For a year now, the world has been a different place: The Russian army’s brutal invasion of Ukraine on Feb. 24, 2022, not only plunged that country and its people into hardship and suffering. It also damaged structures and trust that are central to climate policy, for example. On the anniversary of this turning point, we, therefore, write about how Moscow’s energy and climate policies continue to fuel the climate crisis; how Russia itself is suffering as a result; how the country’s business model, which relies on exporting oil and gas, is faltering; and how international climate research is being hampered as a result.
The World Bank also faces a change of era. Many people are working towards this goal, hoping that a new president will steer this powerful institution from Washington toward greater sustainability and effective climate protection. We provide background information on this, as well as on the German chancellor’s trip to India, where climate policy plays an important role in the form of industrial policy. India, like the EU, China and the USA, wants to secure its share of the markets of the future – and is also launching a billion-euro program to support its domestic green industries. And Indonesia is embarking on emissions trading – while the CO2 price in the EU is reaching the 100-euro mark for the first time under this very instrument.
Last but not least: If you enjoy Climate.Table, please feel free to forward our briefing. If this mail was sent to you: Here you can test our briefing for free.
Russia’s invasion of Ukraine also changed its climate policy. In April 2022, several MPs – including Sergey Mironov, leader and Duma faction chair of the political party “A Just Russia,” even called for Russia’s withdrawal from the Paris Climate Agreement after Western sanctions. The country is the fourth-largest emitter of greenhouse gases. Russia ultimately stayed part of the agreement, although Mironov reiterated his demand.
A withdrawal would have damaged Russia’s climate action and climate research even more than the war already does. But Russia is trying to remain active and visible in global climate diplomacy. At COP27, Russian representatives of politics and business stated that they see the climate crisis as an opportunity for international cooperation. “Without Russia, you cannot solve these problems,” said Vyacheslav Fetisov, a member of the Duma and chair of the All-Russian Society for the Protection of Nature in Sharm el-Sheikh.
However, cooperation with non-Western countries is now being given more attention. Russia is trying even harder than before the war to build partnerships with the Global South by playing the globalization-critical and anti-Western card. For example, Ilya Torosov, Deputy Minister of Economic Development, or Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs, regularly call on Russia not to follow “Western guidelines” on climate issues and instead to develop its own “sovereign” climate agenda.
They pursue the hope that investments from friendly countries such as China, India or the Arab states could replace the lost western investments. Because Western investors in climate-friendly technology have withdrawn or put their plans on hold. And climate science is suffering from the suspension of many cooperation programs with the West.
Even before the war, Russia’s emission reduction plans were hardly ambitious. The government’s goal is to achieve net zero by 2060.
Since 1990, greenhouse gas emissions in the country have fallen, mainly due to the economic downturn. By 2012, emissions had already fallen by a third. Carbon absorption by forests had not yet been taken into account. At present, emissions are approximately 30 percent below the 1990 level. If the sink capacity of forests is included, the figure is as low as minus 50 percent. However, this calculation method is controversial in the UN system. The Russian government has set itself the target of cutting emissions by 30 percent by 2030. If the carbon absorption of forests is included in the calculation, emissions are even likely to rise in the coming years, measured against the 2030 target.
The pressure to step up climate action came mainly from experts and activists – and from some companies, especially those whose products would have been affected by the EU’s CBAM rules. Overall, the prospect of CO₂ border adjustment had greatly intensified the Russian climate debate in business and politics in 2020 and 2021.
Today, there are still companies pledging emission reduction projects and hoping to expand international cooperation in this field. These include companies from the metal, wood and fertilizer sectors, but also companies from the oil and gas sector – i.e., mainly export companies.
But Western business partners and investments are lacking. And other Russian companies, especially from the oil sector, are exploiting the current situation to demand that the government soften environmental protection standards. In the face of Western sanctions, they are increasing their pressure.
The Ministry of Economic Development has already indicated a possible review and change of Russia’s plan to implement a low-carbon development strategy by 2050. No decision has been made on this matter yet.
But several other regulations passed in recent months further undermine the country’s already insufficient climate policies. For example:
It is not yet clear how this will affect the country’s emissions. The statistics for 2022 have not yet been published. Overall, there is a tendency to block public access to a lot of government data. Some of the recent scenario projections looking at Russia’s future emissions do mention that Russia may find it more difficult to secure sufficient funding and technology to reduce emissions. Nevertheless, greenhouse gas emissions could decline in the wake of the economic downturn – similar to what happened in the 1990s.
The Ukrainian government, in turn, estimates the environmental damage caused by the war at 1.896 trillion hryvnyas, the equivalent of about 50 billion euros. The Initiative on GHG Accounting of War estimates that around 100 million additional tonnes of emissions were generated in the first seven months of the war alone. This is equivalent to the emissions of the Netherlands over the same period.
At present, all signs suggest that the basic cornerstones of Russia’s climate policy will remain more or less the same:
In addition, the country relies heavily on forest carbon sequestration and incorporates them and other ecosystems more into emissions reporting. This is disputed within the Russian and international scientific community, as forests are increasingly affected by forest fires and other negative climate change impacts like non-sustainable forest management. Their ability to absorb and store carbon dioxide from the atmosphere could decrease in the long run. By Angelina Davydova, Berlin
Mr. Gustafson, how has the Russian assault on Ukraine changed global energy and climate policy?
The attack is a turning point. It dramatically accelerates the change in Russian climate and energy policy that is coming anyway – with far-reaching implications beyond the country.
What change do you mean specifically?
In my book “Klimat: Russia in the Age of Climate Change,” which was published three months before the invasion, I predicted that Russia would still be making good money in the 2020s with its economic model as an oil and gas exporter. It was only in the 1930s that I saw the Russian economy coming under increasing pressure from the effects of climate policy and a declining global demand for fossil fuels. That is already happening today. Russia has undermined its own economic position and abandoned its role as a reliable energy partner.
What are the consequences for Russia?
Europe breaks free of its dependence on Russian oil and gas, and the export costs rise. This means that Russia is earning less and less. After all, half of its national budget so far has come from fossil sources up to now. Russia is getting poorer.
Not at the moment. Russia is earning good money thanks to high oil and gas prices.
That was in 2022, but it won’t stay that way. Especially because Putin has practically committed gas suicide on the European market. As for oil, Russian export revenues are declining – because prices on the world market are dropping again, but mainly, because the export costs are rising due to the oil embargo. Russia is now paying twice as high cargo rates for oil tankers than before the war. They have to take the oil all the way around Europe to India or through the long and dangerous Northeast Passage. Profits are dramatically lower than before.
How much is the economy suffering as a result?
The Russian economic system is not on the verge of collapse. But it is the moment of truth. And the truth is: fewer profits, less to distribute in a country that is getting poorer, less political leeway in a politically and economically expensive war. Putin’s successors will have to deal with what he has done: diplomatically and economically.
Does this spell the end of Russia’s fossil fuel economic model?
No and Yes. No, because Russia will always gain an economic advantage from exporting fossil fuels and other raw materials. Yes, because the profit from it will decrease.
Is Russia’s elite aware of this?
Yes. In that respect, a lot already changed over the five years before the invasion. There were many people in the Russian political bubble – entrepreneurs, journalists, consultants, young politicians, up to Deputy Prime Minister Alexander Novak – who increasingly realized that dependence on the export of fossils has no real future. But with the beginning of the war, all these debates ended. Nobody talks about alternatives to the fossil model anymore, nobody talks about the climate issue anymore.
There has not been a real climate debate in Russia comparable to the one in Europe or the USA.
Indeed, the debate in the small circles has not had much practical impact. But the situation is complicated, after all.
In what way?
Global warming is progressing two and a half times faster in Russia than in the global average. At the same time, Russia is much less vulnerable to the effects of climate change than the United States, for example: Fewer people live along the coast. Forest fires do not occur in densely populated areas such as California, but in Siberia. Agriculture will suffer from drought, but thawing will also free up new land for cultivation.
The thawing permafrost is a genuine problem. 70 percent of Russia’s land mass is located in permafrost territory, this damages infrastructure, and these regions are completely neglected by politicians. At the same time, new economic benefits are possible if the Arctic becomes ice-free. All energy planning is focused on the large gas and oil fields in the Arctic: the Yamal field and the Vostok field in Siberia.
So is Russia a net beneficiary of climate change, as Putin sometimes claims?
No, that will be prevented by the external effects of the global economy: Profits from the export of fossil fuels will fall because of climate policy. And now even faster due to the embargo.
Is Russia, as the world’s fourth-largest emitter of CO2, a partner in the solution to the climate crisis?
No. They showed up at the COPs and said we’re greener than everybody else because we have so much forest and nuclear power. And because a lot of Russian companies were listed on the London Stock Exchange, for example, they had to deal with these issues publicly. But that was not climate policy, it was propaganda. And since the invasion, that, too, is over. The planning horizon has shortened from decades to next month. And because Russia does not participate in the global climate policy debate, it cannot exert any influence. What happens in climate policy will affect Russia just as much from the outside as climate change. And that will be a decisive factor for the population, politics and economy in 2050, just like everywhere else. But unlike other countries, Russia is completely unprepared.
Will Russia be a post-fossil country after Putin?
No, Russia will always export oil as long as there is demand. Because what alternatives do they have? There is agriculture, fertilizers, nuclear power, metals, and weapons. But in 2019, the last normal year, these industries generated export revenues of about 60 billion dollars. Oil and gas, on the other hand, collectively brought in more than 260 billion.
Some people say Russia needs to be made an attractive offer for a post-Putin, post-fossil economy. The country has huge potential for renewables or green hydrogen exports. Are such plans realistic?
It’s true, there are some foundations. Gazprom loves the hydrogen story because they’re good at handling gases. And they have low emission energy, the pipelines, the gas to turn it into hydrogen. Rosatom loves the wind business because they want to diversify. But there’s no business model for renewables in Russia. It’s a domestic market where gas is unbeatably cheap.
Can there be a decarbonized Russia?
I don’t see that happening in our lifetime. At most for propaganda like with the alleged green hydrogen and reforestation.
Thane Gustafson is a professor of political science at Georgetown University in Washington, D.C.. His work focuses on the political history of Russia and the USSR. He has written several books on Russian energy and climate policy. They are published by Harvard University Press.
India’s transition to low-carbon development and joint efforts to combat climate change will be an important part of talks during Chancellor Olaf Scholz’s visit to India on Feb. 25 and 26. This is according to Indian and German government circles.
Specifically, talks are expected on India’s promotion of its own green technologies, including solar, electricity storage and hydrogen. But issues of Scholz’s “climate club,” Modi’s “LiFE” lifestyle initiative and the phase-out of fossil fuels are also topics between Germany and India. The Asian country plans, for example, to become the second-largest producer of solar technology. All of these issues are part of the “core area of Indo-German cooperation” that will be pursued further, according to the German government. Climate protection is “always an issue” during visits to large economies anyway.
Back in May 2022, Scholz and Prime Minister Modi launched the Indo-German Partnership for Green and Sustainable Development during the latter’s visit to Berlin. It is intended to:
Under this partnership, Germany has committed to supporting India with at least 10 billion euros in new and additional pledges by 2030.
Since the meeting between Prime Minister Modi and Chancellor Scholz in May 2022, India:
In the race for future markets, India wants to keep up. The EU has proclaimed its “Green Deal Industrial Plan”; the US wants to promote green industries with its $370 billion package of the “Inflation Reduction Act” (IRA). And India has developed the Production Linked Incentives (PLI) system. It is intended as a new form of government aid to support the development of renewable energies, for example. Instead of fixed percentages of aid as in the past, companies can claim incentives in proportion to their production.
The goal of the new funding lines “is to ensure that India is better able to meet its obligations to the World Trade Organization (WTO) and that the regime is non-discriminatory and neutral with respect to domestic sales and exports,” said Rajat Kathuria, director and executive director of the policy think tank Indian Council for Research on International Economic Relations (ICRIER).
The PLIs are also intended to promote the production and domestic sales of high-efficiency PV modules in India. This means:
Fatih Birol, head of the International Energy Agency (IEA), then praises: “The Production Linked Incentives (PLI) in India are attracting a lot of domestic and foreign investment for PV manufacturing. When I look at the numbers for India, we expect production numbers to increase more than tenfold. Government policies will make India the second largest location for PV manufacturing.” This assessment by the IEA is consistent with the Indian government’s projections.
PLI programs will also be available for the construction of battery storage facilities. Capacity is to be expanded to 50 gigawatt hours (GWh). The use of battery storage in the grid sector is also to be accelerated. In addition, the electricity sector is to be reformed: For example, fees and subsidies are to be paid more punctually and more competition is to be allowed in the distribution sector.
There are also to be PLI incentives for the introduction of electric cars. To this end, 26 states have formulated their own measures and targets. The government has launched several programs and provided a lot of capital to steer the transport sector in the direction of electric vehicles. The Indo-German Partnership for Environmentally Friendly Urban Mobility, which was launched in 2019, will also provide support.
Green hydrogen is also an important part of India’s plans for decarbonization, particularly with regard to industrial transformation. The government approved the National Green Hydrogen Mission in January with an initial budget of nearly 190 billion INR (about 2.2 billion euros). By 2030, it aims to:
Scholz and Modi have already agreed to develop an Indo-German roadmap for green hydrogen based on the proposals of the Indo-German Task Force on Green Hydrogen. Progress in this area is expected during the Chancellor’s visit.
At COP26 in Glasgow, Prime Minister Modi introduced the concept of “Lifestyle for the Environment” (LiFE). He called on the global community to initiate an international mass movement toward “mindful and conscious use instead of thoughtless and destructive consumption” to protect and preserve the environment. India is pushing the idea as G20 chair. According to the IEA, it could help close the emissions gap toward 1.5 degrees.
Germany is planning a kind of formal announcement on “climate clubs” for COP28 in December and seeks partners outside the G7, including India. An Indian government official said the concept and proposal are currently under consideration. The focus is on setting standards and emissions norms for hard-to-decarbonize sectors. The debate could be linked to Indian concerns about the European CBAM.
The Indian government is also currently working on a proposal for the Just Energy Transition Partnership (JETP). This is probably about more renewable energies in the energy mix. The topic is controversial, but one thing is clear: A JETP with India, if it comes to fruition, will look very different from the others already completed. So far, these partnerships exist with South Africa, Indonesia and Vietnam.
“Each of the JETPs is tailor-made. So the JETP for India will also be tailored to its needs. A big part of my work here is to listen to what is of interest to India,” said German Climate Envoy and Secretary of State Jennifer Morgan in an interview with Table.Media during a visit to India.
Another possible topic during Scholz’s India visit is India’s push at the international level to reduce all fossil fuels. The Modi government had already formally proposed this at COP27 in Sharm El-Sheikh. Germany and the EU were technically interested in joint action, but failed to do so because of the Egyptian conference leadership. India is still very interested in this issue.
Many development and climate politicians have long-awaited this opportunity: Last week, World Bank Group President David Malpass announced that he will step down from his post at the end of June – one year before the end of his five-year term. Ever since there has been more than just speculation about possible successors at the Bank’s headquarters in Washington. Key politicians are also calling for a fundamental change of course.
Since the head of the World Bank is traditionally appointed by the United States, some US congressmen are seeking to oblige the bank’s new leadership to step up its climate action efforts. Reformers like Barbados Prime Minister Mia Mottley have long called for a restructuring of the financial system. And Germany, which has campaigned behind the scenes for many years for a course correction, is also proposing its own ideas.
The new leadership must “turn the bank into the central ‘change agent’ for the upcoming social-ecological transformation of the global economy,” German Development Minister Svenja Schule, who represents Germany as World Bank governor, told Table.Media. She proposes:
Together with other shareholders, Schulze already called on the World Bank to introduce such changes at its annual meeting last fall. With her “Bridgetown Initiative,” Mia Mottley has been calling for a full-scale transformation of the World Bank and the International Monetary Fund (IMF) toward greater sustainability since 2022. Together with Schulze, Mottley also proposed:
Shortly before Malpass’ resignation announcement, Secretary of the Treasury of the United States Janet Yellen also called for more reforms. Throughout his tenure, Malpass, who was appointed by US President Donald Trump in 2019, faced criticism. He supported funding of fossil fuel projects in developing countries and initially refused to acknowledge the burning of fossil fuels as a cause of climate change. Activists and politicians demanded his resignation for months.
In his letter of resignation, Malpass did not give reasons for his decision. However, he stressed that during his tenure, the bank set records in climate funding and launched a climate change action plan.
The World Bank provides loans to low-income countries for poverty relief. Although it has stated that it will align its financing decisions with the Paris Climate Agreement, it has not committed to ending support of fossil fuels. According to an NGO study, the World Bank provided a total of 5.7 billion US dollars in fossil fuel funding between 2018 and 2020.
Members of the US Congress are therefore also urging that “the World Bank needs new leadership to enact reforms that will address climate change and provide more financial support to developing countries.” US Senators Ed Markey, Elizabeth Warren, and Martin Heinrich pose several questions about this in a letter to the Board:
However, the new president will assume office at a time of turmoil in energy policy and the war in Ukraine. Prices and supply of oil and natural gas are fragile, and fossil fuel consumption has increased over the past year. Germany, for example, is considering funding ten international fossil fuel projects worth one billion euros, according to Oil Change International. These include the controversial prospecting for natural gas off the coast of Senegal.
Some developing countries, therefore, demand funding for the exploitation of their own coal, oil and gas reserves. They point to the lack of climate financing, as evidenced by the missed target of 100 billion US dollars in annual aid since 2020. At COP27, countries like Namibia made it clear that without climate financing, more fossil fuels would be needed to escape energy poverty.
At the same time, inflation is driving up lending costs and eroding the value of loans, weakening one of the World Bank’s most valuable tools. Even if the next World Bank chief tries to genuinely tackle the climate problem, his ambitions will encounter political and economic limits.
The Financial Times currently lists the following as potential candidates to head the World Bank:
A new leadership seems to offer a great opportunity for change at the World Bank. However, some fear that Malpass’s announced resignation could also complicate matters. With Malpass, the first changes could be blocked at the Bank’s spring meeting and the discussion could focus on his successor.
The European carbon price exceeded the threshold of 100 euros per metric ton for the first time on Tuesday. The new record high – for the right to emit one ton of carbon within the European Emissions Trading System (ETS) – was 100.70 euros at midday on Tuesday. It is considered a historic and, for climate activists, psychological event. “This is an important signal for investments in climate mitigation: The tightening #CO2Budget is reflected in the rising prices,” climate scientist Brigitte Knopf wrote on Twitter. Experts and analysts see high carbon prices as one of the most important tools to drive industrial transformation, as the cost of CO2 abatement falls in relative terms. Since the beginning of the year, the CO2 price in the ETS alone has risen by 20 percent.
In 2005, the ETS started with a pilot phase in which industrial plants and energy producers initially received their CO2 allowances free of charge but, for the first time, had to collect emissions data in accordance with strict requirements. Nevertheless, the price dropped to zero euros. It was not until 2008, when a fixed emissions cap and specific emission reduction targets were set, that the CO2 price rose again. Above all, the low ambition level of the ETS and the oversupply of CO2 allowances on the market prevented an effective price signal for climate protection from developing in the system. The price bobbed along for almost a decade.
The first major ETS reform introduced a new target in 2018: Emissions are supposed to fall by 40 percent by 2030. In addition, the Market Stability Reserve has since ensured that surplus allowances are removed from the market. Even though an oversupply of emission allowances remained, the market anticipated that the period of ineffective emissions trading was coming to an end – the price rose again.
The announcement of the Green Deal and the revised EU climate target of minus 55 percent emissions by 2030 again caused prices to rise. The presentation of the Fit for 55 package with far-reaching ETS reforms and the change of government in Berlin were also followed by price jumps, some of them enormous, indicating that the system was overheating. However, with the start of the Russian war of aggression in Ukraine, the price crashed. Since then, the market has been subject to major fluctuations, and in the past four weeks, it has almost reached the 100 euro mark on several occasions, but on average, it has been rising steadily. The price of 100 euros per ton of CO2 is therefore not due to a specific event but the result of current European climate policy and system reforms. luk
Despite skyrocketing gas prices and strong economic incentives to reduce gas loss, methane emissions in the energy sector remain high. This is revealed by the International Energy Agency’s (IEA) Global Methane Tracker 2023, presented on Tuesday. “Some progress is being made but emissions are still far too high and not falling fast enough,” IEA Director Fatih Birol said at the presentation.
The report shows that:
Fatih Birol lamented that the sector had raked in a record profit of around $4 trillion in 2022. According to Birol’s calculations, just three percent of that sum “would be enough to achieve a 75 percent reduction in methane emissions.” Most of the gas loss could be prevented without significant cost and with proven methods – such as identifying leaks or repairing and replacing old infrastructure. The use of satellites could reduce particularly large methane leaks by ten percent. Gas flaring has also been reduced globally, according to initial IEA estimates.
In a report, the NGO Environmental Investigation Agency (EIA) criticizes the EU’s lack of action on reducing methane emissions from imported feedstocks, saying this puts EU climate targets at risk. The EU imports much of its fossil fuel feedstock. According to the NGO’s estimates, methane leaks regularly occur during the production of this natural gas, coal and oil, as well as during transportation. According to the report, imported fossil fuels were responsible for over eight million tons of methane emissions in 2020. That was comparable to 200 million metric tons of CO2, or the annual CO2 emissions of 54 coal-fired power plants, it said. Methane is an extremely climate-damaging greenhouse gas in the short term.
According to EIA data, most methane is emitted during production and import from Russia. However, US gas does not have a much better methane balance either. Only gas from Norway performs better. Overall, however, the replacement of Russian gas with gas from the USA and Norway is likely to have contributed only to a small reduction in methane emissions. According to the EIA, liquefied natural gas from Qatar and Australia is responsible for 60 to 175 percent more methane emissions than Russian gas.
The NGO criticizes the EU Commission’s proposal for methane regulation. The Commission’s proposal does not include any obligations to measure, report on, or reduce methane emissions from imported energy feedstocks, the EIA said. The NGO calls for fossil fuel importers to:
Market participants who do not comply should not be allowed to sell raw materials on the EU market, the EIA demands. “The technical requirements to implement strict regulations throughout the supply chain are available at low cost,” the NGO concludes. The EU Parliament needs to tighten up the Commission’s methane regulation, it demands. nib
It took a few years, but European emissions trading has now grown into an effective climate instrument. This week, the price for one tonne of carbon has passed the “magic mark” of 100 euros. Florian Rothenberg follows the trading closely. He is an emissions trading analyst at the information service Independent Commodity Intelligence Services (ICIS) in the German city of Karlsruhe. According to Rothenberg, the high price is “a strong driver for the rapid expansion of renewables”. Should the gas price fall further soon, the high carbon price “will soon make a large part of coal-fired power generation in Europe unprofitable”, says the trading expert. However, he says, one has to wait and see. “The price level must first establish itself at 100 euros,” says Rothenberg.
During the first telephone conversation with Table.Media, Rothenberg wrapped a woolen blanket around himself. The energy crisis does not only concern him in his job; the high energy prices also impact his personal life. Because he wants to win the energy-saving competition of Karlsruhe’s municipal utility company and reduce his energy consumption by at least 20 percent, he hardly heats his home and takes cold showers. And dresses warmly when he works from home. The contest will run until the end of March, and then the results will be announced.
In his job, Rothenberg is currently focusing on the question of how Russia’s invasion of Ukraine will affect European emissions trading and the energy markets.
Many market participants, including Rothenberg’s clients, were concerned at the beginning of the war that politicians would temporarily suspend emissions trading – the prices for electricity and pollution rights had simply climbed too high. “But trust in the market is very important,” says Rothenberg. If an industrial company buys allowances for the next ten years, it must be sure that the emissions trading system will still exist this long.
In the end, a compromise was reached, the so-called frontloading. In the short term, more allowances are placed on the market that companies can purchase now, but in turn, fewer in the future. As a result, emissions trading has not become collateral damage of the energy crisis, says the expert. “Compared to other markets like the electricity or gas markets, it got off easy“.
28-year-old Rothenberg has been working at ICIS for six years, and he never gets bored, he says. He studied industrial engineering in Karlsruhe, and it is normal to hear about ICIS there at some point. “Emissions trading remains a niche, and so not all students are familiar with ICIS,” says Rothenberg. “But anyone who studies energy economics is bound to stumble upon us.”
The analyst’s core focus is on energy markets and decarbonization. What he finds particularly exciting is that the issue of carbon is “everywhere”: “I have to very quickly understand where energy is needed and consumed – and to what extent that affects emissions trading”.
To answer these questions, he constantly stays up-to-date on trends that could affect the markets and gathers data about the demand and supply of pollution allowances. He examines how prices are formed and why they fall or rise. He writes his analyses down in mathematical models, and discusses the results with colleagues and later with his clients.
The EU’s Green Deal is currently an important topic for him. “The big question is at what CO2 price Europe can achieve net zero,” says Florian Rothenberg. The issue is not a specific euro sum, but a price path. Because that is one of the most important decision-making factors for industrial companies when it comes to climate action investments.
Climate researchers criticize that the EU’s targets are not ambitious enough. “That is probably true, but more ambitious targets should have been introduced five to ten years ago,” says Rothenberg. “For the economy to reduce EU emissions by 55 percent by 2030 is a huge step, because it takes an incredibly long time to transform.”
Regarding his own carbon footprint, Rothenberg admits that it is “probably significantly worse than the global average”. After all, he likes to travel and also travels by plane. At least he saves emissions by taking the train whenever he travels on business. “I believe that everyone can and should do a small part against climate change.” Patricia Hoffhaus
For a year now, the world has been a different place: The Russian army’s brutal invasion of Ukraine on Feb. 24, 2022, not only plunged that country and its people into hardship and suffering. It also damaged structures and trust that are central to climate policy, for example. On the anniversary of this turning point, we, therefore, write about how Moscow’s energy and climate policies continue to fuel the climate crisis; how Russia itself is suffering as a result; how the country’s business model, which relies on exporting oil and gas, is faltering; and how international climate research is being hampered as a result.
The World Bank also faces a change of era. Many people are working towards this goal, hoping that a new president will steer this powerful institution from Washington toward greater sustainability and effective climate protection. We provide background information on this, as well as on the German chancellor’s trip to India, where climate policy plays an important role in the form of industrial policy. India, like the EU, China and the USA, wants to secure its share of the markets of the future – and is also launching a billion-euro program to support its domestic green industries. And Indonesia is embarking on emissions trading – while the CO2 price in the EU is reaching the 100-euro mark for the first time under this very instrument.
Last but not least: If you enjoy Climate.Table, please feel free to forward our briefing. If this mail was sent to you: Here you can test our briefing for free.
Russia’s invasion of Ukraine also changed its climate policy. In April 2022, several MPs – including Sergey Mironov, leader and Duma faction chair of the political party “A Just Russia,” even called for Russia’s withdrawal from the Paris Climate Agreement after Western sanctions. The country is the fourth-largest emitter of greenhouse gases. Russia ultimately stayed part of the agreement, although Mironov reiterated his demand.
A withdrawal would have damaged Russia’s climate action and climate research even more than the war already does. But Russia is trying to remain active and visible in global climate diplomacy. At COP27, Russian representatives of politics and business stated that they see the climate crisis as an opportunity for international cooperation. “Without Russia, you cannot solve these problems,” said Vyacheslav Fetisov, a member of the Duma and chair of the All-Russian Society for the Protection of Nature in Sharm el-Sheikh.
However, cooperation with non-Western countries is now being given more attention. Russia is trying even harder than before the war to build partnerships with the Global South by playing the globalization-critical and anti-Western card. For example, Ilya Torosov, Deputy Minister of Economic Development, or Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs, regularly call on Russia not to follow “Western guidelines” on climate issues and instead to develop its own “sovereign” climate agenda.
They pursue the hope that investments from friendly countries such as China, India or the Arab states could replace the lost western investments. Because Western investors in climate-friendly technology have withdrawn or put their plans on hold. And climate science is suffering from the suspension of many cooperation programs with the West.
Even before the war, Russia’s emission reduction plans were hardly ambitious. The government’s goal is to achieve net zero by 2060.
Since 1990, greenhouse gas emissions in the country have fallen, mainly due to the economic downturn. By 2012, emissions had already fallen by a third. Carbon absorption by forests had not yet been taken into account. At present, emissions are approximately 30 percent below the 1990 level. If the sink capacity of forests is included, the figure is as low as minus 50 percent. However, this calculation method is controversial in the UN system. The Russian government has set itself the target of cutting emissions by 30 percent by 2030. If the carbon absorption of forests is included in the calculation, emissions are even likely to rise in the coming years, measured against the 2030 target.
The pressure to step up climate action came mainly from experts and activists – and from some companies, especially those whose products would have been affected by the EU’s CBAM rules. Overall, the prospect of CO₂ border adjustment had greatly intensified the Russian climate debate in business and politics in 2020 and 2021.
Today, there are still companies pledging emission reduction projects and hoping to expand international cooperation in this field. These include companies from the metal, wood and fertilizer sectors, but also companies from the oil and gas sector – i.e., mainly export companies.
But Western business partners and investments are lacking. And other Russian companies, especially from the oil sector, are exploiting the current situation to demand that the government soften environmental protection standards. In the face of Western sanctions, they are increasing their pressure.
The Ministry of Economic Development has already indicated a possible review and change of Russia’s plan to implement a low-carbon development strategy by 2050. No decision has been made on this matter yet.
But several other regulations passed in recent months further undermine the country’s already insufficient climate policies. For example:
It is not yet clear how this will affect the country’s emissions. The statistics for 2022 have not yet been published. Overall, there is a tendency to block public access to a lot of government data. Some of the recent scenario projections looking at Russia’s future emissions do mention that Russia may find it more difficult to secure sufficient funding and technology to reduce emissions. Nevertheless, greenhouse gas emissions could decline in the wake of the economic downturn – similar to what happened in the 1990s.
The Ukrainian government, in turn, estimates the environmental damage caused by the war at 1.896 trillion hryvnyas, the equivalent of about 50 billion euros. The Initiative on GHG Accounting of War estimates that around 100 million additional tonnes of emissions were generated in the first seven months of the war alone. This is equivalent to the emissions of the Netherlands over the same period.
At present, all signs suggest that the basic cornerstones of Russia’s climate policy will remain more or less the same:
In addition, the country relies heavily on forest carbon sequestration and incorporates them and other ecosystems more into emissions reporting. This is disputed within the Russian and international scientific community, as forests are increasingly affected by forest fires and other negative climate change impacts like non-sustainable forest management. Their ability to absorb and store carbon dioxide from the atmosphere could decrease in the long run. By Angelina Davydova, Berlin
Mr. Gustafson, how has the Russian assault on Ukraine changed global energy and climate policy?
The attack is a turning point. It dramatically accelerates the change in Russian climate and energy policy that is coming anyway – with far-reaching implications beyond the country.
What change do you mean specifically?
In my book “Klimat: Russia in the Age of Climate Change,” which was published three months before the invasion, I predicted that Russia would still be making good money in the 2020s with its economic model as an oil and gas exporter. It was only in the 1930s that I saw the Russian economy coming under increasing pressure from the effects of climate policy and a declining global demand for fossil fuels. That is already happening today. Russia has undermined its own economic position and abandoned its role as a reliable energy partner.
What are the consequences for Russia?
Europe breaks free of its dependence on Russian oil and gas, and the export costs rise. This means that Russia is earning less and less. After all, half of its national budget so far has come from fossil sources up to now. Russia is getting poorer.
Not at the moment. Russia is earning good money thanks to high oil and gas prices.
That was in 2022, but it won’t stay that way. Especially because Putin has practically committed gas suicide on the European market. As for oil, Russian export revenues are declining – because prices on the world market are dropping again, but mainly, because the export costs are rising due to the oil embargo. Russia is now paying twice as high cargo rates for oil tankers than before the war. They have to take the oil all the way around Europe to India or through the long and dangerous Northeast Passage. Profits are dramatically lower than before.
How much is the economy suffering as a result?
The Russian economic system is not on the verge of collapse. But it is the moment of truth. And the truth is: fewer profits, less to distribute in a country that is getting poorer, less political leeway in a politically and economically expensive war. Putin’s successors will have to deal with what he has done: diplomatically and economically.
Does this spell the end of Russia’s fossil fuel economic model?
No and Yes. No, because Russia will always gain an economic advantage from exporting fossil fuels and other raw materials. Yes, because the profit from it will decrease.
Is Russia’s elite aware of this?
Yes. In that respect, a lot already changed over the five years before the invasion. There were many people in the Russian political bubble – entrepreneurs, journalists, consultants, young politicians, up to Deputy Prime Minister Alexander Novak – who increasingly realized that dependence on the export of fossils has no real future. But with the beginning of the war, all these debates ended. Nobody talks about alternatives to the fossil model anymore, nobody talks about the climate issue anymore.
There has not been a real climate debate in Russia comparable to the one in Europe or the USA.
Indeed, the debate in the small circles has not had much practical impact. But the situation is complicated, after all.
In what way?
Global warming is progressing two and a half times faster in Russia than in the global average. At the same time, Russia is much less vulnerable to the effects of climate change than the United States, for example: Fewer people live along the coast. Forest fires do not occur in densely populated areas such as California, but in Siberia. Agriculture will suffer from drought, but thawing will also free up new land for cultivation.
The thawing permafrost is a genuine problem. 70 percent of Russia’s land mass is located in permafrost territory, this damages infrastructure, and these regions are completely neglected by politicians. At the same time, new economic benefits are possible if the Arctic becomes ice-free. All energy planning is focused on the large gas and oil fields in the Arctic: the Yamal field and the Vostok field in Siberia.
So is Russia a net beneficiary of climate change, as Putin sometimes claims?
No, that will be prevented by the external effects of the global economy: Profits from the export of fossil fuels will fall because of climate policy. And now even faster due to the embargo.
Is Russia, as the world’s fourth-largest emitter of CO2, a partner in the solution to the climate crisis?
No. They showed up at the COPs and said we’re greener than everybody else because we have so much forest and nuclear power. And because a lot of Russian companies were listed on the London Stock Exchange, for example, they had to deal with these issues publicly. But that was not climate policy, it was propaganda. And since the invasion, that, too, is over. The planning horizon has shortened from decades to next month. And because Russia does not participate in the global climate policy debate, it cannot exert any influence. What happens in climate policy will affect Russia just as much from the outside as climate change. And that will be a decisive factor for the population, politics and economy in 2050, just like everywhere else. But unlike other countries, Russia is completely unprepared.
Will Russia be a post-fossil country after Putin?
No, Russia will always export oil as long as there is demand. Because what alternatives do they have? There is agriculture, fertilizers, nuclear power, metals, and weapons. But in 2019, the last normal year, these industries generated export revenues of about 60 billion dollars. Oil and gas, on the other hand, collectively brought in more than 260 billion.
Some people say Russia needs to be made an attractive offer for a post-Putin, post-fossil economy. The country has huge potential for renewables or green hydrogen exports. Are such plans realistic?
It’s true, there are some foundations. Gazprom loves the hydrogen story because they’re good at handling gases. And they have low emission energy, the pipelines, the gas to turn it into hydrogen. Rosatom loves the wind business because they want to diversify. But there’s no business model for renewables in Russia. It’s a domestic market where gas is unbeatably cheap.
Can there be a decarbonized Russia?
I don’t see that happening in our lifetime. At most for propaganda like with the alleged green hydrogen and reforestation.
Thane Gustafson is a professor of political science at Georgetown University in Washington, D.C.. His work focuses on the political history of Russia and the USSR. He has written several books on Russian energy and climate policy. They are published by Harvard University Press.
India’s transition to low-carbon development and joint efforts to combat climate change will be an important part of talks during Chancellor Olaf Scholz’s visit to India on Feb. 25 and 26. This is according to Indian and German government circles.
Specifically, talks are expected on India’s promotion of its own green technologies, including solar, electricity storage and hydrogen. But issues of Scholz’s “climate club,” Modi’s “LiFE” lifestyle initiative and the phase-out of fossil fuels are also topics between Germany and India. The Asian country plans, for example, to become the second-largest producer of solar technology. All of these issues are part of the “core area of Indo-German cooperation” that will be pursued further, according to the German government. Climate protection is “always an issue” during visits to large economies anyway.
Back in May 2022, Scholz and Prime Minister Modi launched the Indo-German Partnership for Green and Sustainable Development during the latter’s visit to Berlin. It is intended to:
Under this partnership, Germany has committed to supporting India with at least 10 billion euros in new and additional pledges by 2030.
Since the meeting between Prime Minister Modi and Chancellor Scholz in May 2022, India:
In the race for future markets, India wants to keep up. The EU has proclaimed its “Green Deal Industrial Plan”; the US wants to promote green industries with its $370 billion package of the “Inflation Reduction Act” (IRA). And India has developed the Production Linked Incentives (PLI) system. It is intended as a new form of government aid to support the development of renewable energies, for example. Instead of fixed percentages of aid as in the past, companies can claim incentives in proportion to their production.
The goal of the new funding lines “is to ensure that India is better able to meet its obligations to the World Trade Organization (WTO) and that the regime is non-discriminatory and neutral with respect to domestic sales and exports,” said Rajat Kathuria, director and executive director of the policy think tank Indian Council for Research on International Economic Relations (ICRIER).
The PLIs are also intended to promote the production and domestic sales of high-efficiency PV modules in India. This means:
Fatih Birol, head of the International Energy Agency (IEA), then praises: “The Production Linked Incentives (PLI) in India are attracting a lot of domestic and foreign investment for PV manufacturing. When I look at the numbers for India, we expect production numbers to increase more than tenfold. Government policies will make India the second largest location for PV manufacturing.” This assessment by the IEA is consistent with the Indian government’s projections.
PLI programs will also be available for the construction of battery storage facilities. Capacity is to be expanded to 50 gigawatt hours (GWh). The use of battery storage in the grid sector is also to be accelerated. In addition, the electricity sector is to be reformed: For example, fees and subsidies are to be paid more punctually and more competition is to be allowed in the distribution sector.
There are also to be PLI incentives for the introduction of electric cars. To this end, 26 states have formulated their own measures and targets. The government has launched several programs and provided a lot of capital to steer the transport sector in the direction of electric vehicles. The Indo-German Partnership for Environmentally Friendly Urban Mobility, which was launched in 2019, will also provide support.
Green hydrogen is also an important part of India’s plans for decarbonization, particularly with regard to industrial transformation. The government approved the National Green Hydrogen Mission in January with an initial budget of nearly 190 billion INR (about 2.2 billion euros). By 2030, it aims to:
Scholz and Modi have already agreed to develop an Indo-German roadmap for green hydrogen based on the proposals of the Indo-German Task Force on Green Hydrogen. Progress in this area is expected during the Chancellor’s visit.
At COP26 in Glasgow, Prime Minister Modi introduced the concept of “Lifestyle for the Environment” (LiFE). He called on the global community to initiate an international mass movement toward “mindful and conscious use instead of thoughtless and destructive consumption” to protect and preserve the environment. India is pushing the idea as G20 chair. According to the IEA, it could help close the emissions gap toward 1.5 degrees.
Germany is planning a kind of formal announcement on “climate clubs” for COP28 in December and seeks partners outside the G7, including India. An Indian government official said the concept and proposal are currently under consideration. The focus is on setting standards and emissions norms for hard-to-decarbonize sectors. The debate could be linked to Indian concerns about the European CBAM.
The Indian government is also currently working on a proposal for the Just Energy Transition Partnership (JETP). This is probably about more renewable energies in the energy mix. The topic is controversial, but one thing is clear: A JETP with India, if it comes to fruition, will look very different from the others already completed. So far, these partnerships exist with South Africa, Indonesia and Vietnam.
“Each of the JETPs is tailor-made. So the JETP for India will also be tailored to its needs. A big part of my work here is to listen to what is of interest to India,” said German Climate Envoy and Secretary of State Jennifer Morgan in an interview with Table.Media during a visit to India.
Another possible topic during Scholz’s India visit is India’s push at the international level to reduce all fossil fuels. The Modi government had already formally proposed this at COP27 in Sharm El-Sheikh. Germany and the EU were technically interested in joint action, but failed to do so because of the Egyptian conference leadership. India is still very interested in this issue.
Many development and climate politicians have long-awaited this opportunity: Last week, World Bank Group President David Malpass announced that he will step down from his post at the end of June – one year before the end of his five-year term. Ever since there has been more than just speculation about possible successors at the Bank’s headquarters in Washington. Key politicians are also calling for a fundamental change of course.
Since the head of the World Bank is traditionally appointed by the United States, some US congressmen are seeking to oblige the bank’s new leadership to step up its climate action efforts. Reformers like Barbados Prime Minister Mia Mottley have long called for a restructuring of the financial system. And Germany, which has campaigned behind the scenes for many years for a course correction, is also proposing its own ideas.
The new leadership must “turn the bank into the central ‘change agent’ for the upcoming social-ecological transformation of the global economy,” German Development Minister Svenja Schule, who represents Germany as World Bank governor, told Table.Media. She proposes:
Together with other shareholders, Schulze already called on the World Bank to introduce such changes at its annual meeting last fall. With her “Bridgetown Initiative,” Mia Mottley has been calling for a full-scale transformation of the World Bank and the International Monetary Fund (IMF) toward greater sustainability since 2022. Together with Schulze, Mottley also proposed:
Shortly before Malpass’ resignation announcement, Secretary of the Treasury of the United States Janet Yellen also called for more reforms. Throughout his tenure, Malpass, who was appointed by US President Donald Trump in 2019, faced criticism. He supported funding of fossil fuel projects in developing countries and initially refused to acknowledge the burning of fossil fuels as a cause of climate change. Activists and politicians demanded his resignation for months.
In his letter of resignation, Malpass did not give reasons for his decision. However, he stressed that during his tenure, the bank set records in climate funding and launched a climate change action plan.
The World Bank provides loans to low-income countries for poverty relief. Although it has stated that it will align its financing decisions with the Paris Climate Agreement, it has not committed to ending support of fossil fuels. According to an NGO study, the World Bank provided a total of 5.7 billion US dollars in fossil fuel funding between 2018 and 2020.
Members of the US Congress are therefore also urging that “the World Bank needs new leadership to enact reforms that will address climate change and provide more financial support to developing countries.” US Senators Ed Markey, Elizabeth Warren, and Martin Heinrich pose several questions about this in a letter to the Board:
However, the new president will assume office at a time of turmoil in energy policy and the war in Ukraine. Prices and supply of oil and natural gas are fragile, and fossil fuel consumption has increased over the past year. Germany, for example, is considering funding ten international fossil fuel projects worth one billion euros, according to Oil Change International. These include the controversial prospecting for natural gas off the coast of Senegal.
Some developing countries, therefore, demand funding for the exploitation of their own coal, oil and gas reserves. They point to the lack of climate financing, as evidenced by the missed target of 100 billion US dollars in annual aid since 2020. At COP27, countries like Namibia made it clear that without climate financing, more fossil fuels would be needed to escape energy poverty.
At the same time, inflation is driving up lending costs and eroding the value of loans, weakening one of the World Bank’s most valuable tools. Even if the next World Bank chief tries to genuinely tackle the climate problem, his ambitions will encounter political and economic limits.
The Financial Times currently lists the following as potential candidates to head the World Bank:
A new leadership seems to offer a great opportunity for change at the World Bank. However, some fear that Malpass’s announced resignation could also complicate matters. With Malpass, the first changes could be blocked at the Bank’s spring meeting and the discussion could focus on his successor.
The European carbon price exceeded the threshold of 100 euros per metric ton for the first time on Tuesday. The new record high – for the right to emit one ton of carbon within the European Emissions Trading System (ETS) – was 100.70 euros at midday on Tuesday. It is considered a historic and, for climate activists, psychological event. “This is an important signal for investments in climate mitigation: The tightening #CO2Budget is reflected in the rising prices,” climate scientist Brigitte Knopf wrote on Twitter. Experts and analysts see high carbon prices as one of the most important tools to drive industrial transformation, as the cost of CO2 abatement falls in relative terms. Since the beginning of the year, the CO2 price in the ETS alone has risen by 20 percent.
In 2005, the ETS started with a pilot phase in which industrial plants and energy producers initially received their CO2 allowances free of charge but, for the first time, had to collect emissions data in accordance with strict requirements. Nevertheless, the price dropped to zero euros. It was not until 2008, when a fixed emissions cap and specific emission reduction targets were set, that the CO2 price rose again. Above all, the low ambition level of the ETS and the oversupply of CO2 allowances on the market prevented an effective price signal for climate protection from developing in the system. The price bobbed along for almost a decade.
The first major ETS reform introduced a new target in 2018: Emissions are supposed to fall by 40 percent by 2030. In addition, the Market Stability Reserve has since ensured that surplus allowances are removed from the market. Even though an oversupply of emission allowances remained, the market anticipated that the period of ineffective emissions trading was coming to an end – the price rose again.
The announcement of the Green Deal and the revised EU climate target of minus 55 percent emissions by 2030 again caused prices to rise. The presentation of the Fit for 55 package with far-reaching ETS reforms and the change of government in Berlin were also followed by price jumps, some of them enormous, indicating that the system was overheating. However, with the start of the Russian war of aggression in Ukraine, the price crashed. Since then, the market has been subject to major fluctuations, and in the past four weeks, it has almost reached the 100 euro mark on several occasions, but on average, it has been rising steadily. The price of 100 euros per ton of CO2 is therefore not due to a specific event but the result of current European climate policy and system reforms. luk
Despite skyrocketing gas prices and strong economic incentives to reduce gas loss, methane emissions in the energy sector remain high. This is revealed by the International Energy Agency’s (IEA) Global Methane Tracker 2023, presented on Tuesday. “Some progress is being made but emissions are still far too high and not falling fast enough,” IEA Director Fatih Birol said at the presentation.
The report shows that:
Fatih Birol lamented that the sector had raked in a record profit of around $4 trillion in 2022. According to Birol’s calculations, just three percent of that sum “would be enough to achieve a 75 percent reduction in methane emissions.” Most of the gas loss could be prevented without significant cost and with proven methods – such as identifying leaks or repairing and replacing old infrastructure. The use of satellites could reduce particularly large methane leaks by ten percent. Gas flaring has also been reduced globally, according to initial IEA estimates.
In a report, the NGO Environmental Investigation Agency (EIA) criticizes the EU’s lack of action on reducing methane emissions from imported feedstocks, saying this puts EU climate targets at risk. The EU imports much of its fossil fuel feedstock. According to the NGO’s estimates, methane leaks regularly occur during the production of this natural gas, coal and oil, as well as during transportation. According to the report, imported fossil fuels were responsible for over eight million tons of methane emissions in 2020. That was comparable to 200 million metric tons of CO2, or the annual CO2 emissions of 54 coal-fired power plants, it said. Methane is an extremely climate-damaging greenhouse gas in the short term.
According to EIA data, most methane is emitted during production and import from Russia. However, US gas does not have a much better methane balance either. Only gas from Norway performs better. Overall, however, the replacement of Russian gas with gas from the USA and Norway is likely to have contributed only to a small reduction in methane emissions. According to the EIA, liquefied natural gas from Qatar and Australia is responsible for 60 to 175 percent more methane emissions than Russian gas.
The NGO criticizes the EU Commission’s proposal for methane regulation. The Commission’s proposal does not include any obligations to measure, report on, or reduce methane emissions from imported energy feedstocks, the EIA said. The NGO calls for fossil fuel importers to:
Market participants who do not comply should not be allowed to sell raw materials on the EU market, the EIA demands. “The technical requirements to implement strict regulations throughout the supply chain are available at low cost,” the NGO concludes. The EU Parliament needs to tighten up the Commission’s methane regulation, it demands. nib
It took a few years, but European emissions trading has now grown into an effective climate instrument. This week, the price for one tonne of carbon has passed the “magic mark” of 100 euros. Florian Rothenberg follows the trading closely. He is an emissions trading analyst at the information service Independent Commodity Intelligence Services (ICIS) in the German city of Karlsruhe. According to Rothenberg, the high price is “a strong driver for the rapid expansion of renewables”. Should the gas price fall further soon, the high carbon price “will soon make a large part of coal-fired power generation in Europe unprofitable”, says the trading expert. However, he says, one has to wait and see. “The price level must first establish itself at 100 euros,” says Rothenberg.
During the first telephone conversation with Table.Media, Rothenberg wrapped a woolen blanket around himself. The energy crisis does not only concern him in his job; the high energy prices also impact his personal life. Because he wants to win the energy-saving competition of Karlsruhe’s municipal utility company and reduce his energy consumption by at least 20 percent, he hardly heats his home and takes cold showers. And dresses warmly when he works from home. The contest will run until the end of March, and then the results will be announced.
In his job, Rothenberg is currently focusing on the question of how Russia’s invasion of Ukraine will affect European emissions trading and the energy markets.
Many market participants, including Rothenberg’s clients, were concerned at the beginning of the war that politicians would temporarily suspend emissions trading – the prices for electricity and pollution rights had simply climbed too high. “But trust in the market is very important,” says Rothenberg. If an industrial company buys allowances for the next ten years, it must be sure that the emissions trading system will still exist this long.
In the end, a compromise was reached, the so-called frontloading. In the short term, more allowances are placed on the market that companies can purchase now, but in turn, fewer in the future. As a result, emissions trading has not become collateral damage of the energy crisis, says the expert. “Compared to other markets like the electricity or gas markets, it got off easy“.
28-year-old Rothenberg has been working at ICIS for six years, and he never gets bored, he says. He studied industrial engineering in Karlsruhe, and it is normal to hear about ICIS there at some point. “Emissions trading remains a niche, and so not all students are familiar with ICIS,” says Rothenberg. “But anyone who studies energy economics is bound to stumble upon us.”
The analyst’s core focus is on energy markets and decarbonization. What he finds particularly exciting is that the issue of carbon is “everywhere”: “I have to very quickly understand where energy is needed and consumed – and to what extent that affects emissions trading”.
To answer these questions, he constantly stays up-to-date on trends that could affect the markets and gathers data about the demand and supply of pollution allowances. He examines how prices are formed and why they fall or rise. He writes his analyses down in mathematical models, and discusses the results with colleagues and later with his clients.
The EU’s Green Deal is currently an important topic for him. “The big question is at what CO2 price Europe can achieve net zero,” says Florian Rothenberg. The issue is not a specific euro sum, but a price path. Because that is one of the most important decision-making factors for industrial companies when it comes to climate action investments.
Climate researchers criticize that the EU’s targets are not ambitious enough. “That is probably true, but more ambitious targets should have been introduced five to ten years ago,” says Rothenberg. “For the economy to reduce EU emissions by 55 percent by 2030 is a huge step, because it takes an incredibly long time to transform.”
Regarding his own carbon footprint, Rothenberg admits that it is “probably significantly worse than the global average”. After all, he likes to travel and also travels by plane. At least he saves emissions by taking the train whenever he travels on business. “I believe that everyone can and should do a small part against climate change.” Patricia Hoffhaus
