Allianz Lecturers Urge EU Lead on Climate Change

January 30, 2007

The global debate on Climate Change has gone from a sideshow to the main event, taking over the front pages of many newspapers. The Intergovernmental Panel on Climate Change (IPCC) Conference, currently taking place in Paris, follows closely on the warnings issued by the high and mighty from Davos.

In a timely presentation, Allianz AG, Europe’s largest insurer, convened a panel of experts in the sold-out Munich Residenz Theater, featuring EU commissioner G√ľnter Verheugen, economist Joseph E. Stiglitz and climate expert Hans Joachim Schellnhuber to discuss the problem and suggest solutions. They concluded that, “Europe must take the lead in order to prevent a global climate catastrophe,” according to a report on the Group’s web site (www.allianz.com).

“Europe must make a contribution to save the world,” was Commissioner Verheugen’s closing comment. His colleagues agreed with him on the EU’s important role regarding climate protection.

Stiglitz, a US economist and Nobel prize winner, “harshly criticized his country’s government,” according to the report. “Europe should take on a key role in leadership. We’ve seen what happens in a world without checks and balances,” he stated.

Schellnhuber, the physicist and climate advisor to the German government, indicated that he hopes that the EU’s climate protection program will serve to make Europe a role model for the world.

“Market forces by themselves can’t handle this problem,” Stiglitz warned. However, Verheugen mentioned that an ideal policy wouldn’t help if competitiveness suffered: “There’s a risk of industries relocating and taking jobs as well as pollution with them.”

Allianz noted that Stiglitz agreed with that position, stressing that “market forces by themselves couldn’t handle this problem; there is a need for government intervention.” As an example he pointed to the fact that the US does not require its industry to reduce carbon dioxide emissions, which he indicated means: “American firms are in fact being subsidized at a cost to citizens all over the world.”

Schellnhuber expressed the hope that “consumer pressure” would produce a “bottom-up approach,” which he likened to “fair trade” practices. If people will avoid unfairly produced bananas or coffee, you could imagine “clean trade” products, as well.

Another idea raised by the panel indicated that it is “conceivable that a successor to the Kyoto protocol would not be limited to nations. Other actors, such as regions or companies, could participate, thus forming a ‘coalition of the willing’ and increasing pressure on governments.”

Allianz concluded: “In order to limit global warming to two degrees Celsius, emissions would need to be lowered considerably; investing half a percent of the gross global product would be sufficient to become almost ‘carbon-free’ by the end of this century.”

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