Strategic Partner

Dr. Kurt Bock

BASF SE–CEO and B20 Taskforce Chair

Implementing Paris: Paving the Way For a Climate-Friendly, Innovative World Economy

Climate change is a reality that we must acknowledge and address. The Paris Agreement underscores the commitment of the global community to limit global warming to less than 2°C compared to pre-industrial levels. While the Agreement lays out essential goals, we must ensure that these goals are successfully implemented. This will not be easy. We will need to change the way we produce and consume energy across all areas of our economy, while also ensuring competitiveness, economic growth and job creation. Effective global climate protection will require innovation that can only be achieved by a competitive industry driving research and development aimed at delivering energy-efficient products and processes.

We need to think and act globally—now more than ever. The G20 members account for about 80 percent of global emissions and are therefore key players in reducing CO2 emissions. While the G20 cannot issue binding international rules, it can play an important role in setting the global agenda and providing much-needed leadership and guidance. Working together, the G20 can facilitate the transition to a low-carbon, energy and resource-efficient global economy. The B20 stands ready to support these efforts, and has set up a dedicated task force for energy, climate and resource efficiency, representing over 90 businesses from more than 20 countries and diverse economic sectors.

In its final report B20 identifies global carbon pricing as key for implementing the Paris Agreement. An essential step in supporting the UN Framework on Climate Change (UNFCCC) is to develop effective measures that states can use to collect data on emissions, mitigation and actions. This information provides the basis for international review and analysis. Common standards and transparency are important not only to ensure that all parties put forward their best efforts but also for carbon pricing.

We therefore propose a G20 Carbon Pricing Platform to establish operational rules and modalities for international carbon pricing. Member States can also use the platform to share good practices on explicit and implicit carbon pricing policy options and to explore possibilities for bilateral or multilateral collaborations that can converge into larger international carbon pricing systems over time. Furthermore, the platform represents a perfect forum to share best practices for the use of revenues from carbon pricing and for the redirection of inefficient fossil fuel subsidies. As such, G20 members should address the risk of carbon leakage and aim to ensure an energy transition which avoids competitive distortions and benefits all.

Economic growth has lifted billions of people out of poverty and is indispensable to fulfill the 2030 Agenda and its Sustainable Development Goals (SDGs). At the same time, economic growth and a growing world population are increasing the stress on ecosystems and on natural resources that are already scarce today, such as agricultural land, terrestrial and marine wild-life, water and minerals. Meeting future demand for reliable, affordable and sustainable energy will require significant and timely investment in a resource-efficient and climate-friendly infrastructure. The accelerating pace of innovation is transforming most industry sectors and offering opportunities and solutions to drive the transition toward a sustainable world economy. The business sector has already developed innovative solutions that are driving more resource-efficient and lifecycle-oriented production processes. It is therefore a good time for the G20 to put resource efficiency and lifecycle-based economic thinking on its agenda, to discuss its potential, and initiate formats for best practice exchange.

The B20 views and recommendations are shared. In a unique initiative, B20, C(ivil) 20 and T(hink tank)20 have reached out to the G20 governments in a joint statement on the elements of a sustainable energy transition. The statement asks the G20 governments to take the lead in implementing the Paris agreement, to establish a global carbon pricing mechanism and phase out (inefficient) fossil fuel subsidies as well as to enable financial markets to deliver on sustainable development.

The G20 members have the necessary capacities to drive the transition toward a sustainable world economy and should take the lead in developing policies that leverage the potential of business to innovate and invest. By cooperating with international and regional organizations and standard-setting bodies, the G20 can make its messages and decisions heard and drive implementation, also in non- G20 countries. This is an opportunity we cannot afford to miss.

EFFECTIVE GLOBAL CLIMATE PROTECTION WILL REQUIRE INNOVATION THAT CAN ONLY BE ACHIEVED BY A COMPETITIVE INDUSTRY DRIVING RE-SEARCHAND DEVELOPMENT AIMED AT DELIVERING.

Dr. Kurt Bock chairs the B20-Taskforce on Energy, Climate & Resource Efficiency Leadership. Since 2011 Kurt Bock is Chairman of the Board of Executive Directors of BASF SE.