Editing IPCC:AR6/WGIII/Chapter-11 (section)

=== Box 11.4 | Buy Clean California Act ===

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In October 2017, California passed Assembly Bill (AB) 262, the Buy Clean California Act, a new law requiring state-funded building projects to consider the global warming potential (GWP) of certain construction materials during procurement. The goal of AB 262 is to use California’s substantial purchasing power to buy low-carbon products. Such low-carbon public procurement will directly reduce emissions by using lower-carbon products, and indirectly by sending a market signal to manufacturers to reduce their emissions in order to stay competitive in California.

The bill requirements are two-pronged: as of January 2020, manufacturers of eligible materials must submit a facility-specific environmental product declaration (EPD), and the eligible materials must demonstrate (through submitted EPDs) GWP below the product-specific compliance limits defined by the state Department of General Services (DGS), which will regulate policy implementation. The eligible materials include structural steel, carbon steel rebar, flat glass, and mineral wool insulation. In January 2021, the DGS published maximum acceptable GWP limits for each product category set at the industry average of facility-specific GWP for each material. Beginning 1 July 2021, awarding authorities were required to verify GWP compliance for all eligible materials ( USGBC-LA 2 018; [[#DGS--2020|DGS 2020]] ) .

Prior to adoption of the Buy Clean California Act, the California Department of Transportation (Caltrans) had been evaluating the use of lifecycle assessment and EPDs in evaluating materials. In addition to the materials specified in Buy Clean California Act (noted above), the Caltrans project includes materials used extensively in transportation (concrete, asphalt, and aggregate). Also, the California High-Speed Rail project had begun using EPDs as part of its procurement process. The High-Speed Rail Sustainability Report states that the construction projects will: (i) require EPDs for construction materials including steel products and concrete mix designs, and (ii) require ‘optimized lifecycle scores for major materials’ and include additional strategies to reduce impacts across the life cycle of the project (Simone n et al. 2019) .

Several other states such as Washington, Minnesota, Oregon, Colorado, New York and New Jersey are developing similar types of Buy Clean regulations ( [[#Simonen--2019|Simonen et al. 2019]] ; [[#BGA--2020|BGA 2020]] ).

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==== 11.6.4.2 Private Procurement ====

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The number of companies producing sustainability reports has increased rapidly over the last decade ( [[#Jackson--2018|Jackson and Belkhir 2018]] ) and so has the number of pledges to carbon neutrality announced. This trend has mainly been driven by consumer concerns, investor requests, and as a business strategy to gain a competitive advantage ( [[#Higgins--2016|Higgins and Coffey 2016]] ; [[#Ibáñez-Forés--2016|Ibáñez-Forés et al. 2016]] ; [[#Koberg--2019|Koberg and Longoni 2019]] ). For example, Apple and the governments of Québec and Canada are the financier and lead market maker in the Elysis consortium to bring inert electrodes to market for bauxite smelting to make zero-GHG aluminium. Aluminium is a very small fraction of the cost of a laptop or smartphone, so even expensive low-emissions aluminium adds to Apple’s brand at very little cost per unit sold. Some countries are also requiring corporate to report their emissions. For example, the French government requires companies with 500 or more employees and financial institutions to report Corporate Social Responsibility (CSR) and disclose publicly Scope 1 (direct emissions), Scope 2 (indirect emissions from purchased electricity) and Scope 3 (emissions from supply chain impacts and consumer usage and end-of-life recycling practices) emissions ( [[#Mason--2016|Mason et al. 2016]] ).

The most common climate mitigation strategies used by corporates are to set emissions reduction targets in line with the Paris Agreement goals through science-based targets (SBTs) and to develop internal carbon pricing ( [[#Kuo--2021|Kuo and Chang 2021]] ). The SBT initiative records that 338 SBT companies reduced their emissions by 302 MtCO 2 -eq between 2015 and 2019 ( [[#SBTi--2021|SBTi 2021]] ). As of August 2021, 858 companies had set SBT and over 2000 companies across the world currently use internal carbon pricing with a median internal carbon price of USD25 per metric tonne of CO 2 -eq ( [[#Bartlett--2021|Bartlett et al. 2021]] ). The most determined companies have developed internal GHG abatement strategies that incorporate their supply chains’ emissions ( [[#Martí--2015|Martí et al. 2015]] ; [[#Gillingham--2017|Gillingham et al. 2017]] ; [[#Tost--2020|Tost et al. 2020]] ) and design procurement contracts that encourage or require their suppliers to also improve their product GHG footprint ( [[#Liu--2019a|Liu et al. 2019a]] ). For many corporations, the emissions impact within their supply chain far exceeds their operations direct emissions ( [[#CDP--2019|CDP 2019]] ). Therefore, the opportunities to reduce emissions through purchasing goods and services from the supply chain (Scope 3) have much greater potentials than from direct emissions.

However, these trends have to be approached with caution as some of the emissions reductions are not direct emissions reductions from companies’ operations, instead often from offset projects of varying quality ( [[#Chrobak--2021|Chrobak 2021]] ). There is a lack of consistency and comparability in the way firms are reporting emissions, which limits the possibilities to assess companies’ actual ambition and progress ( [[#Sullivan--2012|Sullivan and Gouldson 2012]] ; [[#Burritt--2014|Burritt and Schaltegger 2014]] ; [[#Liu--2015|Liu et al. 2015]] ; [[#Rietbergen--2015|Rietbergen et al. 2015]] ; Blanco et al. 2016). More research is needed to assess the current impacts of corporate voluntary climate actions and if these efforts meet the Paris Agreement’s goals ( [[#Rietbergen--2015|Rietbergen et al. 2015]] ; [[#Wang--2018|Wang and Sueyoshi 2018]] ). It will be critically important that the international corporate accounting frameworks, standards, and related guidance (e.g., GHG Protocol) be maintained and improved to reflect evolving needs in the global market and to allow for comparison of objectives and progress.

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==== 11.6.4.3 GHG Content Certifications ====

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The development of GHG labels corresponds to a growing demand from consumers desiring information about the climate impacts of their consumption ( [[#Darnall--2012|Darnall et al. 2012]] ; [[#Tan--2014|Tan et al. 2014]] ; [[#Feucht--2018|Feucht and Zander 2018]] ). GHG labels fill this information gap by empowering consumers’ purchasing decisions and creating higher value for low-GHG products and materials ( [[#Vanclay--2011|Vanclay et al. 2011]] ; [[#Cohen--2012|Cohen and Vandenbergh 2012]] ). The willingness to pay for lower-GHG products has been found to be positive but to depend on socio-economic consumer characteristics, cultural preferences and the product considered ( [[#Shuai--2014|Shuai et al. 2014]] ; [[#de-Magistris--2016|de-Magistris and Gracia 2016]] ; [[#Tait--2016|Tait et al. 2016]] ; Li et al. 2017; [[#Feucht--2018|Feucht and Zander 2018]] ). Companies and governments that favour low-GHG products and who are seeking to achieve environmental, social, and governance (ESG) goals also need readily available and reliable information about the GHG content of products and materials they purchase and produce ( [[#Long--2016|Long and Young 2016]] ; [[#Munasinghe--2016|Munasinghe et al. 2016]] ).

Numerous methodologies have been developed by public and private organisations to meet the needs for credible and comparable environmental metrics at the product and organisation levels. Most follow lifecycle assessment standards as described in ISO 14040 and ISO 14044, ISO 14067 for climate change footprint only and ISO 14025 (2006) for environmental product declarations (EPD), but the way system boundaries are applied in practice varies ( [[#Wu--2014|Wu et al. 2014]] ; [[#Liu--2016|Liu et al. 2016]] ). Adoption has been challenged by the complexity and the profusion of applications which contribute to confuse stakeholders ( [[#Gadema--2011|Gadema and Oglethorpe 2011]] ; [[#Guenther--2012|Guenther et al. 2012]] ; [[#Brécard--2014|Brécard 2014]] ). The options of applying different system boundaries and allocation principles involve value judgements that in turn influence the results ( [[#Tanaka--2008|Tanaka 2008]] ; [[#Finnveden--2009|Finnveden et al. 2009]] ; [[#McManus--2015|McManus et al. 2015]] ; [[#Overland--2019|Overland 2019]] ). A more systematic and coordinated international approach based on transparent and reliable data and methodologies is needed to induce global low-GHG market development ( [[#Pandey--2011|Pandey et al. 2011]] ; [[#Darnall--2012|Darnall et al. 2012]] ; [[#Tan--2014|Tan et al. 2014]] ).

Within the context of GHG content certifications and EPD development, more transparency is needed to increase international comparability and to validate claims to meet consumers demand for low-GHG material and products ( [[#Rangelov--2021|Rangelov et al. 2021]] ). Greater automation, publicly available reference databases, benchmarking systems and increased stakeholder collaboration can also support the important role of conveying credible emissions information between producers, traders and consumers.

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==== 11.6.4.4 Performance Standards and Codes ====

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Policymakers can set minimum performance standards or maximum emission content specifications through legislation to increase the use of low-GHG materials and products by mandating the adoption of low-GHG production and construction processes while requiring material and resource efficiency aspects.

Construction of buildings represented 11% of energy and process-related CO 2 emissions globally in 2018 ( [[#IEA%20and%20UNEP--2019|IEA and]] [[#UNEP--2019|UNEP 2019]] ). The share of embodied emissions in construction is increasing as building energy efficiency is improving and energy supply is decarbonised ( [[#Chastas--2016|Chastas et al. 2016]] ). As a result, jurisdictions are increasingly considering new requirements in building codes to reduce embodied emissions. This is the case of France’s new building code which is shifting from a thermal regulation (RT 2012) to an environmental regulation (RE 2020) to include embodied GHG LCA metrics for encouraging use of low-GHG building materials ( [[#Ministère%20de%20la%20Transition%20écologique%20et%20solidaire--2018|Ministère de la Transition écologique et solidaire 2018]] ; [[#Schwarz--2020|Schwarz et al. 2020]] ). The 2018 International Green Construction Code (IGCC) provides technical requirements that can be adopted by jurisdictions for encouraging low-GHG building construction, which also covers minimum longevity and durability of structural, building envelope, and hardscape materials (Art. 1001.3.2.3) ( [[#Celadyn--2014|Celadyn 2014]] ). Low-GHG building rating systems, such as LEEDs, are voluntary standards which include specific requirements on material resources in their rating scale. Trade-offs between energy performance achievement and material used in building construction needs to be further assessed and considered as low-GHG building code requirements develop. Local governments can also lead the way by adopting standards for construction. This is the case of the county of Marin in California which specifies maximum embodied carbon in kgCO 2 -eq m –3 and maximum ordinary Portland cement content in lbs/yd 3 for different levels of concrete compressive strength ( [[#Marin%20County--2021|Marin County 2021]] ).

Governments are also turning their attention to developing standards to increase the durability of products and materials by requiring options for maintenance, reparability, reusability, upgradability, recyclability and waste handling. For example, the EU Ecodesign Directive includes new requirements for manufacturers to make available for a minimum of seven to 10 years spare parts to repair household equipment ( [[#Talens%20Peiró--2020|Talens Peiró et al. 2020]] ; [[#Calisto%20Friant--2021|Calisto Friant et al. 2021]] ; [[#Nikolaou--2021|Nikolaou and Tsagarakis 2021]] ). The European Commission plans to widen the resource efficiency requirements beyond energy-related products to cover products such as textiles and furniture as well as high-impact intermediary products such as steel, cement and chemicals in a new sustainable product policy legislative initiative. ( [[#Domenech--2019|Domenech and Bahn-Walkowiak 2019]] ; [[#Llorente-González--2019|Llorente-González and Vence 2019]] ; [[#European%20Commission--2020|European Commission 2020]] ; [[#Polverini--2021|Polverini 2021]] ).

Further research is needed to understand how different international and national frameworks, codes, and standards that focus on emissions can work in unison to amplify their mutually desired outcomes. Building performance and market instrument trading frameworks recognised globally do not always incentivise the same outcomes due to the differences in market approach. LCA metrics are a useful tool to help assess optimal options for ultimate emission reduction objectives ( [[#Röck--2020|Röck et al. 2020]] ; [[#Shadram--2020|Shadram et al. 2020]] ).

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==== 11.6.4.5 Financial Incentives ====

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Fossil-free basic materials production will often lead to higher costs of production, for example, 20–40% more for steel, 70–115% more for cement, and potentially 15–60% for chemicals ( [[#Material%20Economics--2019|Material Economics 2019]] ). There is a nascent literature on what are effectively material ‘feed-in-tariffs’ to bridge the commercialisation ‘valley of death’ ( [[#Wilson--2011|Wilson and Grubler 2011]] ) of early development of low-GHG materials ( [[#Bataille--2018a|Bataille et al. 2018a]] ; [[#Neuhoff--2018|Neuhoff et al. 2018]] ; [[#Sartor--2019|Sartor and Bataille 2019]] ; [[#Wyns--2019|Wyns et al. 2019]] ). Renewable electricity support schemes have typically been price-based (e.g., production subsidies and feed-in-tariffs) or volume-based (e.g., quota obligations and certificate schemes) and both principles can be applied when thinking about low-GHG materials. Auction schemes are typically used for larger-scale projects, for example, offshore wind parks.

Based on how feed-in-tariffs worked, a contract for difference (CfD) could guarantee a minimum and higher-than-market price for a given volume of early low-GHG materials. CfDs could be based on a minimum effective GHG price reflecting parity with the costs of current higher-emitting technologies, or directly on the higher base capital and operating costs for a lower-GHG material ( [[#Richstein--2017|Richstein 2017]] ; [[#Chiappinelli--2019|Chiappinelli et al. 2019]] ; [[#Sartor--2019|Sartor and Bataille 2019]] ; [[#Vogl--2021a|Vogl et al. 2021a]] ). CfDs can also be offered through low-GHG material procurement where an agreed price offsets the incremental cost of buying low-GHG content product or material. Private firms, by themselves or collectively, can also guarantee a higher than market price for low-GHG materials from their supplier for marketing purposes ( [[#Bataille--2018a|Bataille et al. 2018a]] ; [[#Bataille--2020a|Bataille 2020a]] ). Reverse auctions (by which the lowest bidder gets the production subsidy) for low-GHG materials is also an option but it remains to be analysed and explored. While these financial incentive schemes have been implemented for renewable energy, their application to incentivise and support low-GHG material production have yet to be developed and implemented. The German government is currently developing a draft law which will allow companies that commit to cut GHG emissions by more than half using innovative technologies to bid for 10-year CfDs with a guaranteed price for low-carbon steel, chemical and cement products (Agora Energiewende and Wuppertal Institut 2019; [[#BMU--2021|BMU 2021]] ).

New and innovative financial market contracts for basic materials that represent low-carbon varieties of conventional materials are emerging. This is the case of aluminium for which quantity of low-GHG production already exist in countries where hydroelectric power is a common power source. Market developments will allow for low-GHG aluminium to trade at a premium rate as demand develops. For example, Harbor Aluminium has launched a green aluminium spot premium at the end of October 2019 and the London Metal Exchange has introduced a ‘green aluminium’ spot exchange contract. ( [[#LME--2020|LME 2020]] ; [[#Das--2021|Das 2021]] ).

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==== 11.6.4.6 Extended Producer Responsibility ====

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Extended producer responsibility (EPR) systems are increasingly used by policymakers to require producers to take responsibility for the end life of their outputs and to cover the cost of recycling of materials or otherwise responsibly managing problematic wastes ( [[#Kaza--2018|Kaza et al. 2018]] ). According to the OECD, there are about 400 EPR systems in operation worldwide, three quarters of which have been established over the last two decades. One third of EPR systems cover small consumer electronic equipment, followed by packaging and tyres (each 17%), vehicles, lead-acid batteries and a range of other products ( [[#OECD--2016|OECD 2016]] ).

While the economic value of some discarded materials such as steel, paper and aluminium is generally high enough to justify the cost and efforts of recycling, at current rates of 85%, above 60%, and 43%, respectively ( [[#Graedel--2011|Graedel et al. 2011]] ; Cullen and Allwood 2013), others like plastic or concrete have a much lower re-circularity value ( [[#Graedel--2011|Graedel et al. 2011]] ). Most plastic waste ends up in landfills or dumped in the environment, with 9% recycled and 12% incinerated globally ( [[#Geyer--2017|Geyer et al. 2017]] ; [[#UNEP--2018|UNEP 2018]] ). Collected waste plastics from OECD countries were largely exported to China until a ban in 2018 required OECD countries to review their practices ( [[#Qu--2019|Qu et al. 2019]] ). EPR schemes may thus need to be strengthened to actually achieve a reduced use of virgin GHG-intensive materials. The potential for re-circularity of unreacted cement and aggregates in concrete is increasing as new standards and requirement develops. For example, concrete fines are now standardised as a new cement constituent in the European standardisation CEN/TC 51 – ‘cements and construction limes’.

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