"Germany is the champion in export of green technologies"

Question: At the end of 2005, after your period as a Minister of Education and Research, you became Chairwoman of the Parliamentary Committee on Economics and Technology. How is this latest step positioned in your political career?

Bulmahn: For me, it was a logical step. After working in the field of higher education, research and technology for almost 20 years as a Minister as well as in different parliamentary positions, it was interesting, but also challenging to move to economics and technology. However, there are a lot of overlaps since education, research and technology form the basis of each successful economy. In the political economy the greatest challenge we have to master is the transformation of industries from a resource-consuming to a resource-conserving one – and we have to achieve this in a very short period of time! Each industrial sector - whether it is the chemical industry, the automobile industry, the manufacturing industry or the energy industry - has to manage this transformation. Through research and technology plenty of possible solutions have been developed in the last 10 to 15 years. They have to be employed and applied as soon as possible. And of course, research and technology have to continue to look for even better alternatives.

Question: At the moment, the financial economic crisis is used as an opportunity by many countries to redesign their economy economies, and stimulus packages give a good indication of the role that the green economy is destined to play in the future. Of course, Germany has made this strategic decision a long time ago; what are the main changes that will take place in Germany in the coming years?

Bulmahn: In Germany we have been pursuing a twin track strategy for at least 10 years; the use of renewable energies on the one hand and increasing efficiency to reduce overall energy consumption on the other. The combination of these two elements is crucial, should you rely on only one track I’m convinced that you would not succeed. We have to assume this twin strategy.

Question: How is the interaction between government and the business community to turn political ambitions into a reality that meets the expectations of the German population? And what does your business community expect from you?

Bulmahn: Let me give one example, I would say again, we follow a twin track strategy regarding the business sector. German government policy strongly supports research and technology development. On one hand, we have several long-term programs to increase the technological advancement and competitiveness of renewable energies on the other hand. We support research in the field of energy efficiency to reduce energy consumption through new technology development in areas such as machine engineering. As a result, the energy consumption of new machinery has been drastically reduced over the last 10 to 15 years. We also introduced incentives for German companies through the implementation of a green tax in 1999 which helped cutting energy consumption both in households and industry and drove policy in the business community.

Question: While Germany has been the world’s leading exporter for seven years now; we are also the champion in export of green technologies. In 2006, Germany’s share of world trade of environmental goods was 60%. As a former Minister for Education and Research I think that it is especially important that we are performing so well in the export of solar cells and wind turbines, which are based on technologies that we have developed very successfully since the middle of the 1990s.

Bulmahn: Also, I think that Germany is doing so well in this field because we do not only offer single technologies but also complete system solutions. We play an important role in exporting the machinery for the whole supply chain in these industries, because German companies have great expertise in designing and constructing efficient factories with very low energy consumption: each part of the production process is planned and implemented with the goal to reduce energy consumption.

Question: Technology transfer is going to be an important in the climate negotiations leading up to COP 15 in Copenhagen at the end of the year. How should Germany balance technology transfer with protecting its competitive edge in green technology?

Bulmahn: We have to focus on investing in research and technology development as well as in the education of the German workforce. In the end the green economy is a people-based knowledge economy. If we neglect that we won’t have a future. We need to continue our twin track strategy and we have to make sure that our legal framework corresponds with our goal of broadening the use of renewable energy and reducing energy consumption by raising efficiency. One very successful step in order to fulfil our ambition was the German Renewable Energy Act (EEG), which through grid feed-in tariffs provides incentives to companies, especially the small and medium-sized energy firms, and households involved in renewable energy generation business. After its implementation we experienced a huge increase in the use of solar cells and wind mills in our country. Prior to its implementation Germany was very good in research and technology development for solar cells, but we lacked economies of scale in our domestic market that could facilitate the industrialization processes of solar cells manufacturing. This was changed with the German Renewable Energy Act in 2000. The creation of a huge domestic market was the beginning of our success story in transforming a traditional economy into a green economy. You need qualified people, good research, and technological innovation but you also need incentives to support the creation of the market.

Question: Undoubtedly, other countries are studying how Germany developed its renewable energy sector and are eager to copy your success and catch up. How can Germany stay ahead of the competition?

Bulmahn: Germany has set the goal for 2020 to achieve a reduction in the emission of greenhouse gases by 40%, generate 30% of electricity from renewable sources, and double energy efficiency in comparison with 1990 levels. Also, we want to double the combined heat and power share to 25% of electricity generated by 2020. Again, we are aiming to reach these goals by creating incentives. We set up a legal framework and incentive scheme that creates a culture in our country where each person is convinced that we have to follow and pursue an energy efficient way of living.

Question: Germany’s ambitions exceed the European Union’s 20/20/20 targets, why is Germany so much more ambitious the European Union as a whole?

Bulmahn: Germany has a very sophisticated and highly developed industrial sector and if we do not setup these goals then our green technology development may suffer. This is why we decided to set up ambitious goals.

Question: Has Germany really setup these goals is it to improve the climate or is it to boost its economy?

Bulmahn: Both, we want to pursue both objectives. We want to save our planet, we want to stabilize our climate; I’m personally convinced there is no alternative to this strategy. I think the Stern report opened the eyes of many people. If we don’t stabilize our climate we will not only lose part of our wealth, also billions of people will lose their home. I’m also convinced we cannot only improve living conditions on our planet but also our standard of living through green environment technology. If we don’t use coal or cars that pollute, and if we produce food in a way that does not harm our landscape, then will we improve our standard of life.

Question: In the past six months, the global discussion on climate change has increasingly become a bilateral discussion between the US and China. Is Germany being left behind in the political discussion on climate change?

Bulmahn: I wouldn’t say Germany is left behind. We are not the world leading country in terms of political power; the US is the leading political power in our world and China is an increasingly important political power. Nevertheless, I don’t see the Sino-US talks as a threat. I believe that President Obama really wants to change the policy of his predecessor by pushing the transformation of the economy of his country. Of course, Chinese policy plays a very important role as well. When I went to China in the middle of the 1990s there was much less awareness of the importance of environmental policy or the transformation of industry, but there is a growing awareness and change has taken place over the past years.

Question: Do you believe that China’s political system will enable the country to advance faster in the creation of a green economy and world leading renewable energy sector?

Bulmahn: Yes, I think China will be successful because the country’s political leaders know that they won’t be able to protect the environment or improve the quality of life without using green technologies in all areas. They are very well aware that this transformation will be a question of life or death for many Chinese companies. If a company does not undertake the required efforts to change its production processes then it won’t be able to succeed in the global market place in 10 or 15 years.

Question: Environmental problems in Germany are not as pressing as in other parts of the word, is there a risk of complacency?

Bulmahn: Of course, we are not perfect so we still have a long way to go. As we improve our solutions we can continue to offer them to other countries.

Question: What do you think should be on the top of Germany’s political agenda in this context?

Bulmahn: I think that Germany can and should be a leap market for green technologies and by doing this we do not only offer solutions but we set an example and that is the role Germany should play.

Question: Do you think that Germany can serve as a model for China?

Bulmahn: There are huge differences between Germany and China. That is why I am a little hesitant when you ask me whether Germany can serve as a model. But in a way Germany can be a model, because Germany is a highly industrialized country. The combination of instruments that China needs is similar to that in Germany: a qualified workforce, strong research and a sense of urgency to address this challenge among the Chinese population and business community. Of course, that is a challenge for the Government of China.

Question: When we look at the complementarities between green technology and Germany and the ambitions of China, are there shared strategic objectives in your opinion?

Bulmahn: Yes, there are, although the hierarchy of objectives might be different. For example: In China rural regions have a very low standard of living and quality of life contrast with regions that are highly developed and have a highly qualified workforce. This is one difference in comparison with Germany. We have a different political system, this is another one. Germany could be an example in setting up the right political framework and instruments. When I discuss these topics with Chinese politicians I get the impression they try very hard to setup a hierarchy of values which supports this transformation. Just to talk about it is not enough, you need to act.