Gary Litman, Vice-President of Global Initiatives, participated in the G20 official workshop on resource efficiency convened by the German government in Berlin on March 15-18. The G20 is the only credible forum where resource extracting countries can talk to major consumers about industrial policies, and it intends to have a multi-year engagement to coordinate national policies. This work will be continued by the next president of the G20, Argentina.
The U.S. Chamber was the only business association invited to speak at the government session. Below you will find the key takeaways and essential background.
Key Take-Aways:
- Every major economy is tweaking its industrial policy to stimulate more efficient manufacturing, consumption and logistics. U.S. companies will be confronted by these demands globally if not domestically, and business stands to benefit from asserting the high quality of our production and business methods compared to global competitors and in the eyes of both policy-makers and consumers.
- Incentives are provided through preferences in public procurement, mandatory and voluntary targets, tax preferences, specific performance and reporting requirements, concessional financing and pay-as-you waste schemes.
- While many U.S. providers of efficient equipment and solutions are highly competitive, our corporations as a whole are perceived as inflicting an outsize cost on environment through the scale of U.S. global value chains, consumption-driven economy, and an inconsistent environmental record.
- Each government has its own political imperative that fits this agenda item: competitiveness drive (Germany, Japan, Turkey, UK), health impacts of pollution and trade barriers (China, Russia), economic diversification (Russia, Saudi Arabia), development impact (India, Argentina), domestic consumer pressure (Australia, EU, Canada), etc.
- In many countries, resource efficiency falls in the purview of the Ministry of Economy rather than the environmental agency. This makes engagement through the G20 more effective as it allows for access to policy makers with a broad remit.
- Labor unions see a positive jobs story if governments drive efficiency by taxing labor less - and natural resources more - encouraging investment in human capital. Their slogan is "There are No Jobs on a Dead Planet."
- The OECD is looking at trade aspects of resource efficiency needs. It proposes lifting restrictions on the experts of secondary raw materials for recycling.
Background
Unlike energy, resources like land, water, and metals, are patently finite and can become a limiting factor for economic growth. As mentioned above, the G20 will serve as the only credible forum where resource extracting countries talk to major consumers about industrial policies. This meeting was the beginning of the process to identify positions, while the next step in the discussion will likely focus more on incentives via "green finance," procurement, and infrastructure. The next opportunity to continue this dialogue will be the G7 Environmental Ministerial June 11-12 in Bologna, Italy. The G20 Summit in July will include resource efficiency in its official communique.
The U.S. Chamber, along with other B7 leaders, helped develop the International Workshop on Resource Efficiency, which aims to inform G7 and G20 policy-makers of the forward trends within industries and global business experiences toward promoting resource efficiency. This supports the development of an integrated international policy framework that benefits from good practices in resource efficiency. Chamber Chairman John Hopkins will speak at this conference this week. Please click here to view the agenda.
We will be engaging more in the resource efficiency space this year. If you are interested in joining this initiative, please contact Gary Litman at glitman@uschamber.com.
