Development and justice through transformation: The Four Big ‘I’s

Implementing the Paris Agreement will demand a uniquely strenuous effort from the global community. If emissions remain at current levels, the global CO₂ budget for limiting global warming to 2°C will be exhausted within 20 years. If we are to keep global warming below the 2°C guard rail, emissions will have to be reduced to zero by 2070 at the latest. To limit the increase in the global temperature to 1.5°C, we will need zero emissions by 2050. This will only be achieved by fundamentally transforming energy systems and other high-emissions infrastructures and substantially changing citizens’ behaviour. There is a risk that some countries – in order to avoid a rapid phase-out of fossil energies – will engage in a massive expansion of nuclear energy and large-scale deployment of untested technologies such as carbon dioxide capture and storage (CCS, also in combination with bioenergy – BECCS), possibly supplemented by high-risk geoengineering measures, e.g. manipulation of the global radiation budget. The WBGU is proposing a much lower-risk alternative for preventing the global temperature from rising by more than 2°C. It recommends rapidly decarbonizing energy infrastructure, greatly accelerating the expansion and development of renewable energies, and effectively curtailing energy consumption. To bring about such a transformation, the WBGU is presenting a decadal carbon roadmap to plot the profound changes that will be necessary in coming decades. Its proposals range from effective CO₂ pricing and an end to fossil fuel subsidies (by 2020), denying licences for new vehicles with combustion engines (by 2030) and large-scale deployment of renewable energy technologies as well as energy storage and transport (by 2040), to complete decarbonization of the G20 economies (by 2050).

G20 countries are responsible for 82% of CO₂ emissions from fossil fuels, so the G20, with its formative influence on the world’s economy and politics, must play a leading role in implementing the 2030 Agenda and the Paris Agreement. The G20 countries should, for example, increase the reductions they announced within the framework of the UNFCCC to reconcile them with the goals agreed on in Paris. The WBGU also recommends that the G20 adopt the decadal carbon roadmap. Based on this roadmap, G20 countries should develop comprehensive and verifiable national decarbonization strategies for, inter alia, phasing out the use of fossil fuels by 2050 and preserving natural ecosystems, with their carbon stocks und sink functions. If we are to pursue this challenging path, the Four Big ‘I’s must become part of the G20 programme: a reorientation of Innovation to make it possible to develop economies and prosperity within the guard rails of the Earth system; a rapid, climate-friendly and resource-efficient modification of the global economy’s central Infrastructures; the creation of framework conditions for stimulating more Investment in the transformation towards sustainability; and linking these goals with the principle of social Inclusion, i.e. equity and participation, which should guide all these actions and is both a precondition and a goal of the societal transformation towards sustainability

The nations participating in the 2030 Agenda and the Paris Agreement will need to develop effective national policy instruments to implement the goals they have set. The WBGU recommends in particular that G20 countries establish transformative sovereign wealth funds, which we also call ‘future funds’. These could enable G20 countries to be more active in financial markets as stakeholders, with the goal of promoting socially responsible structural change to create a sustainable economic and social system. These future funds should draw their revenues from CO₂ taxes and emissions trading as well as from a generational component levied on estates. The investments made by the transformative sovereign wealth funds should be oriented towards climate change targets and the SDGs; profits should be used to advance equity and the common good.

G20 governments should become involved as pioneers in this area not only ‘at home’, but also at the international level, and help to strengthen cooperation and solve global problems. If correctly configured and strategically used, the Four Big ‘I’s of sustainability and climate policy could serve to leverage solutions to global political problems. First: A far-seeing climate and sustainability policy could become a modernization project for the global economy. It could open up opportunities for economic development by inspiring innovation and creating sustainable investment and employment prospects, and it could help channel investments into technologies, companies and infrastructures that will secure a better future in the long term. Second: Climate and sustainability policy could become an equity project at the national level and promote inclusion by making decarbonization strategies socially responsible, combating inequality and strengthening social cohesion. Third: Tackling shared sustainability and climate policy challenges could become a peace project, enabling countries that otherwise do not cooperate, or are in open conflict with one another, to establish mutual trust. This would require inclusion at the global level to defuse conflicts over resources and their distribution and to counteract civil wars and mass migration.