Resource Efficiency: Indispensable for Climate Protection Birgit Schwenk Head of Division “European and International Aspects of Resource Efficiency, Raw Materials Policy“ Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety

Material consumption: Doubled in last 25 years Severe impacts on environment Drivers: Population growth Growth in prosperity 2050: ? 9.3 to 9.7 billion people Business as usual scenario: Rise from 85 bio. tons today to 183 bio. tons in 2050 Source: Material extraction data from UNEP (2016a), GDP data from UNSD (2015). 2 Challenge: Global resource consumption Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June 2016

Reducing the demand for primary raw materials in the entire economy while increasing human well-being and prosperity Central idea: Decoupling GDP from resource use Focus on materials use (with strong interlinkages to other resources, esp. land, water, energy) Related concepts: sustainable consumption and production (SCP), sustainable materials management (SMM), 3R, circular economy But: resource efficiency is the broadest approach  Applies to all stages of the economic value chain: materials extraction, production, consumption, and using waste as a resource Concept of Resource Efficiency 3 Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June 2016

Challenges of rising resource demand: Environment: GHG emissions, pollution, land use, biodiversity loss Economy: insecurity of supply, costs, highly volatile prices Equity: inequality of resource consumption, conflicts over resource extraction, social and human rights concerns  More efficient use of resources! Benefits: Lowers pressure on climate and environment Saves natural capital for future generations Expanding markets for efficient products Growth, competitiveness and jobs potential Why focus on resource efficiency? 4 Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June 2016

5 More sustainable resource use is central to achievement of 12 of 17 SDGs, most notably: 8.4Improve progressively, through 2030, global resource efficiency in consumption and production and endeavor to decouple economic growth from environmental degradation, in accordance with the 10- year framework of programmes on sustainable consumption and production, with developed countries taking the lead. 9.4By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities. 12.2By 2030, achieve the sustainable management and efficient use of natural resources. Relevance for Sustainable Development Goals

Extraction and use of primary resources is strongly linked to GHG emissions: -Energy-intensive extraction and production processes: 8% of global energy demand for extraction and production of metals alone (IEA estimate) -Associated with emissions from land use change: land and infrastructure needed for extraction processes -Indirect emissions: More materials mean more transport, more storage, more infrastructure, etc. Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June Relevance for climate protection

Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June Example: GHG mitigation potential in processing metals AluminiumCopperSteel CO2 emissions saved by reducing demand by 1 ton About 12 tons> 4 tons1,5 - to 2 tons CO2 emissions saved when using secondary material (per ton of processed metal) > 10 tons > 3 tons About 1 ton Percentage saved when using secondary material (per ton of processed metal) 85 %62 % 64 % Data: UNEP IRP, AlbaGroup, BMUB estimates

Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June UNEP International Resource Panel (IRP): Resource efficiency policies, combined with ambitious climate change goals, could by reduce resource extraction by 28 % and -GHG emissions by 62 % and -increase global GDP by 1 percent Resource efficiency and climate change

Strong Economic Drivers for resource efficiency: Export-oriented economy with strong industrial base Highly dependent on imports of raw materials  rich in minerals, but 66.8 % of metals imported (some 100%) Materials account for 45 % of costs in German manufacturing sector  labour: 19%; energy: less than 3% Leading country in many green technologies  Saving and efficient use of resources is of high priority for both German environment and economic policies Resource Efficiency Policy in Germany 9 Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June 2016

German Resource Efficiency Programme (ProgRess) Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June National Target: Double Raw Materials Productivity by 2020 against 1994 Goals: Decouple economic growth from resource use Reduce environmental impacts of resource use Improve competitiveness of German industry Concept: Measures along the whole value chain Adopted by entire government Broad stakeholder and public involvement Programme reviewed every four years (ProgRess II 2016)

ProgRess: Measures to cover the whole value chain Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June Resource Efficient Production Resource Efficient Consumption Closed Cycle Management Sustainable Raw Materials Supply Overarching Instruments Raw Materials Strategy Product Design Efficient Production Processes Information and Support for SMEs Environment Audits Awareness Raising Sustainable Consumer Decisions Certification Schemes Public Procurement Product Responsibility Optimizing Recycling Prevention of Illegal Exports Research Technology & Knowledge Transfer Support for Faster Market Uptake Sustainable Use of Renewable Materials Standardisation EU / International Legal Framework

German Resource Efficiency Programme (ProgRess) Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June Resource Efficient Production Resource Efficient Consumption Closed Cycle Management Sustainable Raw Materials Supply Overarching Instruments Raw Materials Strategy Product Design Efficient Production Processes Information and Support for SMEs Environment Audits Awareness Raising Sustainable Consumer Decisions Certification Schemes Public Procurement Product Responsibility Optimizing Recycling Prevention of Illegal Exports Research Technology & Knowledge Transfer Support for Faster Market Uptake Sustainable Use of Renewable Materials Standardisation EU / International Legal Framework

Why support resource efficiency in SMEs? Backbone of German economy: 99.7% of all German enterprises are SMEs SMEs provide 66% of all jobs in Germany High potential for resource efficiency benefits: average cost savings potential of 200,000 Euros p.a. per SME through low-cost or no-cost investments in resource efficiency Specific market barriers to resource efficiency: low awareness and information deficits difficult access to finance for resource efficiency improvements Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June Example: Resource Efficiency in SMEs

Policy Measures for SMEs: Information, Awareness, Access to Finance, Innovation Establishment of Resource Efficiency Competence Center (together with German Association of Engineers VDI) State-sponsored consultancy services for SMEs on resource efficiency  Average cost savings of 2,3% of annual company turnover Large-scale information campaign targeted at SME decision-makers Preferential loans for investment in RE (with KfW banking group) Eco-Innovation Programme: support for innovation in material efficiency Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June Example: Resource Efficiency in SMEs

15 Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June 2016 Resource Efficiency is a process with many actors Needs commitment and initiative by stakeholders: policy-makers, business, science, civil society, regions Soft measures are important: awareness-raising, information, education and training, incentives for voluntary action Resource efficiency is a business case, but it will not happen by market forces alone Commitment of entire government essential Some Lessons learnt in Germany

German G7 Presidency 2015 put resource efficiency on G7 Agenda Decisions of G7 summit (June 2015): Commitment to ambitious action to protect natural resources and use them efficiently Establishment of G7 Alliance on Resource Efficiency: Forum to exchange best practices in G7 and with stakeholders Request to UNEP International Resource Panel (IRP) to prepare synthesis report on potentials and promising solutions Request to OECD to provide policy guidance for G7 16 Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June 2016 International efforts: G7 process

Japanese G7 Presidency in 2016 Subject addressed by Environment Ministers Meeting and by Leaders’ Summit (May 2016) Presentation of Reports by UNEP IRP and OECD at Environment Ministers Meeting Adoption of “Toyama Framework on Material Cycles” Continuation of G7 Alliance on Resource Efficiency and outreach to non-G7 countries Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June

Outlook: Resource efficiency in the G20?  Upcoming German G20 Presidency in 2017  The G7 Environment Ministers and the B20 Coalition (leading business associations from G20 countries) call for resource efficiency on agenda  Highly relevant for decoupling of growth from resource use: G20 generate nearly 90% of global GDP and 80% of international trade Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June President of B20 coalition Ulrich Grillo: „Ressource efficiency is crucial for the competitiveness of industries, for economic growth and employment.“

UNEP International Resource Panel: “With concerted action, there is significant potential for increasing resource efficiency, which will have numerous benefits for the economy and the environment.“ Ressource Efficiency: Potential and Economic Implications (Report for the G7, May 2016) Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June

Thank you for your attention! Questions?  20 Birgit Schwenk, Dialogues for a sustainable Future, Mexico, June 2016 Anne Miehe 2012