Background Informations

Climate change

Climate change, or global warming, refers to the gradual increase in average temperature of the seas and lower atmosphere in recent decades.



July 18, 2007 | The average temperature of the Earth’s surface has risen 0.76 degrees Celsius since the eighteenth century. Eleven of the twelve warmest years on record fell between 1994 and 2005.
Carbon dioxide (CO2) is now widely acknowledged to be the main cause of global warming. Produced when coal, natural gas and oil are burned, CO2 traps heat generated by solar energy and prevents it from being reflected back into space. Consequences of global warming may include rising sea levels, flooding, heat waves and droughts, hurricanes and other extreme weather conditions.
Technologies for efficient generation, distribution and use of energy are an important step towards reducing global warming. Virtually all Siemens Groups offer products, solutions and services that help achieve this important goal.

Greenhouse effect

The greenhouse effect is a natural process that keeps Earth at a livable average temperature. The planet’s temperature currently averages 15 degrees Celsius above zero – without the greenhouse effect, it would drop to minus 18 degrees Celsius.
August 1, 2007 | The Earth is supplied with solar energy – and with it heat – in the form of radiation. Seventy percent of solar radiation is absorbed, warming oceans, continents and atmosphere. Thirty percent is reflected, but the radiation doesn’t simply escape into space. In the atmosphere, it encounters carbon dioxide (CO2), water vapor, methane and other so-called greenhouse gases. A natural part of the atmosphere, these gases absorb heat and radiate it evenly in all directions. Some of the heat is returned to Earth, where it warms the planet’s surface.
Global warming is cause for concern because emissions produced by human activity are raising the concentration of greenhouse gases in the atmosphere, intensifying the greenhouse effect and causing a steady increase in the temperature of the Earth’s surface.

Fossil fuels

It’s impossible to imagine our daily life or the world economy without energy sources such as oil, natural gas and coal. In addition to producing electricity and heat, these raw materials are used as fuel and are processed into countless products. As a result, they play a fundamental role in powering the economy and maintaining our standard of living. Most of the world’s energy needs are met by fossil fuel sources.
August 16, 2007 | As always, oil is the world’s leading source of energy, with a 36.4% share of primary energy consumption. In 2005, coal ranked second at 28%, ahead of natural gas at 24%. When fossil fuels are burned, CO2 is their natural waste product. Reduction of CO2 emissions is a major goal in climate politics, but achieving it will require new technologies that are only now being developed. When natural gas is burned, it releases only 75% of the CO2 generated by burning oil, and a mere 58% of the emissions from coal – which means that conversion to natural gas is one possible strategy for environmental protection. At Siemens locations, heating plants and production processes run almost exclusively on environmentally friendly natural gas. For an overview, visit our Corporate Responsibility Web site. Many Siemens locations have also launched programs on using oil and natural gas responsibly. Examples include using and adjusting thermostats properly to avoid setting room temperatures too high. Each additional degree of room temperature raises energy consumption 6%.

Renewable energies

Unlike fossil fuels, renewable energies (also known as regenerative energies) are available in nearly unlimited supply.



August 31, 2007 | The leading renewable energies are wind power, solar power, hydroelectric power and biomass. In recent years geothermal energy – use of the heat from the Earth’s core – has also played an increasingly important role. One very good example is the process through which biomass creates renewable energy. The sun provides a constant supply of energy for nearly all of the continuing processes in Earth’s biosphere, setting the stage for production of so-called secondary raw materials. When these materials, instead of decaying naturally, are converted into heat or propulsion energy through forced combustion, they release exactly as much carbon dioxide as the biomass originally absorbed from the atmosphere during its growth. This is the second major advantage of renewable energy sources: in addition to being nearly inexhaustible in supply, they contribute significantly less to the greenhouse effect than fossil fuels. That’s why the European Union has adopted the goal of meeting at least 20% of its energy needs through renewable energies by the year 2020, and countries outside Europe have set similar targets. Reaching these ambitious goals will demand considerable effort and technological progress. Wind and solar power are often unreliable and decentralized, and the systems needed for storing and transmitting them effectively don’t yet exist. The costs of producing these new energies, though still high in comparison with those for fossil fuels, are being offset through subsidies designed to promote renewable energies.
Siemens’ product portfolio has long included hydroelectric power generation. In the last few years we’ve added wind power stations, biomass power plants and, most recently, geothermal energy.

Kyoto Protocol

Contracting states adopted the agreement known as the Kyoto Protocol at the third climate conference in Kyoto in 1997.



September 19, 2007 | Under the Protocol, industrialized countries made a binding commitment to reduce their collective emissions of the top six greenhouse gases – including carbon dioxide (CO2), methane (CH4) and fluorochlorohydrocarbons (FCHCs) – to 5.2% below 1990 levels between 2008 and 2012. Individual countries also pledged to meet various limits: Germany agreed to a 21% reduction in emissions; the United Kingdom 12.5%; the U.S. 7%; Japan and Poland 6%; and France and Russia +/ 0%. The Kyoto Protocol was the first agreement to establish emissions reduction targets that are tied to a specific time frame and are binding under international law – a milestone in international climate politics.

But the Protocol sets reduction targets only for the “first commitment period” from 2008 to 2012. What happens afterwards is now being negotiated in conferences governed by the United Nations Framework Convention on Climate Change (UNFCCC). The EU has taken a leading role in international environmental protection and is currently considering a pledge to reduce emissions to as much as 30% below 1990 levels by 2020, provided that other major industrialized nations also commit to reductions. The G8 Summit in Heiligendamm also took a groundbreaking step towards a post-2012 environmental protection regime when the G8 countries – in particular the U.S. – expressed support for negotiating a successor agreement under the United Nations framework. In addition, the eight industrialized countries agreed to seriously consider halving greenhouse gas emissions by 2050. As climate politics move into the future, it is imperative that all major greenhouse gas emitters be engaged in the process of protecting the environment. That means, first of all, that the U.S., the largest emitter, must be brought on board, and secondly that emerging and developing countries must gradually become more involved in the environmental protection regime. These countries must make the effort to break the link between growing economies and growing emissions.

Joint Implementation (JI) and Clean Development Mechanism (CDM)

The Kyoto Protocol contains provisions allowing industrialized countries to fulfill part of their emissions reduction commitments outside their borders. Under these so-called flexible mechanisms, greenhouse gases can be reduced where costs are lowest and the benefits of reduction are highest.

October 15, 2007 | Joint Implementation (JI) Under the Joint Implementation mechanism, two industrialized countries can carry out climate protection projects in partnership, provided that both countries have ratified the Kyoto Protocol and committed to a specific reduction target. If one industrialized country implements or finances an emission-reducing project in another industrialized country, it can credit the resulting Emission Reduction Units towards its Kyoto target. The recipient country may not count the reduction towards its own commitment, however, and industrialized countries may not apply Joint Implementation-based reductions toward their targets until 2008.

Clean Development Mechanism (CDM) The Clean Development Mechanism works much like Joint Implementation. The biggest difference is that CDM projects create partnerships between industrialized countries that have made reduction commitments and developing countries that haven’t, though once again both participants must have ratified the Kyoto Protocol. Under the CDM, an industrialized country that implements an environmental project in a developing country can earn Certified Emission Reductions towards its Kyoto target. Like the JI, the CDM seeks to make emission reductions as cost-effective as possible, but the CDM is also designed to help developing countries build sustainable, environmentally friendly economies through technology transfer and to make a lasting contribution to their development. To date, UN officials have accepted 800 CDM projects, with China, India, Mexico und Brazil winning the highest numbers of approvals so far. Many Siemens technologies are suitable for CDM and JI projects. In February 2007, Osram became the world’s first lighting manufacturer to win approval for a CDM methodology that will promote the use of energy-saving lamps. Using the new methodology, CDM projects can replace incandescent lamps with energy-saving models, and the carbon dioxide savings can be credited towards Certified Emission Reductions.

Emissions trading

In addition to setting specific emissions reduction targets for individual countries, the Kyoto Protocol established so-called flexible mechanisms to help countries find cost-effective ways to meet their reduction targets.

November 2, 2007 | Along with the CDM and JI projects examined in Part 6, Kyoto provides for a third flexible mechanism—emissions trading.

Emissions trading harks back to an old idea in environmentalism: that use of the atmosphere and other natural resources should come with a price tag. Under this mechanism, plant operators are issued a minimum supply of certificates entitling the holder to emit a specific quantity of carbon dioxide (CO2) at no cost. If a facility—such as a power station or cement plant—exceeds its allotment of free emissions, the operator must buy emissions certificates for the additional quantity of CO2—for example from a business that has reduced its own CO2 emissions by modernizing its facilities. Prices are determined by supply and demand. This forces the business to decide whether it is cost effective to buy the additional emissions certificates, or whether it is more profitable to update its own plant with more environmentally friendly technology and sell the emissions certificates it will save. In this way, emissions trading ensures that climate protection measures are implemented where they are least costly. Instead of imposing the same rigid quota on all operators, the trading mechanism gives businesses more flexibility in making the transition to lower emissions.

The EU adopted emissions trading for CO2, the leading greenhouse gas, in early 2005. Trading will continue until 2012, but as yet there is no agreement for the period beyond that date. Three Siemens heating plants and an Osram glass plant currently participate in the European emissions trading system.
The U.S. has a limited regional market for voluntary CO2 emissions trading.

Intergovernmental Panel on Climate Change (IPCC)

The IPCC is an intergovernmental panel of experts on climate issues. Founded in 1988 by the World Meteorological Organization (WMO) und the United Nations Environment Programme (UNEP) under the auspices of the UN, the IPCC is open to all UN and WMO members.

November 14, 2007 | Its mission is to improve understanding of the risks and possible impacts of human-induced climate change and to identify options for mitigating and adapting to it by collecting and synthesizing scientific, technical and socio-economic literature on a comprehensive, objective, open and transparent basis.


The IPCC does not conduct its own research or maintain its own climate data. Its findings and recommendations are based primarily on its evaluation of expert opinion and scientific and technical publications.

The IPCC has three working groups and a Task Force:

• Working Group 1 assesses the scientific aspects of climate systems and climate change.
• Working Group 2 assesses the vulnerability of socio-economic and natural systems to climate change, the negative and positive consequences of climate change, and the options for adapting to it.
• Working Group 3 assesses options for limiting greenhouse gas emissions and mitigating climate change.
• The Task Force oversees the IPCC National Greenhouse Gas Inventories Programme.

Since its founding, the IPCC has issued several assessment reports, with the most recent appearing earlier this year. Key findings include:

• Earth’s average temperatures could rise 1.8 to 4 degrees by 2100.
• The resources needed to stabilize and ultimately reduce emissions are available now.
• The price for emitting a metric ton of CO2 is crucial to the profitability of renewable energies and other CO2 reduction initiatives. In the energy sector, for example, up to 35% of the world’s energy could come from renewable sources by the year 2030 if a metric ton of CO2 emissions cost $50 on average. In the construction sector, the largest sources of CO2 include constructing and operating buildings. With better insulation and more efficient heating and air conditioning, some 30% of energy use and CO2 emissions could be saved between now and the year 2020.