The successor to “Factor Four” (first published in 1997) has been published by Earthscan in December.

Factor Five
Transforming the Global Economy through 80% Improvements in Resource Productivity
By Ernst von Weizsäcker, Karlson ‘Charlie’ Hargroves, Michael H. Smith, Cheryl Desha and Peter Stasinopoulos

Picking up where Factor Four left off, this new book examines the past 15 years of innovation in industry, technical innovation and policy. It shows how and where factor four gains have been made and how we can achieve greater factor five or 80%+ improvements in resource and energy productivity and how to roll them out on a global scale to retool our economic system, massively boost wealth for billions of people around the world and help solve the climate change crises.

Spanning dozens of countries including China and India and examining innumerable cases of innovation in design, technology and policy, the authors leave no engineering and economic stone unturned in their quest for excellence. The book tackles sustainable development and climate change by providing in depth Factor 5 resource productivity studies of the following sectors: Buildings, Industry, Agriculture, Food and Hospitality, and Transportation.

In its systematic approach to demonstrating how Factor 5 can be achieved, the book also provides an overview of energy/water nexus and energy/materials nexus efficiency opportunities across these sectors. Given that these sectors are responsible for virtually all energy usage and greenhouse gas emissions globally, this book is designed to guide everyone from individual households, businesses, industry sector groups to national governments in their efforts to achieve the IPCC recommended target of 80 per cent reductions to greenhouse gas emissions.

It also looks at innovation in regulation to increase resource productivity, pricing, carbon trading, eco-taxation and permits and the role of international institutions and trade. The authors also explain exciting new concepts such as bio-mimicry and whole system design, as hallmarks for a new generation of technologies. The last part of the book explores transformative ideas such as a long term trajectory of gently rising energy and resource prices, and new concepts of well-being in a more equitable world.

The book can be ordered online from Routledge here: http://www.routledge.com/books/details/9781844075911/

To receive a 20% discount when ordering online at routledge.com, please enter the voucher code AF20.

The German edition, titled “Faktor Fünf”, will be published by Droemer Knaur in March 2010 and can be pre-ordered online: http://www.droemer-knaur.de/buecher/Faktor+F%C3%BCnf.891358.html

The core of the answer to the energy challenges may not come from modified energy supplies but from a systematic, long term strategy of increasing energy productivity, which essentially means curbing energy demand while further increasing prosperity.

As a matter of fact, huge efficiency increases are theoretically available. In a book, Factor Four, also available in Chinese [1], fifty examples were presented of a quadrupling of energy and material productivity. A more ambitious sequel, called Factor Five [2] is under preparation and will focus more on systemic productivity increases beyond isolated efficiency technologies. Eventually, even a factor of twenty should be feasible, which could solve most energy-related problems of climate, the local environment and social equity, both in China and world-wide.

A strategic increase of energy productivity looks like a highly attractive national goal for China.

Surprise lesson from history: resource prices have been falling

Despite basically well-known potentials, there are few signs in any country of aggressively pursuing the energy productivity agenda. Australia’s and other countries’ decisions of phasing out incandescent light bulbs, Japan’s top runner program, the EU’s emissions trading system ETS, and China’s commitment in the 11th Five Year Plan to increase energy productivity compare favourably with the inertia in other parts of the world. But even these laudable measures fall very far short of meeting the challenges.

The basic reason for inertia on this front, so it seems, is a world-wide policy of keeping energy prices as low as possible. This has understandable social reasons but it also sends a signal to consumers, manufacturers, and investors that energy efficiency and productivity will be mostly left to idealism or some mild state intervention. The trillions of yuans, dollars, and euros invested annually in new businesses and infrastructures have almost no commercial motive of addressing energy productivity. This is the reason why many of the of the Factor Four examples, such as Amory Lovins’ high tech ‘Hypercar’ needing less than 2 litres per 100 kilometres, have not made it to the market. For reaching the market in significant numbers, they require huge investments, which won’t pay off under present conditions.

To make such strategic investments in resource productivity profitable, resource prices should go up. But so far, the opposite has happened. Combined efforts by politicians, entrepreneurs and mining engineers have established a long term trend of continuous decreases of resource prices, as shown in Fig 1 for “raw industrials”, meaning natural resources of industrial importance, including energy. This comes as a big surprise to many who are accustomed to complaining about high resource prices. The price hikes of the past couple of years have just brought us back into the lower confidence interval of the long-term downward trend. (The picture does not reflect the development after 2004!)

Fig. 1: Industrial raw resource prices, inflation adjusted over 200 years. Prospecting, mining and transport technologies were the main drivers. The price hikes since 2000 have just brought us back into the lower confidence interval of the downward trend! Source: The Bank Credit Analyst, 2005

There have been a few periods during which resource prices increased, notably the two World Wars. More memorable in our times have been the oil price shocks of the 1970s, which can also be seen in Fig. 1. In 1973, the oil exporting countries managed to quadruple oil prices overnight and push it further up in 1978. However, the rest of the world reacted by stepping up prospecting and mining until, by 1982, oil prices had come down to pre-1973 levels.

During the first years of the 21st century, many people felt that now, finally, resource prices were now going up irrevocably. The new surge of oil, gas and other mineral resource prices was triggered by steeply rising demand from the rapidly developing Asian economies, led by China. But China and the world wide mining companies have immediately thrown a lot of money into new prospecting and mining, which brought the surge to a halt and there are indications that commodity prices come down again, at least in constant dollars.

Typically, it is the geological limits and extraction and refinery cost that ultimately determine prices. In earlier decades, also access and transport limitations played a major role, but the share of transport cost has been falling systematically over time. If the geological limits remain the main determinant factor for resource prices, it can be assumed that oil prices will come down to something like $80 per barrel, reflecting the price of coal (at a high estimate of $100 per short ton of coal) plus the liquefaction cost at industrial scale plus company profits. Clearly, this price would be a blow to all investors putting their money into high tech vehicles like the Hypercar.

Active policies of raising energy prices

If markets (plus socially motivated price subsidies) lead mostly to low prices and if low prices are seen as the main obstacle to the efficiency revolution, then it would seem evident that China and the world should go for a policy shift from keeping prices low to actively increasing them.

Different instruments are available to put price tags on energy or, for that matter, on carbon dioxide. Theoretically, prices can be fixed by the state, — although in the past this was mostly done to keep prices low. Fees and charges can be levied. The EU’s ETS, a cap and trade regime, serves to put a price tag on fossil fuels. Some states, notably in Europe, beginning in Scandinavia, have introduced energy taxes.

An interesting variant of energy taxation has been the “escalator” idea of adding small annual price signals that were agreed for many years in advance. This has been first introduced in Britain and copied in Germany with some modifications. In retrospect, it can be said that the escalator proved very effective in reducing demand, as can be seen in Fig 2, which compares the two countries with Canada and the USA with regard to fuel consumption/ CO2 emissions per capita and year.

Fig. 2: Steering effect of fuel tax escalators (Picture: FÖS, 2006, Database: DIW, 2005)

Increasing energy prices in parallel with energy productivity gains

Combining the escalator idea with the long term goal of increasing energy productivity, leads to a novel policy proposal, namely to politically establish a trajectory of steadily progressing energy and commodity prices, with the slope of the trajectory being determined by the statistically established increases of energy and resource productivity.

If energy prices increase only in line with average energy productivity gains, then, by definition, there would be no additional suffering. This is of highest political significance and contrasts favourably with experiences from the past of rising energy prices causing major hardship for families, small enterprises, and whole branches of industry. The negative effect, however, has always been associated with the size and suddenness of the price increase and with its unpredictability, allowing no advance adaptation.

Despite this socially most welcome feature, the long term escalator sends a strong signal to investors, manufacturers, consumers, and infrastructure planners to be prepared and to adapt. In all likelihood, the signal will actually accelerate investments into energy efficiency technologies and energy productivity creating systems.

The trajectory would have to be kept stable for many decades. Investors will be all the more courageous the longer they can rest assured of the trend. The time horizon of the measure should be at least as long as the payback time of the most important investments, meaning long lasting infrastructures. A glance back in history shows that under the conditions of the low gasoline prices in the USA, an investment like the Japanese bullet train (Shinkansen) would never have been possible.

Are there alternatives to a tax system for establishing the price corridor? Just theoretically, increasing resource prices can also be induced by an ambitious cap and trade regime with gradually tightened cap levels. However, past experiences with cap and trade regimes show very unpredictable fluctuations, resulting in part from speculation. There is no way of linking resulting prices to previous efficiency gains.

Is there a problem for the poor or industry or inflation?

Objections against an ecological tax escalator can come from advocates of the poor, from industry and from inflation fears.

Advocates of the poor will hint at the relative importance for the poor of the energy costs in the consumer basket. Energy and water taxes tend to be “regressive”, i.e. hitting the poor more than the rich. To answer this problem, it is possible to grant a tax free or tax reduced minimum tableau of, say, one gigajoule of energy per person and week. Then the really poor would actually benefit, while the burden would shift towards middle income and rich strata of the society.

Blue collar workers, too, have a tendency of opposing energy taxes. They typically use the lines of arguments of the poor and have apprehension that energy taxes might destroy industrial jobs. But as demand for industrial output is rising, a country like China need not fear net job losses if the price increase goes slowly and predictably.

Industry and investors are actually likely to benefit from the predictability of the transition. They can move into ambitious technological and infrastructural projects with very limited risks, leading eventually to major advantages over competitors working under conditions of fluctuating if somewhat lower resource prices who invariably giving too little attention to the long term scarcity of resources.

Another concern, very relevant in China today, is inflation. However, a tax shift could be made from value added taxes to energy, which a net neutral effect on inflation.

Evidently, it would be desirable for both ecological and economic reasons to find international agreement on price trajectories. But if the increase is linked to productivity gains, pioneering countries are likely to benefit, not loose because they will be at the forefront of a trend that will come world wide anyway.

The paradigm of a twenty-fold increase of labour productivity

The history of technological progress so far is the history of the increase of labour productivity. It has been a revolution indeed, the Industrial Revolution. Labour productivity grew easily twenty-fold over time. During the 19th century, the increase in what became to be the industrialised countries was some one percent per year, which is not all that spectacular. The rate increased to one and a half percent during the first half of the 20th century and to two percent thereafter. But there have been phases like Germany during the late 1950s, Japan during the 1960s and China after 2000, where it increased more than seven percent per year, — to a large extent by copying technologies that had been developed elsewhere.

One fact, well-known by organised labour and by employers, is that wage negotiations have always taken labour productivity gains as their yardstick. It was only during the recent neo-liberal and neo-conservative phase since the early 1980s, that wages began to lag behind productivity gains, due mostly, as the employers saw it, to competition from low wage countries. What is not so well known is that productivity gains also went up in parallel with gross labour cost. What was the hen and what was the egg? Empirically, we observe wages and productivity going up in parallel (Fig 3).

Fig. 3: Rise of wages and of labour productivity mostly in parallel. The picture shows this for a time span of fifty years in the USA, but very similar pictures are available for other countries and other periods of time.

This trend of labour costs spurring labour productivity is an exciting indication for the potential of using energy price signals for spurring energy productivity gains. As a matter of fact, the “oil crisis” of the 1970s served as an (unplanned) experiment for this hypothesis. As energy prices went up across the board, a new mentality set in that focused on energy efficiency. Fig 4 shows the effect.

Fig. 4: The oil price shocks of 1973 and 1978 triggered a steady increase of energy productivity in the USA. The new mindset of energy efficiency survived even the period 1981–2000 of receding energy prices.

A revenue neutral ecological tax reform

The paradigm of labour productivity seems to support the idea of a steady increase of energy prices. As said before, if energy prices increase in line with average energy productivity gains, there would be no average suffering. The situation can become even more attractive if the fiscal income from energy taxes is re-channelled into the economy by reducing the fiscal or parafiscal load on human labour thus giving an additional push to overcome unemployment. But if inflation is the highest concern, the reduction of VAT is a more plausible candidate.

The new idea is to make the trajectory of energy prices very predictable by compensating world market fluctuations. Downward fluctuations would be compensated upwards and upward fluctuations such as the painful price hikes of late 2007 could be compensated downwards, so as to bring prices back to a previously agreed price corridor. The slope of the upward corridor could be determined annually (or every five years by the cycle of Five Year Plans) in line with measured average efficiency gains over the previous year (or years). Adjustments could be allowed on a quarterly basis so as to make prices even more predictable.

The system could be differentiated for vehicle fuels, electricity, carbon content, and other criteria. It will be a matter of political priority setting weighed against simplicity.

This system of increase should be made a law that is valid for some twenty years or even fifty or more years, with fairly tough clauses for exemptions or deviations from the rule.

It is conceivable to develop a similar system for materials and for water. If prices for primary raw materials and for water extracted from nature go up steadily, the incentives increase for reuse of materials and for water purification. Simultaneously, the profitability of mining operations go down, — which is exactly what we want.

Long term price elasticity is high

Generally, it can be said that energy and resource consumption have a rather low price elasticity in the short term. (Otherwise, the upward curve in Fig. 4 would have started in 1973 or 1974, not in 1977!) In the long run, however, the price elasticity is astonishingly high, as can be seen from an observation made by Jochen Jesinghaus [3].

The picture shows a striking negative correlation between fuel prices and per capita fuel consumption. Ten years after the introduction in the US of the Corporate Average Fuel Economy (CAFE) standards, this country although admirably catching up on per mile fuel consumption was still the country with by far the highest per capita fuel consumption. In other words, under the condition of low fuel prices what CAFE conveyed to automobilists was: “Now you can drive more miles for your bucks”. Which they did.

Fig. 5: Even for petrol consumption which is often referred to as nearly inelastic to price changes, we observe a near perfect price elasticity – if we ask the right question. The question asked for this graph was: how much petrol is consumed per capita and year in different OECD countries that have nearly equal levels of wealth and mobility? Countries had more or less stable policies on domestic fuel prices for many years preceding the year (1988) in which the data were collected. The picture reflects long term price elasticity.

This experience is very valuable for determining a price trajectory overcoming the dilemma of short term instruments. We can safely rely on small signals if we give the society assurance of a long term upwards trend for energy and other resource prices.

[1] Von Weizsäcker, Ernst Ulrich, Amory Lovins, Hunter Lovins. Factor Four. Doubling Wealth, Halving Resource Use. London. Earthscan, 1997; also available in 12 other languages including Chinese.
[2] Von Weizsäcker, Ernst Ulrich, Charlie Hargroves, Michael Smith. Factor Five. London Earthscan, 2009.
[3] Ernst von Weizsäcker and Jochen Jesinghaus. 1992. Ecological Tax Reform. London, Zed Books.

CCICED Taskforce on Economic Instruments for Energy Efficiency and the Environment
Interim Report 2008, Draft segment submitted by Ernst Ulrich von Weizsäcker

Dear Professor Lu Mai, dear Professor Liu Shinjin, ladies and gentlemen,

It is an unusual honour for me to be invited to this keynote address, which I have put it under the title of Resource Productivity.

Fig 1

This title contrasts with the preoccupation with labour productivity during the last 200 years of technological progress. Labour productivity has been the melody of the first Industrial Revolution. It increased twentyfold or more during those 200 years. This has been the basis of prosperity and it is the main theme of China’s stunning economic progress.

During those same 200 years, the world has also seen a systematic decrease of prices of natural resources.

Fig 2

This invited mankind to a wasteful use of those resources. Small wonder, then, that resource productivity was stagnant or even decreasing during much of this time.

Let me submit to you that we cannot continue on this road. It may be wise, chiefly for the industrialized countries to slow down the further increase of labour productivity while forcing the increase of resource productivity.

Forcing resource productivity has become an imperative also for the developing countries that cannot afford a wasteful use scarce resources. Obviously, this consideration was at the roots of planning this conference. The new trend in technological development, namely a strong emphasis on resource productivity, may be triggered by the recent increase of resource prices:

Fig 3

For China in particular, the rising commodity prices were a signal of warning. But then, you have additional reasons to become more resource efficient. It would allow you to simultaneously reduce one major health problem, namely pollution-caused mortality in your industrial agglomerations:

Fig 4

Clearly, air pollution should also be addressed directly by appropriate pollution control measures. These have an additional cost, which however, is far exceeded by the economic benefits for China, according to Stefan Hirschberg et al (2003) of the Swiss Paul Scherrer Institute:

Fig 5

China is going through the standard development with regard to pollution: Countries start poor and clean. Then they industrialize and get rich and dirty. And then they rich enough so that they can afford pollution control and end up rich and clean:

Fig 6

It has been the traditional view of the developing countries that they are too poor to pay for pollution control. As Indira Gandhi said it in 1972 at the first UN Conference on the Human Environment in Stockholm: “Poverty is the biggest polluter”

Fig 7

Indira Gandhi’s slogan went down well not only with the political leaders of developing countries to whom it was a nice excuse for not acting on pollution control, but also for industry in the North that could conveniently say that they needed good profits for the sake of the environment.

The trouble is that today’s biggest environmental problems, biodiversity losses and climate change, are chiefly caused by the rich.

Fig 8

Regarding biodiversity, the biggest problem is habitat losses due to increased land use for agriculture, settlements, mining, energy and transport. You can estimate the acreage that is needed per person for a sustainable supply of all the daily goods and services. This is then the “ecological footprint” according to William Rees and Mathis Wackernagel, caricatured in the next picture:

Fig 9

The ecological footprints of average Chinese people are roughly one hectare. We in Western Europe have footprints four times as large, and in the US and Canada, footprints are even eight times that size. If all 6.3 billion people had US type lifestyles, we would need three to four planets Earth to accommodate all their footprints. This is obviously unsustainable.

The other big problem is global warming. Global temperatures have been rising and falling over the last 160.000 years in close correspondence with CO2 concentrations.

Fig 10
Based on the physics behind this correlation, the Intergovernmental Panel on Climate Change (IPCC) has projected temperatures to rise dramatically during our century:

Fig 11

The consequences could be alarming for water, food security and for biodiversity. You would also have to count with more devastating typhoons and, most dangerous perhaps, with a rising sea water table, indicated by the green line in the next picture.

Fig 12

The difference between high and low water tables is more than 100 metres, which means that coast lines will heavily vary. The next picture shows it for Italy. 20.000 years ago, during the last Ice Age, the Sea was lower and Italy was larger than today. But two million years ago there were no polar ice caps (and also the geological situation was different in the Mediterranean Basin) so that Italy was much smaller:

Fig 13

At present, we see a dramatic change of temperatures in the Arctic region, as has been discussed in the Arctic Climate Impact Assessment (2004). The summer freshwater coverage of Greenland has increased more than fourfold in ten years:

Fig 14

We are unable to predict the consequences of this development. But we know from historical records that ice masses can collapse or glide into the oceans in a very short period of time. This has been the case with the ice shield once covering Labrador and the Hudson Bay, which disintegrated during a few decades, perhaps even a few weeks some 7800 years ago, letting the sea water table rise by some 7 metres:

Fig 15

Imagine what such a mega-event would mean for China’s or Japan’s coastal areas, or for the Netherlands or Egypt or Florida!

What do we have to do to prevent such disasters from happening? It is plausible that at least we should try to stabilize CO2 concentrations. This, however, will require us to reduce annual CO2-emissions by 60-80 percent, according to the IPCC. Let us optimistically assume that 50 percent will do. But under the present trends, we shall get exactly the opposite. We are heading for a doubling of CO2-emissions:

Fig 16

China, India and other countries are drastically expanding their industrial outputs, their motorized transportation and their energy consuming housing and agriculture. So we shall see China and India to have emissions similar to those of the US:

Fig 17

Fig 18

The world energy pie shows that worldwide we have still an overwhelming dominance of fossil fuels.

Fig 19

In Europe, we have begun systematically to work on the reduction of CO2-emissions. The trading began in December, 2004. Initially, the prices paid per ton of CO2-emissions were at around 8 Euros. Meanwhile, prices have roughly doubled.

Fig 20

One component of our combating greenhouse gas emissions has been the increase of renewable sources of energy. In Germany, we have been quite successful in this:

Fig 21

We were very glad to see a large Chinese delegation at the Renewables 2004 conference in Bonn last year, and many said that China was about to copy the German system and is now planning another such conference this November. However, for all their merits, the renewables will not suffice to solve the problem. The energy pie is simply too large and must be reduced if we want to fight global warming and also avoid a dangerous dependence on nuclear power.

The key to the answer will be a Second Industrial Revolution focussing on the strategic increase of resource productivity. This has been the vision in the book “Factor Four. Doubling Wealth, Halving Resource Use”, which was also translated into Chinese:

Fig 22

It has been known for a long time that lower energy intensity is a sign of modernity:

Fig 23

We therefore see the Factor Four story as a true continuation of technological modernization and progress.

Let me now open a window for you to look into the new universe of eco-efficient technologies. The pictures will mostly compare existing technologies on the left hand side with new technologies on the right hand side that are some four times, or even ten or a hundred times more resource efficient than the old ones.

Fig 24

Let me start with my co-author’s Amory Lovins’ favourite idea, the “hypercar”, which allegedly does 150 miles a gallon, or needs only 1,5 litres per 100 kilometres.

Fig 25

Some remain a bit sceptical about its success but according to Amory, some 2 billion dollars have already been invested in the concept.

Fig 26

The next is Amory Lovins’ institute and home, the Rocky Mountain Institute, high up in the Rocky Mountains, which during much of the year is largely energy-self-sufficient and is easily a factor of ten better regarding energy than typical mountain.

Fig 27

The concept has been transferred ten years ago to ordinary apartment houses in Germany and elsewhere, as “passive houses” making use of solar heat and of heat exchange ventilation.

Fig 28

In my political constituency, Stuttgart, or rather in nearby Fellbach, we have a true zero-external-energy house. It has become a tourist attraction. And part of the excess energy it produces is channelled into a super-efficient car.

You all know the efficient light bulbs that need only a quarter of the electricity used in old incandescent bulbs. China has become the largest manufacturer worldwide of the efficiency bulbs. However, as most of you know, this is not yet the end of the road. Light diodes are coming up that are yet another factor of two or three better than the efficiency bulbs shown on the picture.

Fig 29

This is a small cooling chamber to replace the refrigerator that stands freely in the kitchen. Two weeks ago, I met with a Japanese gentleman who told me that even freely standing refrigerators have now been developed that are seven times more energy efficient that the old ones. The new development was probably triggered by the “Top runner programme” of Japan.

Fig 30

Fig 31

If you replace the old-fashioned filing cabinet technology by CD ROM’s you save more than a factor of ten and you have easier access to your data.

Fig 32

Water scarcity is one of the biggest problems of China. You may therefore be interested in a technology used in Germany that has reduced water consumption twelve fold in paper manufacturing, chiefly by systematically recycling and cleaning waste water.

Fig 33

My friend Professor Ryoichi Yamamoto of Tokyo once sent me the above picture showing a thin rod of steel that has the strength and capacities of otherwise ten times more resource consuming steel.

Fig 34

Video conferences are, of course, something like a factor of one hundred more energy efficient than the otherwise necessary business travel. I admit that video does not easily substitute for a business meeting on the Bahamas.

Fig 35

This is the story of modern, energy intensive agriculture. Winter tomato grown in greenhouses in Holland tend to need a hundred times more energy than they afterwards contain! With intensive cattle farming, the ratio is hardly better. Organic farming, on the other hand, is roughly by a factor of four more energy efficient.

Fig 36

This is the well-known strawberry yoghurt saga established by Stephanie Böge at the Wuppertal Institute. Lorries criss-cross Europe and drive some 8000 kilometres for the manufacturing of strawberry yoghurt. Obviously you could do at least ten times better.

So much perhaps to encourage you to think further about the upcoming technological revolution. Let me close by making a few remarks about methods to arrive there.

China is one of the countries that has established efficiency standards for cars. To meet the 2008 standards, many European and American car manufacturers have still to do considerable homework, while Toyota is well prepared.

Fig 37 [*]

In the business world we seem to see a slight competitive advantage of eco-efficient companies listed in the Dow Jones Sustainability Index over the average listed in the Dow Jones Group Index.

Fig 38

And if you compare different countries using the World Economic Forum’s Competitiveness Index you see a positive correlation with the Sustainable Development Index of countries.

Fig 39

So we seem to be on a good way. However, this is all too slow to reach the necessary factor of four. Let me in closing say a few words about instruments. I am impressed with what I heard in China about the determination with which you are creating incentives for more resource efficient technologies. Moreover, Douglas Ogden this morning mentioned the possibility of tax refunds for companies that achieve ambitious standards, and James Sweeney spoke about appropriate pricing.

Japan has gone a considerable step further with her “top runner programme” that makes the most energy efficient appliance or vehicle the top runner or standard and announces shame on those companies in a few years that still sell outdated, less efficient items. Ultimately they even have to pay a fine.

Germany and other countries have adopted an ecological tax reform to reduce the fiscal load on human labour while making natural resources more expensive.

And at the G 8 Summit that takes place in a few days, we hope countries agree on a geographical extension of climate policy beyond “Kyoto”. We hope that also China, India, Brazil etc will be invited under fair term to join international climate policy.

For this, the North has to understand that the present “grandfathering” approach is unfair to the developing countries and has to be replaced step by step by a system based on per capita allowances, – which would be good for China and India.

Mr. Chairman, ladies and gentlemen, I feel that the race is on worldwide among countries and among companies to take the lead in the Second Industrial Revolution that is driven by the second melody of progress, the melody of a revolutionary increase of resource productivity.

Thank you for your patience and attention!

References

• Hirschberg, Stefan, et al. 2003
• Rees, William and Mathis Wackernagel
• Von Weizsäcker, Ernst Ulrich, Amory Lovins and Hunter Lovins. 1997. Factor Four. Doubling Wealth, Halving Resource Use. A Report to the Club of Rome. London: Earthscan. Also available in Chinese and ten other languages.

[*] After the lecture, I was approached by a reresentative of General Motors who said that GM had also met the standards with cars exported to China.

On the other hand, we are already now overexploiting the earth. Just to stabilise carbon dioxide concentrations, we would need a reduction of annual carbon dioxide emissions by more than fifty percent. Similarly, ocean fishing should be cut in half. We seem to loose some fifty animal and plant species every day. To stop this trend, we ought to radically reduce land conversion. It is fair to say that we should reduce the consumption of natural resources by roughly a factor of two.

Fig. 1: The daily toll of environmental destruction.

Doubling wealth while halving resource use, that is quite a challenge. The answer could be quadrupling resource productivity. In a book co-authored by Amory Lovins and Hunter Lovins, “Factor Four” (Earthscan, London 1997) fifty examples of quadrupled resource productivity are featured.

Fig. 2: Factor Four was translated in many languages.

My friend Friedrich Schmidt-Bleek goes considerably further and suggests to increase resource productivity tenfold: Factor 10 Institute.

If you are interested in the factor four agenda, have a look at some of my papers in this field. You may as well visit the Wuppertal Institute’s factor four homepage, administered by Raimund Bleischwitz.

My environmental interest go beyond the factor four agenda. In October 2002 I was appointed Chairman of the Bundestag’s Environment Committee. Here we are working on

• The adaptation to German laws of EU environmental directives,
• The interface of environment and agriculture,
• The promotion of renewable sources of energy,
• International environmental agreements,
• Commenting draft legislation from other policy fields.