Merz touts green technology’s growth potential, calls for international carbon markets

Chancellor Friedrich Merz has stressed the importance of Germany’s green technology sector for the country’s economic future, pointing to innovation in renewable energy production and energy efficiency as key elements of his government’s sustainability strategy. “Sustainability is key to answering the questions of the 21^st century,” Merz said at the annual conference of the German Council for Sustainable Development (RNE) in Berlin on Tuesday (29 September). 

The chancellor said that Germany’s green technology sector has grown at an average rate of five percent a year over the past 15 years, meaning it has doubled in value since 2010 and greatly surpassed overall economic growth. “It is therefore counterproductive to constantly say that there is an almost insurmountable target conflict between climate action and economic growth,” Merz said, adding that sustainable technologies rather have a “complementary” relationship with economic growth and today include some of the most dynamic global markets.  

Germany generated more than 300 billion euros in gross value added in the green technology sector in 2023, which Merz said could account for up to two percent of the country’s overall GDP in the coming years. A push on innovation in the government’s “High-Tech Agenda” would seize this momentum and include more support for technologies in clean mobility and nuclear fusion, Merz noted. 

The government’s latest Sustainability Action Programme, a set of cross-sectoral measures that aim to bring about progress on the UN’s sustainability targets that the government adopted on Wednesday (30 September), would aim to ensure that sustainability measures enjoy broad acceptance and quickly turn into benefits for citizens, he added. 

Merz said Germany’s leading position in many green technologies mean the country has the chance to shape the next stage of industrial development towards greater sustainability. “The transformation towards climate neutrality will pay off in the long run,” he said, arguing that the state’s most important task in this respect is to set reliable guidelines to let market forces work. 

An international market for carbon emissions that can be processed with carbon capture and storage or usage (CCS/CCU) would be a logical next step to complement carbon pricing that allows European companies to regain competitiveness, the chancellor said. Creating such a market would become possible once more countries become convinced of the growth prospects of climate neutral technologies. “And that is currently happening,” Merz said. 

However, besides the growth opportunities posed by climate friendly technologies, Merz said that global warming is already causing society immense costs and requires simultaneous adaptation measures to cope with the impact of rising temperatures and more extreme weather events. “Climate change has become a threat to live and limb,” Merz said, pointing out that Germany just went through a summer of record-breaking heat and drought, which caused thousands of heat-related deaths and significant damages to agriculture and the wider economy.