Climate Change and Environmental Issues

T20 Recommendations Report

Draft // Work in Progress

Compiled by: Katharina Lima de Miranda (katharina.miranda@ifw-kiel.de), Juliane Stein-Zalai

(juliane.stein-zalai@ifw-kiel.de) and Dennis Görlich (dennis.goerlich@ifw-kiel.de)

Version: March 26, 2019

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Content

1. Overarching narrative ..................................................................................... 3

2. G20 Commitments and Initiatives ............................................................... 4

3. TF 3: Climate Change and Environmental Issues .................................... 5

Task Force Description (T20 Japan 2019) ........................................................................................ 5

A. Economic system and rules to establish decarbonized and climate resilient society ................. 5

Challenge ......................................................................................................................................... 5

Visions.............................................................................................................................................. 5

Policy Briefs / Literature .................................................................................................................. 6

Implementations ............................................................................................................................. 8

B. Sustainable community development using local resources & Improvement of value of land as

stock .................................................................................................................................................... 9

Challenge ......................................................................................................................................... 9

Policy Briefs / Literature .................................................................................................................. 9

Implementations ........................................................................................................................... 11

C. Circular Economy ....................................................................................................................... 12

Challenge ....................................................................................................................................... 12

Policy Briefs / Literature ................................................................................................................ 12

Implementations ........................................................................................................................... 15

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1. Overarching narrative

-- to be completed and revised --

"Thus far, our underlying narrative was “recoupling”: Social prosperity (societal wellbeing) can

become decoupled from economic prosperity (GDP); the G20 should focus on social prosperity;

and the G20 should seek to recouple economic prosperity with social prosperity.

We are now in the process of evolving this narrative in the direction of “global paradigm

change”: The existing global paradigm – the interlocking economic, social, political and

environmental systems – are not sustainable; the G20 should promote global paradigm change

by promoting fundamental and consonant economic, social, political and environmental changes

to address major global challenges, from climate change to financial crises."

The ultimate goal of the policy recommendations in this report is to serve the people and

recouple economic and societal progress and to seek resilient and equitable societies.

An efficient and responsible use of resources, including establishing increased efforts in

recycling and circular economy, will be key.

It is necessary to recognize that the economic, social, political and environmental

systems are interconnected. Thus environmental policies need to take societal

challenges, like inequalities within the country or fear of the population, in order to be

successful in the long run.

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2. G20 Commitments and Initiatives

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3. TF 3: Climate Change and Environmental Issues

Task Force Description (T20 Japan 2019)

The international community adopted the Paris Agreement and the 2030 Agenda for the SDGs in

2015. Today, the priority is how to implement these commitments.

Climate change is an issue the international community must address collectively, and the steadfast

implementation of the Paris Agreement is urgently needed. Since climate change is accelerating

more quickly than expected, we must swiftly take more robust action. At the same time, investment

in sustainable energy sources, clean energy technologies and infrastructure brings opportunities for

innovation, sustainable and inclusive growth, competitiveness, and job creation. Moreover,

addressing climate change is a critical pillar for achieving the Sustainable Development Goals.

Based on these ideas, accelerating the virtuous cycle of environmental protection and economic

growth are urgently required.

Source: https://t20japan.org/task-forces/climate-and-environment/

A. Economic system and rules to establish decarbonized and climate

resilient society

Challenge

Following the description of PB: Strengthened actions towards decarbonised and climate resilient

society (IGES):

The importance of climate fragility and climate security, and policies to address these issues

Designing of rules under Paris Agreement to strengthen voluntary activities to address

climate change by each country

Wider application and strengthening of carbon pricing

Decarbonised life style compatible with 1.5 degree target

Background: Decarbonisation required by the Paris Agreement calls for substantial mitigation actions

at all levels. This policy brief will address this issue at international level (rules under the Paris

Agreement), at individual level (decarbonised life style), and in terms of market rule (carbon pricing).

In addition, the importance of climate fragility and climate security is introduced in the context of

climate resilient society.

Visions

The Tipping Point: How the G20 Can Lead the Transition to a Prosperous Clean Energy Economy

G20 Insights Vision Brief 2018

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Eric D. Beinhocker (Oxford Martin School (OMS))

J. Doyne Farmer (Oxford Martin School (OMS))

Cameron Hepburn (Oxford Martin School (OMS))

The world is approaching an historic tipping point. The cost of clean energy technologies such as

solar, wind, and batteries are declining rapidly while their performance increases. These technologies

have already become less expensive than new-build fossil fuel power generation in many regions and

applications. In the coming 10-20 years it is highly likely that clean energy technologies will become

less expensive than coal, oil, and gas electricity generation for almost all regions and all applications.

When this tipping point is reached, clean, modern, cheap energy infrastructure will rapidly replace

dirty fossil infrastructure. While this is good news, unfortunately this tipping point is not going to

happen soon enough to prevent dangerous levels of climate change. Electricity generating

infrastructure has a long life, typically 20-40 years. The generating infrastructure the world has today

already has enough “baked in” future emissions to exceed the 1.5-2°C warming limit committed to in

the Paris Agreement. Any new fossil infrastructure being built or planned today risks not only

contributing to warming above the Paris threshold, but also being made obsolete before the end of

its operating life by rapidly advancing clean energy technologies. G20 nations should take the lead in

policies that accelerate improvements in the cost and performance of clean energy technologies,

eliminate subsidies and support for fossil fuels, and bring forward the clean energy tipping point.

Such policies will bring significant economic benefits to citizens, reduce the risk of being stranded

with costly, polluting, fossil infrastructure, and contribute to global efforts to mitigate climate

change.

Policy Briefs / Literature

Fostering sustainable global growth through green finance – what role for the G20?

G20Insights PB 2017

Kathrin Berensmann (German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE))

Ulrich Volz (SOAS University of London)

Céline Bak (Centre for International Governance Innovation (CIGI))

Amar Bhattacharya (The Brookings Institution)

Tian Huifang (Institute of World Economics and Politics at the Chinese Academy of Social Sciences)

Gerd Leipold (Climate Transparency)

Lawrence MacDonald (World Resources Institute)

Hannah Schindler (Climate Transparency)

Isabella Alloisio (Fondazione Eni Enrico Mattei (FEEM))

Qingqing Yang (Renmin University of China (RDCY))

For a 2°C compatible pathway, the G20 countries face an enormous investment gap. However, public

spending will not suffice to finance the green transformation. In fact, a significant amount of private

investment is required. It is therefore important to align the financial system – banking, capital

markets and insurance – with sustainable development. To increase green investments and align

financial markets with sustainable development, the G20 should 1) promote the standardization of

green finance practices, 2) enhance the transparency of information by promoting disclosure

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standards for carbon and environmental risks; 3) support market development for green investments

at a global level; and 4) support developing countries in developing and implementing national

sustainable finance roadmaps.

Global Carbon Pricing - The Path to Climate Cooperation

Book, June 2017

Richard N. Cooper, International Economics at Harvard University

Peter Cramton, University of Cologne, University of Maryland

Ottmar Edenhofer Economics of Climate Change at the TU Berlin

Christian Gollier Toulouse School of Economics

Éloi Laurent OFCE

David JC MacKa Department of Engineering at the University of Cambridge

William Nordhaus Economics at Yale University

Axel Ockenfels Economics at the University of Cologne

Ian Parry IMF’s Fiscal Affairs Department

Joseph E. Stiglitz Columbia University

Steven Stoft Lawrence Berkeley National Laboratory

Jean Tirole Toulouse School of Economics

Martin L. Weitzman Economics at Harvard University

Why the traditional “pledge and review” climate agreements have failed, and how carbon pricing,

based on trust and reciprocity, could succeed. (almost anything), subject to (unenforced) review. This

approach ignores everything we know about human cooperation. In this book, leading economists

describe an alternate model for climate agreements, drawing on the work of the late Nobel laureate

Elinor Ostrom and others. They show that a “common commitment” scheme is more effective than

an “individual commitment” scheme; the latter depends on altruism while the former involves

reciprocity (“we will if you will”). The contributors propose that global carbon pricing is the best

candidate for a reciprocal common commitment in climate negotiations. Each country would commit

to placing charges on carbon emissions sufficient to match an agreed global price formula. The

contributors show that carbon pricing would facilitate negotiations and enforcement, improve

efficiency and flexibility, and make other climate policies more effective. Additionally, they analyze

the failings of the 2015 Paris climate conference.

Policy options for a socially balanced climate policy

G20 Insights, PB 2017

Thang Dao Nguyen (Mercator Research Institute on Global Commons and Climate Change (MCC))

Ottmar Edenhofer (Mercator Research Institute on Global Commons and Climate Change (MCC))

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Gianluca Grimalda (Kiel Institute for the World Economy (IfW))

Michael Jakob (Mercator Research Institute on Global Commons and Climate Change (MCC))

David Klenert (Mercator Research Institute on Global Commons and Climate Change (MCC))

Gregor Schwerhoff (Mercator Research Institute on Global Commons and Climate Change (MCC))

Jan Siegmeier (Mercator Research Institute on Global Commons and Climate Change (MCC))

Climate policies, including removing fossil subsidies or imposing carbon prices, can be designed in a

way that is both efficient in addressing climate change and results in a fair distribution of the

associated costs.

Challenge

The objective of climate policy is to mitigate anthropogenic climate change. In most cases the cost

burden of such climate policies does not fall evenly on households. Depending on the carbon

intensity of consumption for different income groups, the direct effect of climate policy can be

regressive, neutral or progressive, meaning that low-income households would pay more than

proportionally, the same, or less than proportionally, respectively, than high-income households. In

developed countries, empirical evidence indicates that climate policy would in many cases be

regressive. This implies that low-income households would lose a higher share of their consumption

than high-income households. To avoid climate policy design to be regressive, a comprehensive

approach can neutralize these distributional effects and turn such a policy into being progressive.

Carbon pricing, in the form of a carbon tax or an emission trading system, is widely recommended by

economists as a particularly suitable form of climate policy. Since almost all G20 members have

started implementing carbon pricing or are considering it, this policy brief uses carbon prices as a

leading example.

Implementations

-- to be added –

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B. Sustainable community development using local resources &

Improvement of value of land as stock

Challenge

Following the description of PB: Revitalising local economies in harmony with Nature (IGES)

Revitalization of local economy through utilization of local natural resources

Application of New Inclusive Wealth Indicator & Natural Capital Accounts

Background: This policy brief highlights the way to improve the value of land as a stock and to

establish Regional CES utilising local natural resources.

Following the description of PB: Potential of various renewable energy and its introduction policy in

Southeast Asia (MRI)

Promoting small-scale renewable energy generation, with possible emphasis on small-scale

hydropower. The region of focus is Southeast Asia.

o Analysis of current status

o Impediments towards development

o Possible way forward (e.g. financing methods, institutional improvement and other

issues which facilitate introduction of small-scale renewables)

Background: Due to technological progress in the past decade, renewable energy has become the

cheapest energy source. Given the geographical conditions of Southeast Asia, renewable energy is

the optimal energy resource, economically and environmentally. On the other hand, currently the

proportion of renewable energy to total energy consumption is far below the global average. The

substantial increase in energy that will be needed in the future should be covered by renewable

energy. Hydropower can complement the instability of solar and wind power, and furthermore small

hydropower generation can avoid side effects accompanying the construction of a huge dam. It is

hypothesized that community-based small scale energy systems centered on small hydropower need

to be introduced.

Policy Briefs / Literature

Key Policy Actions for Sustainable Land and Water Use to Serve People

G20 Insights PB 2017

Ashok Gulati (Indian Council for Research on International Economic Relations (ICRIER))

Homi Kharas (The Brookings Institution)

Joachim von Braun (Center for Development Research (ZEF))

To achieve food security for all, new resource policies for sustainable land and water use are needed.

Land, water, and energy need to be considered jointly in policies, not in isolation. G20 countries’

policy makers, corporate and civil society actors, and those of other countries should act in

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coordinated fashion in the following four policy areas on which specific proposals are made in this

T20 Brief: 1) focusing land, and water resource policies on human wellbeing, 2) investing in and

sharing water, agricultural and energy innovations, 3) making wider use of digital opportunities for

sustainable agriculture, and 4) re-designing global governance of agriculture and food.

Figure 1. The Nexus linkages

Inclusive wealth, total factor productivity, and sustainability: an empirical analysis

Journal Article: Sato, M., Tanaka, K. & Managi, S. Environ Econ Policy Stud (2018) 20: 741. https://doi.org/10.1007/s10018-

018-0213-1

Masayuki Sato (Graduate School of Human Development and Environment, Kobe University, Japan)

Kenta Tanaka (Department of Economics, Musashi University Tokyo, Japan)

Shunsuke Managi (Graduate School of Engineering, Kyushu University Fukuoka, Japan)

Sustainability can be assessed by non-declining inclusive wealth, which refers to man-made capital,

human capital, natural capital, and all other types of capital that are sources of human well-being. As

the previous studies—including Arrow et al. (J Econ Perspect 18(3):147–172, 2004) and the Inclusive

Wealth Report (2012 and 2014)—suggest, total factor productivity (TFP) is one determinant of

inclusive wealth, because it is related to the resource allocation mechanism. TFP is one important

component of sustainability. When considering the contribution of TFP toward inclusive wealth,

attention needs to be paid to the improvement in the usage of human and natural capital as well as

the traditional man-made capital. However, in the previous studies, only man-made capital and labor

force have been considered. This study extends current measures of sustainability by capturing the

efficient utilization of natural resources, giving us inclusive wealth-based TFP. Therefore, in contrast

to conventional TFP measures, we consider both human and natural capital in addition to man-made

capital. We examine 43 countries and find that a new indicator which asserts countries previously

considered sustainable by earlier studies such as Arrow et al. (J Econ Perspect 18(3):147–

172, 2004) as no longer sustainable.

Inclusive Wealth Project

http://www.managi-lab.com/iwp/iwp_abt.html

Partha Dasgupta, Economics at Cambridge University

Shunsuke Managi, Kyushu University, Japan

Harold Mooney, Stanford University

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Anantha Duraiappah, UNESCO MGIEP

Barbara Barbara Fraumeni, University of Southern Maine, United States

Hamid Zakri, Science Advisor to the Prime Minister of Malaysia

Kazuhiko Takeuchi, UNU

Pushpam Kumar, UNEP

Stig Johansson, World Bank

Agnès Soucat, WHO

Arico Salvatore, UNESCO

The Inclusive Wealth Index presents the big picture: measuring countries wealth in terms of progress,

well-being and long-term sustainability. It provides important insights into long-term economic

growth and human well-being. The inclusive wealth index measures the wealth of nations by carrying

out a comprehensive analysis of a country's productive base. That is, it measures all of the assets

from which human well-being is derived, including manufactured, human and natural capital. In this,

it measures a nation's capacity to create and maintain human well-being over time.

Climate Change Mitigation Pathways for Southeast Asia: CO2 Emissions Reduction Policies for the

Energy and Transport Sectors.

In Sustainability 2017, 9(7), 1160; https://doi.org/10.3390/su9071160

Lewis McLeod Fulton (Institute of Transportation Studies,University of California, Davis)

Alvin Mejia (Climate Action Implementation Facility (CAIF), Berlin 10439, Germany)

Magdala Satt Arioli (The University of Sydney Business School, University of Sydney & Universidade Federal do Rio

Grande do Sul)

Kathleen Dematera (Clean Air Asia, Philippines)

Oliver Lah (Climate Action Implementation Facility (CAIF), Germany & Mobility and International Cooperation,

Wuppertal Institute for Climate, Environment and Energy, Germany)

As of June 2017, 150 countries have ratified the Paris Climate Agreement. This agreement calls for,

among other things, strong reductions in CO2 emissions by 2030 and beyond. This paper reviews the

Nationally Determined Contribution (NDCs) plans of six Association of Southeast Asian Nations

(ASEAN) countries and compares their current and projected future CO2 levels across sectors, and

their stated targets in the context of their economic and demographic situations. This comparison

reveals wide variations in the types of targets, with the “ambition” level changing as the perspective

changes from total CO2 to CO2/capita and per unit gross domestic product (GDP). We also review

national plans as stated in NDCs and find that while there are many types of policies listed, few are

quantified and no attempts are made to score individual or groups of policies for their likelihood in

achieving stated targets. We conclude that more analysis is needed to better understand the possible

impacts of current policies and plans on CO2 emissions, and whether current plans are adequate to

hit targets. Considerations on better aligning targets are also provided.

Implementations

-- to be added –

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C. Circular Economy

Challenge

Following the description of PB: Resource efficiency and circular economy at multiple levels (IGES)

Acceleration of industrial symbiosis

Reduction of resource throughputs through servicizing and sharing economy

Establishment of appropriate circulation system of plastics in land area, including in

particular in developing countries and strengthening of domestic recycling system

Background: This policy brief introduces actions towards resource efficiency improvement and

establishment of circular economy at various levels. It also discusses appropriate circulation system

of plastics to address marine plastic waste problem.

Based on existing policy briefs

innovate the entire chain of production, consumption, distribution and recovery of materials

and energy according to a cradle to cradle vision

Successfully manage climate change and foster sustainable global growth the G20 need to

implement a sustainability agenda both at the national and international level

Policy Briefs / Literature

The contribution G20 governments can make to support the circular economy

G20 Insights PB 2017

Vasileios Rizos (CEPS)

Arno Behrens (CEPS)

Eleanor Drabik (CEPS)

In recent years the circular economy has received increasing attention worldwide due to, inter alia,

the recognition that security of supply of resources and environmental sustainability are crucial for

the prosperity of countries and businesses. G20 countries should consider developing frameworks

that enhance the circular economy and more generally sustainable production and consumption

modes. In this context, they should 1) integrate the circular economy into discussions about

implementing the 2030 Agenda for Sustainable Development and the Paris Agreement, 2) work

towards agreed terminologies for circular economy products and processes, 3) support demand for

circular economy products and services, 4) support transparency across global supply chains, 5)

facilitate financing for establishing circular supply chains and 6) proactively address the transition

issues.

Circular economy measures to keep plastics and their value in the economy, avoid waste and

reduce marine litter

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G20 Insights PB 2017

Patrick ten Brink (Institute for European Environmental Policy (IEEP))

François Galgani (Ifremer)

Heather Leslie (Vrije Universiteit Amsterdam)

Michiel De Smet (Ellen MacArthur Foundation)

Jean-Pierre Schweitzer (Institute for European Environmental Policy (IEEP))

Emma Watkins (Institute for European Environmental Policy (IEEP))

We live in the plastic age (the “plasticene”), producing over 300 million tonnes (mt) of plastic every

year globally, 5-15 mt of which flow into already polluted oceans. Plastic remains a key material in

the global economy, but low rates of collection, reuse and recycling, emissions of microplastic from

product wear and tear, and often insufficient disposal measures are leading to far-reaching

environmental, health, social and economic impacts. The costs of inaction are unacceptably high.

Globally there is a growing recognition of the need to address marine litter and rethink our approach

to plastics and plastic packaging within the economy. Measures that enable a transition to a circular

economy can avoid waste and reduce marine litter, and contribute to keeping plastics and their value

in the economy.

Better Products By Design

G20 Insights PB 2017

Dustin Benton (Green Alliance)

Simon Wilson (Green Alliance)

Our analysis of three products (Smartphones, Washing machines, Solar Panels) reveals how simple

problems that frustrate consumers and waste resources could be easily fixed with new product

standards for repairability and durability. None of the solutions require new technology or business

models, just market rules that keep manufacturers competing over quality.

Leading economies should set ecodesign standards to deliver better products. The G20 can build on

its approach to Energy Efficiency to promote resource efficiency and the circular economy, including

measures to encourage better design.

Exploring environmental and economic costs and benefits of a circular economy approach to the

construction and demolition sector. A literature review

In Journal of Cleaner Production 178 · November 2017, https://doi.org/10.1016/j.jclepro.2017.11.207

Patrizia Ghisellini - University of Bologna

Maddalena Ripa - Autonomous University of Barcelona

Sergio Ulgiati - Parthenope University of Naples

Circular economy (CE) as a new model of economic development promotes the maximum

reuse/recycling of materials, goods and components in order to decrease waste generation to the

largest possible extent. It aims to innovate the entire chain of production, consumption, distribution

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and recovery of materials and energy according to a cradle to cradle vision. The awareness of

increasing constraints on the availability of resources as well as the increasing demand for access to

welfare and wellbeing by developing countries and social groups make it evident the need for new

economic models capable to improve the efficiency and effectiveness of resource use. In the last two

decades a growing literature addressed the environmental and economic impacts of construction

and demolition (C&D) sectors, with special focus on the production and management of its waste

materials. This study reviews and organizes the recent literature within the framework of the CE to

explore how its key principles (Reduce, Reuse, and Recycle) apply to the management of C&D waste

(C&DW). The reviewed literature mainly focuses on changes of environmental impacts as a

consequence of CE implementation. Impacts have been mainly quantified by means of the Life Cycle

Assessment (LCA) approach, under the adoption of different boundaries of analysis, although other

economic and biophysical approaches were also applied to a minor extent. The final goal of this study

is evaluating if the adoption of the CE framework is environmentally and economically sustainable,

given that the recovery of waste materials requires investments of resources. Different type of

barriers (economic, political, legislative, informative and managerial) as well as solutions and success

factors for implementing an effective management of C&DW within a circular framework are also

pointed out. Results show that in most cases the reuse/recycling of C&DW at the end-of-life of a

building as well as the production of recycled products provide environmental and economic

benefits. Nevertheless, the environmental and economic sustainability of CE framework is very site

specific and depends on several factors such as the type of material, building elements, transport

distances, economic and political context. Finally, several directions for future research have been

proposed: increased LCA modelling for sustainability evaluation, a wider development of cleaner

production strategies focused on circular design, and finally the adoption of a comprehensive

accounting of input and output flows, in order to assign appropriate weights to flows and benefits

that are most often disregarded.

Technical efficiency measures of industrial symbiosis networks using enterprise input-output

analysis

In International journal of production economics, Volume 183, Part A, January 2017, Pages 273-286,

https://doi.org/10.1016/j.ijpe.2016.11.003

Luca Fraccascia (Department of Mechanics, Mathematics and Management, Politecnico di Bari)

Vito Albino - Department of Mechanics, Mathematics and Management, Politecnico di Bari

Claudio A. Garavelli (Department of Mechanics, Mathematics and Management , Politecnico di Bari)

An important challenge that firms should be able to tackle regards the mitigation of the

environmental impact of their production processes avoiding additional costs. Using industrial

symbiosis (IS), two different firms can obtain mutual environmental and economic benefits, at the

same time, exchanging wastes for primary inputs. Industrial symbiosis networks (ISNs), i.e. networks

of production processes exchanging wastes among them, are thus emerging and efficiency measures

are needed to be defined and investigated, in order to drive the ISN design and development. In this

paper, we develop the concept of technical exchange efficiency of ISNs and develop a measure of

such an efficiency. This measure is computed by using an input-output approach at the enterprise

level, modelling symbiotic flows within ISNs. A case example is discussed in order to show the

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practical applications of technical exchange efficiency of ISNs. In particular, technical exchange

efficiency of ISNs can be useful in order to drive the development of existing ISNs and to design new

industrial systems exploiting the IS approach.

Implementations

-- to be added –