German politicians must work with industry leaders if the country is to succeed in reducing its carbon emissions, according to Martin Brudermüller, CEO of BASF, one of the world’s largest producers of chemicals.
“If we are to succeed with the decarbonization plans of Germany, but not of the European Union, we have to find a whole new way of working together between industry and politics,” she told Annette Weisbach on Wednesday. from CNBC.
“What we’re seeing right now is that politics is entangled in one ambition after another: can it be 10 years faster? 10% more reduction? So it’s a race for ambition, ”he said. “I sometimes wonder if society and politics need it? [have] A real check of reality. It’s not lacking in ambition, but we have to get down to it now to find out how… really, where do we want to be? What does it take to get there? It is the effort where politics is not involved.
Federal elections are fast approaching in Germany with a vote on September 26, and there is a good chance that the German Green Party will be part of a future coalition government. The Greens are currently seen with 17% of the vote, the conservative coalition of outgoing Chancellor Angela Merkel, the CDU / CSU with 21% of the vote and the Social Democratic Party 24%, according to the Politico election poll.
The new German government, whatever its form, must engage with industry leaders, said Brudermüller, “to create a positive regulatory framework. It can’t be restrictive anymore, don’t allow it – allow it to be What do you really need to make it successful and stay competitive on this journey? “
Forming a coalition government can take weeks, making it likely that the Greens, once a fringe party, will enter government and wield strong influence over energy policy, taxes and investment. Markets are poised for the party to gain more power and prominence in government, given the Greens’ surge in popularity this spring and summer.
UBS Global’s Dean Turner and Maximilian Kunkel said: “It will take time for a new government to emerge, but when it does, we expect the administration to focus more on fighting change. climate and promotes material economic recovery. Maintain a fiscal policy conducive to achievement. Wealth Management said in a note Wednesday.
“We don’t expect a lot of market reaction to the election. Indeed, alliance agreements can take weeks, sometimes months. Therefore, investors will not know the outcome for some time. But in the long term, green investment is set to rise, ”he added.
The Green Party has an ambitious spending plan as the central party in its manifesto. He presented a 500 billion euro ($ 592 billion) spending plan for infrastructure and climate change in Germany over the next 10 years. The party seeks to reorganize the country’s economic model into a “socio-ecological system” and aims to accelerate the expansion of renewable energies and phase out coal by 2030.
He called for higher taxes on the rich and a lifting of Germany’s so-called debt brake (which limits the government’s structural net borrowing) that would allow Germany to raise more money. money in public markets.
Experts expect green investments to increase dramatically in the long run, but companies, especially energy-hungry ones like BASF, fear this could lead to higher taxes. As such, they fear that they will become less competitive as a result.
BASF is a multinational company based in Germany, whose products range from chemicals and plastics to crop protection products.
Brudermüller told CNBC that the new government’s tax policies need to be watched closely and the government needs to help subsidize any transitions. “We really have to look at how we view the overall package. I think what’s important is [is that] If companies are to manage change, we also need to make sure that they are making money to invest.
“I think if it’s a societal demand that you go for the change, then helping you at the start of this journey is also a social act. There are therefore new innovative technologies, pilot projects, they must be subsidized and financed. . .. so it’s not just taxes, it’s also public money. And that’s the positive framework I’m talking about, ”he said.