Climate Friendly Materials Platform

Karsten Neuhoff (DIW Berlin) and Diana Quezada (Climate Strategies)

• Overview of mitigation options
• Possible set of policy instruments, and how they influence decisions (engage, improve economics, support innovation etc.)
• Outline for the analytic approach and discussion of the day

In this session we discussed individual policy instruments with the objective to assess:

• What experience has been gathered with the instrument – also in other sectors?
• How it influences decisions (engage, improve economics, support innovation etc.)?
• What mitigation options they can support?

The focus was on the following instruments:  Engagement instruments (e.g., networks, training, advice), Ecodesign, Standards, Contract for Differences, Public Procurement, Waste Management. We also discussed what are the policy options, in the absence of a global carbon pricing system, to deliver effective carbon prices while ensuring carbon leakage protection, and in particular focus on the role of: (i) Benchmark based charge on consumption of carbon intensive materials and (ii) Border adjustment.

 Opening comments: DIW Berlin team, Eugenie Joltreau (University Paris Dauphine)

In this session we first discussed criteria for good design of policy package for the material sector. These may include:

• Catalyzing private initiative so as (i) to realize sufficient initiative for transformation and (ii) to align private choices with long-term policy objectives.
• Supporting multiple mitigation options so as (i) to enhance political support and limit policy complexity and (ii) to enhance policy stability and flexibility.
• Subsidiarity so as (i) to enhance local ownership and (ii) to facilitate multiple learning experiences
• Institutional fit – building on existing policy and governance structure.

Based on these criteria we will discuss, if a subset of potential policy instruments can be sufficient to unlock individual mitigation options, in particular:

• What is the policy support required for the mitigation option?
• Does the outlined policy package address these needs?
  
  

Opening comments: Hugo Trappmann (Blechwarenfabrik Limburg GmbH), Moritz Mues (German Federal Ministry for the Environment), Manuela Ojan (HeidelbergCement)

Evaluation of policy instruments in an abstract space is difficult and often controversial. Therefore, in this session we wanted to test, whether in an (existing) policy package trade-offs between different policy instrument can be better assessed? We focused on three examples that have emerged in the preparation of the workshop:

• How to mandate resource efficient product design – reducing embodied emissions and improving recycling, repair and reuse? Two prominent – competing – approaches are extended producer responsibility and extension of the eco-design directive.
  
  • How to create effective carbon price in the short-term? Shadow carbon prices in green public procurement or national pilots for consumption charges / how could they complement each other?
  • How to make business as usual (BAU) not a viable perspective? Incumbent material producers are likely to be important for implementation of low-carbon options. What policy design will ensure that their stakeholders will consider BAU not a viable option – and therefore allow management to engage in a low-carbon strategy?

Opening comments: Paul Ekins (UCL Institute for Sustainable Resources), Manuel Haußner (University Erlangen-Nürnberg), Christopher Beauman (EBRD)

The purpose of policy packages is often not understood, explained and justified. This limits political effort in the implementation and as a result limiting visibility and credibility reduces the effect on firms. In this final session we aimed to answer the question of what can help to explain the logic of a policy package and to manage its implementation to support the portfolio of mitigation options? In particular, we discussed:

• Linkages of the policy mix with pathways to market.
• Linkages of policy instruments meeting funding requirements.
• The role of sub-targets to (i) track progress and manage implementation and (ii) create visibility and reduce policy risks for innovative mitigation actions.

Opening comments: Oliver Sartor (IDDRI), Arjan Geveke (BEIS, UK Government)