SPIEGEL ONLINE - June 27, 2007, 05:50 PM
URL:
http://www.spiegel.de/international/business/0,1518,491075,00.html

SPIEGEL INTERVIEW WITH BASF CEO JÜRGEN HAMBRECHT

'I Have a Problem with the Term Climate Change'

Jürgen Hambrecht is CEO of the largest chemical company in the world,
BASF. SPIEGEL spoke with him about German environmental policy, what
to do about global warming, and how the 12th century wasn't all that
bad.

Climate change is a major concern in Europe. But should environmental
measures be allowed to harm the economy?

SPIEGEL: Mr. Hambrecht, to reduce the effects of climate change
Environment Minister Sigmar Gabriel is calling for the "fundamental
transformation of industrial society." Have you already embarked on
this transformation at BASF, the world's largest chemical corporation?

Hambrecht: A corporation that competes internationally must change
constantly, but in three dimensions, only one of which is
environmental protection. Economic efficiency and social
sustainability are also part of the mix. After all, I am responsible
for 95,000 employees and their families.

SPIEGEL: There are, of course, conflicts among these three dimensions.

Hambrecht: Yes, but one thing is clear: I cannot reach the other
objectives without economic success.

SPIEGEL: Is Gabriel's demand too one-sided, in your opinion?

Hambrecht: Mr. Gabriel is like a whirlwind. He chases the cloud across
the land, but he doesn't really care where the wind is coming from,
just that it blows strongly. What Mr. Gabriel is asking for is a pipe
dream. I would like to know whether he even supports Germany as a site
for industrial production. What does he want? The transformation of
industry into a service economy? Then he should say so.

SPIEGEL: Will you give voice to this criticism at the next energy
summit on July 3, when you and other corporate leaders will meet with
German Chancellor Angela Merkel and other government officials?

Hambrecht: Of course. We cannot continue along the current trajectory.
Everything is currently determined by environmental policy, but an
energy policy worth its salt doesn't exist. Where do we stand on
nuclear power? Will coal have a future in Germany? These are questions
we must urgently discuss. Instead, politicians are constantly setting
new, unrealistic goals.

SPIEGEL: Such as?

Hambrecht: Mr. Gabriel wants to increase annual growth in energy
productivity from one to three percent.

SPIEGEL: What's wrong with that?

Hambrecht: Energy productivity must indeed be increased, but three
percent is a completely unrealistic target.

SPIEGEL: How does the government arrive at three percent?

Hambrecht: By simple arithematic. The coalition agreement calls for
doubling energy productivity in Germany from 1990 to 2020. In reality,
however, it has only grown by 0.9 percent per year in recent years.
This means that we would need three percent to reach the target, which
is completely unrealistic. We're already on the cutting edge when it
comes to efficiency, together with Japan.

SPIEGEL: Gabriel has presented an eight-point plain with which he
claims the three percent goal is achievable.

Hambrecht: The plan is outrageous. For example, it calls for an "an
increase in efficiency in transportation and an increase in the share
of biofuels to 17 percent." The minister doesn't seem to know what
he's talking about. A share of only 10 percent would require the use
of up to a third of current agricultural acreage in Germany.

SPIEGEL: Brazil plans to grow plants for biodiesel on a large scale.

Hambrecht: None of this is as easy as it seems, and certainly not on a
global scale. Growing plants to produce biofuels competes with food
production and also requires a lot of energy and water. Either way, it
won't be feasible without genetic engineering and genetically modified
crops.

SPIEGEL: The use of biofuels is only one of eight points in Gabriel's
program.

Hambrecht: The next one gets me even more fired up: "Reduction of
emissions of other greenhouse gases, such as methane." Methane! Who
produces methane? Cows, sheep and goats. If we could break Germany's
entire livestock population of the habit of eating and digesting, we
would save only 18 million tons, instead of the 40 million Mr. Gabriel
wants. We shouldn't be dreaming. We need more candor!

SPIEGEL: You are considered one of Merkel's key advisors. What does
she say about your allegations?

Hambrecht: We must help the chancellor at the energy summit. But more
reasonable views are gradually taking hold -- finally. New scenarios
are being calculated.

SPIEGEL: The chancellor portrays herself on the international stage as
someone anxious to protect the climate. Shouldn't Germany be setting
an example in this respect?

Hambrecht: Ambitious goals are a good thing, but we must be realistic.
I am opposed to our going it alone as a country, which would be
detrimental to our competitiveness.

SPIEGEL: The energy summit planned for the beginning of July is
already expected to issue recommendations. What do you expect?

Hambrecht: All discrepancies must be discussed openly, and then we
must agree on which initial conditions should go into the joint final
analysis. It is only on this sort of joint basis that we can issue
recommendations capable of enduring in the future.

SPIEGEL: And if you don't achieve this?

Hambrecht: Then certain individuals will probably no longer attend
these meetings in the future.

SPIEGEL: Will you be one of them?

Hambrecht: It's possible.

SPIEGEL: You say that what the government is calling for is completely
unrealistic. What is realistic?

Hambrecht: Realistic is what is doable without harming the economy.
Otherwise we will be solving supposed problems by de-industrializing
Germany. We are one of the few Western economies that still has a
large, well-functioning system of industrial production. If
politicians no longer want energy-intensive companies in Germany they
should be honest about it.

SPIEGEL: No one wants to drive out industry. But why shouldn't there
be other ways to increase energy efficiency?

Hambrecht: Industry has already done a great deal on its own in the
past, including adherence to substantial voluntary obligations. And we
will continue to do a lot in the future. But we have already moved far
up the learning curve. Climate protection that doesn't make sense
economically translates into the loss of jobs to other countries.

SPIEGEL: Does this mean that we have already lost the battle against
climate change?

Hambrecht: We have to do more, of course. But I have a problem with
the term "climate change." It's laden with fear. The climate is a
highly complex system, and it has always changed. If there is one
thing we cannot do, it is to allow ourselves to be scared and to seek
emotional satisfaction in short-term campaigns.

SPIEGEL: Apparently you don't take the report by former World Bank
chief economist Nicholas Stern seriously. He predicts that unless we
take drastic steps today climate change will cause a global economic
crisis worse than the Great Depression of the 1930s.

Hambrecht: That's fear mongering. There isn't really anything new in
the report. There are processes of change in the climate that we still
don't fully understand. This alone makes me believe that steps must be
taken. But there should be some sense of proportion.

SPIEGEL: What do you envision?

Hambrecht: We need a global approach, most of all. Everyone has to
participate, including the United States and the developing nations.
Look at China, for example. Greenhouse gas emissions in China are
growing by more than 300 million tons a year. This is more than
everything Mr. Gabriel wants us to save by 2020. This should be enough
to illustrate the relations. The atmosphere doesn't care where
greenhouse gases come from.

SPIEGEL: Gabriel says: "The industrialized nations have used the
atmosphere as a free garbage dump for decades. Now, through emissions
reductions, they must make room for developing countries." Doesn't
this make sense?

Hambrecht: It's an incredible simplification, and it would mean that
we could no longer grow. If that's what Mr. Gabriel wants then he
should say so.

SPIEGEL: The developing nations and emerging economies are telling the
West: You were able to develop for decades without worrying about
climate change. Now that we are catching up, you come along and tell
us, from your high horse, how we should behave. Can't you understand
that?

Hambrecht: Of course I can understand it, but that's the way to keep
this discussion going ad infinitum. We must develop a different
attitude toward conditions on this earth. Many academics believe that
the 12th century was the most successful for people in Europe. It was
also the century in which Europe was the warmest. But then came the
"little ice age," which lasted until the 19th century and was a
difficult time with many epidemics.

SPIEGEL: Are you saying the warmer, the better? In that case, why
should we do anything at all?

Hambrecht: Because mankind continues to grow and more and more people
want to share in the prosperity. We must conserve resources, not just
oil and gas, but also water, corn and soy. If we do nothing, the
struggle for resources will take on geopolitical forms that we don't
want. That's why have to do something.

SPIEGEL: The German economy benefits from the measures that have been
taken. Companies like BASF are global leaders in many environmental
technologies.

Hambrecht: Certainly. If better insulation were installed in every
house in Germany, we would already save 80 million tons of CO2. And
think of countries like Russia, but also England and the United
States, where they don't use any insulation or where insulation is
very poor. The chemical industry has developed completely new
materials for this purpose. There is a long list of innovations. In
the future you'll be able to use organic luminous diodes in new kinds
of luminous wallpaper, thereby saving electricity. Other
future-oriented technologies with which energy can be saved include
green genetic engineering and methods of storing hydrogen in small
spaces, which we are studying. Eventually we'll have all of these
things.

SPIEGEL: In other words, massive savings will be possible.

Hambrecht: There is certainly potential. But we will never achieve the
three percent Mr. Gabriel wants to set as a goal. And when I hear
charges that Germany invests a "mere $6.20" per capita in energy
research, compared to Japan's $30, I say: We were the world leaders in
nuclear engineering research, but now that's gone. Green genetic
engineering is also heavily restricted in this country. It is
disingenuous to cut off our own research while at the same time
leveling accusations against industry.

SPIEGEL: There are more and more "green" investment products, and more
and more funds place a premium on companies being environmentally
friendly. Do you feel this sort of pressure?

Hambrecht: I approve of the idea of integrating sustainability into
the appraisal of companies. But only a very small group of investors
focuses mainly on things like environmental efficiency analyses.

SPIEGEL: Most are interested purely in quarterly results?

Hambrecht: Yes, as a company today you need economic success more than
ever. Investors have full pockets. The world is full of money. You
have to offer returns to secure a company's long-term existence.

SPIEGEL: It seems only a matter of time before financial investors
will be launching takeover attempts against companies listed on the
DAX. Do you already feel the hot breath of private equity and hedge
funds on the back of your neck?

Hambrecht: No one has come close enough yet to scare me. But it is of
course possible for a financial investor to set his sights on a world
market leader like BASF.

SPIEGEL: Wouldn't BASF be an especially attractive target for asset
stripping? Individual divisions, such as natural gas and petroleum
producer Wintershall, could easily be spun off and sold.

Hambrecht: You'd have to ask the investors. But the companies that are
most at risk are those with weak management, which is certainly not
the case with our company. On the contrary, I don't believe a team
exists that could manage BASF as well as we have.

SPIEGEL: Mr. Hambrecht, thank you for taking the time to speak with
us.

Interview conducted by Sebastian Ramspeck and Armin Mahler.





--
There may come a time when the CO2 police will wander the earth telling
the poor and the dispossed how many dung chips they can put on their
cook fires. -- Captain Compassion.

Wherever I go it will be well with me, for it was well with me here, not
on account of the place, but of my judgments which I shall carry away
with me, for no one can deprive me of these; on the contrary, they alone
are my property, and cannot be taken away, and to possess them suffices
me wherever I am or whatever I do. -- EPICTETUS

Celibacy in healthy human beings is a form of
insanity. -- Captain Compassion

"Civilization is the interval between Ice Ages." -- Will Durant.

Joseph R. Darancette
daranc@NOSPAMcharter.net

SPIEGEL ONLINE - June 27, 2007, 05:50 PM
URL:
http://www.spiegel.de/international/business/0,1518,491075,00.html

SPIEGEL INTERVIEW WITH BASF CEO JÜRGEN HAMBRECHT

'I Have a Problem with the Term Climate Change'

Jürgen Hambrecht is CEO of the largest chemical company in the world,
BASF.

SPIEGEL ONLINE - June 27, 2007, 05:50 PM
URL:
http://www.spiegel.de/international/business/0,1518,491075,00.html

SPIEGEL INTERVIEW WITH BASF CEO JÜRGEN HAMBRECHT

'I Have a Problem with the Term Climate Change'

Jürgen Hambrecht is CEO of the largest chemical company in the world