The Turn of the Year in Climate Policy: Insights and Outlook

The term “triple crisis” loomed large in 2022: The interlinking crises of the pandemic, the climate and energy crises, and the war in Ukraine took many people to their existential limits this past year. Geopolitically, we now face a fragmented world in which power relations are increasingly contested. This was evident at the Sharm el-Sheikh Climate Change Conference (COP 27) in November, where familiar lines of conflict shaped negotiations. Tensions between countries of the Global North and South, for example: Who bears how much responsibility for the climate change that is already occurring (not least of all financial responsibility!) and who (still) counts as a developing country and should be granted support? Debate also continues to rage around the exploitation and use of fossil fuels, which many countries wish to continue for as long as possible – even under the Paris Agreement.

At first glance, 2023 promises to be an inauspicious year. The war in Ukraine is grinding on, leaving a trail of devastation in its wake; in Germany, concerns around energy security are set to last into the winter of 2023/24; and around the world, many countries have borrowed heavily to fund their pandemic recovery efforts. And, once again, the year has begun with a flurry of extreme weather and climate events. Plans to introduce a carbon border tax in the EU and climate-friendly tax credits to bolster domestic investment in clean technology in the USA are causing resentment on both sides of the Atlantic. Finally, the United Arab Emirates, a country not usually associated with trailblazing climate action, will be hosting the Climate Change Conference (COP 28) in 2023.

In Germany, we have seen that the pursuit of ambitious climate policy can be especially challenging in times of crisis. Having barely taken office, the coalition government found itself grappling with the Russian invasion of Ukraine and, as a consequence, Germany’s problematic dependence on energy imports. In light of this, policymakers must now strike a careful balance: On the one hand, we have the climate targets, the energy transition, and a broader transformation towards a more sustainable society. On the other hand, there are concerns around energy and food security, the cost-of-living crisis and a growing recognition that a rapid and far-reaching transformation of the energy system will take more than the flick of a switch. Germany has already begun to look abroad for new suppliers of natural gas, while continuing to build partnerships for the decarbonization of the global economy and the energy transition. The governing coalition of FDP, SPD and Greens – a first for Germany – brings together parties with widely differing positions, posing new challenges for the development and adoption of effective climate policy.

Despite all this, however, the various crises have also provided impetus for much-needed change. Most countries worldwide have embraced the goal of achieving climate-neutrality by mid-century. This, in turn, has generated debate on the specific nature of climate neutrality and what it means for cities, companies, products and more. On the positive side, this has sparked initiatives aimed at making climate neutrality pledges measurable, comparable and standardizable.

In Germany, the energy crisis has also ramped up pressure to accelerate the growth of renewables, for example by simplifying permitting processes. Developments such as the record increase in demand for heat pumps and the resurgence of renewables (although coal-fired power generation has also increased again) offer glimmers of hope. Together with other ambitious countries, Germany is building a Climate Club aimed at bolstering efforts to decarbonize industry and improve the competitiveness of green markets.

Finally, it is also important to keep in mind that much of the progress made on climate protection is not always easily measured or readily quantifiable. Climate policy, sustainability and the Great Transformation have moved to the centre of public debate. We are witnessing a capacity building project on an unprecedented scale, in which technologies, measures and solutions are being developed across the globe to counteract climate change and adapt to its impacts. In addition, there is a growing awareness in our country that broad participation and involvement in political decision-making - across diverse population groups, business sectors, and science – is essential for our future. The flourishing of citizens' assemblies in Europe, in which people from a wide range of backgrounds work together to find political solutions, is just one success story. All in all, we are still a long way from reaching our goal, but perhaps we are slowly heading in the right direction.

This contribution was first published as an editorial on the website of the German Climate Consortium (DKK)