The disappointing results of COP29, the re-election of Donald Trump, climate-related natural disasters worldwide, the escalating geopolitical situation: at the turn of the year, the impressions of recent weeks and months paint a bleak picture – the urgently needed momentum for limiting climate change is lacking.

Although we are of course delighted that the Wuppertal Institute has won the German Sustainability Award this year, it is of little consolation to us – what does give us hope and courage for the future though is the fact that, alongside all the bad news this year, there’s a heap of positive developments.

Renewable energies, for instance, are continuing their victory march: in the first half of 2024 alone, new solar plants with a capacity of around 7.5 gigawatts went into operation in Germany. To put this into perspective, this is significantly more than the nominal capacity of the last three German nuclear power plants, which went offline in 2023. Furthermore, renewable energies have by now become unstoppable for purely market-based reasons: In many regions of the world, they are by far the most competitive form of electricity generation today. At the same time, we in Germany are witnessing a veritable boom in battery storage, the rollout of smart meters, which our researchers have analysed for its potential, and, starting in January, dynamic electricity tariffs – this will have real impact, because only as a complete package can these individual components unfold their true energy transition potential. In the medium term, hydrogen will also play a much greater role, as the approval of the hydrogen core network at the end of October this year reveals the main features of a nationwide hydrogen economy. Many companies also already have plans in the pipeline for hydrogen production and storage facilities. Even though concrete investment decisions are often still lacking due to the many uncertainties in the development of the energy and climate policy framework: The next energy transition booster is already within reach.

Politically, sound and reliable decisions are therefore needed now so that the economy knows where it can make future-proof investments. This is already given at EU level: The Clean Industrial Deal, which Ursula von der Leyen announced in her political guidelines for 2024 to 2029 on the day of her election as President of the European Commission, combines core elements of the previous European Green Deal with instruments to increase European competitiveness and security of supply – and thus sends an important signal of continuity.

Such a signal of continuity, of adherence to the central energy and climate policy goals, is now also needed from the next German government. After all, the next major German climate target is only one and a half legislative terms away: by 2030, greenhouse gas emissions are to be cut by 65 per cent compared to 1990 levels. This will require an absolute reduction in emissions over the next few years that is around twice as high as in the past three decades. This is an ambitious goal, but it is doable given the necessary political will. The biggest challenge is certainly mobilising enough capital for the implementation of the transformation: Estimates show that the annual financing required for the energy transition is equivalent to around ten per cent of Germany's GDP. However, the vast majority of this is required for investments that are due anyway as a result of normal renewal cycles. The additional investment required for green technologies amounts to around three per cent of the GDP, or 50 to 60 billion euros per year. Around a quarter of this must be provided by the public sector, as direct investments in infrastructure or subsidies for local authorities and companies. In times of tight federal finances, this is tough stuff, but again there is good news hidden underneath: the money can be sourced, for example by reducing environmentally harmful subsidies, introducing a wealth tax or even through a kind of global minimum taxation for the super-rich, as was recently proposed at the G20. Also, some measures do not incur any costs at all. A speed limit – which, by the way, is supported by around 70 per cent of the German population – is climate protection at zero cost. What's more, additional investment does not equate to additional costs. The associated savings and the resulting positive economic effects, such as innovation stimuli, must be offset against this.

What also encourages us at the Wuppertal Institute with regard to the political culture in Germany is that even after the coalition government's break-up, instead of mutually deadlocking, the parties have still managed to get some important projects off the ground. We are particularly pleased that this includes the Federal Cabinet's decision on the National Circular Economy Strategy, which we intensively contributed to with our scientific expertise. Although a strategy does not yet equal implementation, it provides the next Federal Government with a good working basis for improving resource conservation and supply security – and at the same time revving up the employment and economic engine: If we succeed in taking the big leap from the current linear economy to the circular economy, this will not only unlock new business models and fields. It also provides the German industry with opportunities to export the required machinery and plants all over the world.

Whether at local, state or federal level, the transition to a circular economy is once again a political issue. After all, where new things are created, old things usually fade away at the same time. In order to absorb this, both socially and economically, this far-reaching process of structural change must be managed and supported in a smart, determined and forward-looking manner in order to give companies planning security and create the necessary framework conditions. And we are working on ways to achieve this.

Without any doubt, we are facing major challenges: We have to implement transformation processes both nationally and globally, and at many levels simultaneously. The world has become more complicated in 2024 and the challenges certainly haven't gotten any smaller. However, we still have the means at hand to reshape our planet for the future. What we need now is courage and consistency. From politicians, from the economy, but also from society. From all of us. Sticking our heads in the sand in the face of so many challenges simply is not an option – because resignation is the wrong thing to do, now more than ever.

In his opening speech at COP29, Ilham Aliyev, President of this year's host country Azerbaijan, described oil and gas as a "gift from God". In their COP analysis report, researchers from the Wuppertal Institute explain why the conference outcomes are anything but a godsend – and what the most critical aspects of the final agreement are.

The current issue of Carbon Mechanisms Review examines the role of Article 6 for international carbon markets – as well as the operationalisation of the article. Other topics include capacity building in the Global South, court decisions on advertising claims about climate neutrality and the reduction of nitrous oxide emissions in industrial processes.

We already understand the technical aspects of the energy transition pretty well, says Dr. Lukas Hermwille, Co-Head of the Transformative Industrial Policy Research Unit at the Wuppertal Institute – and, together with colleagues, explains in a statement why social science research is now key to making the energy transition a success.

In a living lab aimed at optimising heating energy consumption, researchers have determined that room temperatures can often be lowered by several degrees without compromising building users' comfort – with potential energy savings in the double-digit percentage range. They have published their findings in the journal "Energies".

Industrial carbon capture and storage, or iCCS for short, can reduce CO2 emissions from industrial processes, but is the subject of controversial political debate. In a recent paper published in the Journal "Energy Research & Social Science", researchers from the Wuppertal Institute describe the factors that determine public acceptance of the technology.

The Wuppertal Institute and GIZ have developed the "ASEAN Guidelines on Light Electric Vehicles" for the Association of Southeast Asian Nations. The new guidelines are part of comprehensive efforts to decarbonise the transport sector and are intended to promote the implementation of sustainable mobility strategies in the ASEAN member states.

In cooperation with 14 international partner organisations, the Wuppertal Institute is developing the prerequisites for a digitally-enabled Circular Economy in the project "Enabling Circular Value Chains via Production Digitisation and Human Empowerment", or ENCIRCLE for short. The focus is on innovative technologies such as AI, digital twins and digital product passports.