Editing IPCC:AR6/WGIII/Chapter-17 (section)

==== 17.3.3.3 Industry ====

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Industrial transformation is a core component in achieving sustainable development. Across all industrial sectors, the development and deployment of innovative technologies, business models and policy approaches at scale will be essential in accelerating progress both with meeting the economic and social development goals and with achieving low emissions. In this section, we assess the synergies and trade-offs between mitigation options and the SDGs, with a specific focus on asking whether economic growth and employment creation can work jointly with climate actions and other SDGs in least developed and developing countries. Examples of synergies and trade-offs are provided based on the conclusions of [[IPCC:Wg3:Chapter:Chapter-9|Chapter 9]] on the building sector and [[IPCC:Wg3:Chapter:Chapter-11|Chapter 11]] on industry. The potential for greening industry is discussed in relation to eco-industrial parks, with examples from Ethiopia, China, South Africa and Ghana.

[[IPCC:Wg3:Chapter:Chapter-11|Chapter 11]] concludes that achieving net zero emissions from the industrial sector are possible. This will require the provision of electricity free from greenhouse gas (GHG) emissions, including from other energy carriers, increased electrification, low-carbon feedstocks, and a combination of energy efficiency, reduced demand for materials, a more circular economy, electrification and carbon capture, use and storage (CCUS).

The potential co-benefits of mitigation options in industry has been mapped out in [[IPCC:Wg3:Chapter:Chapter-11|Chapter 11]] in relation to five categories of mitigation options: material efficiency and reductions in the demand for materials, the circular economy and industrial waste, carbon capture and storage, energy efficiency, and electrification and fuel switching (Figure 11.15). In particular, the first two categories of options are assessed as having several co-benefits for the SDGs, including SDGs 3, 5, 7, 8, 9 11, 12, and 15. Some studies also point out the potential trade-offs in respect of employment and the costs of cleaner production. The other options primarily impact on climate actions, decent work and employment, and industry as such.

( [[#Okereke--2019|Okereke et al. 2019]] ) offer important generic conclusions on green industrialisation and the transition based on a study of socio-technical transition in Ethiopia. The importance of drivers for changes in terms of clear policy goals and government support for green growth and climate policies, as well as support from a strong culture of innovation, is emphasised. The study also identifies key barriers in relation to stakeholder interactions, the availability of resources and the ongoing tensions between ambitions for high economic growth and climate change. Green innovation in industry critically depends on regulations. ( [[#Gramkow--2018|Gramkow and Anger-Kraavi 2018]] ) have assessed the role of fiscal policies in greening Brazilian industry based on an econometric analysis of 24 manufacturing sectors. They conclude that instruments like low-cost finance for innovation and support to sustainable practices effectively promote green innovation.

( [[#Luken--2019|Luken 2019]] ) have assessed the drivers, barriers and enablers for green industry in Sub-Saharan Africa, concluding that major barriers exist related to material and input costs, as well as product requirements in foreign markets, and that as a result there are trade-offs between economic and environmental performance. Studies of ten countries are reviewed, and although they suffer from limited information, they conclude similarly that further progress is being hindered by poor access to finance and weak government regulation. ( [[#Greenberg--2014|Greenberg and Rogerson 2014]] ). They similarly conclude that the greening of industry in South Africa is lagging behind due to economic barriers and weak governance, despite its high priority in government planning and among international partners.

Ghana has launched a ‘One District One Factory’ (1D1F) initiative, aimed at establishing at least one factory or enterprise in each of Ghana’s 216 districts as a means of creating economic growth poles to accelerate the development of these areas and create jobs for the country’s increasingly youthful population. The policy aims to transform the structure of the economy from one dependent on the production and export of raw materials to a value-added industrialised economy driven primarily by the private sector ( [[#Yaw--2018|Yaw 2018]] ). As has been pointed out by ( [[#Mensah--2021|Mensah et al. 2021]] ), in its initial design the programme did not take environmental quality into consideration. Although it was successful in creating economic growth, exports and employment, the environmental impacts have been negative. It has therefore been recommended that environmental regulations be imposed on foreign investments. Similar conclusions have been drawn by ( [[#Solarin--2017|Solarin et al. 2017]] ).

[[IPCC:Wg3:Chapter:Chapter-11|Chapter 11]] concludes that eco-industrial parks, in which businesses cooperate with each other in order to avoid environmental pressure and support sustainable development, have delivered several benefits in relation to overall reductions in both virgin materials and final wastes, implying significant reductions in industrial GHG emissions. Due to these advantages, eco-industrial parks have been actively promoted, especially in East Asian countries such as China, Japan and in the Republic of Korea (South Korea), where national indicators and governance exist ( [[#Geng--2019|Geng et al. 2019]] ; [[#Geng--2009|Geng and Hengxin 2009]] ).

( [[#Zeng--2020|Zeng et al. 2020]] ) have assessed the role of eco-industrial parks in China’s green transformation for 33 development zones in relation to contributions to GDP, industrial value added, exports, water and energy consumption, CO 2 levels and sulphur emissions. They concluded that industrial parks have played a very important role in China’s industrialisation, and that this structure has supported the decoupling of economic growth and energy and water consumption from the environmental impacts. However, improved environmental performance would require better access to finance and a higher priority by management.

Eco-industrial parks have been promoted in Ethiopia by the government and UNIDO, based on the expectation that they could help to boost the economy ( [[#UNIDO--2018|UNIDO 2018]] ). One of the success stories is an industrial park in Hawassa, a nation-level textile and garment industrial park with a ‘zero emissions commitment’ based on renewable energy and energy-efficient technologies. However, the concept of the industrial park, including feasible policies and institutional arrangements, is new to Ethiopia’s regulatory processes, and this has created problems for management, knowledge and governance, hindering their fast implementation.

A number of business associations have developed strategies for sustainable development and climate change, including corporate social responsibility (CSR). International initiatives have included the promotion of CSR initiatives by international investors in low-income countries to support a broad range of development priorities, including social working conditions, eliminating child labour and climate change ( [[#Lamb--2017|Lamb et al. 2017]] ). ( [[#Leventon--2015|Leventon et al. 2015]] ) evaluated the role of mining industries in Zambia in supporting climate-compatible development and concluded that, although the industry has played a positive role in avoiding migration and pressure on forest resources, there is a lack of coordination between government and industry initiatives.

It can be concluded that most of the mitigation options in industry considered in this section could have synergies with the SDGs, but also that some of the renewable-energy options could indicate some trade-offs in relation to land use, with implications for food- and water security and costs. Carbon capture and storage (CCS) could play an enabling role in the provision of reliable, sustainable and modern energy and could support decarbonisation, but it can also be costly ( [[#IEAGHG--2020|IEAGHG 2020]] ; [[#Mikunda--2021|Mikunda et al. 2021]] ). The provision of water for CCS can include both synergies and trade-offs with the SDGs due to recent progress in water-management technologies ( [[#Giannaris--2020|Giannaris et al. 2020]] ; [[#IEAGHG--2020|IEAGHG 2020]] ; [[#Mikunda--2021|Mikunda et al. 2021]] ).

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