Speech by Foreign Minister Annalena Baerbock at the opening session of the 9th Berlin Energy Transition Dialogue in the Federal Foreign Office
Lush reeds, turquoise water, in the middle of the desert – that is the marshlands in southern Iraq between the Euphrates and the Tigris. It was once one of the most fertile places in the world. People there mainly lived from fishing and from breeding water buffaloes.
When I was there at the start of this month, I understood why this World Natural Heritage site is considered by some to be the biblical location of the Garden of Eden. It is extremely beautiful.
But the paradise has changed. While there I met Kamila Hadi, who is bringing up her three daughters in the marshlands. She told me how they used to live there, how they caught fish, how fertile everything was – and that water was taken for granted.
She went on to say that they now actually pray for water every day. Because the temperatures in summer are over 50 degrees. Because the water buffaloes die of thirst when it becomes dry as they simply get stuck in the mud in the marshlands, which used to be so wet.
Half of the area where people used to farm has already been destroyed. Some 95 per cent of fish stocks have disappeared. The water level is steadily falling. As a result of this, water salinity has increased, many of the water buffaloes are dying of thirst and people are thus losing their livelihoods.
And yet this wonderful beauty remains. In the evening sun, when everything is very quiet, you can see light on the horizon. Beyond the panorama of reeds and water, however, the light is not coming from the stars but from oil fields spewing poisonous flames into the sky. The surplus gas released during oil production is still largely burned off in Iraq. This practice alone accounts for almost 20 per cent of the country’s CO2 emissions.
Iraq is one of those countries which are suffering to an extreme extent from the climate crisis – and, at the same time, the country is also one of the world’s largest producers of fossil energy. Almost 90 per cent of its national revenue comes from the oil business and thousands of jobs depend directly on the oil industry. Without this revenue, the state and the economy would come to a standstill.
When I travelled through these wonderful marshlands I thought – notwithstanding this beautiful landscape, what will people say to me when we talk about oil production and about the great risk it poses to people in the region? Will they say: but our jobs are here in the oil industry? Because, of course, we know debates like this from many other countries in the world. Just over 100 kilometres from here in the Lausitz region, we have people working in the coal industry.
There, however, the opposite was the case. Time and again, people said to me: we’re not praying for oil. The oil can stay in the ground. What we need is water. For it’s patently obvious to people there that oil can be substituted, but not water.
If nothing happens, then it’s very likely that the Euphrates and the Tigris will be completely dried out by 2040. Iraq would then be a country without rivers – and the former Garden of Eden a parched area. The Iraqi Water Ministry – not the IPCC – has raised the alarm. The marshlands and entire stretches of landscape would be uninhabitable. Millions of people, not only Kamila Hadi with her three daughters, but millions of people beyond the region, would be forced to leave their homes – with fatal consequences for their safety and for the stability of the entire region.
I’m talking about the situation in Iraq, but many of you could name countless other examples of this kind from your own regions. They show why our global security depends on how quickly we move away from fossil energies. The energy industry is responsible for almost 40 per cent of the world’s CO2 emissions. Every tonne of CO2 we release into the air with fossil energy brings the world a little closer to global ecosystem collapse caused by the rise in temperatures.
As we all know, the Intergovernmental Panel on Climate Change confronted us again last week with a brutal truth. We’re heading towards global warming of 3.2 degrees Celsius if we fail to take further political action. And as we all know, a 1.5 degree rise is already more than our planet can take. A 3.2-degree scenario – and its currently not only a scenario but the situation towards which we’re moving – would pose a very great risk to the livelihoods of up to 3.6 billion people.
What’s more, fossil energies are driving us into dangerous dependencies. This has been brought home to us painfully here in Germany, in Europe and around the world. We here in Germany always thought that we were buying cheap Russian gas. However, we paid for the supposedly cheap gas twofold and threefold with our security. Above all people in Ukraine have paid for it twofold and threefold.
Other countries, other governments and other peoples around the world are experiencing such dependencies, too. And almost everyone is experiencing their unpredictability. They do so almost daily – in the form of the extreme fluctuations in oil and gas prices.
So when we talk about the energy transition today, we’re talking about our security. The transition towards climate neutrality is the security challenge of our time. We’re thus facing the greatest upheaval in our economy since the Industrial Revolution.
This transformation will succeed if we tackle it together. Provided it prioritises people – whom we as politicians serve. Regardless of whether they live in the marshlands of southern Iraq or in the major cities of South Africa.
That’s why it’s so important to me that we focus more on the issue of human security in all of its dimensions when it comes to this transformation and the energy transition. We’re currently drafting a national security strategy which, of course, is partly a key response to Russia’s war of aggression. However, this national security strategy is also a key response to the biggest security challenge of our century: the climate crisis. And it considers all facets of human security.
Today, I’d like to talk about three things.
First of all, we now have to greatly accelerate the pace of the energy transition, and we have to do so around the world, to ensure that people can benefit from it.
The major industrialised countries have a special responsibility here. At the last Climate Change Conference in Sharm el-Sheikh, the Federal Republic of Germany once more stated quite clearly that it is our responsibility, primarily the responsibility of the industrialised nations, to finally tackle this transformation in our own countries on a massive scale by adopting ambitious emissions targets and quickly phasing out oil, coal and gas.
Since the start of Russia’s war of aggression against Ukraine, we in Germany have therefore greatly accelerated the transition to renewable energies. We want to be climate-neutral by 2045 at the latest.
We should and must believe that although this is going to be difficult, it is of course possible. Because we have the formulas for success which will enable us to resolve this crisis. During the last few years, we’ve seen that success stories never take a linear course. They don’t proceed smoothly. For it goes without saying that new challenges emerge time and again. Sometimes, things happen that we hadn’t reckoned with. Last year, for example, this terrible war of aggression meant that we had to end our fossil dependency on Russia within a year.
But it’s precisely at moments such as this when we’re dealing with twofold challenges that new possibilities emerge: technological breakthroughs are made or we finally find the requisite political will. That’s what happened here in Germany: what we couldn’t manage to agree on for many years in numerous parliamentary debates, namely that clean energy is in our national interest, was finally possible after all in the face of such a brutal challenge.
And some of you have perhaps heard that our coalition committee – that’s a gathering of senior representatives of the three parliamentary groups and parties in the government – has been meeting and has been engaged in a heated debate about how we take responsibility for this security issue, that’s to say for climate action, towards society.
It’s about ensuring that the central heating systems in our basements – and for those of you from countries where it’s a bit warmer at the moment: heating is a matter of security for us, and not just in winter – always function. It’s about every heating system in every basement in our country playing an important role for our future security.
And that has triggered heated debates in our country. However, it’s clear to the Federal Government that if we don’t take all aspects of our security issues into account – including the heating in our homes – then we won’t be able to tackle this immense task.
I’m mentioning this minor discussion – although looking at some headlines you would be forgiven for thinking it’s actually a major discussion – because it brings home to us once more that there is no one-size-fits-all solution. That’s why our understanding of the energy transition is not to present it to the world, not to say: here is our German strategy. That’s how we did it and now you can all do the same thing.
Rather, the transformation – and that’s the beauty of it – thrives on innovation. It thrives on finding specific responses to specific challenges. And we can only achieve that by working with society, with different stakeholders – both here in Germany and around the world.
We will only be able to contain the climate crisis – or, to put it positively, we will only be able to master the immense task of the security transformation – if we tackle it together. That also means that we have a chance to move closer together in the face of all the global challenges and crises.
What matters – on a small scale here in Germany just as much as on a large scale in our international climate diplomacy – is that we listen to our partners and search for pragmatic solutions together. Always on the understanding that others could also be right. And always on the understanding that claiming that nothing can be done is not an option. Rather, we need a joint solution.
That’s why countries and examples of transformation, especially where the situation is particularly challenging, are so interesting for us here at this conference and in general. I mentioned our phasing out of coal-based power in eastern Germany. And there’s a similar situation in South Africa, where the coal industry is one of the country’s largest employers. It’s not possible to simply say: just get on with it. Rather, we have to consider where these people can work in future.
There are more than 100 mines in the province of Mpumalanga alone. Some 90 per cent of South Africa’s coal is produced there. More than 100,000 people feed their families with jobs in mines, power plants and coal supplying companies. We have to keep that in mind when we talk about South Africa’s plan to become climate-neutral by 2050.
It’s for that reason that we’ve developed programmes in Mpumalanga together with the South African Government to offer workers retraining – partly based on our own experience from the transformation of coal regions, thus contributing our lessons learned as an inspiration.
Instead of mining coal, we’re finding common ways to ensure that people can be employed in future in the renewables industry or in the hydrogen sector.
For if we want other countries to aim for climate neutrality, then we have to offer prospects for the future to people whose livelihoods have been dependent on fossil energy for decades. That is a question of fairness for people in the region. However this is also a question of securing their livelihoods.
That is why cooperating with our European partners to form similar transformation partnerships (JETPs) with other key countries – for example, Indonesia, Viet Nam and Kenya – is part of our foreign policy, that of the entire Federal Government as Team Germany. We’re working together in these countries to expand this model – but, as I said, always tailored to the needs of the country in question.
One very special example of how things can work if we tackle the challenges on the ground – and, instead of saying “it’s not possible” we say “we have solutions for our special transformation project” – is in Kenya.
Kenya shows what we can learn from other countries when it comes to ambition and pace. It already derives around 90 per cent of its total energy from renewable sources. And it wants 100 per cent of its energy to come from renewables by 2030. That’s exemplary.
We warmly welcome Kenya’s President, Mr William Ruto. I’m truly delighted to have you with us today. We can learn from your example. Welcome!
If we want to learn from others and to tackle this energy transition with others, then we not only need political leadership – as in Kenya’s case. We also have to mobilise a massive volume of investment, and we all know that it is not distributed fairly around the world.
And that brings me to my second point: a successful energy transition requires capital. We have many innovative companies here in this hall today which know exactly how it’s done and which show that investment in the technologies of the future is worthwhile. However, a large sum of start-up capital is always needed at the outset.
The International Renewable Energy Agency, IRENA, estimates that investment amounting to 5.7 billion US dollars is needed worldwide every year to finance the phasing out of fossil energies. That cannot be met through public funding alone. For that reason, we also have to mobilise private-sector money. Even though we can mobilise money here in Germany, we know that is not so easy. But it’s possible if you have good ratings.
The situation is different for developing countries. They often need 20 per cent equity capital for energy projects. And if, for example, they want to finance a wind farm, then the interest rates on the capital markets are four times higher than if we here in Germany were to borrow this capital. That’s unfair. And it means that those who need this investment most urgently cannot get the necessary capital.
And it leads to a vicious circle. Because when you cannot find this investment fast enough, you’re forced to continue relying on technologies which are harmful to both health and the climate and thus – just think of Iraq – fuel the climate crisis even further.
To ensure that the transformation also leads to greater climate justice, the G7 states and other countries initiated a reform of the World Bank to enable it, in its role as a key financing partner for development, to focus more on climate finance. We want this reform to set standards for other development banks.
At the same time, we’re aware that this investment is even more difficult if you have debts. And some countries are indebted because they were hit a few years ago by terrible climate events such as storms or flooding. They then sink even further into a debt crisis and they have even less money to fund transformations.
That’s why we want to use the G20 to draw up debt forgiveness and restructuring proposals. However, we can only do it together. China, too, has a special responsibility here as a major creditor.
And that brings me to my third point, because we can only embark along this path with sincerity: we have to look and see where our dependencies lie in the fossil sphere. For example, our dependencies from the past but also the dependencies on financial flows and raw materials.
A clean energy transition requires a secure supply of raw materials. That’s my third point. It could soon be that 95 per cent of key raw materials needed for the manufacture of solar panels are produced in China. In theory, that wouldn’t be a problem if they could freely circulate around the world, if it were certain that we can use them everywhere and that no new dependencies were created.
If we don’t know that, however, then we have to diversify – to ensure our own security and the global transformation. With the Critical Raw Material Act, we in the European Union therefore want to ensure that our green industry has sufficient quantities of raw materials in future.
That means that an increasing volume of critical minerals will come from European mines and that they will be sustainably processed in Europe. However, it goes without saying that we cannot conjure up raw materials in European soil. We therefore need diversification to make our supply chains more reliable.
Here, too, we’re opting for international partnerships with mutual value-added. Let me give you just one example: for e-car batteries alone, Europe will need around 18 times more lithium by 2030. At the moment, 78 per cent of the EU’s lithium comes from Chile. However, it is exported to China to be processed before coming to Europe.
That’s not only bad for our CO2 balance, but the very opposite of diversification. And it makes our supply chains less secure. If we now say that we want to expand our raw materials partnerships, then that doesn’t mean repeating the mistakes of the past. For example, as the raw materials are exported from Chile to China, Chile cannot actually make use of the value-added of the raw materials. Rather, to us a fair climate transformation means that everyone benefits from it, especially the places where the raw materials originate.
Our proposal for these partnerships, therefore, is that we work together concretely – in this case with the Chilean Government – to ensure that the lithium is mined sustainably but then processed locally before it’s exported, hopefully directly to Europe.
For climate diplomacy also means taking advantage of the opportunity to make our trade policy fairer, more sustainable and environmentally friendly. We don’t want a new wave of overexploitation of raw materials which allows a few to earn a fast buck but leaves behind contaminated soil for everyone.
Instead, we want partnerships which not only make our supply chains more secure but also make the lives of local people more secure.
Ladies and gentlemen,
Time is of the essence. However, the glass is half full. That presents a huge opportunity for more fairness. And we should seize this opportunity together.
By listening to each other, finding pragmatic solutions and thus creating security for us all. That’s what our climate diplomacy is all about. And that’s what the energy transition is all about.
Last week, the Intergovernmental Panel on Climate Change showed us with brutal clarity how fragile our Earth and our security are. But the good news is that we can – still – be masters of our own fate if we use our know-how, our technology and the money.
We cannot replace the water. We cannot promise anyone that, not even the people in southern Iraq.
But we can promise to do what we can. We can promise to do whatever is possible.
We cannot replace the water but we can replace the oil that we pump out of the ground.
We can replace our gas central heating with heat pumps.
We can replace our coal with hydrogen when we produce steel in future.
And we can do that together – for the health of our planet and for the security of us all.