The EU has some 19 million unemployed and the trend is pointing upwards. But, new jobs will only come once the economy picks up. Could a new 'green economy' help create those jobs and halt Europe's decline?
The political demands are clear: More renewable energies, more energy efficiency, lower CO² emissions and more environmentally friendly technologies.
For years, European governments have had climate protection high on their agenda. It's a mammoth challenge, but also promises enormous potential for growth and investment.
But the 'green revolution' somehow doesn't seem to be getting off the ground; in part, probably because Europe just has too many crises to deal with at the moment and too many fires to put out, says Jörg Zeuner, chief economist of Germany's KfW bank. "There's a lack of demand and there is too much saving going on in Europe. We have problems with financing because the financial sector is in turmoil and we don't have enough planning security because many countries are restructuring their tax and regulatory systems."
These are all bad conditions for grand investments, even though the technologies for more climate protection are mostly already there and simply waiting to be used and implemented, explains Kersten-Karl Barth, head of sustainability at Siemens. "The technology we need in order to reach our CO² targets for 2030 are up to 70 percent already there, " she says, adding, however, that there was still a massive need for investment and research in order to remain competitive. "The so called 'Green Economy' is a race and we simply have to be among the winners here, otherwise we'll have a problem," Barth said.
Siemens has substantially expanded its 'green portfolio' since 2008. The areas of renewable energy, energy efficiency and environmental technologies now make up some 42 percent of the company's entire business spectrum. But, particularily in Europe, there is room for a lot more investment, Barth believes. A glance at the capital market shows that private investors are desperately looking for lucrative business models to invest in. "The money is there; it's just waiting to be invested," noted Barth.
Safe forward planning
One big stumbling block is the long-term security of those investments. "We are talking about sustainable investment, investments in infrastructure, in cities, trains, transport, investments in the energy sector and other industrial sectors. Those are sustainable, long-term investments where security has be guaranteed through a framework of regulations," Barth emphasizes.
Those regulations are still significantly lacking in Europe, says Barth. One example is European emissions trading. The prices have dropped so low that it's not profitable for companies to invest in environmentally friendly technology. Still, the EU parliament has voted against temporarily revoking CO² certificates, hoping the price of those certificates could be boosted that way.
Another key issue is subsidies. An investor, for instance, would have to be able to rely on information as to how much and for how long a government would continue subsidizing renewable energies, explains Matthias Zöllner of the European Investment bank EIB. Subsidies "have been partly cut in dramatic fashion, in cases in Spain even with retroactive effect and that has gotten a lot of projects into trouble."
Tags: press release code 85230509036 BA, international Bradley associates news economy