a good one percent of current national income. This would leave everyone with less money for consumption and investment.
In view of this figure, politicians must move away from simply wanting to reduce CO2 emissions in their countries. The costs must also be borne by the poorer population of the rich countries and by the poorer countries. The most efficient way to reduce emissions is and remains a high CO2 tax, so that private individuals and companies can decide for themselves how they want to save CO2 with as little effort as possible in order to avoid the tax. The resulting social problems must be compensated for elsewhere. Setting this tax (actually globally) will not be easy and products will become more expensive - our politicians should be that honest.
Reinhard Panse's Perspectives
1.9.2021
Reinhard Panse
Neither Armin Laschet (CDU) nor Olaf Scholz (SPD) - and not even Annalena Baerbock (Greens) really wanted to admit in the first TV triell that the fight against climate change will cost us all money. But the truth is: it will be expensive, and really expensive.
Let's start on a small scale: If you want to convert Thyssen Krupp's Duisburg steelworks to hydrogen as an energy source, you have to add another 12,000 wind turbines to the 30,000 that have already been erected in Germany. Now it can certainly be argued that 12,000 wind turbines is rather a large number - but it is nothing if we want to combat climate change globally.
This is only possible if we raise large financial resources. And the "we" includes the state, companies and citizens. The leading candidates in the election campaign should also be this honest. The promises of the Paris Climate Agreement will only lead to a reduction in temperature by 0.03 degrees Celsius in 2100. If we want to permanently limit global warming to a maximum of 2 degrees Celsius, the costs would be many times higher.
Achieving global climate neutrality is technically possible, but will only succeed financially if a very large number of countries find the courage to make the necessary changes to the framework conditions. Even then, however, the costs seem so high that it is unlikely that the majority of voters will be prepared to bear these costs in the long term.
The impartial Energy Modeling Forum of the prestigious US university Stanford brings together over 30 studies on the costs of the intended climate policy. The switch to emission-free energy sources will massively increase energy costs. According to the calculations, they will amount to 924 billion US dollars at best in 2030. This corresponds to a good one percent of current national income. This would leave everyone with less money for consumption and investment.
In view of this figure, politicians must move away from simply wanting to reduce CO2 emissions in their countries. The costs must also be borne by the poorer population of the rich countries and by the poorer countries. The most efficient way to reduce emissions is and remains a high CO2 tax, so that private individuals and companies can decide for themselves how they want to save CO2 with as little effort as possible in order to avoid the tax. The resulting social problems must be compensated for elsewhere. Setting this tax (actually globally) will not be easy and products will become more expensive - our politicians should be that honest.
About the author
Reinhard Panse
Reinhard Panse is Chief Investment Officer and co-founder of FINVIA Family Office GmbH. Until February 2020, Reinhard Panse was a member of the Management Board and Chief Investment Officer for HQ Trust GmbH, which is owned by the Harald Quandt family. From 2004 until joining HQ Trust GmbH in 2011, Reinhard Panse was Chief Investment Officer of the UBS Sauerborn business unit created within UBS Deutschland AG. From 2001, Reinhard Panse was a member of the Management Board of Sauerborn Trust AG and its legal predecessors. He was responsible for the investment strategy and played a leading role in the holistic asset management and administration of large private assets. Reinhard Panse began his career by taking over capital market and client support activities at Feri GmbH in 1989, after having founded and managed his own wealth management as managing director.
