False promises and half-truths accompany you through today’s issue. For example, the climate crisis is being used to polarize the upcoming European elections. Although there is less and less denial of climate change, new narratives are now emerging, as Lisa Kuner analyzes for you.
The advertising of some airlines can also be misleading: They claim that their flights are green and emission-free thanks to carbon offsetting. The EU Commission has now launched an investigation into the promises of several companies. Meanwhile, Commerzbank has announced a hefty plus for its shareholders. Business is booming, yet the climate is suffering due to questionable lending, reports Günter Heismann.
In today’s opinion piece, Lukas Köhler, Deputy Chairman of the German FDP parliamentary group in the Bundestag, explains why he is against raising taxes on the rich. Instead, emissions trading and socially just climate money save the climate, he argues.
And while the climate crisis continues to exacerbate food insecurity worldwide, a recent survey for Germany shows that although Germans remain concerned about the climate, more and more of them see climate action as a threat to their own wealth. It almost seems as if climate disinformation is finding fertile ground here. The European elections will be the yardstick.
The Green Deal has made climate policy an important issue in the EU. As such, it also influences the election campaign. According to new studies, populist parties often use the climate issue to stir up public opinion against established parties.
For example, right-wing extremist flags and conspiracy narratives about an alleged plan for a “great reset” of the global economy under the guise of the Covid pandemic have appeared at farmers’ protests in recent months. The Institute for Strategic Dialogue (ISD), which specializes in extremism and disinformation research, has analyzed how climate policy projects have been portrayed as the actions of a “corrupt elite.” Jennie King, Director of Climate Research and Policy at ISD, told Table.Briefings: “Climate and disinformation about it are increasingly being used to polarize and cause a rift between so-called elites and ‘ordinary’ citizens.”
Similar cases have occurred in many European countries. Climate issues and false information are used strategically to sway political opinion.
The anti-disinformation network European Digital Media Observatory evaluated the disinformation that circulated during last year’s elections in Europe. The results show how diverse and widespread anti-climate narratives already are:
Disinformation about climate change is nothing new. However, it has changed: A report by the NGO Centre for Countering Digital Hate (CCDH) differentiates between “old” and “new” narratives in climate change denial.
This new form of climate change denial includes statements such as:
These new narratives make disinformation about climate change harder to identify. It requires an understanding of complex interrelationships, such as the fact that the threat wind turbines pose to individual birds often does not threaten the species’ population. The new disinformation narratives are often also seen as legitimate criticism of climate policy. It is often difficult to separate deliberate disinformation from legitimate concerns, such as the social impact of climate policy.
Jennie King from ISD takes an even more strategic view of the topic: “Fixating on exposing individual pieces of misinformation can sometimes be less effective,” she said. She believes it is more important to look at the big picture. Climate is increasingly becoming part of a “culture war.” While climate was still mainly a factual issue around five years ago, it is now being discussed more emotionally and polemically. Right-wing and far-right actors now strategically label climate policy as “liberal” and “woke.” This “framing” turns climate policy into liberal politics “from the top” against the interests of “ordinary citizens.” Climate disinformation is less about preventing concrete measures and more about polarizing the political mood, King said.
According to a study by the US think tank Center for American Progress (CAP), one example is the claim that net zero targets or the Green Deal are “anti-democratic.” It is hardly possible to factually disprove this in detail, as the claim is primarily made on an emotional level.
King sees a dangerous polarization here. Declining trust in democratic institutions means that essential discussions on factual climate policy issues are not taking place. She says that communicating climate change as more than an abstract, technical matter could help to counteract this. The message should instead focus on people and the reality of their lives and highlight the positive effects of green structural change.
So far, however, it seems that disinformation and anti-climate narratives could be successful: Polls indicate that populist and right-wing parties could make significant gains in the EU parliamentary elections – and then directly obstruct an ambitious climate policy.
The financial figures that CEO Manfred Knof announced at Commerzbank’s virtual Annual General Meeting on Tuesday were well received by shareholders: Profits climbed by around 60 percent year-on-year to 2.2 billion euros, while return on equity was 7.7 percent. Thanks to its rigorous restructuring course, the long-troubled bank is back on a firm footing.
The performance is far less impressive regarding sustainability – a cornerstone of Commerzbank’s business strategy, after all. “We want to play our part in bringing global financial flows into line with the goals of the Paris Agreement and the European Union’s Green Deal, thereby promoting climate-compatible development,” CEO Knof said.
The bank, in which the German government still holds a 15 percent stake, missed some key targets in the past fiscal year, however: For example, reducing carbon emissions funding and the business share of sustainable financial products. The volume of carbon emissions the bank finances with its loans remains high.
For 2023, Commerzbank reports emissions of 76.6 million tons of CO2 equivalents from corporate customers, financed proportionately with its loans. This was a slight decrease of 2.3 percent compared to the previous year. However, this volume was significantly higher compared to 2021, when the bank funded an estimated 71.2 million tons of CO2-equivalent emissions from corporate and private customers. When asked, the bank did not specify the reasons. But it does point out that it no longer finances certain high-emission sectors at all or only to a limited extent. “In the oil sector, Commerzbank no longer grants new loans for the exploration of new oil fields,” Andreas Thomae, sustainability expert at Deka Investment, the fund company of the Sparkassen-Finanzgruppe, confirmed.
However, this progress contrasts with setbacks in other sectors. “In the commercial real estate financing and cement sectors, financed emissions rose slightly between 2021 and 2023,” Thomae noted. In aviation and the iron and steel industry, financed emissions only gradually decrease.
The sector where Commerzbank reported the largest financed greenhouse gas emissions by far is private residential construction, with a financing volume of 96.6 billion euros in 2023; this corresponds to around 80 percent of the bank’s entire emission-intensive lending business. It estimates that the average greenhouse gas emissions of private residential buildings funded in 2021 were 45.8 kilograms per square meter. This figure is expected to fall to 19.8 kilograms by 2030, corresponding to an overall reduction of 57 percent.
The bank has a lot on its plate: From 2021 to 2023, it only managed to reduce carbon emissions in private construction financing by three percent. To achieve the reduction target, emissions would have to be cut by over 50 percent in the remaining seven years until 2030. Given the slow progress over the past two years, that is hard to imagine.
It is also worth noting that Commerzbank – like other banks – does not fully disclose the greenhouse gas emissions it finances. Henrik Pontzen, Chief Sustainability Officer at the fund company Union Investment, complains that only a fraction of Scope 3 emissions, i.e., the upstream and downstream stages of the value chain, are disclosed. Yet, in the automotive industry, for example, more than 90 percent of total emissions are generated during the use of products. “The carbon emissions that are indirectly financed by accompanying bond issues have also not been recorded to date,” the fund manager notes.
Despite all the deficiencies in its reporting, Commerzbank is in a relatively good position compared to its competitors. It sets climate targets for more sectors than Deutsche Bank, for example, Pontzen notes.
Commerzbank plans to use a wide range of instruments, including loans for renewable energy construction projects and green bonds, to achieve its own climate targets. The toolbox further includes advisory services and sustainable asset management.
Commerzbank combines the volume of all these financial products into a portfolio expected to reach around 300 billion euros in 2025. However, there was a significant setback here last year: Compared to the previous year, the volume fell from 247 to 238 billion euros, while growth in 2022 was still around a quarter. If the bank intends to reach its 2025 target, it will have to step up its efforts considerably.
The decline in sustainable loans was particularly drastic, with Commerzbank reporting a volume of 117 billion euros in 2022. In the following year, the volume shrank by around one-third to 84 billion euros. The bank attributed this to higher interest rates and the economic downturn. But these may not be the only causes. At 222.2 billion euros, the total volume of loans that Commerzbank granted to corporate and private customers in 2023 was almost as high as in the year before. The volume of green loans has apparently fallen considerably more than the volume of brown loans.
Environmental organizations criticize Commerzbank’s climate policy. “In the fossil fuel sector, Commerzbank again failed last year to finally apply existing climate guidelines to existing customers,” says Kathrin Petz, financial campaigner at Urgewald. At present, no exclusions apply to them, she said. Commerzbank does not even exclude expanding oil and gas companies or companies that do not have a 1.5-degree-compatible transformation plan. “This way, the bank continues to fuel the climate disaster.” Günter Heismann
Some consider “taxing the rich” the be-all and end-all of political instruments – a seemingly endless source of eternal financial resources to pour money into almost all the world’s problems. In a recent example, Till Kellerhoff, Program Director of the Club of Rome, recently argued that the ‘rich tax’ could fund government investment and thus become a panacea for climate policy.
There is no doubt that climate change poses immense challenges for our society. However, using climate action as a vehicle for rampant redistribution fantasies is just as wrong as reflexively assigning the government sole responsibility for finding solutions. In fact, there is already a functioning climate action instrument that cleverly places the onus on the market rather than the state and also takes into account a socially fair cost distribution: emissions trading.
Till Kellerhoff’s arguments are based on the assumption that the state can directly ensure a switch to green production and behavior through subsidies or bans. Not only do we Free Democrats know that this is just a naive belief. The German Federal Constitutional Court also recognized this in its 2021 climate action ruling, stating that the state cannot and should not be responsible for this green transition because “the legislator can hardly manage to stipulate the necessary developments.”
The path to net zero is paved with technological breakthroughs, variable market dynamics and changing human behavior. And because “taxing the rich” cannot conjure up a crystal ball for a more adaptable state, climate policy must consistently resort to other incentives and instruments.
Ultimately, and on this I fundamentally agree with Till Kellerhoff, climate policy is about a fundamental question of distribution. However, it is not a matter of state-organiued redistribution of money, but of how the remaining carbon emissions that can still be emitted until climate neutrality is achieved in 2045 can be distributed. And, as always, the market proves to be unrivaled when it comes to the efficient and fair distribution of limited resources.
Emissions trading strictly caps residual emissions in line with climate targets. Carbon emissions can only be emitted with the corresponding credits. This ensures that we are guaranteed to achieve the emission reduction targets. The limited quantity of permitted emissions is not distributed arbitrarily by the state, but through free trade. The price is formed in the tried and tested manner of supply and demand. This ensures that emissions are reduced first by those who can achieve this with the least effort. The state simply lacks the knowledge about individual players’ different carbon avoidance costs to organize the distribution of emissions anywhere near as efficiently.
Furthermore, emissions trading generates revenue via the carbon price, which can be used to create social compensation in the form of a lump-sum climate payment. This reduces the burden on people with lower incomes to a greater extent, and on average, they also have to bear fewer carbon costs. This is because the polluter pays principle applies in emissions trading: Those who cause a lot of emissions, regardless of whether they are rich or poor, must also bear more of the costs. Those who live in a more climate-friendly way have lower costs and can even benefit. And because residual emissions are capped until net zero is achieved, there is no infinite “buying yourself out” as in the days of the Christian indulgence trade.
So instead of using questionable estimates such as the carbon footprint to calculate a supposedly fair share of costs, the market-based approach prices in the carbon intensity of individual and corporate behavior directly and much more precisely – and has a positive impact to boot.
Unfortunately, it has not been technically possible for the German government to transfer money to all citizens so far. Thanks to Federal Finance Minister Christian Lindner, this is now changing. As soon as the payment mechanism is finalized by early 2025, the climate money can be distributed – provided the revenue from carbon pricing is not used up for questionable subsidies.
The key to a successful transition to a climate-neutral society lies in a policy that incentivizes innovation, wins the market as an ally and distributes the costs fairly. In Europe, emissions trading has, therefore, rightly been chosen as the core climate action instrument because it ensures that we achieve our emissions reduction targets in a guaranteed manner and at the lowest possible cost.
Through its steering effect, emissions trading makes private investment in clean future technologies attractive and thus helps the technologies that save the most carbon achieve a breakthrough – without any government subsidy injections. So while emissions trading offers an effective climate action solution, the ‘rich tax’ is just a political ploy that penalizes wealth without saving the climate.
Lukas Köhler is deputy chairman of the German Free Democratic Party (FDP) in the Bundestag. He was the parliamentary group’s climate policy spokesperson in the last legislative period.
False promises and half-truths accompany you through today’s issue. For example, the climate crisis is being used to polarize the upcoming European elections. Although there is less and less denial of climate change, new narratives are now emerging, as Lisa Kuner analyzes for you.
The advertising of some airlines can also be misleading: They claim that their flights are green and emission-free thanks to carbon offsetting. The EU Commission has now launched an investigation into the promises of several companies. Meanwhile, Commerzbank has announced a hefty plus for its shareholders. Business is booming, yet the climate is suffering due to questionable lending, reports Günter Heismann.
In today’s opinion piece, Lukas Köhler, Deputy Chairman of the German FDP parliamentary group in the Bundestag, explains why he is against raising taxes on the rich. Instead, emissions trading and socially just climate money save the climate, he argues.
And while the climate crisis continues to exacerbate food insecurity worldwide, a recent survey for Germany shows that although Germans remain concerned about the climate, more and more of them see climate action as a threat to their own wealth. It almost seems as if climate disinformation is finding fertile ground here. The European elections will be the yardstick.
The Green Deal has made climate policy an important issue in the EU. As such, it also influences the election campaign. According to new studies, populist parties often use the climate issue to stir up public opinion against established parties.
For example, right-wing extremist flags and conspiracy narratives about an alleged plan for a “great reset” of the global economy under the guise of the Covid pandemic have appeared at farmers’ protests in recent months. The Institute for Strategic Dialogue (ISD), which specializes in extremism and disinformation research, has analyzed how climate policy projects have been portrayed as the actions of a “corrupt elite.” Jennie King, Director of Climate Research and Policy at ISD, told Table.Briefings: “Climate and disinformation about it are increasingly being used to polarize and cause a rift between so-called elites and ‘ordinary’ citizens.”
Similar cases have occurred in many European countries. Climate issues and false information are used strategically to sway political opinion.
The anti-disinformation network European Digital Media Observatory evaluated the disinformation that circulated during last year’s elections in Europe. The results show how diverse and widespread anti-climate narratives already are:
Disinformation about climate change is nothing new. However, it has changed: A report by the NGO Centre for Countering Digital Hate (CCDH) differentiates between “old” and “new” narratives in climate change denial.
This new form of climate change denial includes statements such as:
These new narratives make disinformation about climate change harder to identify. It requires an understanding of complex interrelationships, such as the fact that the threat wind turbines pose to individual birds often does not threaten the species’ population. The new disinformation narratives are often also seen as legitimate criticism of climate policy. It is often difficult to separate deliberate disinformation from legitimate concerns, such as the social impact of climate policy.
Jennie King from ISD takes an even more strategic view of the topic: “Fixating on exposing individual pieces of misinformation can sometimes be less effective,” she said. She believes it is more important to look at the big picture. Climate is increasingly becoming part of a “culture war.” While climate was still mainly a factual issue around five years ago, it is now being discussed more emotionally and polemically. Right-wing and far-right actors now strategically label climate policy as “liberal” and “woke.” This “framing” turns climate policy into liberal politics “from the top” against the interests of “ordinary citizens.” Climate disinformation is less about preventing concrete measures and more about polarizing the political mood, King said.
According to a study by the US think tank Center for American Progress (CAP), one example is the claim that net zero targets or the Green Deal are “anti-democratic.” It is hardly possible to factually disprove this in detail, as the claim is primarily made on an emotional level.
King sees a dangerous polarization here. Declining trust in democratic institutions means that essential discussions on factual climate policy issues are not taking place. She says that communicating climate change as more than an abstract, technical matter could help to counteract this. The message should instead focus on people and the reality of their lives and highlight the positive effects of green structural change.
So far, however, it seems that disinformation and anti-climate narratives could be successful: Polls indicate that populist and right-wing parties could make significant gains in the EU parliamentary elections – and then directly obstruct an ambitious climate policy.
The financial figures that CEO Manfred Knof announced at Commerzbank’s virtual Annual General Meeting on Tuesday were well received by shareholders: Profits climbed by around 60 percent year-on-year to 2.2 billion euros, while return on equity was 7.7 percent. Thanks to its rigorous restructuring course, the long-troubled bank is back on a firm footing.
The performance is far less impressive regarding sustainability – a cornerstone of Commerzbank’s business strategy, after all. “We want to play our part in bringing global financial flows into line with the goals of the Paris Agreement and the European Union’s Green Deal, thereby promoting climate-compatible development,” CEO Knof said.
The bank, in which the German government still holds a 15 percent stake, missed some key targets in the past fiscal year, however: For example, reducing carbon emissions funding and the business share of sustainable financial products. The volume of carbon emissions the bank finances with its loans remains high.
For 2023, Commerzbank reports emissions of 76.6 million tons of CO2 equivalents from corporate customers, financed proportionately with its loans. This was a slight decrease of 2.3 percent compared to the previous year. However, this volume was significantly higher compared to 2021, when the bank funded an estimated 71.2 million tons of CO2-equivalent emissions from corporate and private customers. When asked, the bank did not specify the reasons. But it does point out that it no longer finances certain high-emission sectors at all or only to a limited extent. “In the oil sector, Commerzbank no longer grants new loans for the exploration of new oil fields,” Andreas Thomae, sustainability expert at Deka Investment, the fund company of the Sparkassen-Finanzgruppe, confirmed.
However, this progress contrasts with setbacks in other sectors. “In the commercial real estate financing and cement sectors, financed emissions rose slightly between 2021 and 2023,” Thomae noted. In aviation and the iron and steel industry, financed emissions only gradually decrease.
The sector where Commerzbank reported the largest financed greenhouse gas emissions by far is private residential construction, with a financing volume of 96.6 billion euros in 2023; this corresponds to around 80 percent of the bank’s entire emission-intensive lending business. It estimates that the average greenhouse gas emissions of private residential buildings funded in 2021 were 45.8 kilograms per square meter. This figure is expected to fall to 19.8 kilograms by 2030, corresponding to an overall reduction of 57 percent.
The bank has a lot on its plate: From 2021 to 2023, it only managed to reduce carbon emissions in private construction financing by three percent. To achieve the reduction target, emissions would have to be cut by over 50 percent in the remaining seven years until 2030. Given the slow progress over the past two years, that is hard to imagine.
It is also worth noting that Commerzbank – like other banks – does not fully disclose the greenhouse gas emissions it finances. Henrik Pontzen, Chief Sustainability Officer at the fund company Union Investment, complains that only a fraction of Scope 3 emissions, i.e., the upstream and downstream stages of the value chain, are disclosed. Yet, in the automotive industry, for example, more than 90 percent of total emissions are generated during the use of products. “The carbon emissions that are indirectly financed by accompanying bond issues have also not been recorded to date,” the fund manager notes.
Despite all the deficiencies in its reporting, Commerzbank is in a relatively good position compared to its competitors. It sets climate targets for more sectors than Deutsche Bank, for example, Pontzen notes.
Commerzbank plans to use a wide range of instruments, including loans for renewable energy construction projects and green bonds, to achieve its own climate targets. The toolbox further includes advisory services and sustainable asset management.
Commerzbank combines the volume of all these financial products into a portfolio expected to reach around 300 billion euros in 2025. However, there was a significant setback here last year: Compared to the previous year, the volume fell from 247 to 238 billion euros, while growth in 2022 was still around a quarter. If the bank intends to reach its 2025 target, it will have to step up its efforts considerably.
The decline in sustainable loans was particularly drastic, with Commerzbank reporting a volume of 117 billion euros in 2022. In the following year, the volume shrank by around one-third to 84 billion euros. The bank attributed this to higher interest rates and the economic downturn. But these may not be the only causes. At 222.2 billion euros, the total volume of loans that Commerzbank granted to corporate and private customers in 2023 was almost as high as in the year before. The volume of green loans has apparently fallen considerably more than the volume of brown loans.
Environmental organizations criticize Commerzbank’s climate policy. “In the fossil fuel sector, Commerzbank again failed last year to finally apply existing climate guidelines to existing customers,” says Kathrin Petz, financial campaigner at Urgewald. At present, no exclusions apply to them, she said. Commerzbank does not even exclude expanding oil and gas companies or companies that do not have a 1.5-degree-compatible transformation plan. “This way, the bank continues to fuel the climate disaster.” Günter Heismann
Some consider “taxing the rich” the be-all and end-all of political instruments – a seemingly endless source of eternal financial resources to pour money into almost all the world’s problems. In a recent example, Till Kellerhoff, Program Director of the Club of Rome, recently argued that the ‘rich tax’ could fund government investment and thus become a panacea for climate policy.
There is no doubt that climate change poses immense challenges for our society. However, using climate action as a vehicle for rampant redistribution fantasies is just as wrong as reflexively assigning the government sole responsibility for finding solutions. In fact, there is already a functioning climate action instrument that cleverly places the onus on the market rather than the state and also takes into account a socially fair cost distribution: emissions trading.
Till Kellerhoff’s arguments are based on the assumption that the state can directly ensure a switch to green production and behavior through subsidies or bans. Not only do we Free Democrats know that this is just a naive belief. The German Federal Constitutional Court also recognized this in its 2021 climate action ruling, stating that the state cannot and should not be responsible for this green transition because “the legislator can hardly manage to stipulate the necessary developments.”
The path to net zero is paved with technological breakthroughs, variable market dynamics and changing human behavior. And because “taxing the rich” cannot conjure up a crystal ball for a more adaptable state, climate policy must consistently resort to other incentives and instruments.
Ultimately, and on this I fundamentally agree with Till Kellerhoff, climate policy is about a fundamental question of distribution. However, it is not a matter of state-organiued redistribution of money, but of how the remaining carbon emissions that can still be emitted until climate neutrality is achieved in 2045 can be distributed. And, as always, the market proves to be unrivaled when it comes to the efficient and fair distribution of limited resources.
Emissions trading strictly caps residual emissions in line with climate targets. Carbon emissions can only be emitted with the corresponding credits. This ensures that we are guaranteed to achieve the emission reduction targets. The limited quantity of permitted emissions is not distributed arbitrarily by the state, but through free trade. The price is formed in the tried and tested manner of supply and demand. This ensures that emissions are reduced first by those who can achieve this with the least effort. The state simply lacks the knowledge about individual players’ different carbon avoidance costs to organize the distribution of emissions anywhere near as efficiently.
Furthermore, emissions trading generates revenue via the carbon price, which can be used to create social compensation in the form of a lump-sum climate payment. This reduces the burden on people with lower incomes to a greater extent, and on average, they also have to bear fewer carbon costs. This is because the polluter pays principle applies in emissions trading: Those who cause a lot of emissions, regardless of whether they are rich or poor, must also bear more of the costs. Those who live in a more climate-friendly way have lower costs and can even benefit. And because residual emissions are capped until net zero is achieved, there is no infinite “buying yourself out” as in the days of the Christian indulgence trade.
So instead of using questionable estimates such as the carbon footprint to calculate a supposedly fair share of costs, the market-based approach prices in the carbon intensity of individual and corporate behavior directly and much more precisely – and has a positive impact to boot.
Unfortunately, it has not been technically possible for the German government to transfer money to all citizens so far. Thanks to Federal Finance Minister Christian Lindner, this is now changing. As soon as the payment mechanism is finalized by early 2025, the climate money can be distributed – provided the revenue from carbon pricing is not used up for questionable subsidies.
The key to a successful transition to a climate-neutral society lies in a policy that incentivizes innovation, wins the market as an ally and distributes the costs fairly. In Europe, emissions trading has, therefore, rightly been chosen as the core climate action instrument because it ensures that we achieve our emissions reduction targets in a guaranteed manner and at the lowest possible cost.
Through its steering effect, emissions trading makes private investment in clean future technologies attractive and thus helps the technologies that save the most carbon achieve a breakthrough – without any government subsidy injections. So while emissions trading offers an effective climate action solution, the ‘rich tax’ is just a political ploy that penalizes wealth without saving the climate.
Lukas Köhler is deputy chairman of the German Free Democratic Party (FDP) in the Bundestag. He was the parliamentary group’s climate policy spokesperson in the last legislative period.
