ISSUE 5 GLOBAL SOLUTIONS JOURNAL RECOUPLING THE GLOBAL SOLUTIONS SUMMIT 2020 EDITION ABDALA ∙ ABRIGNANI ∙ ALEXANDROFF ∙ ALMUBARAK ∙ ANBUMOZHI BAUER ∙ BEIER ∙ BENGU ∙ BERGER ∙ BILOLO ∙ BOLLRICH ∙ BRADFORD BUCHOUD ∙ CHICOMA ∙ COSTIN ∙ DE MELLO ∙ DITTRICH ∙ ENGELS FELBERMAYR ∙ FLEURBAEY ∙ GOLD ∙ GÖRLICH ∙ HELLER ∙ IACOBUTA KHARAS ∙ KIRSCH ∙ KIRTON ∙ KULIK ∙ LIMA DE MIRANDA ∙ POMARES RAMOS ∙ RAPSON ∙ SABUNCUOGLU ∙ SCHRADE ∙ SCHULZE ∙ SNOWER STEINHILBER ∙ STEIN-ZALAI ∙ STRAUBE ∙ TIBERGHIEN ∙ TIMMERMANS URVASHI ∙ WANG ∙ WARREN ∙ WEST ∙ YILAZ ∙ YOSHINO ∙ ZOTHAN ISSUE 5 ∙ APRIL 2020 GLOBAL SOLUTIONS JOURNAL ∙ ISSUE 5 FOREWORD Paradigm change for a sustainable world order Dennis J. Snower Dear Reader, President, Global Solutions Initiative In the fifth edition of this journal, re- Global Solutions Summit 2019 Opening Plenary: (from left) Naoyuki Yoshino, T20 Japan; searchers from the Global Solutions net- Ronnie Chan, Hang Lung Group; Ngaire Woods, Oxford University; Evan Davis, BBC; work offer their visions and recommen- Gabriela Ramos, OECD; Dennis J. Snower, Global Solutions Initiative; Colm Kelly, PwC. dations for engaging with this year’s G20 priorities. The recent spread of Covid-19, Markus Engels the coronavirus, is challenging globaliza- achieved. In their contribution, John Kir- This requires concepts for measuring how Secretary General, tion in its old form and shows the need for ton and Jessica Rapson present concrete people are faring around the world. The Global Solutions a new orientation, one based on interna- instruments to ensure countries comply article Recoupling Economic and Social Initiative tional cooperative measures that empow- with their commitments. Prosperity proposes a “recoupling dash- er and protect societies. Global problems board”, a new instrument that considers a can only be defeated if the international In politics, business and civil society, peo- broader variety of factors than mere eco- community works more closely together ple are now taking action to safeguard nomic growth for assessing human well- Dennis Görlich than ever. the planet. With its Green Deal, the EU being. Head, Global Challenges has developed an ambitious strategy for Center, Kiel Institute for This understanding is reflected in the fighting climate change. Executive Vice This journal features many other insight- the World Economy key aims of this year’s Saudi Presidency President of the European Commission ful contributions. The ideas expressed by Research Director, and groups like the Think 20 (T20): Em- Frans Timmermans explains the thinking the authors help prepare the ground for Global Solutions Initiative powering people, safeguarding the planet behind this strategy. the T20 Summit and the G20 Leaders’ and shaping new frontiers. The Saudi G20 Summit. As always, we invite you to con- Sherpa Fahad Almubarak describes these A common thread that joins all three aims tribute articles to the next journal, with priorities in his article on raising collec- of the Saudi Presidency is the conviction your proposals for global solutions to G20 tive ambitions and strengthening commit- that multilateral and international coop- issues. ments. eration partners should put human needs and purposes at the heart of their en- Yours, in hope and confidence, Faced with global challenges like climate deavors. The G20 can accomplish this by change, the G20 is now focused on imple- seeking to recouple economic, social and menting the agreements it has already Koch Tobias Copyrights: environmental progress. 4 5 CONTENTS CONTENTS Global Solutions Journal Issue 5 RECOUPLING: ENDING THE DIVERGENCE OF ECONOMIC AND BEYOND GREENWASHING: INSTRUMENTS TO FIGHT CLIMATE CHANGE SOCIAL PROSPERITY AND PROTECT THE PLANET’S RESOURCES 14 Recoupling economic and social prosperity 106 Realizing the low-carbon future: What role for central banks Dennis J. Snower, Katharina Lima de Miranda and monetary authorities? 24 New approaches to global solutions Venkatachalam Anbumozhi Gabriela Ramos 115 With or without you: How the G20 could advance global action 31 Why corporate purpose matters toward climate-friendly sustainable development Marc Fleurbaey Steffen Bauer, Axel Berger, Gabriela Iacobuta 38 Five theses against self-indulgence: How new cross-sector partnerships 123 The diet of the future can balance financial, environmental and societal value creation José Luiz Chicoma Dennis West, Céline Bilolo, Christian Heller 129 Putting climate and environmental protection at the heart of European policy Svenja Schulze THE FUTURE OF MULTILATERALISM: GLOBAL GOVERNANCE 132 Solidarity and the Green Deal: Delivering a social Green Deal IN A CHANGING WORLD to all of Europe’s citizens 54 Toward “effective multilateralism” in turbulent times Frans Timmermans Alan Alexandroff, Colin Bradford, Yves Tiberghien 135 G20 governance of climate change through nature-based solutions 61 Realizing opportunities of the 21st century for all Brittaney Warren Fahad Almubarak 67 The WTO needs a Plan B INFRASTRUCTURE: TOWARD SUSTAINABLE INVESTMENT AND FINANCING Gabriel Felbermayr 148 Making the case for G20 action on urbanization 72 The economic causes of populism Nicolas J.A. Buchoud, Raja Almarzoqi, Hazem Galal, Aawatif Hayar, Robert Gold, Thiemo Fetzer Nella Sri Hendryietty, Jean-Bernard Kovarik, Katharina Lima de Miranda, Fiki Satari, Naoyuki Yoshino 78 The future of multilateralism: Toward a responsible globalization that empowers citizens and leaves no one behind 156 Green finance in emerging markets Homi Kharas, Dennis J. Snower, Sebastian Strauss Michael Dittrich 84 The future of AI governance: The G20’s role and the challenge 168 Vas-Y: Unlocking private investment for fragile states of moving beyond principles Urs Schrade, Tobias Straube, Franziska Frische Julia Pomares, María Belén Abdala 95 China and its Long March: End in sight? Not yet Wen Wang 6 7 CONTENTS CONTENTS SHAPING THE DIGITAL ECONOMY ERA: IMPULSES FOR EDUCATION DEMOGRAPHIC CHANGE: IMPLICATIONS FOR MACROECONOMIC POLICY AND LABOR MARKET POLICY 242 Structural reforms to make the most of demographic change 178 Rethinking higher education for the emerging needs of society Luiz de Mello, Yvan Guillemette Elif Bengu, Emeric Abrignani, Ihsan Sabuncuoglu, Cengiz Yilmaz 249 How does population aging affect the effectiveness of monetary 188 Strengthening labor protections for 21st century workers and fiscal policy? Urvashi Aneja, Zothan Mawii Naoyuki Yoshino, Hiroaki Miyamoto 196 Education and social progress Claudia Costin 256 The Global Solutions Initiative for the G20 ACHIEVING THE SUSTAINABLE DEVELOPMENT GOALS 258 Imprint 206 Smart implementation of complex change processes: Cooperation management facilitates the recoupling of progress toward sustainable development Christoph Beier, Renate Kirsch 212 Implementing the SDGs: On the relationship between sustainable development and the global commons Elisabeth Bollrich, Jochen Steinhilber 218 Gender equality for a sustainable future: G20 governance of the gender equality – climate change link Julia Kulik 224 Raising compliance with G20 commitments: Two evidence-based instruments Jessica Rapson, John Kirton 234 Making gender equality a reality: We need concrete policy action, substantial funding and multilateral cooperation Juliane Stein-Zalai 8 9 RECOUPLING: ENDING THE DIVERGENCE OF ECONOMIC AND SOCIAL PROSPERITY Page 14 Recoupling economic Recoupling: and social prosperity Dennis J. Snower Ending the Global Solutions Initiative Katharina Lima de Miranda Kiel Institute for the World Divergence of Economy Economic and Page 24 New approaches to global solutions Social Prosperity Gabriela Ramos OECD Page 31 Why corporate purpose matters Marc Fleurbaey Princeton University 11 GLOBAL SOLUTIONS JOURNAL ∙ ISSUE 5 Page 38 Five theses against self-indulgence Dennis West Céline Bilolo Christian Heller value balancing alliance 12 GLOBAL SOLUTIONS JOURNAL ∙ ISSUE 5 RECOUPLING: ENDING THE DIVERGENCE OF ECONOMIC AND SOCIAL PROSPERITY Many of the prominent challenges of the may leave large segments of voters person- Recoupling economic 21st century – including the rise of pop- ally disempowered and socially alienated. ulism, growing nationalism, a backlash The same holds with regard to the massive against globalization and multilateralism – protests in Chile that began with a subway and social prosperity arise from a decoupling of economic pros- fare hike and those in Lebanon, which were perity and social prosperity. While GDP triggered by a WhatsApp tax. per capita – our conventional measure of The “Recoupling Dashboard” – economic prosperity – has grown reason- ably steadily over the past four decades, » Tackling A new measurement for well-being beyond GDP this growth does not appear to have been matched by a steadily rising sense of so- the major cial prosperity, in terms of rising well-be- ing within thriving societies. Nor has this challenges The authors: The institutions: economic growth been environmentally sustainable, with further adverse reper- Dennis J. Snower of our time cussions for social prosperity. The per- President, Global sistence of national, ethnic and religious will involve Solutions Initiative conflicts around the world, combined with The Global Solutions Initiative is a global rising dissatisfaction among large popula- confronting collaborative enterprise that proposes policy tion groups that feel “left behind” in both responses to major global problems, ad- the developed and developing countries, the paradox dressed by the G20, the G7 and other global attests to such decoupling