Germany Sustainability Issues

The critical environmental and sustainability issues of Germany:

  1. Income Inequality, Poverty and Homelessness

According to a study published by The Institute of Economic and Social Research (WSI),the gap between the rich and the poor in Germany is growing, as more and more income is concentrated among the very rich, mainly due to higher income groups benefiting from increased capital and corporate income and from reductions of the top tax rate or the reform of inheritance tax, while poorer households faced additional hurdles from higher indirect taxes.

The poverty gap is the ratio by which the mean income of the poor falls below the poverty line. Researchers saw an increase of almost 30% in the poverty gap. According to the study, the median income in Germany in 2016 sat at €20,881 ($22,900) per year, or €1,740 ($1,909) per month, after taxes were deducted. From that figure, the poor were defined in the study as individuals making €1,000 or less per month. Meanwhile, the rich were considered individuals making more than €3,500 per month or above.

The study also observed the persistent and wide gap in income inequality between eastern and western Germany, but it noted that while wage disparity had a slight uptick in the west from 2015 to 2016, the opposite was true for eastern Germany. Although 284 of 324 districts in western Germany had average per-capita disposable income above €20,000, only 6 of 77 districts in eastern Germany did. The overall average for the whole of Germany was €23,295.

Around 678,000 people in Germany are without a permanent home, according to figures released by the Federal Association for Assistance to Homeless People (BAGW) on Tuesday. 22,000 children are among the homeless in Germany. One of the reason being that not enough houses are being built. The need lies between 80,000 and 100,000 new council flats every year, and another 100,000 new affordable apartments.

 

  1. Ageing Population and Low Fertility Rate 

At present, one in five Germans is over the age of 65. By 2060, it’s expected to be one in three. The main explanation for this demographic shift is that the so-called “”baby-boomers,”” born between 1955 and 1969, are reaching retirement age. Thanks to medical advancements and enhanced social protection, they’re likely to live longer than previous generations did, too. 

Despite having hit a four-decade high, at 1.59 babies per woman of child-bearing age, the German birth rate was still just shy of the EU average of 1.60. The rate statisticians say is needed to prevent the population from shrinking is 2.1.

The most feared outcomes are rising poverty among the elderly and an increase in the retirement age.

 

  1. Crumbling Infrastructure

Economists, business leaders and international organisations including the IMF are urging the government to abandon its mantra of balanced budgets and loosen the purse strings. By taking advantage of historically low borrowing costs, they argue, Germany could launch a state-driven investment drive that would fix its crumbling infrastructure and at the same time cushion the impact of a looming recession.

But in today’s Germany, the persistent bottlenecks in the system have led to a massive investment backlog that is proving almost impossible to clear. The money set aside by the federal government for investment has been rising steadily for years and now stands at €15 billion, or roughly 4 percent of the overall federal budget. But more often than not projects fail to make it off the drawing board. 

A special development fund for municipal investments contained €7 billion but as of mid-2019 only €1.7 billion had been drawn down, he said, while a €9bn fund for improving Germany’s digital infrastructure remained untapped.

The country’s telecommunications infrastructure lags behind that of other developed countries. Potholes and crumbling bridges show that parts of the transport network need urgent attention. A report by Germany’s Federal Highway Research Institute found that while only 12.4 percent of the country’s road bridges were in bad condition, just 12.5 percent were considered good. Schools and universities also have major infrastructure problems that need to be addressed immediately.

 

  1. Economic Problems and threat of Recession 

Economists worry that a combination of turmoil in Germany’s car making industry, the escalating trade war between the US and China and the prospect of a disruptive UK exit from the EU could drag the world’s fourth-largest economy into its first recession for more than six years — defined as two consecutive quarters of negative growth. Germany’s central bank has issued warning for the same. GDP for the three months ended June contracted 0.1% compared to the first quarter. 

A string of economic data releases laid bare the growing weakness in Germany’s export-heavy industrial heartland, which has long been the main motor of the country’s economic growth. German exports have fallen 8 percent in the past year, while industrial production has dropped 5.2 percent.

Several big German manufacturers have warned recently that the downturn is hitting their performance, including Continental, Bosch and Thyssenkrupp. 

For now, the weakness of growth in the German economy has not yet become a big issue in the public debate in Germany, mainly because of still rather strong employment data and low levels of unemployment.

 

  1. Consumption of Paper and Production of Packaging Waste

The average German uses more paper and cardboard than any other country in the G20. The growing online retail market is fueling paper consumption. Germany used 241.7 kilograms of paper per person last year. In second place was the US at 211 kilograms per person.

The use of paper packaging in particular has gone up considerably in Germany. In 1991, the average German used 70 kilograms of paper packaging. In 2018 that figure was 96.3 kilograms.

The figures also show that the use of recycled paper rose from 49% to 76% over the last 30 years. The German government and its agencies are another reason for the high paper consumption. They used 1.05 billion sheets of paper in 2018, a slight decline from 2015, when it used 1.15 billion sheets.

Timber forests equivalent to 40,000 football fields are necessary to satisfy Germany’s rate of paper consumption.

A 2005 study published on Paperwatch also called for reducing Germany’s paper consumption. The paper cited that demand for paper has serious consequences: illegally cut timber is employed, some of the last remaining primeval-forest areas of the world are being destroyed, indigenous people are deprived of their land and the subsistence of future generations is endangered. It further said that the industrial countries which comprise approximately one-fifth of the world’s population but consume more than 80 percent of the paper world-wide are responsible for the scenario. Also in Germany, the paper consumption has reached a level that is not compatible with sustainable development and global justice, it quoted. Less than 10 percent of the pulp being required to maintain our lavish use of paper, are manufactured in domestic factories from local timber, more than 90 percent however is being imported, it added.

According to a new report by the Federal Environment Agency, 18.7 million tonnes of packaging waste were generated in 2018 – 226.5 kilograms per person, an increase of three percent over the previous year. Private consumers constituted 47 percent of the waste, or 107 kilograms per capita.