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Environmental Minister Jürgen Trittin Supports Ecological Modernization (October 21, 1999)

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6. Proposals for the Energy Sector

Ecological tax reform should be the first part of a comprehensive change in energy policy; in my opinion, this would be an important contribution to ecological modernization and would have a positive impact on employment.

The increase in energy prices makes it possible to lower non-wage labor costs. Energy is getting more expensive, but labor is getting cheaper.

As to the effect on the labor market, the Rhine-Westphalia Institute for Economic Research in Essen assumes that the first stage of the eco-tax alone will create around 100,000 jobs.

Additionally, an ongoing German Environmental Ministry research project to examine the impact of climate protection on employment suggests that climate protection will preserve more jobs, overall, and also create new employment opportunities.

Therefore, labor market policy harmonizes with climate protection and alternative energy sources.

One concrete example of an initiative in support of the environment and job creation – one that I see as a desirable outcome of the dialogue on the subject – is the current “Solar Campaign 2000” carried out under the auspices of both Chancellor Schröder and myself.

Trade and environmental associations are among the sponsors of this campaign. The project is also supported by the environmental ministries of the federal states and by other associations and corporations.

The main sponsor is the German Federal Foundation for the Environment [Deutsche Bundesstiftung Umwelt or DBU].

The goals of the campaign are:

— to install an additional two million square meters of solar collectors by 2003 (this corresponds to roughly 400,000 new solar energy systems)

— to reduce CO2 emissions by approximately 0.3 million tons per year

— to create about 100,000 jobs by 2010

Reducing energy consumption in existing residential buildings is another possible joint initiative in the area of energy.

Realizing ecological goals, especially in this area, means a great deal of work for skilled tradesmen and a large number of orders for suppliers.

Making existing buildings more energy efficient is also a very labor-intensive process.

Therefore, a program like this will also create jobs directly and help fill public coffers through social insurance contributions, value added tax, and income and corporate taxes.

The connection between ecology and the creation or preservation of jobs has been effectively demonstrated by credit programs financed and/or initiated by the federal government through the Reconstruction Credit Institute [Kreditanstalt für Wiederaufbau or KfW] for the purpose of promoting investments in housing. These include:

— the KfW housing modernization program in the new federal states

— the KfW program to reduce CO2 emissions in the old federal states

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