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“We need a footprint-based taxation”

Not many people know more about politics, big economy, and the way those two interact on an international level, as Connie Hedegaard does. Especially when it comes to climate change. The Danish politician has worked as a leading tv, radio and newspaper journalist, before she became Minister of the Environment in Denmark in 2004, and Minister for Climate and Energy in 2007. In 2009 she hosted the UN Climate Change Conference COP15 in Copenhagen. From 2010 to 2014, she served as European Commissioner for Climate Action. Ever since, she has made a name as public intellectual and climate change expert of global top-class standard. In October 2016, she was appointed as a Member of the Sustainability Council of the Volkswagen Group. The nine renowned Council members advise the Volkswagen Group Board of Management on the topics of sustainable mobility and environmental protection, as well as social responsibility, integrity, the future of work, and digitization. They work fully independently.

Interview with Connie Hedegaard, Member of the Volkswagen Sustainability Council

How can we stop global warming below two degrees? And what should car manufacturers and politicians do? Connie Hedegaard, Member of the Volkswagen Sustainability Council, gives answers.

Ms. Hedegaard, the Sustainability Council has been working for more than two and a half years now. How would you define the main task of your Council?

By appointing the Council, Volkswagen has sent a clear signal: Climate change is a key issue for us. We consider this as a great chance to create an open dialogue space between Europe’s biggest car manufacturer, scientists, environmental activists, and NGO’s. Ever since, we’ve had some genuinely frank exchanges with the management board.

Among your focus issues is also the cultural change within the entire Volkswagen Group.

That’s true. Questions like: How come that what lead to the diesel scandal could run for such a long time? We’re encouraging Volkswagen to really think deeply about how to have a culture in the company that could avoid such things happening in the future. Besides that, it’s no pure coincidence that Volkswagen has taken the lead in decarbonizing the automotive sector. The diesel crisis was grave for Volkswagen, financially and image-wise. But it may have also been a mental kick in the butt at the right time.

What have been the main achievements of the Council so far, let's say, mental- and measure-wise?

In my view, Volkswagen has re-entered a constructive dialogue with civil society. And it’s strengthening its position in this dialogue mainly by enabling strong measures towards CO₂ neutrality, and pushing a serious decarbonization plan. The latest steps forward here may, amongst many others, also be the result of intense debates curated by the Sustainability Council. To me personally, it is tremendously important that top companies like Volkswagen dedicate themselves to help combat climate change.

So a cultural mindset change is already perceptible at Volkswagen?

Sincerely, I have no idea how employees on the production floor and in the offices would feel about decarbonization, e-cars, and digitization. But in the top management, the recognition that Volkswagen is engaging in a truly new way forward and better succeeds in doing that, seems more anchored than in 2016. The last time Mr. Diess met the Council, he took three hours to engage. That’s quite a priority statement.

At the moment, the younger generation is making the pace in pressuring society towards a more effective decarbonization policy. How do you see movements like #fridaysforfuture in this situation?

I think that the mobilization is good. Younger people obviously understand that they’ll have to pay a huge bill for climate change – and the bill grows as their parents‘ generation is not acting bold enough. But I also think the general awareness is changing. In spring 2019, daily news are about severe floodings in Zimbabwe, Mozambique, Malawi, more than one million people just lost their homes. In April, in Greenland the temperature rose by 20 degrees in one day. And more and more people think: “Oh, that was what the scientists have been warning us against." In Denmark, for the first time ever climate change has become Number One on the voters' agenda.

Coal and oil are the biggest drivers of increasing CO₂ emissions.

The world finally realizes that climate change is in full flood?

I very much hope so. In 2009, in the run-up to the UN Climate Change Conference, there was a similar global mobilization. Everybody seemed to have understood it was five to twelve. Then came the financial crisis, and suddenly decision makers, banks and investors got other things to deal with. We once have experienced how fragile that kind of recognition is. We couldn’t afford another experience like that. And mobilization is one way of helping to avoid it.

How strongly do you feel this recognition rules within the automotive branch?

The sector is significantly changing. When I was an EU Commissioner, I heard auto manufacturers often say, "Oh, don't regulate this, that’s too much, we can’t do this." Of course, it’s perfectly legitimate trying to get as loose regulations as you can get away with, but I guess the sector had put the foot a bit too much on the brake. Green mobility offers huge opportunities, if you are early and fast enough, and so does digitalization. We are facing a huge disruption in the mobility sector, with new competitors from China and Silicon Valley. As far as I can see, top leaders at Volkswagen Group are fully aware of that.

Lately, Volkswagen CEO H. Diess has declared e-mobility as one-and-only drive technology to achieve climate protection goals for OEM’s. Would you agree?

You cannot live up to the latest EU standards unless you have a huge component of BEV’s or PHEV’s. And you most definitly cannot become CO₂ neutral by 2050. Apart from that, I’d see Mr. Diess’ statement also as a symbolic message: Hello everybody, we are really investing big time here! So that politics hopefully will push infrastructure, and financial incentives. There has to be a common effort in order to help the new drive technology make its breakthrough.

What could political stakeholders within the EU do for that?

The EU has set clear regulations concerning CO₂ emissions. In order to help the OEM’s fulfill them, the EU countries could do more to make e-mobility be the greenest drive technology. It goes without saying that the most important thing, for instance in Germany, would be to significantly reduce coal generated electricity. In countries like Norway, e-cars have a far better CO₂-footprint than others, due to the country’s almost 100% water-generated current. Given this, Norway’s politicians can better explain the many incentives they introduced to support e-mobility. And that’s one reason why every second new car in this country is already going electric. I think the EU nations have a huge responsibility to take care that the taxation works to the benefit of electrification. For example, a tax reduced system for electric company cars could play an enormous role for a limited period. At the same time, indirectly subsidizing fossil fuels in Europe should stop. What we need, is a smart footprint-based mobility taxation system.

The transportation sector contributes around 14 percent of the worldwide CO₂ emissions.

How do you see the chances of stopping global warming at 1.5 degrees?

We should do everything to stay below two degrees and try to head towards 1.5. According to the IPCC report last fall, there is a huge difference between 1.5 and two – what it does to the world. 1.5° will be extremely challenging, but to stay below two degrees is feasible, if we really focus on changing our rules of energy, transportation, buildings, and agriculture. There is quite some hope in in it, especially when I see how consumers – especially young ones – are changing their habits, diets, their entire value system: You don’t have to own everything. Your clothes don’t have to be produced just for you. It’s really not trendy to waste food. There is a paradigm shift from quantity to quality, from more and more to enough is enough.

Critics object that all efforts in Europe would be globally wrecked by growing consumption in emerging economies.

Why should we go that cynical? And how would we ask them to start reducing their CO₂ impact if we are not going ahead? We are far more industrialized, we have the skills and resources. Germany and Denmark, for instance, have developed wind technologies that are now competitive to coal in India – a country that still has 350 million people without access to electricity. This is extremely challenging. At the same time, it encourages me that investors worldwide are attracted by sustainable products – not out of philanthropy, but as a way to grow business.

Connie Hedegaard during the interview at DRIVE Volkswagen Group Forum in Berlin.

Sustainability pays off?

That’s what makes people change. We now have business cases: pension funds that invest more green instead of black, perform better than average. The more of these examples we see, the more it’ll grow.

How do you personally reduce your carbon footprint?

In our household, we have replaced the windows, gone to central district heating, changed our diet to buying less food, eating less meat. I bike every day, mostly 16 kilometers to Copenhagen and back. But then I fly a lot for job reasons. I hope that technology will help me out here soon, developing alternative fuels and new sustainable ways of far distance traveling.

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