Schriever calls for carbon pricing

The Savings Banks Finance Group supports efforts towards sustainable business practice and consistent climate change management, but also calls for more market and more global standards in the implementation. “Detailed political regulation imposed on market players restricts entrepreneurial creativity, which would lead to faster and better solutions,” said Karolin Schriever, executive member of the Executive Board of the German Savings Banks Association (DSGV), at the DSGV’s press conference on the occasion of the Annual Meetings of the International Monetary Fund and the World Bank in Marrakech (Morocco). 

“To achieve the objective of climate neutrality, approx. 6 percent of Germany’s GDP will need to be invested annually in the German economy alone,” said Schriever. Such large amounts can only be mobilised if the investments are economically attractive and not associated with too much red tape. 

The EU is successively obliging banks, investors, insurance companies and businesses to make sustainability measurable and to report the results. “We endorse the objective behind the political measures, but we do not believe that the bureaucratic pathway chosen is efficient enough,” said Schriever. In future, a stronger focus should be placed on setting economic incentives for climate improvements, instead of creating new bureaucratic burdens. 

Schriever proposed that a carbon price should be introduced rather than new regulations. Currently, because climate impacts were not included in the market price, they usually had to be borne by society as a whole and not by the actual polluters. However, in a market economy, price was the most effective way to influence behaviour. Instead of trying to steer capital towards politically desirable purposes through governmental regulation, it would be better to put a price on the consumption of resources and, hence, to make it an integral part of any economic calculation.             

Carbon pricing would create incentives for businesses and individuals to reduce their emissions and would leave it to the market to find the most efficient ways of reducing the footprint. With the revenue generated, the government could provide social compensation for excessive burdens on individuals. 

At the same time, Schriever advocated more global sustainability standards and free world trade. In view of the international orientation of capital markets, the European standards on taxonomy and sustainability reporting were not sufficient. Because of differences in the interpretation of sustainability, customers often did not understand what was really included in sustainable financial products. 

Schriever warned against deglobalisation and trade restrictions. The German economy was export-oriented and relied on an international division of labour. A renationalisation or even re-Europeanisation would entail significant economic costs. For this reason, Germany had a genuine economic interest in supporting good international relations and minimum obstruction to global trade.