Climate protection through businesses and markets – taking responsibility and seizing opportunities

Dialogue Forum in cooperation with the Catholic Academy in Bavaria

29 October 2025, 7pm

Multiple crises are pushing climate protection further into the background. At the same time, business representatives are calling on policymakers to soften or even withdraw existing climate targets and regulations. How can market-based frameworks help counteract this trend—enabling and rewarding climate-positive action? And what opportunities does this open up for innovative business models, new technologies, and economic partnerships?

A man speaks at a podium with a sign for the Katholische Akademie in Bayern and colorful background graphics. — Dr. Martin Dabrowski welcomes the audience on behalf of the Catholic Academy in Bavaria

Many countries now regard the EU’s climate targets as overly ambitious. They fear for the competitiveness of their industries, given that companies outside the EU face far less stringent requirements. Professor Andreas Löschel, Chair of Environmental and Resource Economics and Sustainability at Ruhr University Bochum, considers this perspective too short-sighted: “Climate protection causes burdens, but these pay off globally and in the long term—and they create opportunities for businesses.” Some sectors, he notes, are affected more than others, particularly Germany’s energy-intensive industries. “We’re caught in a kind of middle-technology trap, where legacy sectors such as automotive and chemicals dominate, while in other countries, high-tech industries are driving growth.”

A person in a suit speaks into a microphone while seated in a red chair, with water bottles on a table nearby.

Climate protection causes burdens, but these pay off globally and in the long term—and they create opportunities for businesses.

Prof. Andreas Löschel

Chair of Environmental/Resource Economics and Sustainability, Ruhr University Bochum

Harnessing the power of innovation

A strong tendency to preserve the status quo means that, basically, few are willing to change anything. Yet global developments are moving in a different direction, and disengaging is not an option. “We need to start a serious discussion about how to promote climate protection more effectively and efficiently,” Löschel urged. China, for example, is setting the pace when it comes to the electrification of its economy. But there are many technological fields in which companies can close gaps and seize opportunities. “Technologies such as hydrogen, synthetic fuels, or CO₂ removal from the atmosphere are still under development—and precisely for that reason, they offer great scope for innovation,” he explained.

Christine Völzow, Head of Economic Policy at the Bavarian Industry Association, also sees new technologies as the key to greater sustainability. “The fact that Bavaria accounts for only about 0.2 percent of global CO₂ emissions doesn’t mean our companies have no influence,” she emphasized. With more than ten percent of Europe’s world-class patents, Bavaria is highly competitive in climate-related research. It would be wrong, she added, to expect one single ‘game-changing’ technology: “Bavaria alone is well positioned in 28 different innovation fields.”

A woman seated in a chair holding a microphone, with water bottles and glasses on a table nearby.

The fact that Bavaria accounts for only about 0.2 percent of global CO₂ emissions doesn’t mean our companies have no influence.

Christine Völzow

Head of Economic Policy, vbw – Bavarian Industry Association

A pilot project for a virtual power plant

A striking example comes from Flexa GmbH, a Munich-based company planning to build and operate Europe’s largest virtual power plant (VPP). Such a VPP is a digital network that links decentralized energy systems - solar panels, battery storage units, heat pumps, and EV charging stations - and operates them as one large power plant. Smart software aggregates surplus renewable electricity, feeds it into the grid when needed, and helps stabilize the overall system. “Generating electricity from gas is three to five times more expensive than using wind or solar power,” explains CTO Sébastien Schikora. “By connecting to the electricity exchange, a virtual power plant can be optimized minute by minute, matching supply and demand to determine the best use of each individual installation.”

However, Schikora sees unclear political frameworks as the greatest obstacle to scaling up. “We don’t need higher subsidies - we need clarity about how renewable energy markets will operate in the future. Only then can we assure our customers that participating in the VPP will truly pay off.” Frequent changes in ministerial leadership and shifting policy signals, he said, have created widespread uncertainty.

Emissions trading under pressure

Professor Löschel identified another challenge: the lack of strong incentives for climate protection. After the supply shock following the attack on Ukraine, fossil fuel prices have dropped significantly again. Emissions trading could be an effective tool to make oil and gas more expensive and curb demand, but this approach is increasingly viewed with skepticism. “Another issue is whether we want to continue supporting the rooftop solar boom, which also drives grid congestion and costly expansion,” he noted. “Today, it’s not generation costs but grid infrastructure that makes renewable energy expensive. If we design the grid too large - or too small - we risk much higher costs in the future.”

A panel discussion with four speakers seated in red chairs, facing an audience in a conference setting.

In terms of industrial transformation, Löschel called for more flexibility: “We must accept that value chains and production structures won’t remain the same. There hasn’t yet been a truly open political debate about this.” Völzow responded: “We don’t want to preserve everything at any cost - but abandoning entire sectors such as chemicals would be dangerous. Past experience shows that such phase-outs can have massive ripple effects.” “The road toward climate-neutral production is rocky”, she added. For instance, there is still no infrastructure to make cement plants climate-neutral through CO₂ capture and storage. “We need a competitive industrial electricity price if we don’t want to risk entire industries collapsing and becoming dependent on imports.”

Bureaucracy as a barrier

The experts agreed that technological potential - such as in the hydrogen economy or the production of “green steel” - should be pursued far more aggressively. “Germany is strong in research but weak in scaling up,” Schikora lamented. That’s why transitional funding is important if Germany is to avoid new dependencies, as happened with photovoltaics. In China, large-scale battery and electric vehicle factories are already being built at impressive speed. Völzow added: “The reason innovations don’t take off here also lies in the framework conditions - too much bureaucracy and too high costs.”

Beyond costs and bureaucracy, the discussion also turned to corporate responsibility. Schikora urged business leaders and shareholders to move away from short-term, bonus-driven thinking and adopt a medium-term perspective to safeguard prosperity. “As an exporting nation, we must tackle climate change decisively and position ourselves in future-oriented industries. Everyone must take responsibility within their own sphere.” Völzow agreed: “Sometimes I wish I knew the best way to motivate companies to do more for climate protection.” Sharing best-practice examples - real stories of what works - can be a powerful incentive.

A man in a checkered shirt holds a microphone while seated on a red chair, with water bottles on a table nearby.

As an exporting nation, we must tackle climate change decisively and position ourselves in future-oriented industries. Everyone must take responsibility within their own sphere.

Sébastien Schikora

Chief Technology Officer, Entrix & Flexa

Reconciling climate protection, economic growth, and industrial transformation will require major collective effort. But it’s vital to recognize that climate protection does not only entail costs—it also unleashes innovative forces that boost efficiency, modernization, and competitiveness. These forces are key to securing long-term prosperity and social stability.

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