Sustainability: Business

"What 'Lacostes' the world – money's no object" is a rough translation of a humorous saying in Germany that pokes fun at people who buy expensive luxury T-shirts. In fact, however, we should all be asking how much a T-shirt costs. The "ecological rucksack" model shows just how many kilograms of energy and natural resources go into producing one kilogram of basic material.

We all have our cross to bear …

… and anyone who wears a black cotton T-shirt has, according to the calculations of Professor Friedrich Schmidt-Bleek, a burden of 4,583.70 kilograms resting on their shoulders. He developed the concept of the "ecological rucksack". In the T-shirt example, he looks at the cotton itself, how it is manufactured and how durable it is, how it was dyed, packaged, transported and, above all, how it is used. How often is it washed, is the washing machine used at full capacity when the T-shirt is washed, what temperature is it washed at? Is it then hung out to dry on a washing line, or is more energy used to dry it in a tumble drier? All these factors are taken into account; the result is a figure in tons of CO₂ which are generated due to the total consumption of energy. This makes a black T-shirt weigh as much as a fully-grown elephant.

This is a terrible burden on our planet, in the opinion of the Wuppertal Institute for Climate, Environment and Energy, which declares on its website, next to a thought-provoking illustration: "We use resources as though we had four earths at our disposal." The figures which bear testimony to our consumption of resources also appear astronomical and are hard to take in: Germans alone, for example, use 5.3 billion plastic bags each year to carry home their T-shirts or weekly shopping. Because even carrier bags end up in the bin, everyone takes home at least one new bag every week. At landfill sites, it takes 500 years for these plastic bags to degrade. Nowadays, hardly anyone would seriously argue that this will have no consequences, though what we should do about it is a matter of controversy.

Winners and losers as temperatures rise

Management consultancy firm Roland Berger estimates that sales of environmental technology will amount to a billion euros in the year 2030. The Association of German Engineers (VDI) even talks of a "green miracle on the labour market" and an ecological boom. As the German Press Agency (dpa) sums up: "All companies active in the area of renewable energies are the winners when it comes to climate change, and are the darlings of the stock exchange." The dpa prophecies the same for firms which supply environmental technology to clean waste gases, for cooling or for water treatment. The building trade would also benefit from milder temperatures because they would no longer have to interrupt their work during the winter. Even farmers could warm to the idea of climate change, believes Karsten Brandt, a meteorologist and economist, who tells the dpa: "Farmers have to adapt and, for example, grow corn instead of wheat."

The German Institute for Economic Research (DIW), on the other hand, warns that roads and river banks would be frequently destroyed by flooding and storm tides if the earth were to heat up by 4.5 degrees. Droughts, forest fires and storms could cost the insurance industry billions. Water used for cooling purposes in power stations would become more expensive, thus raising energy costs. The DIW in Berlin calculates the total costs of climate change for the German economy as being 800 billion euros by 2050. It will be hard to cover these costs, because it is likely that economic growth will be half a percentage point lower over the same period.

So just how much will climate change cost?

Despite all the many calculations, no-one can say just how much climate change will actually cost. The methods and their results are too different. The DIW believes that the cost will be in the billions, and the Kiel Institute for the World Economy (IfW) agrees, having conducted other studies. However, there are also economists such as Michael Bräuninger of the Hamburg Institute of International Economics (HWWI), who believes: "Climate change is a slow process which will give companies enough time to adapt." Meteorologist Brandt even believes that global warming could offer a potential win situation. As the dpa reports: "Brandt has calculated that savings in heating and energy costs, coupled with additional earnings from tourism, agriculture and insurance, could reach 8.7 billion euros per year. This would be set off by adaptation costs – for air-conditioning, for instance, or increased capital reserves needed to cope with natural disasters – of 3.5 billion euros by 2050. 'Per year, the German economy will make direct savings of around five billion euros thanks to the greenhouse effect'."

What will it cost to protect the environment?

Calculations are also being made in the other camp. The Potsdam Institute for Climate Impact Research (PIK) asks how much it will cost to reduce global greenhouse gases, claiming: "Several international studies have proved that the steps necessary to limit global warming would cost less than one percent of the worldwide gross national product. As a most conservative estimate, the IPCC expects the costs to be three percent." The new UN report stresses that an active climate policy would reduce the costs to the economy of protecting the climate because it would stimulate technological development, thereby making it cheaper.

The question is, which calculation produces the correct result. The only thing about which there seems to be no doubt is that something has to be done. And quickly: "Delaying climate protection will make it more and more expensive" warns Ottmar Edenhofer of PIK. "If the emission rates continue to rise as they have been doing, we risk seeing global warming by as much as six degrees Celsius by the end of the century." Just what that will cost the world is something which no-one dares calculate.

Friedrich Schmidt-Bleek (Hrsg.): Der ökologische Rucksack – Wirtschaft für eine Zukunft mit Zukunft, Hirzel Verlag 2004, ISBN 3-7776-1289-8