B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

B20 ITALY

Energy & Resource Efficiency

Policy Paper 2021

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYTABLEOF CONTENTS
Foreword by the Taskforce Chair

5

Taskforce Composition

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Recommendations: Executive Summary

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Recommendation 1

12

Recommendation 2

26

Recommendation 3

39

Recommendation 4

47

Annex

54

Bibliography

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Foreword by the Taskforce Chair
Polluting energy sources and unsustainable resource consumption are still causing severe global warming effects, alongside a continuous degradation of natural balance in ecosystems. It is of paramount importance to reach net zerocarbon emissions by 2050 and set a pathway consistent with the 1.5°C goal of
the Paris Agreement.
We have just started a crucial decade in which we must achieve the goals of the2030 Agenda for Sustainable Development, for which we are currently not on
track. Therefore, we must channel our efforts to recover better from the Covid crisis, solving also the climate crisis, with multilateralism and global actions
based on science and technology. We cannot reach 2030 and regret the lack ofambition we should have today.
The G20 Presidency agenda is based on three fundamental pillars: People, Planet, Prosperity. These pillars reflect on the priorities set by the B20 Energy andResource Efficiency Taskforce, that aims to provide impactful and actionable
recommendations to empower a sustainable progress, reshaping our future in
an inclusive and green way. The Taskforce focused on three main challenges:- Accelerating the Clean Energy Transition, by promoting a significant acceleration of the transition to clean energy and leading man-made emissions into
structural decline.
- Strengthening inclusive and sustainable growth, by implementing an effective
global framework to support the transition to sustainable energy.
- Fostering Environmental Preservation, by pushing for global adoption of effective policies to reduce global consumption of unsustainable resources.
The energy sector has always been transforming, but - for the first time - wehave the opportunity to accelerate the pace of transition in a short time frame, guided by the technological improvements that enable us to use energy in amore efficient and decarbonized way, without impacting the environment. Technology is therefore not a problem, since clean and renewable energy sources
as well as energy efficiency are already available and effective solutions thatwill allow us to achieve a large part of this transition. To move in this direction
development and modernization of enabling infrastructures and investments ininnovation are key.
The energy transition is essential for the future of our planet, but in order tocreate value it must be just, sustainable and inclusive. An efficient use of energy
will generate significant benefits both for the environment and the economy,
fostering inclusive economic growth and ensuring access to critical resources,
such as clean energy and water, for all communities.
Reducing the consumption of natural resources cannot be put off, as biodiversity loss and ecosystem collapse are worsening faster than ever. To halt environmental degradation and preserve the natural balance of ecosystems, a global
commitment to the proper use of natural resources and the spread of circular
economy approaches is needed.
The transition to a more sustainable and efficient system not only involves theenergy sector, but also encompasses and impacts other sectors, which will un-

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dergo important changes. G20 countries possess the capabilities to be the driving force of positive change in the global society and economy. In the wakeof the post-Covid-19 recovery, together with the innovative capabilities of thebusiness community, they have the opportunity to take decisive steps forwardin the enhancement of sustainability, resiliency and inclusivity of the world economy. The management of financial resources linked to sustainable objectives
will play a major role.
The time has come to take strong action towards the radical decarbonizationof the global economy and a sustainable energy transition for a brighter future.
Sincerely,
Francesco Starace
Chair of the B20-Taskforce on Energy & Resource Efficiency
Position of CEO and General Manager of the Enel Group6

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Task Force Composition
Task Force Leadership

Gurdeep Singh

Co-Chair
Chairman & Managing
Director, NTPC Limited

Patricia
Vincent-Collawn
Co-ChairCEO, PNM Resources

Jean-Pascal Tricoire

Co-Chair
Chairman & Chief
Executive Officer, Schneider
Electric

Sergio Affronti

Co-Chair
CEO & Board Member,
YPF S.A.

Herbert Diess

Co-Chair
Chairman Board of Management, Volkswagen AG

Xin Baoan

Co-Chair
Executive Chairman, State
Grid Corporation of China(SGCC)Why Energy & Resource Efficiency
MatterTransition to clean energy is about
making an investment in our sustainable future. We need to ensure thatclean energy is accessible and affordable to all while taking care of stakeholders and making ecosystems more
resilient.
This Policy Paper lays out recommendations and a path to make our planet more sustainable while providing ajust transition and opportunities forall. It has been a privilege to serve on
this task force that has created suchan impactful document.
We need to bridge progress and sustainability for all. Achieving a carbon
neutral world will require a systemic
and coordinated approach, leveraging
existing technology to make the mostof our energy and resources.
To achieve a sustainable future for all
we must boost just energy transitions,fostering innovative solutions and actionable strategies while taking into
account each country’s starting pointand development needs.
Climate change calls for a clear policy framework by G20 members. In
the mobility sector battery-electricvehicles are the only realistic option
to make a change yet require a rapidtransition to renewable energy.
Consensus and cooperation are needed more than ever to meet the target
of Paris Agreement and foster a community of life for man and Nature,
following the principle of common but
differentiated responsibilities.

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Task Force Coordination Group
Knowledge Partner

Scientific Partners

Simone Mori
Deputy Chair
Head of Europe,
Enel Group

Massimo Beccarello
Task Force Manager,
Confindustria

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Network Partners

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Recommendations: Executive Summary
Recommendation 1: Accelerate the transition of the energy system
towards a sustainable and carbon neutral energy mix and an efficient useof energy, in order to meet the carbon-neutral goal of the Paris Agreement and targets set out in the National Determined Contributions
Policy Action 1.1: Shift energy end-uses towards clean energy – G20 members should promote and accelerate the shift in the energy end-uses, driving
the substitution of fossil fuels with Decarbonized Electricity and other carbon neutral energy sources and carriers based on a cost effectiveness approach that will include indirect or direct costs of externalities as well.
Policy Action 1.2: Increase efficiency – G20 countries should sustain the increase of energy and resources use efficiency, substantially reducing energy intensity of domestic GDP while supporting its growth, with dedicatedactions towards industrial and consumers sectors, building, transport andcities.
Policy Action 1.3: Develop infrastructures – The G20 should promote thedevelopment and modernization of infrastructures to sustain the transition
towards a carbon neutral energy mix.
Recommendation 2: Provide effective policy pathways to foster sustainable growth and secure the energy transition
Policy Action 2.1: Leverage sustainable finance – The G20 should encourage and drive the adoption of common ESG frameworks and disclosures to foster the financial sector’s role in supporting business transition towards longterm sustainable economic activities and value creation for stakeholders.
Policy Action 2.2: Drive carbon pricing – The G20 should drive effective androbust carbon pricing taking into account the local markets peculiarities andpromote strategic dialogue to lay the foundation for global mechanisms tovalorize environmental externalities, while quickly phasing out direct or indirect inefficient energy subsidies.
Recommendation 3: Ensure resilience and inclusivity of global resource
supplies
Policy Action 3.1: Foster supply chain resiliency – G20 members should improve the resilience of global infrastructures to cope with adverse climate
events, cybercrime, and other disruptive events.
Policy Action 3.2: Commit to a just transition – The G20 should commit toa just and inclusive transition across countries, vulnerable communities andeconomy sectors.
Policy Action 3.3: Guarantee resources access and security – The G20
should commit to grant affordable and secure access to clean energy andwater to all communities.
Recommendation 4: Commit to preserve the equilibrium of the natural
ecosystem, promoting a more sustainable use of natural resources
Policy Action 4.1: Exploit circularity practices to reduce the environmen-

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tal impact of economies – The G20 should promote the diffusion of circular
economy practices to use global resources more sustainably, increasing international collaboration.
Policy Action 4.2: Enhance sustainable use of marine and terrestrial resources – G20 members should commit to the preservation and restorationof the natural ecosystems, safeguarding life on land and below water.

Introduction
In the post-industrialization era, the unsustainable rate at which global society and economy consume energy and resources has caused a structural
increase in greenhouse gases emissions and dramatic environmental degradation, which have a direct impact on human life. Despite the growing awareness of these issues, the actions implemented globally are not sufficient
to change the trend. Humanity is currently consuming natural resources 1.75
times faster than the rate at which the planet can regenerate [1]; moreover,
five years after the Paris Agreement, global warming estimates for the end of
the century considering implemented policies have fallen by only 0.7°C from
3.6°C in 2015 to 2.9°C in 2020, far from the 1.5°C target [2].
The Covid-19 pandemic has caused an unprecedented negative energy demand shock; consequently, global energy-related CO2 emissions showed thelargest annual drop since the Second World War [3]. However, the analysis ofprevious crises suggests that the reduction of emissions due to contingent
phenomena is unlikely to turn into a long-term trend and have marginal impacts on the accumulation in the atmosphere of greenhouse gases, the maincause of climate change. Furthermore, after reaching a low in April 2020,
global emissions rebounded strongly and soared above 2019 levels in December [3].
Therefore, three challenges are today more pressing than ever. First, global
warming should be curbed by cutting greenhouse gases emissions caused byhuman activities, since it is essential to ensure the long-term livability of theplanet. Second, inequalities and vulnerabilities among communities should
be addressed: access to energy, water, advanced infrastructures and technologies are not fairly distributed across countries and these disparities might
become deeper if the transition towards a sustainable and clean economy
will not be properly carried out. Finally, environmental degradation should be
halted since the natural balance in the ecosystems has been deteriorated byhuman activities, causing resources depletion, increasing air pollution, biodiversity loss as well as natural disasters.
The Energy and Resource Efficiency (ERE) Task Force of the B20 Italy is convinced that through collaboration among the actors of the business community and G20 leaders it is possible to achieve the challenging goal of fostering
prosperity in a sustainable and inclusive way. Economic growth is essential
to fight poverty and improve global quality of life; through innovation, it canbe decoupled from unsustainable natural resource consumption and creation of social divides. However, as the last decade of the 2030 Sustainable
Development Agenda begins, it is critical to act immediately, keeping into
consideration the differences among countries in terms of development andnatural endowment.

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Building on the work of previous B20 and considering the changes to theglobal landscape, the ERE Task Force has identified three main vectors ofactions: accelerating clean energy transition, strengthening inclusive and sustainable growth, and fostering environment preservation.
First, to put emissions into structural decline, it is essential to accelerate theclean energy transition. GHG emissions derived from energy consumption
accounts for more than 70% of global emissions [4] and the carbon intensity of the energy mix has not improved over the last decade, continuing torely extensively on fossil fuels [5]. In addition, despite the improvements interms of energy intensity [6], the growing demand for energy has set an unsustainable development path for the energy system. Hence, to achieve carbon neutrality, it is necessary to shift energy end-uses towards clean energy
carriers and, at the same time, improve efficiency to decrease the overall demand for energy without limiting economic growth. To do so, development
and modernization of enabling infrastructures and investments in technological advancement, digital transformation and innovation are key.
Second, it is important to implement effective global frameworks to support a sustainable and just energy transition. To achieve collective climate
goals, common policy pathways, forward-looking legislative and regulatory
frameworks and harmonized taxonomies, are key to coordinate decarbonization strategies. In particular, sustainable finance principles and carbon
pricing mechanisms are increasingly required to facilitate and accelerate thecarbon-neutral transition. As different countries and communities, public
and private actors align to decrease their environmental impact and enable
sustainable economic growth, it is imperative to adhere to the principles ofa just transition, fostering inclusivity and granting fairness. This commitment
should be reflected in the support to communities most affected by the clean energy transition, with a focus on access to energy and water, job displacement, capacity building and creation of opportunities for younger generations and women.
Third, the global adoption of effective policies to reduce natural resources
consumption cannot be postponed as biodiversity loss and ecosystem collapse are among the top five threats humanity will face in the next decade[7]. Building on the momentum of the Decade on Ecosystem Restoration,
global economies should increase their level of circularity to use resources
more sustainably. Moreover, countries should strengthen their commitment
to preserve and restore the natural ecosystems, safeguarding life on land andbelow water.
The urgency of ensuring the sustainability of our presence on the planet isdramatically increasing. Addressing the needs of the planet is not an option,
it is a necessary condition to our common well-being, to international peaceand security and, ultimately, to our long-term survival on this “pale blue dot”.
In line with the overarching priority themes, People, Planet and Prosperity,
G20 countries have the responsibility of leading the world towards a betterand brighter future for the entire global society and possess the capabilities
to be the driving force of positive change in the global society and economy.
In the wake of the post-Covid-19 recovery, together with the innovative capabilities of the business community, G20 countries can reignite growth andnurture a renewed prosperity while fostering sustainability, resiliency and inclusivity.

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Recommendation 1: Accelerate the transitionof the energy system towards a sustainable andcarbon neutral energy mix and an efficient useof energy, in order to meet the carbon-neutral
goal of the Paris Agreement and targets set out
in the National Determined Contributions
Policy Actions
1.1 Shift energy end-uses towards clean energy – G20 members should
promote and accelerate the shift in the energy end-uses, driving the substitution of fossil fuels with Decarbonized Electricity and other carbon neutralenergy sources and carriers based on a cost effectiveness approach that will
include indirect or direct costs of externalities as well.
• Accelerate the electrification of transport, building energy uses and industrial sectors.
• Promote the development and scaling up of clean fuels, such as green hydrogen, bioenergies and synthetic fuels, to decarbonize “hard to abate” industrial sectors, as well as the transport sector and, in particular, air, maritime and long distance transportation, preventing the displacement of land
use from agriculture or forestry to fuel dedicated intensive cultivations.
• Facilitate the conversion of end use technology from heavy to free or lower
carbon sources and carriers, such as blue hydrogen and flare free natural gas,
as a transition measure for the mid-term, avoiding investments leading tostranded costs as well as compromising the urgent achievement of decarbonization objectives, while preventing long term lock in effects.
1.2 Increase efficiency – G20 countries should sustain the increase of energy
and resources use efficiency, substantially reducing energy intensity of domestic GDP while supporting its growth, with dedicated actions towards industrial and consumers sectors, building, transport and cities.
• Scale energy upgrading interventions both in industrial and consumer sectors (e.g., Real Estate, Automotive, etc.).
• Implement more efficient systems in transport and buildings.
• Develop holistic energy efficient solutions for growing metropolitan areas.
1.3 Develop infrastructures – The G20 should promote the development
and modernization of infrastructures to sustain the transition towards a carbon neutral energy mix.
• Foster carbon free power generation, storage, transmission, distribution,and specifically infrastructures to support reliability and growth of renewableenergy sources, exploiting the potential of digital and smart technologies.
Consider cost competitive and reliable Carbon Capture Sequestration andUtilization systems if and when their economic and reliability standards demonstrate a technological maturity to enable a possible reliable application
to large scale in the future.
• Promote the deployment of economically competitive and carbon neutralhydrogen supply chain targeted to “hard to abate” sectors.

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY• Pursue the development and experimentation in suited sites of economically viable and environmentally reliable CCUS in “hard to abate” sectors(such as cement production), DAC and BECCS technology and nature-based
solutions (e.g., afforestation) to provide carbon negative technology able tooffset residual direct air greenhouse gas emissions.
Leading Monitoring KPI

Baseline (2020)

Target (2030)

Global energy-related CO2 emissions(Gt CO2)1
1. Includes carbon dioxide emissions from the
combustion of fossil fuels and non renewablewastes, from industrial and fuel transformation
processes (process emissions) as well as CO2
removals.

33.9

21.1

Global % of renewables in total energy
supply1
1. Includes solar, wind, hydro, modern solid, liquid and gaseous bioenergy, and other renewables.

12%

30%

Global energy intensity1 CAAGR2
1. Computed as Total Energy Supply/GDP (GJ
per USD 1000, PPP);
2. Compound average annual growth rate.

-1.6%

-4.2%

SDGs impacted:
Recommendation 1 contributes to SDG 7 – Affordable and clean energy – bypromoting increasing reliance on renewable energy sources, improvementof energy efficiency and investments in clean energy research and technology. This way, Recommendation 1 fosters a sustainable transformation of theenergy system, aiming at conciliating the needs of a growing population withenvironmental and climate objectives.
Moreover, by promoting the development and modernization of infrastructures essential to achieve a carbon neutral energy mix and a sustainabletransformation of industry, Recommendation 1 supports also SDG 9 – Industry, innovation and infrastructure.
Through its suggested actions, Recommendation 1 also sustain the achievement of SDG 11 – Sustainable cities and communities – and SDG 12 – Responsible consumption and production – by encouraging a more efficient use ofresources and the shift of energy end-uses to carbon neutral clean energy
sources and carriers.
Finally, since most of global greenhouse gases emissions are related to the
production and use of energy, Recommendation 1 significantly contributes
to SDG 13 – Climate action – advocating for a clean transition of the energy
system and a drastic reduction of its environmental impact.

1

Data from: IEA (2021) - Net-Zero Emissions by 2050 Roadmap

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G20 Italy Priorities:
Recommendation 1 contributes to addressing G20 Italy Priorities People,
Planet and Prosperity.
The use of energy impacts significantly the habits and lives of people; thus, bypromoting a shift towards clean energy carriers and more efficient technologies, Recommendation 1 can foster improved quality of life.
Moreover, given the weight of energy production and consumption over the
global emissions of greenhouse gases, the actions henceforth suggested contribute to reduce the environmental impact of economies and achieve longterm decarbonization objectives.
Finally, the promotion of infrastructure development and modernization tosustain the transition towards a carbon neutral energy mix and a more efficient use of energy represent an important driver to achieve prosperity.

Context
In 2015, 196 Parties at COP 21 adopted the Paris Agreement, a treaty aiming
at limiting global warming to well below 2°C, pursuing efforts to limit it to
1.5°C, compared to pre-industrial levels. The Agreement entered into force
on November 4th, 2016 [8]. Five years later, global efforts proved to be insufficient to follow a path aligned with its goals: considering implemented
policies, global warming estimates for the end of the century have fallen by
only 0.7°C from 3.6°C in 2015 to 2.9°C in 2020 [2]. Moreover, these objectives have been overcome by some nations, who are currently aiming at achieving the even more challenging goal of reaching net zero emissions: to date,net zero pledges cover about 70% of global GDP and CO2 emissions [9]. For
instance, the European Union, Japan and the United States committed to
becoming carbon-neutral by 2050 [10] [11] [12]; China aims to achieve carbon
neutrality before 2060 [13].

14B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYExpected global greenhouse gas emissions and consequent warming
estimates by scenario

Exhibit 1 | 2100 warming projection

The trajectory determined by current policies is significantly inconsistent
with the targets set by the Paris Agreement. The scenario does not improve
including current pledges and targets in the estimates. In fact, these would
lead to global warming of 2.4°C by the end of the century.
Source: Climate Action Tracker (2021) - Warming Projections Global Update

To effectively curb global warming, it is of paramount importance to abate the emissions derived from energy consumption. In fact, they accounted
for more than 36.4 GtCO2e in 2017, more than 70% of global greenhouseemissions [4]. The carbon intensity of the energy mix has remained constantover the last decade, producing an average of 2.4 tCO2/toe [5]; this is due
to its reliance on fossil fuels, from which more than 80% of energy supply isderived2. In addition, the increase of global population and economic advancements have significantly increased the total energy consumption by morethan 40% from 2000 to 20183. Although in the same period the global energy
intensity improvement rate of economies exhibited an increase ranging from
1.2% to 2.3% [6], the data still portrays an unsustainable development trajectory of the energy system. Therefore, a radical change in said energy system
is needed as soon as possible to abate its contribution to global greenhousegas emissions and requires the collaboration of different players across sectors [14], considering that the actions taken in the next decade will significantly determine the possibility to meet global climate objectives.
For a sustainable transformation of the current energy system, making it
carbon neutral, three key actions should be undertaken. The first is shiftingenergy end-uses towards clean energy carriers, considering the possible
transition role of low-carbon fuels in the short to mid-term, and as such working towards lowering their carbon footprint as well. The second consists ofimproving efficiency to decrease the overall demand for energy, without limiting economic growth4. The third is linked to the development and modernization of the infrastructures required to enable the transition.

Deloitte analysis based on data from IEA, 2020
Deloitte analysis based on data from IEA, 2020
4
Refer to Policy Paper Trade & Investment: Policy Action 4.1
2

3

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Policy Action 1.1: Shift energy end-uses towards clean energy
G20 members should promote and accelerate the shift in the energy end-uses, driving the substitution of fossil fuels with Decarbonized Electricity andother carbon neutral energy sources and carriers based on a cost effectiveness approach that will include indirect or direct costs of externalities as well.
The transition of the energy system towards carbon neutral energy sources
and carriers can accelerate if pulled by energy end-uses. This will significantly
increase the share of renewables in the energy mix and displace the mostpolluting fuels. While current policies and announced pledges provide for ashare of renewables in total final consumption equal to 12% in 2050, to limit
the global temperature rise to 1.5 °C as set by the Paris Agreement, increasing this figure up to about 67% is necessary [9]. Energy end-uses have to shift towards renewables or carbon neutral energy sources to effectively offset
the use of fossil fuels.
In the next decade, to boost the emissions decline, it is paramount to accelerate the deployment of all already available and early-adoption energy
technologies, especially through electrification. In fact, a progressively andincreasingly decarbonized electricity emerges as the most efficient energy
vector to achieve net zero ambitions. In particular, it is imperative for energy
uses in industry, buildings and transport, as these sectors are the main causes of global greenhouse gases emissions [4]. Clean and smart electrification
is a cost-effective route to decarbonize large portions of total final energy
uses. The transport sector progressively sees a growing role for direct electrification, mainly in the light duty segment, driven by the electrification of thepassenger vehicle fleet through electric vehicles; electrification could findcost-effective applications also in the long haul heavy duty segments. Decarbonization of buildings relies on greater electrification achieved through the
deployment of electric heat pumps and a deeper building renovation rate incorporating smart technologies. Electrification of industrial processes, including direct use of electricity and indirect use through carbon free hydrogenand e-fuels, will contribute to the decarbonization of industries. For instance,
direct electrification could result from the fuel switching in industrial processes, such as iron and steel production using electric arc furnaces, or, in the
cement industry, through the development of technologies for electrificationof cement clinker production. To limit the rise in global temperature to 1.5°C,
the share of renewable energy consumption in industry should increase from
12.4% in 2020 to 58% in 2050, with renewable electricity covering 40% of thetotal energy demand. Regarding the building sector, the variation during thesame period should be from 15.5% to 81.8%, increasing the reliance on renewable electricity to 58%. Finally, in the transport sector, renewables should
account for 54.5% of energy consumption in 2050, raising sharply from 3.5%
in 2020, with renewable electricity satisfying 38% of demand5.

Deloitte analysis based on data from IEA, 2021

5

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYEnergy consumption in industry, transport and buildings sectors

Exhibit 2 | Changes in the energy
mix of energy end uses

Note: the portrayed scenario aims at achieving net zero CO2 emissions fromthe energy sector by 2050, consistently with the long-term goal of containing
the average global temperature rise to 1.5°C, as well as achieving universal
energy access by 2030 and delivering a major reduction in air pollution.
Source: IEA (2021) - Net Zero by 2050. A Roadmap for the Global Energy Sector

For some specific hard-to-abate sectors, direct electrification can be challenging. In addition, to support the achievement of emissions reduction
objectives in the long-term, it is necessary to develop additional technological solutions to decrease the reliance of these end-uses on fossil fuels, also leveraging on R&D and innovation. A complementary option gaining traction ishydrogen, a clean-burning molecule constituting a flexible energy carrier for
those parts of the economy that cannot be easily or economically electrified,
once economies of scale are in place. It can be employed directly or combined with carbon to produce synthetic fuels when CO2 is captured fromthe atmosphere. Presently, hydrogen is mainly utilized for oil refinery and in
the chemical industry, mostly for the production of ammonia and methanol.
However, its versatility creates opportunities for different applications. In
iron and steel production, hydrogen can be employed in the direct reducediron (DRI) stage as a substitute for fossil fuels. In maritime and air transportation, it can substitute fossil fuels directly, in the form of ammonia or othersynthetic fuels. Hydrogen might be a possible energy carrier also in the long
haul heavy duty road transport, where fuel cell electric vehicles might present the advantages of operational flexibility, relatively short refueling timeand large payload capacity. Furthermore, hydrogen could be employed togenerate high-temperature heat in several industrial processes [15].
The environmental impact of shifting to hydrogen depends on how it is produced. The vast majority of present production employs natural gas or coalin reforming or gasification processes. These production methodologies are
emission intensive, releasing between 10 and 19 tCO2/tH2 [15], resulting inthe so-called grey hydrogen. Therefore, to sustainably increase the use of thismolecule in the economy, it is necessary to scale the production of the greenhydrogen. It is produced through water electrolysis and does not produce
emissions if the electricity is sourced from renewables. Today, green hydrogen is not a cost-competitive solution yet, but technologies’ improvement
and falling costs of renewables and electrolyzers (whose cost in Europe andNorth America dropped by 40% between 2014 and 2019), if achieved on anindustrial scale, might improve its economics in the future, possibly making

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it the cheapest option to produce hydrogen within a decade [16]. To achieve
this goal, however, both public and private investments and support to research, development and innovation programs are key.
Furthermore, if produced sustainably, carbon neutral synthetic and bio fuels
might play a key role in a decarbonized energy system, provided long term
lock in effects and land use that displaces agriculture and forestry at theexpense of intensive fuel dedicated cultivations are avoided. Examples are
ethanol, produced from corn and other crops, biodiesel, derived from vegetable oils, and biomethane, captured from landfills, livestock operations or
wastewater and then refined. Biofuels present several advantages. First, they
can avoid emissions produced by the natural decomposition of the organic
matter from which they are derived. Second, in many cases, they can be used
to fuel existing engines either directly or, as a transitional short-term option,
blended with fossil fuels to contribute to reaching emission reduction targets more quickly. Third, if produced using waste as feedstock, such as crop
residues or organic fraction of municipal solid waste, they can enhance thecircularity level of the economy; to this end, it is necessary to collaborate toimprove waste collection processes making them more economical, efficientand reliable. However, to assess the real reduction of greenhouse gases emissions associated with the production and use of fuels and energy carriers, itis necessary to take into account their entire life cycle as well as their impact
in terms of local air pollution, implementing LCA methodology; this will ensure that equivalent zero-carbon energy solutions can be pursued taking into
account local specificities. To this end, clear additionality needs to be considered and land occupation should not come at the expense of forestry andagricultural uses.
Finally, during the transition period towards the realization of a clean energy
system, low-carbon fuels can support the change making the transition more
efficient and affordable, provided that investments leading to stranded costs
are avoided. They can be the last energy sources and carriers to be substituted by renewables and clean sources, as their environmental impact is lower
than highly pollutant fossil fuels. Moreover, they can be used to switch fromhigh- to low-carbon fuels if no investments in permanent infrastructures
are required; this way, emissions reductions are achievable without incurring
into stranded costs and lock-in effects. Coordinated efforts are necessary to
manage the transition phase effectively at the global level, taking into consideration the differences among countries without compromising the achievement of urgent decarbonization objectives, making the energy systemcarbon neutral. In this context, natural gas represents a useful transitional
resource for the mid-term to make the use of some technologies already inplace more sustainable until the end of their lifecycle. Natural gas is indeed
the least polluting among fossil fuels, generating the lowest amount of CO2
per MWh of energy produced [17]. However, flaring and methane leaks associated with gas extraction and transportation need to be severely reduced
in order for natural gas to be a reliable transition fuel in the path to carbon
neutrality. In fact, aside from not eliminable flaring (e.g., for safety reasons),
severe pollution is caused by the so-called routing flaring, happening during
normal operations in the absence of sufficient facilities or amenable geology
to re-inject the produced gas, utilize it on-site, or dispatch it to a market [18].
To this end, disclosure methodologies and strict enforcement of policies will
be needed to ensure methane leaks are detected and eliminated from thewhole gas value chain. Furthermore, during this transition, it might be useful
to explore the production of blue hydrogen, mainly based on natural gas reforming or coal gasification with carbon capture, ensuring the capture of at18

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least 90% of the emitted CO2 and low methane leakage, provided it proves
to be an economic and reliable technology to decarbonize the present useof high carbon intensive grey hydrogen without incurring into stranded costs and lock-in effects. With blue hydrogen, a partial decarbonization of theexisting hydrogen value chain can be carried out and environmental benefits
can be achieved. In this context, it becomes critical to rapidly verify the technical and economic maturity of CCS technologies.

Actions:• Accelerate electrification of transport, building energy uses and industrial sectors.
G20 countries should enable and promote a large-scale deployment of technologies fueled by renewable electricity in order to abate the consumptionof fossil fuels in those end uses where electrification can easily replace incumbent carriers, such as private and public transport with electric vehicles,
buildings with heat pumps and electric appliances and industrial processes
happening at low or medium temperatures.
• Promote the development and scaling up of clean fuels, such as greenhydrogen, bioenergies and synthetic fuels, to decarbonize “hard to abate” industrial sectors, as well as the transport sector and, in particular, air,maritime and long distance transportation, preventing the displacementof land use from agriculture or forestry to fuel dedicated intensive cultivations.
To support the achievement of emissions reduction objectives in the longterm, G20 members should scale up clean fuels , especially for sectors inwhich electrification is not a viable option yet, investing in and supporting
research, development and innovation programs to make carbon free hydrogen, bioenergies and synthetic fuels a competitive, sustainable alternative tofossil fuels, also assuring a prompt and suitable development of the regulatory framework and pathways for the decarbonization of these sectors. Also
displacing agricultural land use or forestry should be avoided.
• Facilitate the conversion of end use technology from heavy to free or
lower carbon sources and carriers, such as blue hydrogen and flare freenatural gas, as a transition measure for the mid-term, avoiding investments leading to stranded costs as well as compromising the urgent
achievement of decarbonization objectives, while preventing long term
lock in effects.
In the transition phase towards a carbon neutral energy system, withoutcompromising the achievement of decarbonization objectives, G20 members should facilitate the switch from high- to low-carbon fuels as a measurefor the mid-term, avoiding investments leading to stranded costs and lock-in
effects.

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Policy Action 1.2: Increase efficiency
G20 countries should sustain the increase of energy and resources use efficiency, substantially reducing energy intensity of domestic GDP while supporting its growth, with dedicated actions towards industrial and consumers
sectors, building, transport and cities.
The second driver of the energy transition is represented by the energy efficiency increase, the overarching objective being the decrease of the overall energy consumption without constraining human activities, end uses andeconomic development. Thus, the energy intensity of global economies has
to improve. However, between 2010 and 2020, the average annual energy
intensity improvement rate was equal to 1.6% [9]. Estimates show that energy intensity improvement has to increase to 4% per year between 2020 and
2030 and, later, to 2.7% per year until 2050 to reach the 1.5°C goal set by theParis Agreement [9].
Exhibit 3 | Energy consumption
improvement

Total final energy consumption and demand that should be avoided by
mitigation measure and sector

Note: NZE stands for Net Zero Emissions Scenario, a scenario reaching net
zero CO2 emissions from the energy sector by 2050, consistently with thelong-term goal of containing the average global temperature rise to 1.5°C,
as well as achieving universal energy access by 2030 and delivering a major
reduction in air pollution.
Source: IEA (2021) - Net Zero by 2050. A Roadmap for the Global Energy Sector

Direct electrification represents the main solution to increase the efficiencyof energy end-uses. Electric vehicles represent one example: on average, they
convert over 77% of the electrical energy from the grid to power at the wheels, while vehicles fueled by gasoline convert between 12% and 30% of theenergy stored in gasoline to power at the wheels [19]. Considering heating,the main energy use for buildings in regions such as the European Union andthe U.S. [20] [21], heat pumps are, on average, two to four times more efficient than conventional heating systems [22].
In addition, other interventions and technologies could increase the overall energy efficiency of our economies. Thermal management technologies
could enable further energy savings in vehicles. Considering buildings, im-20

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

proved insulation, appliance modernization and energy-saving components
could significantly contain unnecessary energy demand. Sustainable materials should be used from the design stage to reduce energy consumption,
as well as making buildings more durable, resilient and adaptable to climatechange; moreover, digital technologies, such as IoT, could be used to gather
and analyze data to optimize resource consumption (e.g., smart thermostats
could automatically regulate residential heating systems to decrease energy
waste or enable predictive maintenance) [22]. These interventions would becritical to achieving decarbonization goals since, considering the European
Union, buildings are responsible for approximately 40% of the energy consumption and 36% of greenhouse gas emissions from energy and almost
75% of the building stock is energy inefficient according to current building
standards [23]. Besides, in the industrial sector, process improvements could
lead to an energy consumption reduction of 25% [22]. Additional savings inindustry can be achieved by implementing continuous energy management
systems and regular and standardized energy audits, reducing costs and environmental impacts. Energy efficiency gains are achievable through process
improvements, recycling, sector coupling (e.g., through green hydrogen) andelectrification; the potential varies by type of industrial process, with significant gains in energy intensive sectors such as cement, steel and iron industry.
Energy efficiency should be a key point of attention while developing andexpanding metropolitan areas. Today, around 3.5 billion people already livein urban centers and this number is expected to grow up to 5 billion by 2030,
with most of the increase due to developing countries [24]. This trend will
significantly increase the demand for energy coming from cities and, without
careful planning, also their contribution to global greenhouse gas emissions.
Energy efficient solutions (e.g., for HVAC systems) can help to improve urban
services curbing their environmental impact. However, several impediments prevent their deployment, such as financial, implementation capacity andawareness barriers [24].
Investments from public and private sectors in energy efficiency are not only
necessary for the environment, but could also be accretive for the economy.
One of the main benefits is linked to job creation. Compared to the business-as-usual scenario, accelerating the clean energy transition could increase the number of people employed in energy efficiency by 21%, reaching a
total of 21.3 million people, two times as much as today [22]. Thus, proper
incentive systems and standards might be implemented in order to promote
investments in energy efficiency.

Actions:• Scale energy upgrading interventions both in industrial and consumer
sectors (e.g., Real Estate, Automotive, etc.).
G20 countries should provide incentives to investments directed to increasing the energy efficiency of industrial and consumer sectors, reducing theconsumption of energy without impairing economic growth.
• Implement more efficient systems in transport and buildings.
G20 members should invest in the implementation of solutions increasing
the energy efficiency of transport and buildings sectors, leveraging especiallyon electrification and smart technologies and accelerating the pace of regulation for highly efficient and sustainable technologies.

21

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY• Develop holistic energy efficient solutions for growing metropolitan
areas.
G20 countries should face the increasing demand for energy coming from
cities deploying efficient solutions for urban services, abating the environmental impact of metropolitan areas.
Policy Action 1.3: Develop infrastructures
The G20 should promote the development and modernization of infrastructures to sustain the transition towards a carbon neutral energy mix.
The clean energy transition has to be sustained with the needed infrastructure improvements. To this end, if operated in line with past practices andfor the typical operational lifetimes, existing and under construction infrastructures would lock in a temperature increase of around 1.65°C, causing
CO2 emissions of around 26.5 Gt in 2030 and 10 Gt in 2050, falling to zero
only by 2070 [25]. Therefore, government support in research and development is needed to progress the required technologies until they becomecommercially viable, developing future-proof infrastructure for early-stage,
emissions-neutral technologies and further advancing more mature innovations. Nevertheless, investments in infrastructures should provide an efficient allocation of resources and avoid the creation of stranded assets andthe risk of lock-in effects, considering the time horizon set by climate-related
objectives. Moreover, investments should be deployed in infrastructures connecting global and regional markets related to carbon free energy carriers to
optimize energy use and security6.
As mentioned above, drastically changing the composition of the energy mix
increasing the share of renewables is critical. More in detail, to set a pathway
consistent with the 1.5°C goal of the Paris Agreement, by 2050, renewables
should represent ~30.5% of global energy supply by 2030, growing by 142%
with respect to 2020 levels7. Thus, it is necessary to accelerate the development of power infrastructure for renewable generation, transmission anddistribution with adequate investments. Consequently, the reliance on fossil
fuels should radically drop, with specific regard to coal and oil, whose share in
the energy mix should decrease in the same period by 53% and 21% respectively8. In the same timeframe, nuclear energy is expected to increase its sharein total energy supply by up to ~8% [9]. To this end, it is recommended toinvest in new research of more sustainable technologies to reduce the longterm environmental impact of nuclear energy.
Nevertheless, as the power sector increases the share of renewable energy
and, consequently, the variability of its supply, together with the increasing
electrification of final uses and electricity consumptions, it has to improve its
flexibility. This requires new investments in grid facilities, both at transmission and distribution levels. In particular, smart grids accomplish the required
optimization of the power network by using digital and advanced technologies. Relying on smart meters, advanced automation, remote controls, monitoring and communication systems, modern grids are crucial to sustaining
the penetration of renewables; they enable the shift from a centralized to adecentralized distribution system, where consumers can be also producers
and electric vehicles can help to balance energy demand and production
peaks and plunges. Moreover, as consumers become prosumers, smart andflexible buildings gain importance to provide behind-the-meter control andenergy management. Additional solutions, complementary to renewables,

6
7

22

8

Refer to Policy Paper Finance & Infrastructure; Policy Action 2.2
Deloitte analysis based on data from IEA, 2021
Deloitte analysis based on data from IEA, 2021

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

able to increase flexibility are Battery Energy Storage System (BESS), green hydrogen production and pumped hydropower storage; they provide away to store renewable energy, making its management more flexible andefficient. This brings to light the important role of the electricity grid as anenabler of the energy transition, requiring investments in modernization anddigitalization: they are necessary to increase the penetration of renewables
by connecting new production capacity to the grid, reducing costs linked to
the risk of curtailments, as well as to increase the flexibility and integration of
the energy system. Moreover, to enable the above-mentioned electrificationof road transport, a proper charging network should be developed to overcome barriers to adoption.
Investing in these infrastructures could also have a positive effect on employment: by 2050, a development of the energy sector aligned with the Paris
Agreement objective could increase by 14% the number of jobs related to
power grids and energy flexibility compared to a business-as-usual scenario,
doubling the number of today’s employees in this field [22].
Furthermore, in order to tackle the emission of “harder to abate sectors” andaccording to the future deployment of hydrogen solutions, it could be also
necessary to develop suitable infrastructures to exploit the benefits of hydrogen. Hydrogen poses challenges linked to its transportation and storage,
due to its low energy density on a volume basis that implies the need for larger storing facilities and higher transportation costs. The main alternatives
currently available are geological formations and tanks for storage, pipelines,
ships and trucks for transport, for which common rules and standards forreadiness assessment should be set. However, technological advancement
can ease the development of a cost-efficient supply chain. To this end, greenhydrogen produced through electrolysis can also optimize the infrastructure
allowing the installation of electrolyzers fueled by the electric grid close to
the location of hydrogen demand, as opposed to transporting hydrogen. Moreover, if and when fuel cell heavy-duty trucks are going to become a viable
alternative for the transport and logistics industry, a proper network of hydrogen refueling stations along the main national and regional transit routes,
logistics centers and urban nodes has to be developed, as well as adequatehydrogen-related infrastructures in ports. Additionally, to ramp up the deployment of zero-carbon hydrogen, clusters of industrial activities represent
a major opportunity since they offer the possibility to co-locate demand andsupply, reducing upfront costs for transmission and distribution, and employ
large volumes of hydrogen [15]; to this end, ports represent an example ofcluster enabler as they can sustain the use of hydrogen in maritime sector
and connect the entire hydrogen value chain.
However, as shown in Exhibit 1, to meet the most ambitious goals of the Paris
Agreement, it is not sufficient to stop emitting greenhouse gases; global economies have to take a step forward and become carbon negative, i.e. actively
remove CO2 from the atmosphere. This is necessary to decrease the concentration of carbon dioxide and reduce the amount already released in a fasterway. Alongside cost effective nature-based solutions such as afforestation
and reforestation, which may provide additional carbon sequestration if managed sustainably [26], Carbon Capture, Usage and Storage (CCUS) technologies can contribute to this objective. Technological options are particularly
useful as they grant more predictable outcomes and are less land-intensive.
The most relevant alternatives in this field are Direct Air Capture (DAC) andBioenergy with Carbon Capture and Storage (BECCS). DAC solutions, which
capture CO2 directly from the atmosphere, are still at small-scale pilot and23

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

demonstration stage. Thus, their cost estimates are still uncertain. However,
due to the low concentration of CO2 in the air, which is the main cost driverof CCUS technologies, DAC technologies are highly energy-intensive and,
consequently, expensive [27]. BECCS technologies are able to capture andstore CO2 from processes where sustainable biomass is converted to energy or used to produce materials; if sustainable biomass is converted into afuel and BECCS technologies are applied, less CO2 is released into the atmosphere (when the fuel is burnt) than is removed (by the crops during their
growth), making the process carbon negative. BECCS is the most mature
carbon removal technology, but requires a life-cycle assessment to evaluate
its effectiveness, considering also the sustainability of the biomass feedstockand the land-use change [27]. CCUS technologies can contribute also to reduce non-energy related emissions from hard-to-abate sectors along theirproduction processes. Industrial process emissions were equal to 2.5 GtCO2
in 2019, 63% of which produced by the cement sector and more than half ofthe rest coming from the chemicals and steel sectors [27]. Thus, adequate
resources might be implemented in order to advance experimentation in thefield of CCUS in suited sites and the needed technology-related R&D thatshould bring the cost of these technologies to desired economic levels.
As already highlighted above, digital technologies and innovation will play a
critical role in the clean energy transition, enabling both the shift of energy
end uses towards clean energy sources and carriers and higher efficiency. This
is why investments in digital technologies by energy companies have increased significantly over the last few years, accelerating the digitalization process of the energy system [28]. In particular, through digital technologies it ispossible to: deploy smart demand response strategies, providing flexibility to
the energy system and saving investment in new production infrastructures;
integrate variable renewable energy sources, matching supply and demand
peaks and reducing curtailment risks; implement smart charging for electricvehicles, providing additional flexibility to the grid; and develop distributed
electricity resources, integrating prosumers in the energy system [28]. For
this to happen, however, it is necessary to ensure a high level of interoperability. Moreover, to significantly advance the level of digitalization of theenergy system, it is necessary to consider also supporting information andcommunication technologies and infrastructures, with special attention fordata collection, management and protection.

Actions:• Foster carbon free power generation, storage, transmission, distribution, and specifically infrastructures to support reliability and growth ofrenewable energy sources, exploiting the potential of digital and smart
technologies. Consider cost competitive and reliable Carbon Capture
Sequestration and Utilization systems if and when their economic andreliability standards demonstrate a technological maturity to enable a
possible reliable application to large scale in the future.
G20 countries should invest and incentivize the production of renewableenergy and in the development of the relative transmission, distribution andstorage infrastructure, exploiting the potential of digital and smart technologies such as smart grids.
• Promote the deployment of economically competitive and carbon neutral hydrogen supply chain targeted to “hard to abate” sectors.
To support the decarbonization of sectors in which electrification is not a
viable option yet, G20 members should enable the development of convenient infrastructures for the hydrogen supply chain.
24

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY• Pursue the development and experimentation in suited sites of economically viable and environmentally reliable CCUS in “hard to abate”
sectors (such as cement production), DAC and BECCS technology andnature-based solutions (e.g., afforestation) to provide carbon negativetechnology able to offset residual direct air greenhouse gas emissions.
To address residual emissions and actively remove CO2 from the atmosphere, G20 countries should invest in additional R&D efforts on CCUS technologies aiming at reducing costs and increase the effectiveness of carbon
capture technologies. At the same time, G20 countries should consider thecontribution achievable through sustainably managed and cost effective nature-based solutions.

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Recommendation 2: Provide effective policy
pathways to foster sustainable growth and secure the energy transition
Policy Actions
2.1 Leverage sustainable finance – The G20 should encourage and drive theadoption of common ESG frameworks and disclosures to foster the financial
sector’s role in supporting business transition towards long-term sustainableeconomic activities and value creation for stakeholders.
• Promote policy pathways towards harmonized taxonomies for finance products to qualify as sustainable.
• Compel improved ESG and particularly climate risks assessment and disclosures by companies.
2.2 Drive carbon pricing - The G20 should drive effective and robust carbon pricing taking into account the local markets peculiarities and promotestrategic dialogue to lay the foundation for global mechanisms to valorize
environmental externalities, while quickly phasing out direct or indirect inefficient energy subsidies.
• Drive the adoption of effective carbon markets in local jurisdictions.
• Foster linking of local carbon markets through agreeing to and enforcing
Article 6 of Paris Agreement considering solutions to limit the risk of relocation of industrial activities due to different national climate ambitions andcarbon related regulation, while taking into account the principle of common
but differentiated responsibilities.
• Harmonize carbon pricing metrics and leverage new technologies for carbon data acquisition and analysis.
• Reorganize current fiscal policies to complement carbon markets schemeswith non-market-based initiatives where needed.
• Phase out inefficient energy subsidies vs carbon neutral targets, and provide adequate incentives by advancing fiscal tools for the energy transition topromote affordable and carbon neutral energy sources.

26

Leading Monitoring KPI

Baseline (2020)

Target (2030)

Global % of CO2 emissions covered by carbon pricing mechanisms1
1. Includes both market-based mechanisms(ETS) and carbon taxes implemented at global
level;
2. Target set on the hypothesis of a liner increase leading to meet 100% coverage in 2050.

22%

48%9

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYSDG impacted:
Recommendation 2 contributes to SDG 8 – Decent work and economic
growth – by promoting the financial sector’s role in securing adequate resources for the energy transition and supporting sustainable economic
growth, therefore effectively decoupling economic prosperity from environmental degradation.
Moreover, this recommendation also aims to ensure that long-term value
creation for all stakeholders is at the center of companies’ business models,therefore fostering economic and social equality for all, in accordance with
the SDG 10 – Reduce inequality. At the same time, increased international
cooperation and harmonization will support developing countries in reaching decarbonization objectives in a just and inclusive manner.
In accordance with SDG 13 – Climate action – the recommendation also calls
for robust international standards on ESG metrics and for effective carbon
pricing mechanisms in order to make all economic actors accountable andencourage their progresses in tackling climate change.
All these measures will reach their scope only if adopted through global coordination, with a strong partnership and shared policy pathways among all
countries. In this context, and in line with the SDG 17 – Partnerships for thegoals – the recommendation underlines the key role of collaboration between governments, international organizations, the private sector and NGOsin order to agree on global standards and metrics in the area of sustainablefinance and GHGs taxation.

G20 Italy Priorities:
Recommendation 2 contributes to addressing all the G20 Italy’s Priorities ofPeople, Planet and Prosperity.
In particular, the implementation and harmonization of carbon pricing could
generate substantial revenues for national governments, which could be
used to support vulnerable groups and communities along the energy transition and strengthen social safety nets.
Moreover, adequate carbon taxation, along with the adoption of the ESG disclosure for companies, could lead to a significant abatement of GHG emissions at global level, potentially limiting climate change and triggering positive repercussion on the environment.
Finally, the reorientation of financial flows toward sustainable investments
and new low-carbon technologies could foster economic growth and employment, therefore increasing the prosperity and resilience of all countries.

9

Data from: World Bank (2021) - Carbon Pricing Dashboard

27

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYContext
In order to reach the goals of the Paris Agreement, more than technology andefficiency is needed for societies to hit their targets. Thus, a large collection of
incentives – in terms of policies, regulations and market-based solutions – areincreasingly required to facilitate and speed-up the carbon-neutral transition.
In this context, despite large differences at national level, in recent years G20
governments have increasingly recognized the importance of establishingcommon policy pathways to coordinate decarbonization strategies and secure sustainable growth in their economies. International discussion and negotiations after 2015’s Paris Agreement, including in fora such as UNFCCC
COP, have provided much-needed advancements in governments’ ambitions and coordination on climate change, but fragmentation of policy frameworks remains one of the key challenges to overcome in the coming years.
Existing G20 efforts need to be further strengthened by more concrete
action plans at different levels and by mobilizing the private sector. Stable,
forward-looking legislative and regulatory frameworks, as well as harmonized technical standards, will be key to facilitate the flow of private capitals
and investments toward carbon neutral opportunities. Moreover, strong
collaboration between international public finance and the private sector isessential to mobilize the vast amount of investments needed for the energy
transition, also through global initiatives aimed at financing green technologies development and deployment. In addition, governments should put inplace a sound environment for capital flows in order to attract investments
and reduce financial risks for businesses, in particular in developing countries, which will require significant private capital alongside public funding.
To this end, the B20 recommends the G20’s members to define shared policy
pathways in a number of areas which are considered critical to achieve collective climate goals and secure an inclusive transition, with a specific focus
on sustainable finance principles and carbon pricing mechanisms.
Policy Action 2.1: Leverage sustainable finance
The G20 should encourage and drive the adoption of common ESG frameworks and disclosures to foster the financial sector’s role in supporting
business transition towards long-term sustainable economic activities andvalue creation for stakeholders.
Sustainable finance represents one of the key enablers of the energy transition and should be regarded by governments and companies alike as anefficient instrument to facilitate the financial sector’s role in supporting businesses transition toward long-term sustainable activities10. In particular, sustainable finance frameworks should aim, among others, at:• Reorienting capital flows towards sustainable investments.
• Managing financial risks deriving from climate change, resource depletion,
environmental and social degradation.
• Promoting transparency and long-term vision in economic and financial
activities.
• Integrating sustainable finance best practices in the investment decisions ofgovernments and development finance institutions11.
• Facilitating the understanding and adoption of sustainable finance principles within all economic actors, including SMEs.

10

28

11

Refer to Policy Paper Trade & Investment: Policy Action 2.3
Refer to Policy paper employment & education: Policy action 3.1

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

In this context, despite decades-low oil prices and the Covid-19 devastating
impact on virtually all world’s economies, ESG metrics and climate risks considerations are increasingly gaining attention from both institutional and retail investors – to this end, it is clear that the pandemic did not divert attention from climate change.
From January through Decembers 2020, investors in mutual funds and ETFs
invested $288 billion globally in sustainable assets, a 96% increase over 2019.
Many large groups worldwide – as well as a growing number of SMEs – madepublic their carbon commitment for different time-scales, but mostly in linewith the goals of mid-century carbon neutrality. Governments and companies are expected to issue $500 billion in green debt in 2021, nearly half thetotal that has been raised since the asset class inception.
At the same time, while the reallocation of capital toward green organizations and products is taking place globally at an increasing pace, many institutional investors, shareholder groups and civil society actors are also pressuring companies into placing ESG considerations at the core of their businessmodels. This is partly due to the need of addressing the growing regulatory,financial and reputational risks that companies face when they fail to set ambitious ESG targets for their operations12.
Sustainable finance encourages companies to include environmental, social,and governance (ESG) considerations in their business model and long-term
strategic objectives. These considerations entail:Exhibit 4 | ESG benefits forbusinesses• Environmental - Refers to the energy a company consumes and the waste itdischarges, the resources it needs, and the consequences for living beings as
a result. It also encompasses carbon emissions and climate change.
• Social - Refers to a company’s relationship with employees and its approachto human rights, as well as the engagement it fosters with stakeholders, including the people and institutions it does business with. Social propositions
also help employees’ formation and retention, and strengthen companies’social responsibility.
• Governance - Refers to the internal system of practices, controls, and procedures a company adopts in order to govern itself, make effective decisions,comply with the law, and meet the needs of external stakeholders, also in terms of transparency and accountability.
In this context, ESG performance of a business positively correlates with its
financial performance: for example, a strong ESG proposition correlates withhigher equity returns, higher credit ratings and lower cost of debt (such asloan and credit default swap spreads). Several ESG propositions can make apositive impact on financial performance, including:• Market share growth, fostered by changes in consumer preferences. Over
70% of consumers in multiple industries would pay an additional 5% for asustainability produced product.
• Cost reductions, particularly during operating phases of the asset, due togreater efficiency and lower operational costs.
• Lower regulatory intervention, and potential increased access to government support.
• Higher productivity, since a strong ESG proposition helps businesses attract
and retain quality employees, and enhances employee motivation through asense of purpose. Employees’ satisfaction is positively correlated with productivity and shareholder returns.

12

Refer to Policy Paper Finance & Infrastructure, Policy Action 1.2 and to Policy Paper Action Council, Policy Action 1.2

29

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY• Asset optimization and risk management, as allocating capital to sustainable initiatives can enhance investment returns, while avoiding investments
losses due to longer-term environmental issues.
Even in times of economic distress, such as during the Covid-19 pandemic, astrong ESG proposition can help reduce negative impacts for companies. For
example, a strong governance foundation can help neutralize fraudulent or
risky activities that could be exacerbated during times of stress. In addition,prioritizing social considerations related to ESG – such as employees’ healthand safety – can improve businesses’ ability to safeguard their workforce andminimize business disruptions. Financial aid from governments and investors
is also increasingly focused on sustainable development.
Despite recent capital flows momentum and regulatory and public attention
to these matters are on the rise in many geographies, the lack of consistent
metrics and standards identifying sustainable financial products and companies represents an acute barrier to wider market adoption, and can lead toinvestors’ uncertainty and to so-called “green-washing” practices. Assessing
sustainability requires that policymakers, regulators and investors have access to consistent, high-quality, and material public information.
To this end, one of the key challenges that the G20 governments should address in this context is the lack of harmonized taxonomies on sustainablefinance. To this day, little global coordination exists on sustainable financetaxonomies. While there has been a harmonization process in some geographies, there are still multiple taxonomies across jurisdictions, with different objectives and focus on different components of ESG. The majority of
the newly-created frameworks emphasizes the environmental aspect. Moreover, the lack of consistent application of common and globally-accepted
ESG taxonomies across jurisdictions leads to different interpretations of thesustainability-related performance of large corporations and SMEs.
A global coordination and harmonization on taxonomies is seen as an essential reform that could bring positive results and benefits for all economic actors. Indeed, harmonized taxonomies have been assessed as tool available toall financial market participants to identify sustainable assets, reducing thecosts of developing their own classification. Harmonizing taxonomies has
also demonstrated to ensure a high-level playing field and reduce fragmentation, bringing more clarity to definitions, which may limit greenwashing andreputational risks. In this context, a holistic approach to taxonomy shouldtake into account life-cycle analysis and carbon abatement cost per ton of
CO2 for all technologies, in order to foster carbon neutral innovation in all
sectors.
Also, global coordination on taxonomy can be used by companies in different
regulatory frameworks, such as disclosure of environmentally sustainable investments and financing. The growing interest in taxonomy has also led businesses to incorporate sustainability concerns into their strategy. Further, byidentifying its green activities, a company can diversify its investors’ base. A
common approach to taxonomies could also provide a clear path for companies on how to leverage the energy transition and be used as a metric in along-term business strategy and for marketing purposes.

30

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

For retail consumers, consistent taxonomies have proven to reduce information asymmetries, increase transparency of activities and easier access to sustainable products have, improve awareness among retail investors and limit
research costs. This would also led to increased competition, allowing retailinvestors to more easily compare financial products with each other.
In this context, regulators and supervisors would also use the taxonomy
to implement new sustainable investment frameworks as a reference forestablishing policies that encourage sustainable investment by private andpublic actors. This would also be used to monitor capital flows to green investments and to set targets.
A second challenge that G20 governments should address in order to leverage sustainable finance principles is the lack of shared non-financial disclosure
frameworks. As a matter of fact, current sustainability disclosures do not follow common standards, which limits a user’s ability to run comparisons acrossbusinesses and jurisdictions, and often results in comparative disadvantages
and increased regulatory burden depending on companies’ reporting jurisdiction. So far, progress has been made around standardizing sustainabledisclosures with a primary focus on climate-related financial disclosures, but
multiple frameworks still exist. Also, sustainability reporting remains largely
voluntary and adoption uneven among publicly traded corporations acrossgeographies, with little external verification and attestation of the reliabilityof the disclosed data, partly due to different levels of market preparedness
among countries.
To this end, transparent measurement and disclosure of sustainability performance is a fundamental component of an effective business management, and essential to preserving trust in business as a force for good. Sustainability disclosure not only is increasingly critical for investors, as they seek
to make robust economic decisions, and for regulators, as they look at theoverall stability and efficiency of financial markets, but to a wide variety of
stakeholders who rely on companies to preserve and improve the communities where businesses operate.
In the last 50 years, financial reporting has matured as a result of internationally recognized accounting standards that bring transparency, accountability and efficiency to financial markets around the world. The financial reporting eco-system has achieved global legitimacy through regulatory mandates
by policymakers and users, while at the same time enabling the preparationof comparable and reliable information that can be consumed by a wide variety of data aggregators, analytics, ratings and indices providers. Its transparent, collective standard-setting process and governance structure haveresulted in a body of standards that are widely accepted as fit-for-purposeand globally used.
In order to reach the same level of maturity and reliability in the ESG disclosure’s ecosystem, the G20 should foster ongoing international effortsof leading standard-setters, integrated reporting framework providers andregulators, including the TCFD, the IFRS Foundation and the International
Organization of Securities Commissions (IOSCO), to design and disseminate
a common standard for ESG disclosure by businesses, also building on existing best practices developed by regional and national policymakers andensuring alignment with their efforts in this area.
Such standards should provide users with material and comparable informa-

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

tion on all business’ key sustainability metrics and should allow for externalverification of such information to assure its reliability, similarly to that provided for financial data across markets worldwide. Moreover, in order to driveincreased adoption, ESG disclosure frameworks should demonstrate sufficient flexibility to be applied to a wide variety of industries and sectors, aswell as being adaptable to reflect changes in circumstances and in technologies. Standards should also take into account the double materiality concept,
and its right balance with administrative burden. Finally, also in light of global
discussion on integrated and interconnected reporting, sustainability disclosure frameworks and standards should be designed to easily blend within businesses’ annual reports, disclosing financial and ESG information alongsideas part of a comprehensive corporate reporting system that sheds light on
how value is created at all level.
For all these reasons, the G20 should support international discussion on harmonized taxonomy for sustainable finance products, as well as foster adoption of ESG and climate risks assessment and disclosure for all organizations.

Actions:• Promote policy pathways towards harmonized taxonomies for financeproducts to qualify as sustainable
G20 countries should ensure alignment between existing or future taxonomies for financial assets in order to provide more certainty to all economic
actors on the transition path and facilitate capital flows towards sustainableassets.
• Compel improved ESG and particularly climate risks assessment and disclosures by companies.
G20 countries should foster the adoption of robust ESG disclosure frameworks for all businesses in order to promote long-term value creation,
while at the same time managing financial risks deriving from climate change
and providing comparable, material information on businesses’ key sustainability metrics.
Policy Action 2.2: Drive carbon pricing
The G20 should drive effective and robust carbon pricing taking into account the local markets peculiarities and promote strategic dialogue to lay
the foundation for global mechanisms to valorize environmental externalities, while quickly phasing out direct or indirect inefficient energy subsidies.
The global nature of carbon emissions poses significant challenges, mostnotably from the policy perspective: given the border-free circulation ofCO2, all countries have to act together to reduce carbon emissions and fightagainst climate change within the multilateral frameworks of the UNFCCC
and the WTO. In this context, the COVID-19 pandemic only granted a shortterm reduction in global emissions and will not lower long-term emissions
unless countries pursue an economic recovery that incorporates strong decarbonization strategies.
Economists, businesses, governments, NGOs and international bodies likethe World Bank, the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) are advocating forcarbon pricing as a key instrument in transitioning to a low-carbon economy.
The adoption of financial frameworks that put a value on carbon and effecti-

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vely reallocate capital is seen as an effective, flexible and low-cost tool todecarbonize a wide range of sectors and spurs innovation into zero-carbon
technologies13.
Article 6 of the Paris Agreement provides for both market-based approaches (such as Emission Trading Systems, or ETS, and Joint-Crediting Mechanism, or JCM) and non-market-based instruments (such as carbon taxes).
Both systems often exist side by side in the same jurisdiction, together withother complementary policies.
As of 2021, more than 60 national or sub-national jurisdictions have launched initiatives to valorize environmental externalities. However, the fragmentation of these carbon pricing schemes – which in some cases differ even
within the same country – and their co-existence with other policy instrument greatly reduces the effectiveness of these instruments and can lead tomarket distortions and a high carbon price volatility. At the same time, 46%of energy-related CO2 emissions in G20 countries do not face a carbon priceat all, while 88% of emissions in the same countries are priced below US$35
per ton of CO2, substantially lower than the one needed to be consistent
with the Paris Agreement. As a matter of fact the Paris Agreement required
an estimated average of US$50–100 for ton of CO2 by 2030, to be reachedtacking into consideration the peculiarities of different geographies and theneeds of the developing countries.

ETS and carbon tax mechanisms implemented or scheduled for implementation

Exhibit 5 | Overview of carbon pricing initiatives worldwide

Source: World Bank (2020) - State and Trends of Carbon Pricing

Refer to Policy Paper Action Council; Policy Action 1.1

13

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In this context, because country-specific shadow carbon prices (i.e. prices
necessary to meet specific mitigation targets) vary substantially across countries and regions, there is a large potential for cost savings from international
cooperation through carbon markets. In particular, benefits tend to be higher with broader participation of countries, broader coverage of emissions
and sectors. The synergies from such cooperation can facilitate the adoptionof more ambitious policy goals (e.g. with emission reduction targets that go
beyond Nationally Determined Contributions - NDCs - and align with thegoals of the Paris Agreement).
For these reasons, international co-operation on carbon pricing - in particular trough market-based mechanisms - can deliver both economic (e.g. lower
mitigation costs) and environmental benefits (e.g. reduced GHG emissions),
although the economic dividend of international co-operation may varyacross countries and regions. It is estimated that a global effective carbon
pricing mechanisms and the reduction of fossil fuel subsidies alone could
lead by 2030 to a decline in fossil-fuel related emissions by over 20% globally[29], reduce air pollution related deaths by over 50% and boost government
revenues by $2.9 trillion (3.6% of global GDP) [30].
Moreover, using carbon markets to help countries meet the mitigation goals
in their initial NDCs with a uniform global carbon price has the potential toreduce global mitigation costs by 58 to 63% compared to countries meetingthese targets unilaterally, translating into annual cost savings of up to USD
259 billion by 2030. These same benefits are estimated to be much higher
if countries were to set NDCs that are in line with limiting global warming to
2°C, resulting in savings up to 1.240 billion by 2030. In this context, economic
benefits can be the foundation to raise ambitions.
Article 6 provides for international cooperation mechanisms supporting
the linking of carbon pricing approaches across countries and jurisdictions –mainly through foreseeing cross-country trade of internationally transferredmitigation outcomes (ITMOs) and other offsetting certificates that countries
can account against their NDCs. Even though this would clearly result in a
reduction of emissions by a greater magnitude than what is possible solely
at domestic level, Paris Agreement’s Parties have not yet concluded the negotiation on the specific Article 6 implementing provisions within the Paris
Agreement Rulebook. Despite the greater effectiveness of global frameworks for carbon pricing, governments’ discussion on potential shared approaches should also take into consideration local specificities and different
grades of preparedness at national level, also to secure the affordability andaccessibility of energy for everyone, particularly in emerging economies. Moreover, coordinating the convergence towards global carbon prices shouldtake in to account the uneven distribution of cost-savings among countries
and regions, as well as among different households and groups within thesame country. International cooperation on carbon pricing should therefore consider the need to safeguard countries’ competitiveness (which could
be affected by higher carbon prices), also through developing international
platforms and multilateral agreements to share best practices and technologies that might facilitate the transition. In terms of country-level impacts, national policymakers should consider carbon revenues recycling mechanismsthat are progressive in nature and can facilitate an even distribution amonghouseholds of the cost-saving benefits deriving from pricing carbon.

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Despite these issues, local markets’ considerations should take into accountsolutions to limit the risk of relocation of industrial activities due to different
national climate ambitions and carbon related regulations. In this respect,
G20 members should cooperate closely with third countries and the corresponding WTO and UNFCCC institutions in order to reduce these risks – also
through fair, mutually-agreed trade mechanisms of energy intensive goods– aiming to strike the right balance between the inevitable differences in carbon prices and minimizing the risk of trade distortions. However, while thesemechanisms could help create a level playing field between different sectors
and countries, global coordination on GHGs pricing remains the primary way
to ensure a cost-efficient emissions reduction, finance the transition of developing countries, and mitigate the risk of global trade disruption which could
result from the implementation of such mechanisms. Such coordination
should be firmly grounded within both the WTO framework and its tradeprinciples of open borders and non-discrimination, as well as the UNFCCC
framework and its principles of cooperation but also common but differentiated responsibilities.
Despite the fact that carbon prices are increasing in many jurisdictions, theyremain substantially lower than those needed to be consistent with the Paris
Agreement.

Exhibit 6 | The price of carbon worldwide

The High-Level Commission on Carbon Prices estimated that carbon prices
of at least an average of US$40–80/tCO2 by 2020 and US$50–100/tCO2 by2030 are required to cost-effectively reduce emissions in line with the temperature goals of the Paris Agreement, although with significant differencesamong countries.
As of today, less than 5% of GHG emissions currently covered by a carbon
price are within this range, with about half of covered emissions priced at lessthan US$10/tCO2, and the IMF calculates the global average carbon price isonly US$2/tCO2.
Percentage of CO2 reduction in 2030, compared to "business as usual"

Source: IMF (2019) - The case for carbon taxation: putting a price on pollution

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In view of these challenges, G20 governments should first secure effective
carbon markets in local jurisdictions while at the same time providing platforms to share best practices and foster dialogue to lay the foundation for
global, market-based mechanisms to valorize environmental externalities,
based on Article 6 of the Paris Agreement. To ensure greater coordination,
governments should also consider supporting the development of pilots under Article 6 to demonstrate its effectiveness.
Other potential forms of market-based cooperation should include extending the coverage of pricing schemes towards non-CO2 (NC) GHGs andtowards other economic sectors which are not included within current frameworks: both measures are considered to be unambiguously beneficial forall participating countries, regardless of their developing levels.
In particular, while CO2 accounted for the largest share of global GHG emissions in 2017 (74%), other sources of GHG include CH4 (17%), N2O (7%) andfluorinated GHGs (2%).This means that current carbon pricing schemes
exclude a number of low-cost abatement opportunities from NC-GHGs,
such as methane leaks from animal agriculture. Although extending the coverage to these gases could result in measurement and metrics challenges,
on balance, cost savings would be around 50% more compared to excluding
NC-GHGs. In this context, one third of the reduction target would be met
by low-cost abatement options of NC-GHGs, particularly in sector such as
agriculture and forestry.
Also, current carbon prices (i.e. also taking energy taxes into consideration)
within countries vary considerably across sectors, ranging from more than
US$ 350/tCO2 in the road sector to zero in other sectors (e.g. buildings) atOECD level [31]. Sectoral coverage of ETS is much lower for sectors with large
number of diffuse emitters, including buildings, transport, and waste, as well
as for domestic aviation. Expanding sectoral coverage would generally reduce mitigation costs at an aggregate level through harmonizing carbon prices
across sectors, while reducing the risk of inter-sectoral leakage.
However, cooperation on emission trading systems at regional or global level might not be enough to decarbonize all economic sectors. In particular,
all these mechanisms should be implemented in a coherent legal context inorder to ensure effectiveness and efficiency of the policy mix in each jurisdiction. Differently, governments’ efforts in adopting carbon pricing approaches could be jeopardized by other contradictory policies. Therefore, theG20 should complement market-based approaches with adequate environmental taxation – such as carbon taxes and incentives for the energy transition – while taking into account national circumstances and energy pricelevels in order not to hinder social and economic progress.
For specific sectors in which market mechanisms are not a viable option,
as well as for certain developing countries, which may not have adequate
structural resources to administer efficient ETSs, carbon taxes can represent
complimentary policies in the context of reaching a full price coverage of
GHGs emission worldwide, also thanks to their relatively low implementation
and administration costs. In this context, well-designed carbon taxes, both
explicit or implicit, send market signals that can unlock new business models
and mobilize private investing and spending in greener alternatives, reducing
climate damage and air pollution. This taxes can also raise much-needed revenues which can be used to support vulnerable groups in adjusting to higher
energy prices or to strengthen social safety nets.

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYRegardless of the carbon pricing mechanism adopted, each country should
also take into account the distortionary effects of inefficient energy subsidies– in terms of carbon neutrality targets – which represent countervailing policies to carbon pricing, as they can act as a negative carbon price. In this context, while these subsidies can be used to achieve specific policy goals, such asproviding affordable energy for low income households, or enhance energy
security, they often incentivize carbon-heavy energy production and inefficient use. For these reasons, the G20 governments should coordinate with
relevant international organizations to collect energy subsidy data, analyze
their impact on carbon neutral pathways and socio-economic issues (such as
employment, income distribution, and energy security), and devise effective
pathways to withdraw all inefficient subsidies, while also taking into accountlocal specificities. The potential savings from reforming these subsidies could
go towards financing climate change mitigation and adaptation measures,
scaling up R&D support for climate-friendly technologies, or to providing
compensation for trade-exposed, energy-intensive sectors.
Finally, the G20 should also promote carbon data and metrics harmonization
through new technologies with the goal of simplifying the administration of
the carbon pricing. In this context, the increasing ability to generate, capture,transmit as well as learn from data will be a critical feature for jurisdictions torefine and coordinate their carbon pricing policies. Innovative projects, suchas the World Bank’s Climate Warehouse meta-registry, demonstrate the potential of a decentralized IT approach to link climate market registry systems,
supported by AI, IoT and blockchain technologies.

Actions:• Drive the adoption of effective carbon markets in local jurisdictions.
G20 countries should foster the creation of robust and comprehensive local
carbon markets in order to meet their mitigation targets and spur innovation
in low-carbon technologies, and should exchange best practices for a levelplaying field, also taking into account different grades of preparedness in the
different geographies.
• Foster linking of local carbon markets through agreeing to and enforcing Article 6 of the Paris Agreement, considering solutions to limit therisk of relocation of industrial activities due to different national climate
ambitions and carbon related regulation, while taking into account the
principle of common but differentiated responsibilities.
G20 countries should finalize Article 6’s Rulebook in order promote interconnected carbon markets at global level and consistently reduce mitigation costs, while minimizing the risk of trade distortion through the review of
WTO’s provisions.
• Harmonize carbon pricing metrics and leverage new technologies forcarbon data acquisition and analysis.
G20 countries should introduce a common set of metrics on GHGs emissions
and adopt innovative technologies for measurement in order to simplify theadministration of carbon markets and obtain reliable data on effective emissions reductions.
• Reorganize current fiscal policies to complement carbon markets schemes with non-market-based initiatives where needed.
G20 countries should adopt a holistic approach to reduce GHGs emissions,37

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

complementing market-based instruments with coherent fiscal policies andcarbon taxes in local jurisdictions in order to abate harmful emissions throughout all the economic sectors.
• Phase out inefficient energy subsidies vs carbon neutral targets, andprovide adequate incentives by advancing fiscal tools for the energy
transition to promote affordable and carbon neutral energy sources.
G20 countries should agree on effective pathways to withdraw the inefficientenergy subsidies, while taking into account national circumstances and theobjectives of a just and inclusive transition, and introduce adequate incentives to accelerate the shift toward clean energy sources and consumption.

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Recommendation 3: Ensure resilience and inclusivity of global resource supplies
Policy Actions
3.1 Foster supply chain resiliency – G20 members should improve the resilience of global infrastructures to cope with adverse climate events, cybercrime, and other disruptive events.
• Develop plans to strengthen the climate resilience of infrastructure (including energy systems, transport infrastructure, buildings, ICT systems, andwater supply systems).
• Promote research and development of new digital products and services inorder to increase the resilience of the energy and water systems, with special
regard to the cyber-security.
3.2 Commit to a just transition – The G20 should commit to a just and inclusive transition across countries, vulnerable communities and economy
sectors.
• Promote capacity building, vocational training, up-skilling, re-skilling andother measures for communities and countries affected by energy transition.
• Implement policy pathways and support for affected countries, communities and economy sectors.
3.3 Guarantee resources access and security – The G20 should commit to
grant affordable and secure access to clean energy and water to all communities.
• Facilitate funding and foster the adoption of innovative financing vehicles
to facilitate clean energy and water access in less developed markets.
• Promote international collaboration to share best practices on water andenergy infrastructure innovation.
Leading Monitoring KPI 14

Baseline (2020)

Target (2030)

Global % of population with access to safely
managed drinking water services11
1. Aligned with SDG Goal 6, Target 6.1, Indicator
6.1.1.

71%(2017)

100%

Global % of population with access toelectricity1
1. Aligned with SDG Goal 7, Target 7.1, Indicator
7.1.1.

90%(2019)

100%

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYSDG impacted:
Recommendation 3 contributes to SDG 6 – Clean water and sanitation – andSDG 7 – Affordable and clean energy – by advocating for a secure accessto clean energy and water for all, posing particular attention to developing
countries and vulnerable communities.
Additionally, by focusing on the impacts of the energy transition on society
and the job market, Recommendation 3 sustain the achievement of SDG 8– Decent work and economic growth. In this context, remarking the importance of a just transition, Recommendation 3 also contributes to SDG 10 –Reduced inequalities.
Moreover, Recommendation 3 supports SDG 9 – Industry, innovation and infrastructures – and SDG 13 – Climate action – promoting the improvementof global supply chains resiliency by strengthening infrastructures against theeffects of climate change and other disruptive events.
Finally, given the need for international cooperation and solidarity required
to tackle the aforementioned challenges, Recommendation 3 sustains SDG
17 – Partnerships for the goals – suggesting means of collaboration and encouraging international support.

G20 Italy Priorities:
Recommendation 3 contributes to addressing G20 Italy Priorities People andProsperity.
The tree suggested Policy Actions aims at tackling existing inequalities anddivides, building a more inclusive society and protecting the most vulnerable
by promoting capacity building and safe and secure access to fundamental
resources such as energy and water. This way, it would be possible to progressin both the People and Prosperity priorities.

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYContext
The transition to a more sustainable and efficient energy system is not deferrable. Its effective completion, however, requires a global effort and collaboration across sectors. Different countries and communities, public and private
actors have to align their objectives to decrease their environmental impact
and unlock sustainable economic growth. Therefore, there is a need for themto agree on the principle of a just transition, fostering inclusivity and granting
fairness.
The backbone of this process is constituted by global supply chains and theinfrastructures upon which they are built. As climate change and cybercrimes
threaten their functionality, it is necessary to boost their resilience to disruptive
events. Moreover, global supply chains should grant access to basic resources
to all communities, especially energy and water. This objective is specificallytargeted by SDGs 6 and 7 [32] and can produce positive social and economic
output.
Furthermore, the clean energy transition will affect communities and industry in a heterogeneous way. Inevitably, despite the clear benefits it can provide, the transition will deeply transform several economic sectors, with directconsequences for the job market and the society as a whole. Thus, the risk ofinequalities has to be addressed with effective policies granting an equitable
distribution of the transition’s upsides.
Policy Action 3.1: Foster supply chain resiliency
G20 members should improve the resilience of global infrastructures to copewith adverse climate events, cybercrime, and other disruptive events.
Infrastructures are a core enabling element for social and economic development. They serve most basic human needs and support the growth of innovative ventures ensuring effective supply of resources, communication andmobility. However, infrastructures often lack the required investments, bothin developing and developed countries [33]. Additionally, infrastructures are
critical to addressing inequalities, as poorer countries are suffering morefrom infrastructure disruptions, which hinders their ability to grow [34]15.
Low-income countries suffer the most due to inadequate infrastructures

Exhibit 7 | Relationship between
per capita GDP and infrastructure
disruption

Source: The World Bank (2019) - Lifelines: The Resilient Infrastructure Opportunity

15

Refer to Policy Paper Integrity & Compliance; Policy Action 2.3

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYClimate change constitutes a severe threat to global infrastructures. The impact of rising sea levels, changing temperatures and extreme weather events
can deeply disrupt their functioning. These risks are clearly perceived by thebusiness sector, as companies estimate potential losses equal to USD 1 trillion due to climate impacts by 2025 [35]. Therefore, plans and investments
are needed to make infrastructure climate-resilient, both mitigating climatechange and adapting to its inevitable consequences; this way, it will be possible to protect communities and businesses from related risks16.
Several actions could be implemented. First, new infrastructure should bedesigned to be climate-resilient over their lifetime. Second, existing infrastructure should be analyzed to assess their need for being retrofitted or
managed differently. Third, it can be evaluated the need for additional infrastructure able to mitigate the impact of climate events, such as sea walls or
nature-based solutions [36], which can, for instance, help to cool urban areas
or provide coastal protection [26].
Moreover, while most critical infrastructure protection and disaster management programs only address physical threats, to strengthen the resilienceof modern infrastructure it is also necessary to cope with cyber threats, possibly causing service disruption or public safety concerns17. Indeed, cybersecurity is among the top ten risks of the World Economic Forum Global Risks
Perception Survey 2019–2020, both in terms of likelihood and impact [7]. In
the energy sector, for instance, the increase of data-driven processes might
generate vulnerabilities in the communication networks and information systems. Cyberattacks present unique challenges since they lack distinct borders, employ constantly evolving technologies and tactics and require coordination between private and public actors [37]18.
Resilient infrastructures risk being disrupted by several menaces, but they
are also a key factor to resist and thrive against them. To this end, resilient
infrastructures are fundamental to ensure services and resources provision,increase the life of assets and protect the return they can generate. However,to meet the environmental and economic objectives set for 2030, approximately USD 6.9 trillion per year should be invested in resilient infrastructures[33]. Therefore, global collaboration and coordination are fundamental tocollect the funds and plant the investments required to make the international infrastructure system future-proof, considering also the importance ofmarkets integration and systems interconnection in crisis situations19.
Furthermore, supply chain resiliency is fundamental to sustain the clean
energy transition. The production of minerals is expected to increase by up
to 500% by 2050 to satisfy the demand generated by clean energy technologies, corresponding to over 3 billion tons of minerals and metals [38]. The
pandemic has deeply stressed these supply chains, raising the need for resiliency-focused interventions, considering the whole industry chain and life
cycle of emerging energy technologies, which are key to improve energy security and enable the clean energy transition.
An important role is played by insurance and reinsurance players. Their activity can decrease barriers to investing in climate-resilient infrastructures inseveral ways: they can offer financial compensation for large losses linked toenvironmental disasters so that those affected can recover faster; they canhelp to assess, communicate and signal risks through premiums, deductibles
and payments, increasing understanding and awareness of threats and encouraging measures to prevent and address the effects of climate risks; final-

Refer to Policy Paper Trade & Investment: Policy Action 2.3
Refer to Policy Paper Health & Life sciences; Policy Action 3.3
18
Refer to Policy Paper Action Council; Policy Action 3.1
16
17

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

ly, they can create incentives or requirements for risk management, limiting
potential impacts of extreme weather events [39].

Actions:• Develop plans to strengthen the climate resilience of infrastructure (including energy systems, transport infrastructure, buildings, ICT systems,
and water supply systems).
G20 countries should assess the ability of existing infrastructures to copewith climate change and, consequently, plan investments in both retrofittingof existing infrastructures and design of new infrastructures, necessary to secure critical, national and international supply chains.
• Promote research and development of new digital products and services in order to increase the resilience of the energy and water systems,with special regard to the cyber-security.
G20 members should invest in digital technologies useful to monitor the state of infrastructures and improve their resiliency and interconnection, also
preventing service disruption or public safety concerns due to cyber threats.
Policy Action 3.2: Commit to a just transition
The G20 should commit to a just and inclusive transition across countries,
vulnerable communities and economy sectors.
The transition of the energy system towards a sustainable energy mix andefficient use of energy is expected to generate significant benefits both forthe environment and the economy. However, as with every transformation,
its impact will affect in different ways countries, local communities and industries. Therefore, it is necessary to plan carefully for the transition to be just,ensuring wide participation in the gains and support for the most affected20.
The idea of just transition is embedded in the Paris Agreement. It underlines
the importance of creating decent work and quality jobs, posing “the imperatives of a just transition of the workforce” [40]. Moreover, the just transition concept is also a link among many SDGs [41], representing a pillar of the2030 Sustainable Development Agenda.
Two aspects have to be considered to enable a just transition: work displacement (distributive effects on the society) and affected economic sectors(industrial competitiveness). Moreover, the transition has to be sustainablefrom a socio-economic point of view even in the short run, making sure that“no one is left behind”. The shift to a low-carbon and climate-resilient economy will change the skills and qualifications needed by the workforce. In
particular, the deployment of clean technologies requires skills in technological application, adaptation and maintenance; additionally, skills are fundamental to adapt quickly to changes caused by climate change and environmental policies [42]. This will substitute or even eliminates existing jobs, butoffers also significant opportunities for the creation of new jobs: with a clean
energy transition, by 2030, jobs linked to clean energy, efficiency and low
emissions technologies could employ additional 30 million people, increasing the number of additional jobs in this sector by almost four times compared to stated policies scenario [9]. Moreover, the effects of a green economy
transition will not be homogenous among countries and businesses. Those
who are going to be most disrupted include countries exporting fossil fuels

19

Refer to Policy Paper Trade & Investment: Policy Action 1.3; Policy Action 2.2
Refer to Policy Paper Action Council; Policy Action 1.1

20

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and companies reliant on the use of fossil fuels for energy production andconsumption [43].
Therefore, governments need to consider the full repercussion on communities disproportionately impacted by the clean energy transition, taking into
account the effects on displaced workers and their families, as well as on local businesses. On the one hand, efforts should be directed to develop andimplement effective training, re-skilling and up-skilling programs to enhance
the resilience of the workforce to these changes21. On the other hand, adequate support should be granted to communities and industries that aregoing to be most challenged, requiring proactive plans to be developed andimplemented in collaboration with local and national governments, leading
to new, viable industries and labor markets. These actions should be especially directed to strongly affected regions. Achieving a just transition willconsequently require dialogue among workers, industry, and governments todefine an inclusive agenda to be implemented in their geographical, political,
cultural, and social contexts [44].
Furthermore, this process has to take into particular consideration younger
generations and women22. As job opportunities grow, more students should
be choosing STEM and energy-related educational paths (including apprenticeship and vocational training) and deploy acquired competences to foster
innovation and progress to build a climate-resilient and sustainable energy
future. Despite the hurdles faced during the pandemic, particularly on education and employment, young people represent the main human resourcefor development and key agents for social change, economic growth, innovation and environmental protection [45]. At the same time, gender diversity
is crucial to develop more innovative and inclusive solutions for the energy
sector. However, women account only for 22% of the labor force in the oiland gas sector and 32% in renewables, while representing about 48% of the
global labor force; it is also harder for women in the energy sector to reachleadership roles than in the broader economy [46]. Thus, a just transition has
to promote youth participation and gender equality to fulfill its mission.

Actions:• Promote capacity building, vocational training, up-skilling, re-skillingand other measures for communities and countries affected by energy
transition.
G20 members should invest and promote programs aiming at developing
the skills needed to adapt to and foster the clean energy transition, especially
STEM, with particular attention to younger generations and women; countries may cooperate with multilateral and regional development banks andeducational institutions to provide capacity development.
• Implement policy pathways and support for affected countries, communities and economy sectors.
G20 countries should provide clear regulation and milestones to allow businesses to plan for an effective transition to a clean energy system, offering
incentives for research and development activities dedicated to the implementation of clean and efficient processes and material usage. In this context, it should be key to ensure seamless coordination between central andlocal government and promote full stakeholder participation in transparent
planning processes.

21

44

22

Refer to Policy paper employment & education: Policy action 1.1
Refer to Policy paper employment & education: Policy action 3.1; Policy action 3.2

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Policy Action 3.3: Guarantee resources access and security
The G20 should grant affordable and secure access to clean energy and water to all communities.
In order to ensure a just transition and foster inclusive economic growth,access to fundamental resources such as clean energy and water should be
granted to all communities. This objective is also set by the 2030 Sustainable
Development Agenda through the SDGs 6 and 7 [32]. However, today we arestill far from granting universal supply of sustainable and safe energy and water.
Energy can contribute to the achievement of all the SDGs and, more in detail,to meet 125 out of 174 targets [47]. Despite the improvement in global energy
access, 789 million people lacked electricity in 2018, while 2.8 billion people
could not rely on clean cooking fuels and technologies [48]. Moreover, energy access is not distributed equally across regions, as countries with higher
poverty levels generally have lower access to modern energy services [47].
In 1990, 45% of people without access to electricity were located in SouthAsia; by 2016, the largest share was concentrated in Sub-Saharan Africa [49].
In this region, the pandemic has partially reversed the progress made in thelast years in terms of energy poverty, with people with no access to electricity
forecasted to increase for the first time since 2013 and the fraction of the
population without access to clean cooking growing [25]. If urgent actions are
not taken, by 2040, about 600 million people will not have access to electricity yet [50].
A similar portrait emerges analyzing world access to clean water. While anenormous amount of treated water is lost every day due to crumbling infrastructures causing water leaks (e.g., in the United States, this amount is almost equal to 23 billion liters [51]), in 2017, considering the global population,
only 71% had access to safely managed drinking water and 45% to managed
sanitation services, whilst 785 million had not even basic drinking water [52].
Moreover, on average, while high-income countries are able to treat about
70% of municipal and industrial wastewater, the percentage falls to 38% in
upper-middle-income countries, to 28% in lower-middle-income countries
and to 8% in low-income ones [53]. This has immediate health implications.
Contaminated water and poor sanitation are linked to the transmission of
diseases such as cholera, hepatitis A, typhoid, and polio. In 2019, unsafe water, sanitation, and handwashing caused around 1.7 million death [54]. Again,
low-income countries are the most affected by these issues, particularly in
Sub-Saharan Africa and Asia [55].
Water and electricity are strictly linked, since water plays a crucial role inenergy production (e.g., in hydroelectric plants, in cooling thermal plants,etc.) and energy is required to process and distribute water, to treat wastewater, to pump groundwater and to desalinate seawater [56]. Together,
they are critical for many human activities; one example is represented byfood production, considering that agriculture is responsible, on average, for
the withdrawals of about 70% of all global freshwater [57] and the agrifood
chain employs roughly 30% of the world’s available energy [58]. To this end,
managing water, energy, and food resources simultaneously and meet multiple potentially conflicting objectives, without compromising the resourcebase of any sector, represent a challenge that has to be addressed with urgency [59]; it demands an integrated approach, in which clean energy can
act as an enabler of increased food security, agricultural productivity andimproved access to water resources. This way, the water-food-energy nexus

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

has the transformative power to build new markets for access to energy andwater and to increase economic productive capacity.
In this context, increased global commitment and collaboration are neededto effectively tackle these concerns. To meet SDGs 6 and 7 in all low- andmiddle-income countries, where water and energy access levels are currently
lower than 100%, the investment need could be of USD 5.8 trillion between
2016 and 2030 [60]. The two objectives are strongly bonded, as water scarcity materially impacts energy production and reliability; considering that inrural areas almost 66% of those who lack access to electricity also lack access to clean drinking water, planning for water supply and clean electricity
provision together can trigger several synergies [61]. Possible solutions havealready been advocated. For instance, to spread access to clean electricity
and clean cooking solutions for underserved communities, countries could
invest in grid-electrification providing connections to urban and rural areasand in off-grid electrification through community-level micro- or mini-gridsystems [47]. Though, the effect of taxation on vulnerable consumers should
be carefully considered to avoid the exacerbation of energy poverty issues.
These investments not only provide social benefits, but also economic ones.
For example, a WHO study estimates that every USD 1 invested in improved sanitation generates an average global economic return equal to USD
5.5 [62].

Actions:• Facilitate funding and foster the adoption of innovative financing vehicles to facilitate clean energy and water access in less developed markets.
G20 countries should invest to enable clean energy and water access for all
through innovative financing vehicles, such as sustainability-linked bonds, inorder to achieve SDGs 6 and 7 and unleash opportunities for global economic development.
• Promote international collaboration to share best practices on waterand energy infrastructure innovation.
G20 members should increase the level of collaboration and sharing of data
and best practices useful to improve critical water and energy infrastructures, harnessing the benefits of innovation to grant access to and security ofthese essential resources.

46

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Recommendation 4: Commit to preserve theequilibrium of the natural ecosystem, promoting a more sustainable use of natural resources
Policy Actions
4.1 Exploit circularity practices to reduce the environmental impact of
economies – The G20 should promote the diffusion of circular economy
practices to use global resources more sustainably, increasing international
collaboration.
• Agree to a common set of metrics to assess and monitor the progress ofcircularity indicators.
• Incentivize increased use and reuse of products and waste resources, product life extension and other circular models.
4.2 Enhance sustainable use of marine and terrestrial resources – G20
members should commit to the preservation and restoration of the natural
ecosystems, safeguarding life on land and below water.
• Prevent and significantly reduce marine pollution and plastic pollution in
oceans, rivers and all water habitat.
• Halt the degradation of natural habitats and the loss of biodiversity.
• Establish international collaboration agreement to preserves oceans andlands.
Leading Monitoring KPI23

Baseline (2020)

Target (2030)

Global % of recycled natural resources employed in the economy1
1. Computed as cycled resources/total resources entering the global economy;
2. Defined in reference to a 1.75° trajectory to
be achieved by 2032, thereby meeting the goalof the Paris Agreement.

8.6%

17%2

SDG impacted:
Recommendation 4 contributes to SDG 6 – Clean water and sanitation – bypromoting a more conscious use of scarce resources such as water and a higher level of commitment to reducing pollution and release of hazardous
chemicals and materials in water ecosystems.
Moreover, sustaining innovative business models leveraging innovation todecouple economic growth from resource consumption, Recommendation
4 support the achievement of SDG 9 – Industry, innovation and infrastructures – and SDG 12 – Responsible consumption and production – through theadvancement of the circularity level of the global economy.
Circular economy practices are necessary also to manage the trends of population growth and urbanization sustainably; in this regard, Recommendation 4 also contributes to SDG 11 – sustainable cities and communities – by

23

Data from: Circle Economy (2021) – The Circularity Gap Report47

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

encouraging, for instance, better waste management solutions.
Finally, Recommendation 4 strongly supports the achievement of SDG 13 –Climate action –, SDG 14 – Life below water – and SDG 15 – Life on land –shedding light on the critical conditions of our environment and suggesting
actions to preserve and restore natural ecosystems and their balance.

G20 Italy Priorities:
Recommendation 4 contributes to addressing G20 Italy Priorities People,
Planet and Prosperity.
Promoting a higher level of circularity for global economies and the preservation and restoration of the environment, Recommendation 4 aims at improving people’s quality of life as well as protecting the natural balance ofthe planet.
At the same time, by implementing more sustainable economic practices andbusiness models, it is possible to sustain long-term prosperity and growth.

Context
As the last ten years of the 2030 Agenda for Sustainable Development start,
the world is on track to meet only 17% of the environment-related SDGs [63].
This means that there are insufficient political support and technical capacity
in both the public and private sectors to effectively tackle the challenge of environment preservation. For this reason, the UN Member States have decided
to implement a Decade on Ecosystem Restoration to increase the commitment toward achieving the SDGs and curb environment depletion [64].
These actions cannot be procrastinated. The global population is currently
consuming the environment and its resources at an unsustainable rate, 1.75
times faster than ecosystems’ ability to regenerate themselves, consequently
compromising future resource security [1]. The effects for the planet are devastating, including deforestation and increasing carbon dioxide concentrationin the atmosphere, leading to biodiversity loss, climate change and extreme
weather events. These phenomena impact directly on human life. For instance,
in 2015, 19.2 million people in over 110 countries were displaced due to weather,water, climate and geophysical hazards, more than two times of those displaced by conflicts or violence [65].
Accomplishing the objectives of the UN Decade on Ecosystem Restoration
would also unlock significant economic benefits. In fact, every US dollar spenton environment restoration is expected to generate between USD 3 and USD
75 of economic benefits from ecosystem goods and services [64]. Therefore,
it is time to accelerate global efforts to preserve the equilibrium of the natural
ecosystem.

48

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Policy Action 4.1: Exploit circularity practices to reduce the environmental
impact of economies
The G20 should promote the diffusion of circular economy practices to use
global resources more sustainably, increasing international collaboration.
In order to increase the chances of achieving the SDGs, it is necessary tochange the economic paradigm from a “take-make-waste” model to a circular one. In fact, circular economy not only addresses the greenhouse gas
emissions which cannot be abated by the energy transition, but also contributes to decreasing biodiversity losses and water stress [66].
However, the current circularity level of the global economy is equal to 8.6%
and is declining from the 9.1% reached two years ago: of the total 100.6 Gtof resources entering the global economy, only 8.6 Gt are cycled, while therest is constituted by newly extracted resources; besides, of the 32.6 Gt ofmaterials collected as waste, 23.9 Gt are lost [67]. Moreover, global resource
consumption is expected to double in the next 40 years [68] and the annual
production of waste is forecasted to rise by 70% by 2050 [69]. These consumption rates are unsustainable in the long term.
Circular economy addresses this challenge by promoting an economic model that does decouple activities from the consumption of not renewable resources, designing restorative and regenerative processes24. This way, circular
economy could decrease primary material consumption by 32% by 2030 [70]and could contribute to 45% of the CO2 emission reduction targets by 2050
[71]. This is even more relevant considering that the share of global emissions caused by materials production increased from 15% in 1995 to 23% in2015 [72]. Through circularity practices, it is possible to introduce and scale effective waste and wastewater management solutions, which are crucial
to cope with population growth and urbanization. Circular economy could
also contribute to solving the issue of food waste, which amounts to about
one-third of total yearly food production and causes emissions equal to 4.4
Gt CO2eq [73], thorough regenerative practices and exploitation of foodby-products. Furthermore, alongside environmental benefits, implementing circularity practices has the potential to unleash also economic gains.
In Europe, implementing circularity principles could increase GDP by an additional 0.5% by 2030 and create around 700,000 new jobs [74]. In China,
circular economic practices could generate business and household savingsof around USD 10 trillion by 2040 [75]. Therefore, the level of awareness related to circular economy should be raised among countries globally in orderto harness its benefits more effectively.
Several business models could change the way value is created, decoupling
economic growth from resource consumption. They aim at minimizing theuse of new resources exploiting recycled materials, reducing the carbon footprint. Additionally, they extend the useful life of products both designing
for durability and innovating their applications or ownership models. They
can be applied to a wide variety of sectors, such as mobility, healthcare, foodproduction and ICT. Examples of circular business models are resale or product-as-a-service platforms [76]. They both increase product utilization,
providing greater market access and discouraging the production of unnecessary goods. Furthermore, effective industrial symbiosis can be promoted
as a strategy to increase economic competitiveness, sustainability, resource
efficiency and resource security by transforming the waste and by-productsof an industry or industrial process into productive inputs for others.

24

Refer to Policy Paper Finance & Infrastructure; Policy Action 1.2

49

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYExhibit 8 | Enabling elements of thecircular economy

Source: Circle Economy (2021) – The key elements of the circular economy framework

The deep transformation of the economy implied by the transition to these business models requires both private and public collaboration. In thiscontext, circularity has to be considered holistically, taking into account its
impacts on the society, the environment and the economy. Therefore, newpolicy frameworks are needed to support circular practices and ensure a justand inclusive transition25. To this end, several actions could be implemented
such as: the use of virgin natural resources should be disincentivized to favormodels focused on redesign, repair, reuse and recycle; incentives should bedirected to materials with a high degree of recycling without losing their original qualities, as well as goods with a low carbon footprint. Moreover, all industrial support initiatives should have a circular economy focus, taking into
consideration resource efficiency, redesign, shift towards circular inputs andclosing the loop. At the same time, since the accounting and fiscal frameworks in use were developed for a linear economic model, now they should be
updated in order to facilitate the transition to a circular economy. Finally, theupcycling/repowering of existing assets should be supported in order to reduce the social, environmental and economic impacts associated with thetransition to a circular economy.
As currently there is a plurality of frameworks developed by different organizations or single companies that might hinder comparability across corporations and countries and sharing of best practices, one of the greatest
challenges associated with circular economy is the definition of a common
set of metrics. This can then be applied in accordance with the specific needs
and objectives of each country. Clear indicators are useful to identify solutions, assess their potential and actual impact, monitor progresses and drive
improvements.

25

50

Refer to Policy Paper Trade & Investment: Policy Action 4.1

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Actions:• Agree to a common set of metrics to assess and monitor the progress ofcircularity indicators.
Since having common metrics is critical for comparability and sharing, G20
countries should define a common set of indicators able to capture the progress in terms of circularity of their economy and to be applied taking into
account the differences among countries, with a specific focus on supply
chains critical to the energy transition such as transport, industry, buildings
and power generation.
• Incentivize increased use and reuse of products and waste resources,
product life extension and other circular models.
G20 members should provide incentives to businesses and consumers to increase the circularity of their production and consumption habits, favoring
innovative circular business models able to create value while reducing environmental impact and funding for research for new technologies and scalingof existing solutions. To this end, transparent standards on waste management and manufacturing and usage of materials with high recyclability rate
without losing original qualities and low carbon footprint should be promoted.
Policy Action 4.2: Enhance sustainable use of marine and terrestrial
resources
G20 members should commit to the preservation and restoration of the natural ecosystems, safeguarding life on land and below water.
According to The World Economic Forum’s 2020 Global Risks Report, biodiversity loss and ecosystem collapse constitute one of the top five threats
humanity will face in the next decade [7]. Human life depends heavily on environment and natural ecosystem balance, which provides food, energy andmaterials. However, air quality, biodiversity losses and environmental degradation are worsening faster than ever and this trend is due to unsustainablehuman activities [77]. For instance, agriculture, which has caused about 20%of global greenhouse emissions between 2010 and 2017 [78], is the leading
cause of water pollution in several countries and a major factor of land consumption and degradation [79].
Human health protection and environmental preservation are becoming
ambitious goals across the world. Bad air quality and exposition to pollutants remain a serious unresolved problem not only causing reduced health for
citizens and a deteriorated environment but also high directly and indirectly related monetary costs. Most of air pollutants concentration comes fromthe tertiary and residential sectors that are the biggest emitters of primaryparticulate matter, while transport is the biggest emitter of nitrogen oxides,
for which exceedances occurred almost entirely in the proximity of traffic
stations [80].
The marine ecosystem has been deteriorating significantly, creating serious
threats for the 3 billion people relying on it for their livelihoods [81]. Ocean
temperatures are increasing, as well as the concentration of carbon dioxide,
which makes waters more acidic [82]. This has halved live coral cover on reefs in the past 150 years, consequently reducing the ability of coastal marine
ecosystems to provide sustainable livelihoods and protect shorelines [77].
Moreover, around 8 million metric tons of plastic are dumped yearly in mari-51

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

ne environments, adding up to the already estimated 150 million metric tons
dispersed into the oceans [83]. This has affected several marine species andmay impact humans directly through food chains.
Human activities have also degraded the terrestrial ecosystem, directly andindirectly. Only approximately 25% of land is sufficiently not impacted byhuman intervention [77]. Consequently, the existence of many life forms isendangered: around 9% of the world’s terrestrial species have insufficient
habitat for long-term survival and are committed to extinction if no action isundertaken [77]. Particularly critical is the situation of forests. They host roughly 80% of the world's terrestrial biodiversity and contribute significantly
to climate change mitigation [84]. However, in 2018 alone, around 12 million
hectares of tropical forest were lost worldwide [7] and about 80% of global
deforestation is due to the expansion of land used for agriculture [84].
Nature-based solutions such as afforestation and reforestation, if managed
correctly, can not only contribute to curbing CO2 concentration in the atmosphere, mitigating climate change, but also help to protect and restore
the natural balance providing ecosystem services such as pollination, pollution treatment or groundwater recharge [26]. Moreover, more sustainable
practices and emission absorption projects can contribute to reducing theenvironmental impact of agriculture and LULUCF.
Environment degradation has other direct consequences for human life. One
major risk is linked to future food security. For instance, land depletion has
reduced productivity in 23% of the global terrestrial area, and annual global
crop output risks to be diminished by USD 235 - 577 billion due to pollinatorloss [77]. A second one is related to human health. On the one hand, increased pollution can cause a variety of diseases, such as respiratory infections[85]. On the other hand, reduced biodiversity can hinder the developmentof medicine, considering that 50 – 70 thousand plant species are employed
for traditional or modern medicine and about 50% of modern drugs weredeveloped from natural products [7].
Thus, increased commitment and global cooperation are needed to tackle
effectively environment degradation and foster a sustainable use of natural
resources. One area of action could be data collection and sharing. In the recent past, lack of data has caused the impossibility to track progress on 68%
of environment-related SDGs, consequently inhibiting the chances to invest
and act to achieve them [63].

Actions:• Prevent and significantly reduce marine pollution and plastic pollution
in oceans, rivers and all water habitat.
G20 countries should define standards for sustainable water and wastewater
management and governance systems to drastically reduce the presence ofhuman-made pollution such as plastic and microplastics in oceans, rivers andall water habitats.
• Halt the degradation of natural habitats and the loss of biodiversity.
G20 members should set clear objectives for the preservation and restoration of natural ecosystems and enforce better monitoring and control systems
against hazardous behaviors negatively affecting the environment and its biodiversity, addressing, for instance, deforestation and forest degradation issues.

52

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY• Establish international collaboration agreement to preserves oceans
and lands.
G20 countries should promote greater international collaboration to fightthe global issue of environment degradation and tackle the growing problemof air quality degradation, define governance, monitoring standards andguidelines on the sustainable exploitation of natural resources and financial
support programs; they should also involve the private sector to ensure common understanding and effective deployment.

53

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Annex
Acronyms

54

BECCS

Bioenergy with Carbon Capture and Storage

BESS

Battery Energy Storage System

CCS

Carbon Capture Sequestration

CCUS

Carbon Capture, Utilization And Storage

CO2

Carbon Dioxide

CO2eCarbon Dioxide Equivalent

COP

Conference of the Parties

DAC

Direct Air Capture

DRI

Direct Reduced Iron

ERE

Energy and Resource Efficiency

GDP

Gross Domestic Product

Gt

Gigatons

H2

Hydrogen

HVAC

Heating, Ventilation and Air-Condition

ICT

Information and Communication Technologies

IEA

International Energy Agency

IoTInternet of Things

IRENA

International Renewable Energy Agency

KPI

Key Performance Indicator

LCA

Life Cycle Assessment

LULUCF

Land Use, Land-Use Change and Forestry

MWhMegawatt-Hour

NDC

Nationally determined contributions

R&D

Research and Development

STEM

Science, Technology, Engineering and Mathematics

T

Tons

Toe

Tonne(s) of oil equivalentUN

United Nations

USD

United Stated Dollars

WHO

World Health Organization

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Schedule of Taskforce Exchanges
#

Date

Event

LocationTheme1

23/02/2021

TF Videoconference 1

Virtual

Review of 1st draft of Policy Paper2

23/03/2021

TF Videoconference 2

Virtual

Review of 2nd draft of Policy Paper

3

27/04/2021

TF Videoconference 3

Virtual

Review of 3rd draft of Policy Paper

4

01/06/2021

TF Videoconference 4

Virtual

Review of 4th draft of Policy Paper

5

06/07/2021

TF Videoconference 5

Virtual

Review of final version of Policy Paper

6

7-8 October, 2021

B20 Summit

Rome; Virtual

Presentation of TF Policy Paper

Distribution of Members
Country#Country#Country#Country#

Argentina

4

France5

Mexico

1

Spain

1

Belgium

2Germany

4

Netherlands

1

Sweden1

Brazil

3

India

3

Poland1

Switzerland

1

Canada2

Indonesia

1

Russia9

Turkey

9

China

16

Italy

69

Saudi Arabia

2

United Kingdom

2

Egypt

1

Japan

1

South Africa

3

USA

3

Taskforce Members

NameCompany/Organization

Country

Deputy

Enel

Italy

Simone Mori

Confindustria

Italy

YPF S.A.

Argentina

Chair
Francesco Starace
Policy Manager
Massimo Beccarello
Co-Chairs
Sergio Affronti

Silvina Oberti
Joaquin MahdjoubianDiaz Cano

Patricia Collawn

PNM Resources

United States of America

Maureen Gannon

Herbert Diess

Volkswagen AG

Germany

Jens Hanefeld

Gurdeep SinghNTPC Limited

India

Mohit Bhargava

Jean-Pascal Tricoire

Schneider ElectricFranceSandrine De Guio

Baoan Xin

State Grid Corporation of China

China

Guangchao Zhu

55

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Coordination Group
Name

Function

Marco Alberti

Senior International
Institutional Affairs Officer

Laura Filipazzi

CEO Office, International
Institutional Affairs

Andrea Andreuzzi

Collaborator

Jacopo Terrosu

Company/Organization

Enel Group

Confindustria
B20 Secretariat

Olivia Zangrilli
Angelo Era
Paola Rolli
Alessandra Di Salvo
Alessandro De Luca
Knowledge Partner

Deloitte.

Anoushka Marie Marthe
Alexandre
Emmanuel Orlando
Daniele De Gregorio
Luca Villani
Alberto Giammattei
Cesare Pozzi,
Full Professor
LUISS
Umberto Monarca,
Full Professor
Fabio Inzoli,
Full Professor

Politecnico di Milano
Scientific Partner

Roberto Zoboli,

Università Cattolica del Sacro Cuore

Full Professor
Piero Salatino,

Università di Napoli Federico II

Full Professor
Stefano Pogutz,

Università Bocconi

Researcher with Tenure
Noam Boudissam, Lead,

World Economic Forum

Energy & Materials Platform
Lorenzo Tavazzi, Partner

Network Partner

International Chamber of Shipping – ICS

Alessandro Viviani, Business
Strategy Senior Consultant

56

The European House – AmbrosettiB20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYMembers
Name

Company/Organization

Position

Country

Alessandro Curti

Curti Costruzioni Meccaniche Spa

Director

USA

Alessandro Russo

Gruppo Cap

Ceo

Italy

Alessandro Saglio

Confindustria Polonia

General Manager

PolandAlexander Dumin

Inter Rao

Head Of Capital Markets, Investor
Relations, Investment Projects And
International Cooperation

RussiaAlexander Kazimirov

Russian Railways

Deputy Head Of Department Russia

Alexandre Fongaro

Kering

Institutional Relations
OfficerFranceAnalia Gay

Organizacion Techint

Institutional Relation

Argentina

Andrea Bos

Hydrogenpark Scarl

President

Italy

Andrea Cotrufo

Quantum Investments

Chairman

Italy

Andreas Guertler

Eiif - European Industrial
Insulation Foundation

Foundation Director

Switzerland

Andrey Logatkin

Pjsc "Rosseti"

Director - Head Of Department For
International Cooperation

RussiaAndrey Melen’kin

Pjsc Gazprom Neft

Project Manager, Government
Relations (Gr) Department

RussiaAndrey Melnichenko

Russian Union Of Industrialists
And Entrepreneurs

Chairman Of The Committee On
RussiaClimate Policy And Carbon Regulation

Andrey Sapozhnikov

En+ Group

B20 Project Manager

Anna Gubina

Russian Union Of Industrialists
And Entrepreneurs (Rspp)

Expert Of The Center For Multilateral
RussiaCooperation And Eurasian Integration

Anna Tavano

Hsbc Italy

Head Of Global Banking, Italy

Annalisa Del Pia

Maire TecnimontGroup Institutional and International
Italy
Relations & Clients Assistance Manager

Antoine Sautenet

Michelin

Public Affairs Manager - Diplomatic
AdvisorCanadaAntonio Brufau

RepsolChairman

Spain

Antonio Fazzari

Fater

General Manager & Chief
Operating Officer

Italy

Antonio Gozzi

Duferco Italia Holding

President

Italy

Antonio Lazzarinetti

Itelyum

Chairman

Italy

Aurelio Regina

Manifatture Sigaro Toscano

Vice President

Italy

Averaldo Farri

Zucchetti Centro Sistemi SpA

Green Innovation Division Director

Italy

Bernardino Vega

PT Pembiayaan Digital / IndonesianChamber of Commerce and Industry

CEO

Indonesia

Bruno Fierro

Anima

Vice President

Italy

Carolina Clemente

Siemens Gamesa

Public Affairs

Spain

RussiaItaly

57

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

58

Dany Qian

Jinko Solar

Jinko Solar

China

Dario Molteni

Schlumberger

Global Account Director & Chairman
Italy

Italy

Davi Bomtempo

National Industry Confederation(Cni)

Executive Manager

BrazilDavide Cucino

Fincantieri Spa

Vp - Head Of Brussels OfficeBelgium

Dennis Burke

Global Federation Of Insurance
Associations/Reinsurance
Association Of America (Raa)

Chair - Gfia Extreme Events Working
Group; Vice President And Director Of USA
Extreme Events Policy , Raa

Eberhard Von Rottenburg

Bdi - Federation Of German
Industries

Deputy Head Of Department

Germany

Ed Brzytwa

American Chemistry Council

Director For International Trade

USA

Elena Morettini

Globant

Director Sustainable BusinessArgentina

Elsa Di Paolo

Italfluid Geoenrgy Srl

Chartered Accountant And Legal
Auditor

Italy

Emanuela Lucchini

Ici Caldaie Spa

President

Italy

Emily Hickson

The B Team

Head Of Advocacy

United Kingdom

Emma Beccio

Gala S.P.A.

Direttore Generale - General Manager Italy

Eugenio Madero

Rassini Mexico

President & CEO

MexicoFabio Marchetti

Assicurazioni Generali

Director

Italy

Faisal Alfadl

Saudi Green Building Forum

Secretary General/ Chief RepresentaSaudi Arabia
tive To United Nations

Fatih Abras

Fca / Tofas

Facilities And Technical Services
ManagerTurkeyFederico Suria

Microsoft

Ec Lead

Italy

Filippo Carzaniga

FIMER S.p.A.

Chairman

Italy

Filippo Maria Stefanelli

Acea Produzione Spa

Managing Director Generation &Energy Solutions Acea Spa, Ceo Acea
Produzione Spa

Italy

Fortune Mojapelo

Bushveld Minerals

Chief Executive Officer

South Africa

Francesco Del Pizzo

Terna

Director Of Grid Development
Strategies And Dispatching

Italy

Francesco Somma

Impes Service Spa

President

Italy

Franco Del Manso

UNEM

International Relations, Enviromental
and Technical

Italy

Gary Litman

U. S. Chamber Of Commerce

Vice President, Global Initiatives

USA

Gianandrea Ferrajoli

Mecar S.p.A.

Chairman

Italy

Giovanni Baroni

X3energy S.P.A.

Ceo

Italy

Giovanni Gasparini

Renco

President

Italy

Giovanni Lombardi

Tecno

Founder, Shareholder and Chairman

Italy

Giovanni Musso

Irem Spa

CEO

Italy

Giuseppe Ricci

Eni Spa

Energy Evolution Chief Operating
Officer

Italy

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYGuangbin Sun

Ja Solar Technology Co., Ltd.

Senior Vice President

China

Guangying Liu

China Datang Coporation Ltd.

Vice President

China

Guido Grimaldi

ALIS – Associazione Logisticadell’Intermodalità Sostenibile

President

Italy

Hangdong Hu

Tibet Summit Resource Co., Ltd.

President

China

Hiroyuki Tezuka

Jfe Steel Corporation

Fellow & General Manager, Climate
Change Policy Group, Technology
Planning Department

Japan

Ibrahim Yelmenoglu

Turkish Petroleum Refineries
Corp.

Ceo

TurkeyIvan Zhidkikh

Suek

Head Of Special Projects And Analysis Russia
Division

Jakob Flechtner

Dihk E.V. - Association Of German
Chambers Of Industries And
Commerce

Director Climate Policy

Germany

Jarredine Morris

Business Unity South Africa

Energy And Environmental Policy
ManagerSouth Africa

Jean-Baptiste Baroni

Medef

Deputy Sustainability Director

FranceJerry Jiao

China Minmetals Corporation

Vice President

China

Jiaqiang Liu

China National Chemical Engineering Group Corporation Ltd.

President

China

Jieyuan Zhang

Shanghai Haicheng Resources(Group) Co., Ltd.

Vice President

China

Joanne Yawitch

National Business Initiative

Chief Executive Officer

South Africa

Khaled Sharbatly

Desert Technologies

Managing Partner

Saudi Arabia

Letizia Magaldi

Magaldi Power S.P.A.

Vice President

Italy

Lin-Jie Huang

Sanhua Holding Group

Vice President, Chief Scientist

China

Lisandro Deleonardis

Organizacion Techint Tecpetrol

Institutional Relation

ArgentinaLong Han

Bgrimm Technology Group

President

China

Lorenz Isler

Ingka Group (Ikea)

Public Affairs Leader Sustainability& People

SwedenLuca G. Donelli

Donelli - Corrosion Protection
Applications Since 1911

Market Dev. Manager

Italy

Luca Matrone

Intesa Sanpaolo

Head Of Energy - Imi Cib Division

Italy

Majda DabaghiInternational Chamber Of
Commerce

Director, Inclusive & Green Growth

FranceMarco Amleto /Giuseppe Golinelli Wärtsilä

Director Energy Solutions

Italy

Marco Decio

Siram Veolia

Managing Director Business Unit

Italy

Marco Geneletti

TenarisSenior Planning Director Europe

Italy

Marco Oriolo

Kerry Project Logistics Spa

Shareholder & CEO

Italy

Margaret-Ann Splawn

Climate Markets And
Investment Association

Executive Director

United Kingdom

Maria Giovanna Gulino

Ima Industria Meridionale
Alcolici Srl

CEO

Italy

Mario Branco

Abinee - Brazilian Association
Of Eléctrical And Eletronics
Industries

External Trade Advisor

Brazil59

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCYMario Mattioli

Confitarma - Confederazione
Italiana Armatori

President

Italy

Mario Zagaria

C.O.M. S.C.P.A.

General Manager

Italy

Marta Martinez

Iberdrola

Head of Analysis and Special Projects,
Climate Change and Alliances
Direction

Spain

Massimiliano Turci

Nuovo Pignone, Part Of Baker
Hughes Company

Massa Plant Manager

Italy

Massimo Bonato

Areti

CEO

Italy

Massimo Di Genova

Nokia

Sales Manager

Italy

Matteo Bertolini

Sime S.R.L.

Chief Executive Officer

Italy

Matthias Berninger

Bayer Ag

Svp Public Affairs

Germany

Maurizio Coratella

SAIPEM

Chief Operating Officer E&C Onshore
Italy
Division

Meltem Türker

Dow

Government Affairs Leader

TurkeyMichele Somma

Tecnoparco Valbasento Spa

Ceo

Italy

Michele Stangarone

Nuovo Pignone, Part Of Baker
Hughes Company

President Nuovo Pignone

Italy

Michele Ziosi

Cnh Industrial

Vice President Institutional Relations
Europe, Middle East, Africa And Asia
Pacific

Italy

Mirco Viotto

Elettromeccanica Viotto

Ceo

Italy

Mohamed Kassem

Federation Of Egyptian
Industry Fei

Board Member And Chair Of Foregin

Egypt

Nevio Benvenuto

Guccio Gucci

Csr Manager

Italy

Nicola Angelo Marotta

Technip Italy Direzione Lavori
S.P.A. (Tpidl S.P.A.)

Chief Executive Officer

Italy

Nicola Monti

Edison Spa

Ceo

Italy

Norine Kennedy

USCIB

Senior Vice President for Policy andGlobal StrategyUSANurşen Numanoğlu

Tusiad-Turkish Business And
Industry Association

Deputy Secretary General Turkey

Oscar Guerra

60

Corporate Ceo - Board Member Of
Assorisorse – The Italian Sustainable
Energy & Resources Industry
Association

Italy

Paola Fienga

Webuild

Corporate Communication Manager

Italy

Paolo Ghirelli

Bonatti S.P.A.

Chairman (And Board Member Of
Assorisorse - The Italian Sustainable
Energy & Resources Industry
Association)

Italy

Paolo Stabellini

Edilteco Spa

Ceo

Italy

Pascal Roger

FedenePresident

FrancePhilippe Ducom

ExxonMobil Europe

President

Belgium

Piero Manzoni

Neoruralehub Srl

Founder & Ceo

Italy

Pistorio Rosario

Sonatrach Raffineria Italiana
S.R.L.

Ceo

Italy

Qi Zhou

China Global New Technology
Import& Export Co. Ltd.

President

China

Rachel Cheng

Rachel Innovation Technology
Corporation Limited

CEO

China

B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

Raghav Kanoria

India Power Corporation

Managing Director

India

Renato Mazzoncini

A2a Spa

Ceo And General Manager Italy

Renato Vito Bocca

Consorzio Industriale Lucano

President

Italy

Richard Wang

Hengtong Group Co., Ltd

Director, Overseas Invst & PIM

China

Roberto Bocca

Li.Bo Srl

Business Developer Manager

Italy

Roberto Carpaneto

Rina Consulting S.P.A.

Rina Consulting Ceo

Italy

Roberto Savini

Settore Consumo e Utenza
Confcooperative

President

Italy

Roberto Vavassori

Brembo S.P.A.

Chief Institutional Affairs Officer

Italy

Robin Edger

Insurance Bureau Of Canada(Ibc)

National Director, Climate Risk Canada

Rogelio Pagano

DESA

CEO & Chairman

Argentina

Rogerio Ghesti

International Chamber Of
Commerce - UK

Head of International Policy

United Kingdom

Ruggero Corrias

Snam Spa

Ceo Diplomatic Advisor And Head Of
International Relations

Italy

Sachin Joshi

B20 Saudi Arabia

Policy Director

India

Salvatore Antonio De Biasio

Cmd S.P.A. - Costruzioni Motori
DieselManager

Italy

Salvatore Russelli

Hydros S.R.L.

Legal Rappresentant

Italy

Sarp Kalkan

Union Of Chambers And Commodity Exchanges Of Turkey(Tobb) / B20 Turkey

Deputy Secretary General/B20 Turkey
TurkeySherpaSebastiano Bongiovanni

Tes Srl

Amministratore Unico

Italy

Sergey Chestnoy

Uc Rusal

Official Representative

RussiaStefan Spindler

Industrial Schaeffler AG

CEO

Germany

Sudhakar Asawale

Jsw Steel Piombino Spa ,Italia

Chief Operations Officer (C.O.O)

Italy

Susan Shannon

Shell

Vice President International
Organizations & Policy

Netherlands

Vineet Mittal

Avaada Energy

Chairman

India

Vito Grassi

Graded S.P.A

Ceo

Italy

Xibing Wang

Tibet Summit Resource Co.,
Ltd.

CEO

China

Yiyang Liu

Trinasolar

Vice-President,Head Of Strategic
Development Department

China

Yuwei Kan

Air Liquide

Public Affairs Director, International
Development, Air Liquide

FranceYuzhuo Zhang

China Petrochemical
Corporation (Sinopec Group)

Chairman

China

Zhiyong Li

China Council For The
Promotion Of International
Trade

Division Director Of The Department
Of International Relations

China

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B20 POLICY PAPER ENERGY & RESOURCE EFFICIENCY

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