No Country Is More 'Green By Design'.(Cover Story: Who Is the Greenest of Them All?; SPECIAL REPORT)(Germany)

Byline: Stefan Theil

Not long ago Berlin resisted every push to clean up its act. Now it's showing the way.

Germany ranks 13th, but it was quick to turn its economy green.

It is hard to imagine that not so long ago, Germany was one of Europe's worst environmental laggards. In the 1970s, the river Rhine was a stinking cesspool, poisoned by heavy industry. German negotiators said nein to all efforts by the United States and the Scandinavian countries to cut sulfur-dioxide emissions or ban ozone-depleting hydrochlorofluorocarbons. Industry lobbyists and labor unions argued that regulation would kill jobs--and called for yet more research to prove the effects of pollution. (Sound familiar?) It took a series of big environmental disasters in the 1980s--acid rain, Chernobyl, toxic spills in the Rhine--plus a burgeoning environmental movement and the world's first major Green party to put the heat on Germany's leaders. Amid a rapid change in the national mood, the country cleaned up its act.

Today, Germany may be the world's greenest country--and not just because salmon once again return to spawn in the Rhine. A few nations score better overall on Yale and Columbia's Environmental Performance Index (EPI), and Germany still lags in protecting habitat and in curbing gas-guzzling cars. But "among countries making themselves green by design, Germany is No. 1," says Yale's Daniel Esty.

Germany's massive turnaround goes far beyond its environmental cleanup, its decoupling of energy use from economic growth, and a surge in renewable power. More important, because of the weight of its economy and international clout, Germany has been setting standards in policy and technology that are making the world greener beyond its borders. As climate change and energy continue to drive the global economy, no country now seems better poised to profit.

The Germans' success at pushing a green agenda--first at home, then in the European Union, and now worldwide--stems from the decision to work in tandem with industry from the start, not against it. The country's first Environment minister--Klaus Topfer, a conservative, no less--formulated a blueprint in the 1980s that still holds today. Cleaner technology, Topfer saw, was a way to modernize Germany's metal-bending economy. "The idea was to create markets and businesses that profit from higher environmental standards," says Andreas Kraemer, director of the Ecologic Institute, a think tank in Berlin. "Another key was to plan long-term and give industry time to adapt." In time, steadily tightening standards on pollution, waste and recycling would add up to a radical overhaul of industry and the economy. The effect was massive pressure on German companies to use less energy and fewer resources. They became more competitive as a result.