Jochen Wermuth

Letter to fellow citizens on the #Berlin2030 climate-neutral referendum

Berlin, the 16. March 2023

Dear Berlin neighbors,

my name is Jochen Wermuth, I live with my family in Berlin and work as a climate impact investor. I support the referendum for a climate-neutral Berlin by 2030 to help ensure that my children can grow up in a world worth living in, as well as for economic and geopolitical reasons:

Access to the cheapest form of energy means competitiveness. A low cost of living, capital and influence follow. The British became a world power thanks to steam power, the Russians and Americans thanks to oil and gas. Today, 90% of the solar and wind power components for today's cheapest energy come from China. In order to defend our liberal values, Berlin must therefore create the framework conditions to lead the way in the expansion of today's cheapest form of energy - renewable energies - and a digitalized and efficient circular economy.

As the global expansion of renewable energies - driven solely by market forces - continues to grow exponentially, many regions will already be using more than 100% renewable energy by 2030. The regions that continue to slow it down through regulation and subsidies for fossil fuels - as in Berlin so far - will be left behind.

It took even more energy to produce the solar panels for the 1969 moon landing than they ever produced. Today, solar panels recover the energy needed to produce them in one to two years, depending on the weather. After that, they provide free energy for at least another two decades! This is an incredibly attractive investment that we simply cannot afford to ignore any longer. The same applies to wind, geothermal energy, heat pumps and environmental heat networks in Berlin. It simply pays to invest here. This is about lucrative investments and not about "costs" that Berlin would have to bear. Our city just needs to create a sensible regulatory framework that can be adopted and adapted from Copenhagen, for example.

In 2022, renewable energies already accounted for around 50% of Germany's electricity supply and around 20% of total energy consumption. Extrapolating exponential growth in newly installed solar capacity means that new installations are doubling every two years. With the latest growth of 3% of the total German energy supply in 2022 and 80% of energy still coming from fossil sources, you start by thinking 80%/3% = 27 years, so we will be at 100% in 2049. If we assume an increase in expansion of 3% per year, we will already be at 101% renewable energies by 2028. Even if expansion doubles every two years as it has done so far, Berlin and Germany will be at over 100% renewable energy by 2029 at the latest. The decarbonization of other sectors is progressing at a similarly rapid and profitable pace. Remaining emissions can be sequestered in natural carbon sinks. Berlin-Brandenburg can therefore clearly be climate-neutral by 2030.

Global trends confirm this: by 2022, 80% of newly installed electricity capacity worldwide was already renewable. So it's no longer a question of being brave, it's just a question of not oversleeping any further and not being taken for fools by the "experts" of the fossil fuel industry. They are trying to unsettle the public with deliberate misinformation and give the impression that renewable energies are unreliable and expensive - although they are obviously cheaper and reliably stable in terms of costs, in stark contrast to expensive, volatile fossil energy prices. All they are doing is trying to defend an old, long-broken business model with fossil energy for as long as possible:

The International Energy Agency (originally focused on securing fossil fuels!) reports that subsidies for fossil fuels (not renewables!) have increased from $250 billion in 2020 to $1000 billion in 2022. The oil and gas industry reached record profits of almost €4000 billion in 2022.

This is also thanks to the highly irresponsible €200 billion "double whammy", the German government's gas and electricity price brakes. Every economist knows that no matter where we buy fossil fuels, our state-subsidized additional demand fuels global demand for fossil fuels, global market prices for fossil fuels, state revenues for Putin's attack on Ukraine and global famine. The price brakes also help the socially disadvantaged households the least and the large consumers the most. The federal government must stop this immediately and should instead distribute the money as per capita energy money to citizens so that they can decide for themselves whether they prefer to save energy, use expensive fossil fuels or cheap renewable energy. The excuse that the Federal Ministry of Finance still doesn't have a system for this is unbelievable.

With 83 million German citizens, €200 billion is €2400 per capita. Over two years, that's €200 per month. An app that gives you €200 per person per month is quickly programmed and downloaded. A "yes" vote for #Berlin2030 climate-neutral can also make a decisive contribution to this:

If Berlin is legally obliged by our votes to be climate-neutral by 2030, the Senate will also be obliged in the Bundesrat to end the further promotion of fossil fuels and instead demand direct support for citizens.

In addition, following a successful referendum, Berlin as a city-state should also finally advocate in Germany, the EU and the G7 for sensible, market-based and socially just solutions to the climate crisis that have been known for decades. Just as Baden-Württemberg, California, New York, Copenhagen, Paris and many other regions and cities of the "Under 2 MoU" alliance, whose members account for 50% of the global economy, have been doing for a long time.

Above all, we need a CO2 tax in Berlin and the world at a full social cost of around €700/tonne of CO2 with a simultaneous distribution of revenue of €700 per person per month, i.e. €2800 per four-person household as a target. One could start at €100/tonne CO2 tax and €100/person/month climate dividend (see Appendix 1).

The "carbon tax and dividend" is a socially just, market-based way of putting the climate crisis behind us, supported by 26 Nobel Prize winners and 2,000 economists. Those who consume more CO2 than average have to pay extra, those who consume less have money left over at the end of the month. In this way, everyone can decide for themselves what means of transportation, forms of energy, textiles and food they want to buy, but they pay for the social damage that this entails.

The "carbon tax and dividend" was proposed back in 1993 by the then Vice President of the USA, Al Gore. Today it exists in Sweden and Canada and is being called for by a broad bipartisan coalition in the USA. CO2 emissions from the extraction and import of oil, gas and coal as well as from the import of products whose manufacture emits CO2 should be taxed. The EU Commission is already working on its equivalent, the Carbon Border Adjustment Mechanism (CBAM). The German government's coalition agreement includes the "climate dividend". It is high time to introduce this in order to comply with the simple "polluter pays principle" of the Lisbon Treaty, according to which those who cause damage also pay for it, to make our economy fit and to be fairer:

The 1% of the richest people in the world are responsible for 15% of global CO2 emissions, more than twice as much as the poorest 50% combined! The richest 10% of humanity are responsible for more than 50% of global emissions! A CO2 tax would therefore primarily affect the rich, the climate dividend would put the money in the hands of the citizens.

A monthly climate dividend financed with average CO2 equivalent (CO2ä) emissions of 12 tonnes per capita, through a CO2 tax on the tonne of CO2 when importing or extracting oil, gas and coal as well as when importing goods with CO2 content (Carbon Border Adjustment Mechanisms (CBAM)) would be fair and would give us a modernization boost.

Instead of hundreds of small regulations or even bans, instead of cowbow turbo capitalism, we must finally give a sustainable, regenerative social market economy a chance. This can only work if externalities are calculated at full cost (instead of not at all or as good as not at all). If we calculate at least 761 million tons of CO2ä emissions in Germany in 2022, we come to €532 billion in damages, or 14% of gross domestic product, which we pass on to future generations every year. Our budget deficit in 2022 was therefore not 1.8% but 15.8%!

If we do not save the social market economy immediately, extreme income and wealth inequality, natural disasters and billions of refugees will threaten our society. Then there may be movements to the extreme right or back to a planned economy, which are well-intentioned but - as has already been tried several times around the world - are guaranteed to backfire.

We must also vote YES for #Berlin2030 climate neutrality out of solidarity with Ukrainians. We must not believe the G7 propaganda about "tough sanctions packages against Russia", but must look at the facts. Due to our consumption of fossil fuels, Russian state revenues rose by 20% in US dollars in 2022 despite over 7,000 sanctions against Russia. This is partly due to our unchecked demand for fossil fuels, which has been stimulated by the "double whammy".

Ramstein's "Ukraine Defense Contact Group Meeting" agenda item 1 should therefore be every time: How much fossil energy have G7 countries consumed and thus strengthened Putin's budget? Only a G7 Carbon Tax and Dividend, a CO2 tax and climate dividend will bring about a significant reduction in our fossil energy consumption. This can lower global energy prices and hit Putin's budget. If that happens, there will be a chance for blue helmets in the Russian-occupied areas of Ukraine, for peace and for security for Berlin from a land and nuclear attack.

So your vote on March 26, 2023 can help ensure that we take our environment, our security, our competitiveness and our children seriously.

So I appeal to you: do your research, actually look at independent studies. Listen to scientists like Professor Johann Rockstrom who sits in Albert Einstein's former office in the Potsdam Institute for Climate Impact Research building. He warns that the target of no more than 1.5 degrees global warming is not a political compromise but a planetary boundary that we must not exceed. He says that we only have a 50% chance of not reaching this tipping point if we only become climate-neutral by 2050.

This is in stark contrast to the false statements made by many leading media outlets and politicians based on reports by the International Energy Agency which repeatedly and falsely claim that we only need to be climate neutral by 2050 in order to achieve the 1.5 degree target. No, even if we manage to be climate-neutral worldwide by 2030, we still only have a 2/3 chance of not reaching the tipping points after the high emissions of recent years. Berlin and Europe will be among the hardest hit by the consequences of climate change, with deadly hot summers, dried-up rivers, heavy rainfall and storms.

This means that it not only pays off, it not only makes us competitive and allows us to defend our values but it is also simply necessary for survival. A progressive and digitalized Berlin with stable lower energy and living costs, innovative mobility concepts and a green inner city makes our city more attractive for companies and employees from all over the world. It also leads to the development of new technologies, innovations and jobs.

As an investor, you go where the framework conditions are right. As a Berliner, I am committed to creating the framework conditions for a competitive and therefore sustainable Berlin. I have therefore followed the example of many others and supported the outstanding work of the people behind the Klimaneustart Berlin campaign.

The result is also a detailed catalog of measures on how Berlin can become climate-neutral by 2030. Entrepreneurs, scientists, craftspeople, administrative experts and politicians have come together and will continue to work beyond March 26, 2023 as the broad alliance "Good Future - Berlin Think and Do Tank" (see Appendix 2 for a possible concrete catalog of measures).

It is now in your hands to decide whether you will carefully consider the information offered by the campaign, involving many truly independent experts, and make a wise decision for the future of our city.

There will perhaps never again be such a realistic chance as we have today to make Berlin legally climate-neutral by 2030. So take advantage of the incredible opportunity we have here and vote 'yes': by postal vote, by voting at one of the polling stations already open today or at your polling station on Sunday, March 26, 2023!

Before that, I cordially invite you to take part in the online "Berlin Green Investment Summit" on Wednesday, March 22, 2023 from 5-6 p.m. to discuss the topic "Investment opportunity #Berlin2030 climate neutral" with experts. And on Saturday, March 25, 2023 at 14-20h at the Brandenburg Gate for a concert with Igor Levit, the Orchestra of Change of the Staatskapelle Berlin, Beatstakes et al and speeches by climate experts.

Best regards,
Jochen Wermuth

Attachment 1: CO2 taxation & climate dividend thanks to Berlin 2030 climate neutral

Berlin should demand a CO2 tax and climate dividend (carbon tax and dividend, especially for the EU and the G7. The state levies a CO2 incentive tax, whereby it de facto taxes CO2 emissions, but pays out 100% of the revenue evenly per capita to the population. As a result, the state budget does not increase. The money collected goes directly into the hands of the citizens, or it is even paid out to them monthly in advance so that they have enough money to pay the higher prices due to the fossil fuel tax. In this way, every citizen has the money in their hands for the average price increase of goods and services due to the CO2 tax.

This CO2 tax should be based on the full social costs of a ton of CO2 emitted today. According to the Federal Environment Agency, these are €700/tonne of CO2 for undiscounted damage to health and the environment. These damages are incurred over 100 years - that is how long a ton of CO2 emitted today has an effect. Only if you discount the future do you arrive at the €200/tonne of CO2 that Fridays for Future is demanding. However, this figure is based on important technical errors: You can only discount if you value the lives of future generations lower than ours - which the Federal Constitutional Court has forbidden us to do - or because you can earn €700 on money paid today - i.e. €200 gilt-edged with compound interest, so that the damage caused can be paid for over time - which is not the case with the zero interest rates on our bank deposits.  

Therefore, CO2 emissions should not be taxed at only €30/tonne CO2 as in the German heating sector, which corresponds to only 4.2 percent of the externalities, or the only €90/tonne CO2 on the European Emission Trading System (ETS) market (still 12.8 percent, but still less than 1/6th of the costs), or the €130 CO2 tax in Sweden (still 18.5 percent, or almost 1/5th), but always talk about €700/tonne CO2.  

Professionals such as the European Investment Bank (EIB) have been working with this scale for a long time. The EIB uses between €500 and €800/tonne of CO2 to evaluate projects. These figures have major political consequences, which is why they are always hushed up.

What does the figure of €700/tonne of CO2 mean for our perception of reality? With around 761 million tons of CO2-equivalent emissions in Germany per year, this means that we in the Federal Republic of Germany cause €532 billion in climate damage per year, which corresponds to 14% of the gross domestic product.

In other words, every year we cause 14% of gross domestic product in damages that we pass on to future generations, in stark contrast to the ruling of the Federal Constitutional Court that prohibited this. The honestly calculated budget deficit is therefore not the proudly proclaimed 1.8%, but 15.8%! We can either continue to pretend that everything is fine and bury our heads in the sand, or we can be honest and realize that we are living at the expense of our children and grandchildren. In the end, there is no way around it, because as they say about the ostrich: it may bury its head in the sand, but its butt still keeps peeking out.

Attachment 2: 7 measures for #Berlin2030 climate-neutral in 7 years

The following measures show by way of example that a climate-neutral Berlin by 2030 is feasible and affordable. They were developed with input from independent experts, scientists, tradespeople, investors, administrative experts and politicians in an incredibly exciting collaborative process. They will also be published as part of a study in the near future.

1) Heat transition (40% of emissions)
Low geothermal energy and "cold local heating networks", decarbonization, district heating and expansion of decentralized climate-neutral heating solutions:

  1. Actions: Approval assumption for low geothermal drilling and "cold local heating networks" (= environmental heating networks) in Berlin.
    Design of climate-neutral heat in Berlin using the existing heat and water infrastructure, development of climate-neutral alternatives for decentralized heat supply, recovery of waste heat from water, data centers & industry.
    Implementation as a mix of solar thermal energy, seasonal heat storage, geothermal energy, heat pumps, bioenergy CHP and electricity from renewable energies - also from the Brandenburg region.
  1. Impact: Long-term guaranteed heating and cooling at ½ of today's costs for heating and cooling with fossil fuels, by using groundwater geothermal energy waste heat for waste water, data centers, industrial processes, cooling for hot water and heating in winter.
  1. Bottlenecks & solutions: Buyback of the Berlin district heating network, investment in a local heating network (e.g. cold local heating networks) see educational lecture by Aktionskreis Energie.

2.) Electricity transition (20% of emissions), 100% renewables for the whole year:

  1. Actions: Provision of land for wind & solar in Berlin and Brandenburg. Short deadlines for approvals so that construction can begin quickly. Storage expansion using batteries and hydrogen. Involvement of all key stakeholders - including local residents - in the implementation of the energy transition. Comprehensive introduction of smart meters to enable dynamic electricity prices. Develop off-shore wind power.
  1. Impact: Long-term guaranteed electricity prices at 4 cents/kWh, i.e. considerable savings compared to today's electricity prices; in addition (see also solution study by the Zero Emission Think Tank) independence from extreme fluctuations in electricity prices such as those caused by the war in Ukraine...
  1. Bottlenecks & solutions: Purchase agreements by the city of Berlin lead to €2 billion private investment in 10 GWp solar plants and €2 billion wind turbine production in Berlin/Brandenburg, installer training centers support developers through cooperation with universities of applied sciences...

3.) Transport transition (20% of emissions), efficiency offensive and electrification:

  1. Actions: "London Ultra-Low-Emission Zone" model: €15/day daily fee for the stay of combustion engines in Berlin (and in other cities in the state of Berlin), residential parking at €10/day, with simultaneous per capita distribution of income to the residents of Berlin, so that a family can continue to afford a residential parking space, and public transport becomes highly attractive, as citizens save money when they change, expand public transport accordingly in parallel, including car/ride-sharing services and electric cabs.
  1. Impact: Significantly reduced number of private combustion engines but also of private cars in general in Berlin.
  1. Bottlenecks & solutions: Existing investments must be protected, therefore professional and affordable conversion from combustion engines to electric technology (see UPS). The distribution of toll revenues only to Berlin-Brandenburg citizens may be contested at EU level, so a per capita distribution for all EU citizens can be proposed.

4.) Housing turnaround (40% of emissions), insulation, CO2-negative and affordable new construction, ownership instead of renting thanks to 100-year loans:

  1. Actions: Simple, inexpensive insulation of cavities in old buildings; control of heating and cooling depending on the forecast weather conditions; digital building register with thermography for transparency and comparability of the thermal efficiency of residential units; financing of apartment purchases through 100-year loans without a down payment, abolition of the real estate transfer tax for the main apartment, increase in property tax for unrenovated apartments, new construction offensive with low-cost CO2-negative buildings, creation of new neighborhoods in Berlin-Brandenburg
  1. Impact: Significantly lower housing costs (partly due to ½ heating costs on average across all households)
  1. Bottlenecks & solutions: General housing shortage, therefore targeted housing management (e.g. densification of the urban building fabric and increase in property values by adding storeys - additional storeys under renovation obligation, at least "KfW40" and solar systems on the roof surfaces, solidarity-based "combi-housing", multi-generational living, etc.); new districts only where they are CO2-negative, including development.

5.) Industrial and service transition (20% of emissions), globally competitive, emission-free circular economy through low energy costs, digitalization of administration and up-cycling:

  1. Actions: Mediation of long-term, low-cost and emission-free contracts for electricity, heating/cooling, internet, skilled workers, permits, housing, schools, etc. to companies (take-off agreements) through a (digital) agency/platform (of the City of Berlin / State of Brandenburg); VAT refund for reused materials/raw materials
  1. Impact: Berlin-Brandenburg becomes the most competitive region in the world
  1. Bottlenecks & solutions: As in Saxony in the case of Intel - organize energy supply per company (e.g. wind farm was built/approved)

6.) carbon sinks (10% of emissions):

  1. Actions: Permit acceptance for peatland rewetting, afforestation, process protection and nature conservation areas, green roofs and roads. Reforestation funds and projects are properly verified (e.g. with the help of satellite images of the areas concerned), whereby GHG sequestration must be additional and sustainable.  In the case of deforestation, the GHG emissions from the soil to be expected over the years must be taken into account in addition to those bound in the wood; only with the implementation of appropriate measures is a full supply of all energy sectors in line with demand possible (see EnergyWatchGroup study for 100% renewable energies for Berlin-Brandenburg by 2030).
  1. Impact: Up to 10% of Berlin's emissions can be offset each year and Berlin-Brandenburg can become CO2-negative
  1. Bottlenecks & solutions: Access to reforestation funds, which already yield over 10% in Germany, mixed financing approaches for developing countries, where CO2 can sometimes be bound through reforestation for just €6/tonne of CO2 (yes, less than 1/100th of the externalities!)

7.) Berlin EU and G7 initiative for CO2 pricing at full cost, climate and peace dividend:

  1. Action: Berlin introduces the market-based and fair approach to solving the climate crisis, which Al Gore proposed 30 years ago, to the Federal Council and the European Parliament, supported by 27 Nobel Prize winners and 2,000 economists:
    700 government climate bonus per capita and month, which low-income households with a low carbon footprint can use to save money, financed by a €700 EU CO2 steering levy with Carbon Border Adjustment Mechanism (CBAM, full costs according to the German Federal Environment Agency's cost estimate without taking future damage into account) with 100% per capita distribution to EU citizens,
    Start on 01.01.2024 with around €100/person/month (i.e. €400 per month for a family of four), then increase by €100 p.a. each year to reach the targeted €700 CO2/tonne CO2 incentive tax and monthly climate money on 01.01.2030.
  1. Impact: The climate bonus provides relief for low-income households in particular. These households usually have a very low carbon footprint. However, as they do not have as much money at their disposal, they have to spend a relatively high proportion of their income on basic supplies such as energy. The climate bonus relieves these households and, if they save, they can even make a plus. €30 trillion of capital that wants to invest in climate solutions ( flows even faster into already competitive climate solutions, so that the world can be climate neutral by 2030 and the climate crisis can still be stopped with 67% probability (climate neutrality 2050 offers only 50% probability of survival according to Rockström), a world in which there is the possibility to live well and peacefully everywhere in the world through cheap decentralized renewable energies. Lower demand for fossil fuels also means lower prices on world markets, less revenue for dictatorships such as Russia, Iran, Saudi Arabia, less money for bombing Ukraine, hope for many.
  1. Bottlenecks & solutions: Fossil Energy Lobby. But: even in the US Congress, Republicans are prepared to agree to the CO2 reduction levy with 100% distribution in return for exempting the fossil fuel industry from liability (see If we in the EU do not want to lag behind, as we did with the Inflation Reduction Act, we must act now to be the first to transform our economy and society and become competitive.

Notice: The sum of the emissions is greater than 100%, as the heating transition affects both residential and industrial and commercial buildings, etc.