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fuels to protect their privileges are also considered. Additional research is necessary to explore the possibility of forming an international alliance for joint mitigation efforts. The potential and limitations of installing a global carbon market as the principal coordination device should be confronted with research on alternative instruments. Specifically, further research should compare the bargaining approach (insistence on reciprocity) with an approach of leading by example.5 Functional global institutions require ongoing effectiveness evaluations and processes for their corresponding adaptation. Therefore, the establishment of global monitoring efforts and observa- tory processes is needed to assess progress and quickly identify unintended side effects and their origins. Future research should provide the conceptual basis for this endeavor. Monitoring efforts should adhere to harmonized measurement procedures and accounting rules, ideally via a global system that accounts for entire life cycles of goods (in Life Cycle Assessments, LCA). Similarly, it will be crucial to identify and estimate the total system cost of traditional and future patterns of production and consumption in a comprehensive approach that considers exter- nalities. Further research will be required to clarify whether important prerequisites for sustainable production are met, e.g. the sufficient provision of sustainable resources or energy sources at the right location. Research might focus on questions of whether, how, and from where sufficient sustainable input factors could be produced or, if necessary, imported. This discussion holds especially true for the chemical industry. For example, is it optimal to use renewable raw materials or to recycle waste? Are differences between continents and regions significant? And can the utilization of waste as raw materials contribute to economic growth and job creation? Generally, research is needed to deepen our understanding of the impact of a circular economy on future material flows, including inputs, products, and residuals/waste. Research should aim to understand not only the requirements, solutions, economics, and logistics of technological innovations, but also their societal consequences and resultant regulations. Global regulation will have to reflect the global markets for energy-intensive goods, e.g. many metals and basic chemicals. As competition in these markets is global, companies will only be able to pursue sustainable production technologies if the negative externalities arising from other approaches are fully internalized (also see Section 11). If such a level playing field cannot be established, regulated, energy-intensive industries might suffer from carbon leakage. Further research is needed to establish which industries and companies would be particularly prone to this problem. Building upon that, economically sound as well as practically feasible instruments to counteract carbon leakage must be developed. 5Cramton et al. [9] and MacKay et al. [10] suggest an approach to international climate negotiations which instead of a “pledge and review” approach pursues a “common commitment” scheme involving reciprocity. 122PDF Image | sustainable production of fuels and chemicals
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