Climate Action How industries can reduce global greenhouse gas emissions

Editor: Rosemarie Stahl

A new report from the World Bank Group, Clasp and Carbon Trust aims at informing industries about the role they can play in the global effort to tackle climate change. According to the report it is important to inform about solutions that work without affecting the companies’ competitiveness.

One third of direct and indirect global greenhouse gas emissions are created by industries, such as aluminium and chemical manufacturing.
One third of direct and indirect global greenhouse gas emissions are created by industries, such as aluminium and chemical manufacturing.
(Bild: Pixabay)

The report “A Greener Path to Competitiveness: Policies for Climate Action in Industries and Products” promotes greener, more climate-friendly technologies and strategies, which are necessary in the industry, which contributes more than one third of global greenhouse gases. Certain sectors, including iron and steel, cement, chemical, and aluminum manufacturing, are the primary contributors to climate change due to their inherent requirement for large amounts of energy.

“The unprecedented task presented at COP 21 in Paris to decarbonize globally introduces challenges but also enormous opportunities for industries as they seek a greener path to production while remaining globally competitive. Now is the time for companies and countries to act.” said Cecile Fruman, Director of the Trade & Competitiveness Global Practice at the World Bank Group.

New technologies can be critical to industry efforts to reduce greenhouse gases, but aren’t always cost effective. Technology solutions must be complemented by institutional frameworks and policies that counter competitive disadvantages.

“If we are to meet our global ambitions on climate change then we need a clean revolution in industrial production. Taking the long view, there is an incredibly strong business case for the transition to a low carbon economy. Many of the technologies we need to achieve this already exist today. But to capture this value, it is imperative that governments and energy intensive sectors work together to put in place a market framework that will help to maintain competitiveness at the same time as delivering the step change in carbon emissions from industrial output which is both possible and necessary,” said Michael Rea, Chief Operating Officer at the Carbon Trust.

60 percent of unused savings

The report recommends focusing on cost-effective and energy efficient options that have short payback periods, low transaction costs, and easy-to-access finance. An estimated 60 percent of future energy efficiency savings can still be exploited, even though many leading companies have already implemented energy efficient solutions.

To decrease greenhouse gas emissions while remaining competitive, the report calls on industry, government and consumers to also focus on technologies and interventions that are on the cusp of cost-effectiveness. Energy efficiency standards and labeling are one solution to reduce energy usage and greenhouse gas emissions. According to the report, adopting the most stringent minimum energy performance standard could reduce 9% of the global total energy consumption.

The report also suggests that governments should pursue policies such as removing distorting production subsidies or trade tariffs and putting a comprehensive price on carbon. Technology incentive programs can also be developed to find solutions that currently have a weak business case, for example, in the adoption of large-scale and capital-intensive carbon abatement technologies.

“The report shows that appliance energy efficiency policies can simultaneously reduce energy use and improve competition,” said Christine Egan, Executive Director and CEO at Clasp. “Clasp knows from years of experience that these policies are powerful tools for reducing energy use and greenhouse gas emissions and, therefore, are an essential part of any climate change mitigation strategy.”

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