A Low-carbon Economy: Technologically Possible, Economically Attractive

By [Jenny Bofinger-schuster], Senior Vice President, Sustainability And Cities, Siemens Ag

Jenny Bofinger-Schuster, Senior Vice President, Sustainability and Cities, at Siemens AG, discusses the need for joint action on climate change – and Siemens’ contribution to that effort.

Climate change is real. Pacific Islands cannot get out of the way of rising waters. Arctic maritime ecosystems cannot escape warmer waters. People often cannot flee hurricanes in time. And even someone reading the news in an armchair may find it impossible to avoid reports on how a changing climate endangers the lives of us all, worldwide, every day.

While we do have a plan – the Paris Agreement’s goal of limiting the global temperature rise to two degrees Celsius above pre-industrial levels – to date, international commitments towards this goal are not sufficient. Therefore, it is our obligation, and the obligation of others, to take more joint and forceful actions. For this, we do not only need international institutions and governments establishing frameworks and policies. We also need coalitions of businesses, academia and especially cities, which produce 70% of all emissions. The longer we delay action, the more dramatic the actions that need to be taken, the more serious the consequences become. And the higher the price tag will be, as preventive actions today cost less than adaptive efforts tomorrow.

At Siemens, as we support the Paris Agreement, we consider ourselves a leading partner in this effort, serving customers, governments and society. With respect to climate change mitigation measures, we take the entire value chain of our company into account – from sustainable supply chain initiatives and our CO2-neutral operations target to Siemens’ products and solutions. The aim in these efforts is clear: enabling the transition towards an affordable, low-carbon economy that does not lower our standard of living but actually improves it. In doing so, we show our customers that there aren’t just opportunities to do the right thing, but also that there is a good business case for doing so.

Siemens walks the talk

In 2015, we announced our ambition to become a carbon-neutral company by 2030. Since then, Siemens has reduced its CO2 emissions by more than 20% by powering around 60% of German sites with 100% green energy, increasingly deploying distributed energy systems, and investing in smart e-mobility solutions. While our efforts clearly serve the environment, they also make economic sense: as part of our carbonneutral programme, we are investing €100m in energy-efficiency projects at our production facilities and buildings, and in return expect € 20m in savings each year from 2020 onwards.

Siemens’ Environmental Portfolio, representing approximately 50% of Siemens’ annual revenue, is our big-gest lever towards decarbonization. It includes various technologies affecting all parts of our lives, be it smart grids, industry automation, e-mobility, better public transport or renewable energy options. In 2016 alone, this has helped our customers to save the equivalent of 60% of Germany’s annual CO2 emissions.

Sector integration is necessary

In a recent analysis, Siemens looked at Germany’s ambitious climate targets for 2050 and found that reducing greenhouse gas emissions by at least 80% by 2050 relative to 1990 is technically and economically feasible. To achieve this, the share of renewables should steadily increase. Also, the transformation of the conventional electricity generation to low-carbon emitting technologies is vital and needs to be one central pillar of the next phase of the energy transition. Transforming the conventional energy sector from using coal towards low-carbon gas power plants shows a 50% CO2 reduction potential by 2035. It also guarantees base load until renewables take over later in the century. Whilst decarbonisation efforts on the supply side are key, they won’t be enough to achieve Germany’s climate goals. Another key pillar has to be “sector coupling” of the demand-side sectors – such as transport, industry and heating – on the basis of electrification, as well as synthetic fuels. Not only does this make economic sense, it ensures the energy system’s security, power supply and flexibility.

Siemens partners with cities

These and other measures are not just optional but a necessity to successfully achieve the international climate goals. With the growing role of city action on climate change, Siemens has developed the City Performance Tool (CyPT) that identifies which technologies from the transport, building and energy sectors best fit a city’s baseline in order to mitigate CO2 levels, improve air quality and add new jobs in the local economy.

Siemens has partnered with a number of cities to identify not only which technologies lead to the most significant carbon reductions, but also at what scale they should be implemented. For Mexico City, which is making “green” decisions with regards to infrastructure, CyPT analysis showed that the city could accelerate its progress towards ambitious sustainability targets by adopting forty building, energy, and transport tech-nologies. By doing so, the city could generate more than 1.3 million jobs between now and 2050.

Finally, while companies such as Siemens can accelerate the pace at which innovative low-carbon solutions are being developed, reducing greenhouse gas emissions is a team sport. It takes partners to innovate technologies, competitors to spark creative innovations, investors and the banking sector to provide financ-ing, and cities to cooperate. Putting a price on carbon to capture the true cost associated with carbon emissions will be relevant to trigger a shift towards low-carbon technologies. And last, but not least, we need the political will of governments to provide a reliable long-term investment perspective and create a global level playing field to accelerate large-scale deployment of low-carbon technologies.

With all that, we should stand at least a fighting chance of shepherding Earth towards a healthier future, for all life on the planet, ourselves included.

Editor’s Note:

This article first appeared in UNIDO’s Making it Magazine and is reproduced with permission.

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