Keywords

The description of a 3-degree warmer world, as presented in the various scientific contributions to this volume, depicts a devastating future for humanity. In such a future world, we will have to deal with a radicalization of weather patterns and with temperatures that will be as much as 6 degrees higher on average over land areas. Such a transformation will have grave effects on global agriculture, massively damage global infrastructure, and significantly impair or even destroy large ecosystems.

The majority of human beings will be affected by unprecedented restrictions on their living and survival conditions, and many will be killed. For example, regions south of the Sahara will become uninhabitable, forcing millions of people to migrate. As “climate refugees,” their main destination will be Europe. Unlike today, the Mediterranean region will not offer them a new home—increasing dryness and droughts will lead to desertification there as well.

Furthermore, the economic damage in the 3-degree scenario outlined here will exceed 10% of the gross world product annually. In previous global crises, whose economic damage was incomparably smaller, extended recovery phases for the world economy finally set in. This will be dramatically different in the case of future climate-related crises. The intervals between crises will become ever shorter—until the burdens on state budgets and companies grow to the point where entire national economies will gradually implode and the global economy will be in danger of collapse. We can already foresee the violent conflicts and wars that will result from the growing competition for ever scarcer resources. What will happen when such a global collapse occurs?

We have not even mentioned non-linear effects and the occurrence of tipping points in the climate system. They can lead to a much stronger and faster rise in sea levels or to a collapse of the Antarctic Circumpolar Current or the Atlantic Meridional Overturning Circulation. No one can accurately predict what this will mean for the survival of humanity, but it is highly likely that billions of people will starve, die of thirst, and lose their lives to warfare.

Against this background, it becomes clear that the whole climate discussion of the last decades has failed adequately to discuss and to research the limits of societies’ ability to adapt to increasing global warming.

Anders Levermann of the Potsdam Institute for Climate Impact Research warned in a Frankfurter Allgemeine guest article on 14 April 2011 that civil societies—in relation to rising global warming—also have a tipping point at which all essential social systems gradually collapse (Levermann, 2011). Science cannot predict at what degree of warming this collapse will set in. It is highly likely to be between +3 and +6 °C. According to Levermann, warming will stop at that point because societies will collapse and human CO2 emissions will collapse with them.

In 2024, 13 years later, it can be assumed that the tipping point will probably be reached already at +3 °C. In this context, an article by climatologist Mojib Latif in Focus, 27 March 2023, should be cited, in which he argues that it is a huge mistake to believe that Germany’s society and economy will be able to adapt to a world that is 2–3 degrees warmer (Latif, 2023).

The world community can still avert such a scenario. But decision-makers in politics, business, and civil society must form a realistic picture of both the consequences of this scenario and the set of measures now necessary to avert it, including their affordability.

In democracies, such a gigantic undertaking will only become politically feasible if the vast majority of the population becomes aware of the consequences of a +3 °C scenario and thus accepts the necessary measures to avert it. However, there will be such acceptance only if the rich upper class of our societies bears most or all of the cost of these future measures.

However, educational campaigns have so far been lacking in all democracies and must therefore be set in motion by governments as a matter of priority. Against the background of the current narrative, which essentially focuses on the consequences of global warming of +1.5 °C, no successful climate policy can be implemented in any democracy. Since the remaining window of opportunity in climate change is narrow, time is of the essence.

In this context, I would like to recall that governments mobilized trillions of U.S. dollars, overnight, as it were, both in 2008 to deal with the world financial crisis and in 2020 in the wake of the rampant Corona pandemic! We must realize that global warming poses an incomparably greater challenge.

Why the Paris Agreement Needs to Be Supplemented

From today’s perspective, the resolutions of the 2015 Paris Agreement are insufficient and must urgently be improved and supplemented so that it corrects the failed climate protection policies of the last two decades while also addressing new challenges.

These challenges include a further global population increase by about two billion by 2050 and, above all, the economic rise of another two billion people into the so-called middle class of consumers in the emerging and developing countries. This new middle class will strive for a lifestyle and consumption style just as wasteful as those of the rich industrialized nations. This importantly includes an energy-rich diet with substantially increased consumption of meat.

Efficiency Improvements and Switch to Renewable Energies

Taken together, these changes will overwhelm the Paris Agreement in its current form. In my opinion, its two main pillars, efficiency improvements and the switch to renewable energies, cannot be implemented fast and comprehensively enough to achieve the treaty’s goal.

In the area of efficiency, stricter requirements than previously envisioned would mean deep structural changes in key sectors of the global economy. The massive increase in unemployment to be expected would be a heavy burden, and the measures would therefore be politically risky and hard to enforce.

In addition, we must remember that, although relatively great progress has been made over the last 20 years in improving energy and resource efficiency, much of this progress has been cancelled out by so-called rebound effects. Future efficiency improvements will suffer the same fate.

In this context, I would like to make a few brief comments on basic research. According to the International Energy Agency, a little more than $30 billion is currently spent worldwide on publicly subsidized basic research. The economic historian Adam Tooze commented on this in Die ZEIT of 6 July 2023 as follows: “We do not even know the possibilities of progress yet. Why don’t we increase the research tasks in the energy sector tenfold and see what happens?” (Tooze, 2023).

More intensive investment is needed in research into the concept of carbon capture and storage (CCS). Its large-scale use is not yet possible at economically feasible prices. But if the concept is politically desired and socially accepted, there are ways to accelerate this process (Schellnhuber, 2015). The consulting firm McKinsey, for example, even estimates that, to achieve climate neutrality for Europe by 2050, carbon capture and storage (CCS) will have to account for 25% of the reduction in CO2 emissions (McKinsey & Company, 2020).

The German public is mostly skeptical about the use of CCS because it poses a new problem for us: the safe storage of CO2. However, in my opinion, all options should be explored against the background of the danger of unchecked climate change. In this context, we must take into account that many poorer countries, in particular, have large coal reserves and want to and will use them for as long as possible. In the long term, CCS is certainly the far lesser danger to humanity.

The subject of nuclear fusion is also viewed very controversially in our society. Around 70 years have been invested in basic research toward developing the commercial application of nuclear fusion. Calls for an end to such funding are growing louder. However, according to a large majority of physicists, nuclear fusion has the potential to make a significant contribution to the future energy mix because, like nuclear fission, it is low in CO2 emissions, has a high energy density, and can be used in base-load operation. In addition, nuclear fusion has the advantages over nuclear fission that it basically cannot lead to a meltdown and only produces radioactive waste with a comparatively short half-life. Therefore, as with electricity storage, we should persist, covering a period of up to 100 years in basic research.

There is, in any case, an urgent need for a massive increase in spending on basic research, as this is the only way to achieve fundamental breakthroughs for technological innovations in future-oriented fields.

When it comes to the switch to renewable energies, the difficulty is that even the targets adopted to-date will only be achieved with great difficulty. For this reason, a substantial acceleration in the pace of expansion must be envisioned, both in renewable energy production and in electricity grids. Developing countries, in particular, urgently need financial aid to build up their renewable energy systems.

Today, solar and wind power account for around 12% of global electricity generation. To reach 90% by 2050, only 26 years remain. This underscores what enormous efforts must be made to restructure the global energy industry.

At the same time, we must not ignore the fact that renewable energy production also consumes substantial resources such as raw steel, copper, aluminum, chrome, and cement. For example, a single wind turbine (WTG) uses up to 200 tons of material in total, including steel, copper, and other industrial metals (Misereor, 2018). These materials are energy-intensive in their production and, in some cases, also scarce, which is why experts are already talking about our approaching an inevitable peak metal point.

This is not an objection to the energy transition because, compared to fossil fuel plants, the overall raw material balance of renewables plants is still better. However, it is to be feared that, in the course of the necessary massive expansion of renewable energies, the price of copper, for example, will rise so sharply that only the rich industrialized countries will be able to afford this transition.

Sufficiency, or Why Less Is More

In the developed countries, the relatively easy efficiency improvements have been largely exhausted, especially in business. Efficiency improvements beyond the level achieved today require much higher capital input and take much more time, so the question of sufficiency inevitably belongs here. Politically, a call for “less” is a difficult issue worldwide because politicians—especially in the industrialized nations—do not have the courage to show citizens how wasteful their lifestyles and consumption patterns are (as are most of the production processes that accompany them).

When balancing efficiency and sufficiency, we must be clear that every climate-harming action we avoid constitutes active climate protection; every flight we do without (= sufficiency) immediately improves the climate balance. We will therefore not be able to avoid a political and social discourse on sufficiency. It is long overdue, because we live on a planet with limited resources and energies as well as limited sinks for (harmful) substances. If we do not want to seriously endanger our existence, our activities must not exceed the biophysical limits of the Earth system and, where they have already done so, we must quickly reverse such transgressions.

In the field of energy, we in the industrialized countries are engaged in breathtaking waste. In his book The Uninhabitable Earth (Wallace-Wells, 2019), British journalist David Wallace-Wells refers to a study according to which two thirds of the energy produced in the USA is wasted (Stark, 2016). We are similarly wasteful and thoughtless with regard to many resources. In the industrialized countries, we have had saturated consumer markets for decades. As a result, efforts are made daily in a great many companies to develop new consumption needs or to slightly modify or improve existing products in order to push them into the saturated markets with great advertising pressure. A vivid example of this is the cell phone. Although economically usable for many years, consumers are induced to replace their current device with a new one every time the model changes. It is therefore not surprising that for years now more than 1 billion new cell phones were sold annually; in 2021, the figure was 1.36 billion. At the same time, hundreds of millions of devices lie discarded in drawers without their valuable components being recycled.

For more than two decades, material scientists have been calling for the dematerialization of our product world. The incessant rise in material consumption goes largely unnoticed due to the fixation on CO2 emissions during operation. Yet, 40 years ago, for example, the VW Golf weighed 800 kg, while a comparable car today weighs 1200–1500 kg and carries an “ecological backpack” that, according to the Wuppertal Institute for Climate, Environment and Energy, is 80–100 tons. This concept of the ecological backpack describes the chain from raw material extraction, production, packaging, transport, and use to the disposal of a product.

These few examples illustrate that far too little attention is paid to resource consumption, even though every raw material consumed has caused significant energy consumption in the production chain. Every kilowatt hour not consumed in the process helps avoid investments in renewable energies and thus in valuable non-renewable resources.

The identified challenges to the Paris Agreement require this treaty to be amended and supplemented. This centrally involves a commitment by countries to rapidly invest 2% of their gross domestic products in climate protection policies and in comprehensively launching the nature-based solutions that the treaty envisages.

Why We Need Nature-Based Solutions

In addition to the two main pillars of the Paris Agreement, efficiency improvements and a comprehensive energy transition, we must rapidly implement also its third pillar: nature-based solutions. These help set milestones in climate protection policy in a timely, relatively cost-effective, and socially acceptable manner and help demonstrate to the global population that major progress in climate policy is finally being made.

The most important measures are an immediate halt to deforestation of rainforests, the reforestation of 350 billion trees in the tropics and subtropics, the global rewetting of drained peatlands, and the highest possible humus enrichment on agricultural land. These nature-based solutions are largely envisaged in the climate agreement and the nationally determined contributions (NDCs), but so far without binding funding commitments, which is why they require rapid political support for timely implementation.

While the threatening destruction of rainforests as well as the demand for regeneration of degraded rainforests has been increasingly noted in the public debate for two decades, the possibilities of strengthening nature-based solutions via climate protection policy have remained under researched thus far.

The rewetting of peatlands is one of these solutions, because draining peatlands for gaining peat and agricultural land turned out to be an ecological disaster and one of the worst CO2 sources in agriculture. The resulting global CO2 emissions are now close to two billion metric tons per year. Nonetheless, it has only been in the last few years that the immensely urgent rewetting of degraded peatlands has attracted public attention as a climate protection measure.

Another nature-based solution is humus enrichment in soils as a climate-relevant carbon sink. This will be achieved through various humus-building agricultural practices such as agroforestry systems, use of crops with greater root mass, improved grassland management, etc. At the Paris climate summit, France launched the “4-Promille Initiative” and 39 nations and more than 190 NGOs and other institutions signed a voluntary agreement. The initiative aims to foster collaboration among scientists, policy makers, and practitioners to ensure science-based actions. However, implementation in agricultural practice is very demanding.

Far too little attention was paid also to another potential carbon sink. To stabilize the climate, climate researcher Hans-Joachim Schellnhuber calls for a new direction in the building sector, with a return to sustainable timber construction. This would offer an opportunity for long-term CO2 storage and would measurably reduce two energy-intensive sources of CO2 emissions in the construction sector: steel and cement. Around 40% of greenhouse gases are emitted during the construction and use of buildings. Here wood must become the globally dominant raw material of the future.

Rainforest Rescue

The absolute priority, however, is to put a stop to deforestation of the rainforests as quickly as possible. This stop would reduce annual human-induced CO2 emissions by around 4.7 billion metric tons. All public and private funds have failed in the last 20 years to significantly slow the process of deforestation. Even “The New York Declaration on Forests,” a UN initiative established in 2014 to end rainforest deforestation in two stages by 2030, says it has failed for lack of funding. The destruction of rainforests continues unabated. It is undeniable, however, that without these many initiatives the rate of deforestation would be even higher today.

What are the main reasons for this failure? The newly industrializing and developing countries can, without burdensome formalities, receive a lot of export revenue, directly and indirectly, from palm and soy plantations established, or large-scale cattle breeding practiced, on deforested land. In addition, trade in precious tropical woods is still a highly lucrative business. Governments justify their support for such activities by appeal to the poverty of their countries—ignoring both the longer-term disastrous effects and the unsustainability of this approach.

Deforestation can be successfully stopped only if the global community is prepared to compensate these countries for the opportunity cost in lost income. An important step is to create a better legal framework for forest conservation. The ongoing legislative process on the EU law against deforestation and forest degradation will be a model here for trade in raw materials that may involve forest destruction. Supply chains to and within Europe must then be designed to ensure that only products whose raw materials come from land already used for agriculture before 2022 are used. The current process, REDD+ (Reducing Emissions from Deforestation, and Forest Degradation and the role of conservation, sustainable management of forests, and enhancement of forest carbon stocks in developing countries), developed under the umbrella of the UN, will hardly achieve this goal in the future. It is too bureaucratic, too slow, and also lacks sufficient funding. In addition, funds only flow on a performance basis, based on clearly demonstrated CO2 reductions.

To appreciate the urgent need to stop deforestation of the rainforests, we must realize that this destruction is ongoing and requires immediate action. Brazil’s former President Bolsonaro viewed Brazil’s rainforest as nothing more than untapped economically potential and promoted its deforestation with slash-and-burn. This brought the tipping point for the desertification of the Amazon rainforest ever closer. In Indonesia, there is a real danger that its 21 million hectares of peat swamp rainforests will be cleared in the next 10–15 years. Since they store 20 times as much carbon as normal rainforests, their destruction will also emit 20 times as much CO2.

There are no reliable figures on the revenue losses emerging and developing countries would incur if deforestation were to stop. Older estimates were in the range of $40–$45 billion annually. The demand of the former Brazilian president, who was prepared to preserve the Amazon rainforest for $10 billion annually, is of the same order of magnitude.

REDD+ has so far offered the countries of the global South $5 per metric ton of CO2 averted. In the meantime, there are initial projects in which $10 have been agreed, which would amount to $47 billion if the deforestation process were to be completely stopped globally. If, in the spirit of the political scientist and philosopher Thomas Pogge, this money flow from the industrialized nations could be dedicated toward a basic income paid out in the emerging and developing countries, such an arrangement would certainly be widely approved by their populations. In the West, the argument that these funds would be misused by corrupt governments would no longer apply.

What does the global community gain from a treaty-based freeze and simultaneous compensation for lost revenue? Global CO2 emissions would be reduced by 4.7 billion metric tons per year (or about 11% of global emissions), which is more than all of Europe emits annually. At the same time, the largest possible milestone would be set in the short term to preserve the unique tropical biodiversity.

In my view, a corresponding agreement with the countries of the tropics is possible in 4–5 years, but only on condition that the industrialized nations are prepared to provide around US$47 billion annually for this purpose. Under the new Brazilian president, Lula da Silva, it should be possible to end the deforestation and burning of the Amazon rainforest within 2–3 years.

There is no alternative way of achieving CO2 savings of this magnitude in such a short time span and also in a socially acceptable way. Nor is there one that can be implemented so easily, because we basically have to do nothing to achieve this, we have to refrain from doing something by stopping logging immediately!

In the medium and long term, global CO2 emissions can be reduced by up to 25% through further nature-based solutions such as reforestation, rewetting of the world’s drained peatlands, humus enrichment, and long-term storage of CO2 through widespread use of wood in the construction sector. Estimates suggest that the annual investment required to achieve this reduction will be between $200 and $300 billion by 2050 (see also chapter “Stop Rainforest Deforestation”).

Reservations About Climate-Based Solutions

How can it be explained that politicians have over the last two decades paid very little attention to nature-based solutions? This is especially remarkable because such solutions can be promptly implemented, are reasonably cheap (certainly relative to the damages climate change will cause), and threaten no jobs but, on the contrary, would have highly positive employment effects for decades, especially in the emerging and developing countries.

In my opinion, a large proportion of politicians remain convinced that the Paris Agreement, limiting global warming to well below 2 °C, can only be fulfilled with technical innovation. Ideas for investing in nature-based solutions on the scale required are therefore very slow to get off the ground at this time. For the most part, nature-based solutions have so far been viewed as a simple, unhelpful offset mechanism for economy-based emissions. This view does not do justice to their great potential importance—also in regard to the preservation of biodiversity.

The prevailing policy stance is supported by various other arguments against nature-based solutions. With regard to afforestation, it has been repeatedly argued that, to have meaningful climate effects, the areas converted into forests would have to be so large that valuable agricultural land would be lost. This would indeed be unjustifiable, but it is not necessary. There are enough degraded rainforest areas that lie fallow and are still suitable for reforestation. Under the UN’s Bonn Challenge initiative, countries in Africa, South America, and Asia, in particular, have identified some 200 million hectares (equivalent to about 200 billion trees) of degraded rainforest and pledged to restore tree-rich landscapes. Implementation failed, again due to lack of funding.

From time to time, the term “neocolonialism” appears in connection with afforestation in the tropics and subtropics. Without doubt, it must be ensured through the UN that the afforested areas remain the property of the countries of the global South or the relevant indigenous populations. The planting of about 350 billion trees, financed by the industrialized countries, would build substantial national wealth in the developing countries. A seedling costing at most $3 or $4 becomes a tropical tree worth $400–$500 in 20 years. If the rainforests are managed sustainably, this can create the basis for a functioning and profitable bioeconomy in the long term. Central to this, of course, is the preservation and protection of the rights of indigenous peoples. With its two platforms “The New York Declaration on Forests” and the “Bonn Challenge,” the UN has built up enough expertise to address these legitimate concerns.

In addition to the accusation of neocolonialism, many climate activists are accused of “selling indulgences” on the motto: if you plant trees, you can continue business as usual. If, on top of that, compensation payments in the billions would have to be made to corrupt countries in order to protect the rainforests, any willingness to engage in a constructive discussion about such solutions disappears.

Such rejection fails to recognize the crucial role that investments in nature-based solutions can play in achieving the goals of the Paris Agreement and for preserving biodiversity. None of these measures should impede the social-ecological transformation of the economy, the reduction of greenhouse gas emissions, and the achievement of climate neutrality. But through them we can gain a time buffer that would make the socio-ecological transformation more socially acceptable and its political implementation much easier.

Last but not least, I believe that the industrialized nations are reluctant to take part in implementing nature-based solutions. As already mentioned, their role would consist in providing financial support to the poorer countries of the global South. This is not a high priority for them because they get more credit for their domestic emission reductions. Their reluctance then spreads to the countries of the South which—lacking financial resources from, and also role models in the richer North—prioritize other goals, such as achieving basic prosperity for their population, over “saving the world.”

Such mutual demotivation fails to recognize, however, that nature-based solutions are a global asset in the fight against global warming. If investments in these areas are not financially secured through a climate treaty, they will remain irresponsibly absent, and the destruction will continue. Under no circumstances must this continue if we are to avoid climate collapse. Nature-based solutions such as those described are timely, socially acceptable, and extremely cost-effective measures compared to the threat of enormous damage.

How We Can Finance the Measures

Since the beginning of global climate protection policy, it has been impossible, year after year, to mobilize the political will to provide the financial resources needed to limit global warming to +1.5 °C. For politicians, investments in climate protection policy were and are primarily costs that must be minimized to please taxpayers.

As early as 2006, the economist Nicholas Stern, commissioned by the British government, and the management consultancy McKinsey presented, independently of each other, expert opinions showing that limiting global warming to the then target of +2 °C could only be achieved if by 2050 1% of the gross world product (at that time around $500 billion annually) were invested in climate protection. Failure to do so would mean having to cope with many times this amount in material damage later on. This fact was ignored by politicians around the world.

In 2021, Stern estimated that investments of 2% of gross world product were needed to limit global warming to +1.5 °C. He explicitly emphasized that he is not talking about costs, but about profitable investments: “It is not about adding costs to things we are already doing today. It’s about investing in new things and in a radically different way.” The same view is now held by other well-known institutions such as Morgan Stanley and McKinsey. No one can reliably estimate today the total volume of investment needed to secure the 1.5 degree target. It is likely, however, that the quoted 2% of gross world product will turn out to be rather optimistic.

In the coming decades, trillions of U.S. dollars will have to be invested in the transformation of today’s fossil fuel energy systems in industrialized nations and in the development of climate-neutral energy systems in emerging and developing countries. Investments in the infrastructures of both the industrialized nations and the emerging and developing countries will be similarly high. At the same time, the now unbearable gap between rich and poor must be reduced both between and within countries. In addition, debt relief for developing countries in the order of $800 billion is needed if we are to kick-start private investment in climate protection in those countries.

Let the Polluter-Pays Principle Prevail

In addition to the unmanageable challenges outlined above, poor countries face the additional problem that, if global warming is to be limited to +1.5 °C, a large part of their known coal, oil, and gas reserves must remain in the ground. But how can this be achieved when fossil fuels often represent the overwhelming majority of the nation’s wealth?

The answer: we will have to provide fair financial compensation to the countries of the South. And not merely because we benefit from limiting greenhouse gas emissions, but because the pressing issue of achieving climate justice obliges us to do so. After all, since industrialization, the material prosperity of rich countries has been based primarily on the unrestrained use of fossil fuels for energy production and on the exploitation of other non-renewable raw materials in today’s emerging and developing countries. Taking these long-standing inequities into account, it becomes obvious that the industrialized countries must bear the cost of implementing climate-protective measures.

In energy production, in particular, a large part of the environmental costs were externalized (while the profits benefited the companies). No one should expect these costs to be borne by countries and populations that had no role in the relevant decisions and received no share of the created wealth.

Climate fairness requires that the richest 1% of the world’s population, in particular, bear the “lion’s share” of future costs or investments to cap global warming at +2 °C. They have built up their current fortunes through massive use of fossil fuels without paying for the true ecological costs of their conduct.

How Are These Gigantic Investments to Be Financed?

In the interests of intergenerational justice, consumer spending should not be financed by an expansion of government debt. In 2022, according to IMF, global government debt has reached 92% of gross world product. Total global debt rose to 238% of gross world product in the same period.

Future investments in climate protection as well as climate adaptation measures should be financed from government budgets, private businesses as well as donations from philanthropists. If these are insufficient to jointly finance the necessary climate protection policies, then additional investment measures for climate protection are justified, also through further indebtedness.

Governments should first look at possible shifts in their budgets. This should include eliminating direct and indirect subsidies of fossil fuels. According to the IEA in Paris, direct subsidies have averaged $500 billion annually over the past 10 years. The International Monetary Fund (IMF) estimates that in 2022 direct subsidies came to $1.3 trillion (up from $0.4 trillion in 2015) while indirect subsidies amounted to $5.7 trillion (up from $4.1 trillion in 2015). Indirect subsidies include, among other things, the externalized costs associated with burning fossil fuels (Statista, 2023). Budget shifts might also involve closing tax loopholes for high-income earners and reducing the $1500–$1800 billion in military budgets around the world. The latter option, however, is likely to be unfeasible for the next 5–10 years because the current geopolitical realignment is leading to massive resistance to any reductions in military budgets and, indeed, to strong pressures to increase military spending.

Since we have only a narrow window of opportunity to set the course for tolerable climate change with a certain degree of reliability, the focus in the short and medium term must be on taxation.

The initial focus here is on a CO2 tax. Such a CO2 tax really is equivalent to a reduction in fossil fuel subsidies because it internalizes the cost that fossil-fuel burning imposes on third parties and the planet. As a steering instrument, it is to be gradually increased in the medium and long term. Since even in Germany it probably burdens more than a third of all people disproportionately and thus not in a socially acceptable way, the complete reimbursement for this part of the population is planned. In this respect, this source of revenue will also be reduced by this portion and, due to its gradual introduction, will only come into full effect years later anyway.

Let’s therefore take a look at two types of tax that need to come into focus worldwide because they are significant both in terms of their potential yield and allow for an urgently needed social correction: the financial transaction tax and the inheritance tax. Both taxes should flow into new sovereign wealth funds to be established, which may be used exclusively for climate and infrastructure investments.

To reiterate: The 2008 global financial crisis and the Corona pandemic have driven all nations of the world, almost without exception, deeper into debt. Now, trillions of U.S. dollars in investments in climate protection (prevention as well as adaptation) are due over the next three decades. It would be socially irresponsible and politically unfeasible to try to finance these investments through general tax increases. In the interest of future generations, however, countries must not continue to run up debts. Let us now look at how such a sovereign wealth fund can be built.

Financial Transaction Tax

A financial transaction tax is a minimum-turnover or value added tax (VAT) in the financial sector. Anyone who makes everyday goods or other purchases today pays between 7% and 22% VAT, depending on the country. Anyone who buys shares or bonds, invests, or speculates in high-frequency trading does not pay a cent of VAT.

A 2015 report by the German Institute for Economic Planning concluded that a tax of 0.1% on trades in stocks and bonds, and of 0.01% on high-frequency trading would generate around 40 billion euros annually in additional tax revenue for the German government. Extrapolated to the global financial system, governments could collect a high three-digit billion amount (US$) annually with this tax.

I find it regrettable that politicians around the world are still shying away from this potentially profitable and, above all, socially acceptable source of revenue. In democracies, it would meet with great approval if voters were properly informed about the elimination of a tax injustice that has existed for decades. In the meantime, Great Britain and France have introduced this tax on shares and bonds even in the amount of 0.5%, although the entire derivatives sector has been left out.

The world financial crisis of 2008 showed us how far the financial world had distanced itself from the real economy and how, through the extent of its speculative transactions, it had brought not only itself but, above all, the real economy to the brink of global collapse. Trillions of U.S. dollars of taxpayers’ money had to be used to save the global financial system then. It is therefore time to finally include this area comprehensively in the sales tax system. All countries are highly indebted today, so it should be possible to convince politicians worldwide to introduce this tax.

Inheritance Tax

According to the CS Global Wealth Report, 1.1% of the world’s population own around 45% of its private wealth (UBS, 2023).

This concentration of wealth is due to two main causes: income taxation favoring the super-rich, and extremely low prices of fossil fuels with, more generally, the ruthless exploitation of finite raw materials at sometimes dirt-cheap prices in emerging and developing countries. A timely introduction of “ecologically true prices” would have significantly reduced the concentration of wealth and today’s environmental problems. Even if introduced now, far too late, such true pricing can still make a substantial contribution to slowing climate change by reducing emissions. And some of the past mispricing can be corrected through a comprehensive inheritance tax which would recoup some of the undue benefits derived from the past underpricing of fossil fuels, without which the accumulation of today’s extreme fortunes would not have been possible. Such an inheritance tax would also reduce the existing extreme wealth concentration, which in my view represents a ticking time bomb in terms of the stability of societies.

Conclusion

Without incurring new debt, the democracies can afford climate protection policies as well as the necessary infrastructure investments if the political course is quickly set for the introduction of a financial transaction tax and a reform of the inheritance tax.

To limit global warming to +1.5 °C, the global community must become climate neutral by 2050. There are only 26 years left to meet this challenge. In the short term, the greatest obstacle will be the provision of sufficient financial resources, in addition to public acceptance.

In democracies, legislative processes to introduce a financial transaction tax or to reform the inheritance tax certainly take a period of at least 4–5 years. In view of the urgency of combating climate change, bridge financing should therefore be considered. On the world’s financial markets, there is investment-seeking capital in the trillions that would be available in the short term and would be satisfied with a minimum interest rate. Essential condition: investment security. Governments could set up sovereign wealth funds that, with government-backing, would borrow on world markets. Future debt service—interest and repayment—would be financed from the two types of taxes once these will have been introduced. In this way, years could be gained to immediately initiate nature-based measures and the urgently needed restructuring or development of the energy sector in the global South, for example. Time is of the essence when it comes to achieving these goals.

In order to involve the private sector in the financing of future investments to a much greater extent than in the past, governments must set appropriate framework conditions. These include planning security, openness to technology, reduction of bureaucracy, debt relief for developing countries or government protection of investments in these countries, and acceptance of an appropriate return on these future investments.

Why Mobilization of Civil Society Is Needed

The scenarios and consequences of +3 °C global warming highlighted in the contributions to this volume suggest urgently needed additions to the Paris climate protection measures. So far, politicians have seen little reason to show the citizens of their countries the seriousness of the situation and to appeal for understanding for more comprehensive climate protection measures.

Therefore, a majority of the world’s population is still not aware of the dramatic consequences of +3 °C global warming. For far too long the dangers of climate change have been downplayed in the media or displaced to distant regions of the world. The melting of glaciers or the extinction of the polar bear may have caused feelings of consternation, but this did not allow for a realistic assessment of the real economic and biophysical threats that people are facing today.

In July 2022, leading climatologists around lead author Luke Kemp of Cambridge University published an article in the journal PNAS entitled “Climate Endgame.” In this report, they accuse the Intergovernmental Panel on Climate Change of having downplayed for years the impending consequences of a temperature increase of “3 degrees and more.” Furthermore, they call on the Intergovernmental Panel to submit a special report and to address the crucial question: “Can human-induced climate change lead to a global collapse of societies or even the extinction of humanity?”

A public discourse about the true consequences of a global warming of +3 °C, which will threaten the existence of all humankind, has never been conducted with the necessary clarity. This has allowed governments to pursue half-hearted climate policies with impunity for a good 20 years, leading to a dangerous increase in global CO2 emissions from 22 billion metric tons per year in 1990 to just under 40 billion today (and still rising!). In my opinion, comprehensive education of the world’s population about the devastating consequences that decades of completely inadequate climate protection policies will cause would have led to the development of massive resistance against the climate ignorance of politics, at least in the democracies.

In 2018, the great commitment of Swedish climate activist Greta Thunberg and the global Fridays for Future movement initiated by her school strikes had managed to mobilize parts of civil society for the first time. Despite Thunberg’s media omnipresence, her active participation in environmental summits, UN meetings, and exclusive talks with governments, however, this has so far not been enough to put politicians under decisive pressure to act. To make matters worse, the Corona pandemic took the debate on climate protection measures out of the focus of the world’s media—despite an increase in extreme weather events and catastrophes.

Nonetheless, I remain convinced that the transformation to climate neutrality will not succeed without broad popular support, despite all the declarations of intent by politicians and industry. I find it incomprehensible, even negligent, that politicians around the world claim to believe they can push through the suite of measures that are indispensable for achieving the goals, some of which are drastic, under enormous time pressure. And this without a comprehensive social discourse with and in civil society about the devastating consequences of unchecked climate change.

If policymakers stick to their guns, foundations, in cooperation with companies and wealthy individuals, should initiate science-based dialogues with the public about the consequences of global warming of +3 °C. Without such a discourse, there is a high probability that we will lose further valuable years in the fight against climate change.

There have been few highlights in climate policy over the past 25 years. One highlight was undoubtedly the Paris Agreement in which, for the first time, 196 countries acknowledged the existence of human-made climate change and promised to do everything in their power to limit global warming to well below +2 °C. Since then, however, once again far too little has been done.

Climate policy needs a new global proof of commitment, showing that meaningful progress is really being made. One such milestone would be a binding agreement under international law with the emerging and developing countries to stop the deforestation of tropical and subtropical rainforests within the next 3–4 years. This would achieve global CO2 emissions equivalent to Europe becoming climate-neutral by 2026 at the latest. At the same time, it would be the greatest possible step toward preserving biodiversity. The estimated annual cost would be “only” around $45 billion.

Realizing an equivalent step—a reduction of five billion metric tons of CO2 emissions in addition to the planned measures of the climate treaty—via the global economy requires much more time, is much more expensive, and would be politically difficult to implement.

The financial resources required to realize this project can only be raised if the G20 countries make a binding commitment to do it. At the 2020 World Economic Forum in Davos, major global corporations declared their intention to commit financially to the preservation of rainforests without compromising their companies’ own efforts toward climate neutrality. Were these corporations to keep their promise, this would substantially lighten the burden of such a commitment on the G20 countries.

From my perspective, stopping the deforestation of the rainforests would have the greatest chance of being realized quickly if a country such as Germany took the lead, as it has done with renewable energies. In line with its economic strength, Germany would have to provide around $2 billion annually and mandate the contributors to the UN platform “The New York Declaration on Forests” to negotiate treaties with countries such as Indonesia, Ecuador, Peru, or Honduras to stop the deforestation of their rainforests. At the same time, this initiative should be put on the agenda of the G7 and eventually the G20 to start negotiations, especially with Brazil, on the protection of the Amazon rainforest. Success in such an endeavor would set a milestones in climate protection and biodiversity policy and would demonstrate to the world that significant progress in climate protection can finally be achieved.

It is therefore up to governments to quickly seek dialogue with their own populations about the dangers posed by climate change and by a +3 °C warmer world. The experience of the last 10 years with the consequences of increasing global warming leads to fears that the tipping point for many societies could occur well before +3 °C is reached. Together we still have the power to prevent this from happening!