16 August 2024
In November 2024, Brazil will host the G20 summit for the first time, with the slogan “Building a Just World and a Sustainable Planet”. The G20 was created in 1999 in response to the Asian financial crisis that spread to markets worldwide, and comprises 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Saudi Arabia, South Africa, Russia, Turkey, the UK, and the US) and two regional bodies: the African Union and the European Union. Together, the members of the G20 represent around 85% of the world’s GDP and over 75% of global trade. In addition, this year, countries as diverse as Norway, Angola, and Singapore, among others were invited by the Brazilian government to attend.
While few people would disagree with the idea of a just world and a sustainable planet, forging a consensus on how to build it is a very different matter—especially given the current geopolitical tensions plaguing the new multipolar world order. Throughout 2024, hundreds of meetings and events are being held involving G20 government officials as well as ‘engagement groups’ including local governments, civil society organizations, and selected think tanks and academic institutions, providing recommendations to G20 governments through various working groups and task forces.
As a Fellow at the University of Edinburgh Business School Centre for Climate and Sustainability and Director of Future Horizons Institute, a Norwegian think tank, I co-authored a Policy Brief for the G20 for the T20 Task Force 4, under the topic Trade and Investment, food security and climate action, along with researchers from universities and think tanks from Latin America, the US and China. Our motivation was to bring the attention of the G20 to an issue that we find critical on the road to building “a just world and sustainable planet”: how the global commodity trade may create and reinforce inequalities and increase greenhouse gas (GHG) emissions, even when the commodities in question should contribute to food security and climate action.
Take agricultural commodities. Intuitively, most people would agree that an increasing global population needs more agricultural production to ensure food security. The United Nations Sustainable Development Goal 2 Zero Hunger is about having a world free of hunger by 2030; Yet the UN estimates that in 2022, approximately 735 million people suffered from chronic hunger, while 2.4 billion struggled with food insecurity globally.[1] The rationale for boosting agricultural production in order to ensure food security is therefore strong. However, land use change associated with agriculture is a source of GHG emissions and this brings another set of challenges.
At the same time, the world needs critical minerals for the clean energy transition, which requires batteries used for solar and wind power, electric vehicles and more. According to the International Energy Agency (IEA), the energy goals agreed by 200 countries at COP 28 in Dubai cannot be met without batteries, and renewable energy capacity needs to triple by 2030. The IEA also estimates that to achieve net zero emissions by 2050, world demand for minerals such as manganese, lithium, graphite and nickel will increase sixfold by 2030, while the demand for cobalt will triple.[2] This indicates that battery production must increase, if the transition to clean energy is to succeed—but the extraction of the minerals required for batteries may entail serious social and environmental impacts.
Since countries that do not produce commodities also need them, global trade may be a win-win, providing hard currency to exporting countries, and contributing to global food security and the clean energy transition. It could then be argued that an increase in the global trade of food and minerals can be a pathway to the G20 goal of a just world and a sustainable planet—but, as I indicate above, there is a problem.
Or rather, many.
It is not about the what, but the how. Historically, industry practices for mineral extraction and agricultural production have led to a wide range of serious social and environmental problems (as we argue in our Policy Brief, based on cases in Africa and Latin America) that undermine the very ideals of justice and sustainability.
All too often, communities in the Global South get negatively impacted, when not forcefully displaced, by mining projects that pollute the local water and soil compromising local food security, causing diseases, forest degradation and biodiversity loss. Indigenous Peoples and the rural poor in particular suffer as a result of a combination of indifference, negligence and corruption by companies and governments alike. Large scale food production comes with a price: 28% of anthropogenic greenhouse gas emissions come from agriculture, forestry, and other land use (AFOLU), with deforestation being responsible for 45% of AFOLU emissions.[3]
Taking Angola, Mozambique, Ecuador, and Brazil as cases, we argue that social and environmental guardrails are urgently needed in global trade and investments. In Angola and Mozambique, community displacement fueled by mining and infrastructure projects to service the extractive sector has led to social crises and environmental disasters, exacerbating hunger and internal conflicts.[4] These problems have their roots in the lack of robust social and environmental standards in the production and trade of commodities. Studies documenting BRICS investments in these countries have shown that appropriate due diligence in licensing procedures would have prevented much of the suffering at community level, arguably freeing national resources for local development instead. In addition, tax benefits for companies have deprived national budgets of much needed capital.[5]
In resource-rich Ecuador, the focus of foreign investment has been in the extractive industries, with high levels of displacement, social conflicts and environmental damage, leading to the United Nations calling for meaningful consultations on Ecuador’s mining projects.[6]
Brazil, the G20 host and the world’s 8th economy, has seen a serious humanitarian crisis related to mining[7] and a surge in deforestation linked to agriculture. Cattle production, often in combination with soy cultivation, is responsible for over two-thirds of deforestation and corresponding land use change emissions in Brazil, the world’s top beef exporter.[8] While the current government has made laudable progress in curbing deforestation, this is not enough to mitigate emissions caused by land use change.
So how can these challenges be addressed? First and foremost, through the robust adoption and implementation of best practice standards such as the Performance Standards on Environmental and Social Sustainability | International Finance Corporation (IFC) and the Extractive Industries Transparency Initiative Standard.
Secondly, governments should ratify the International Labour Organisation Indigenous and Tribal Peoples Convention (ILO169), including the adoption and vigorous enforcement of national legislation in full support of the Convention, with zero tolerance for violent eviction of communities, fair land purchases, community relocation, and benefit sharing at all levels. Mining in particular needs to be restricted and avoided altogether in areas of great ecological and cultural sensitivity, including national parks, land and marine reserves, and areas of cultural significance to Indigenous Peoples.
In addition, national and local governments must guarantee full transparency in the tendering process for public works and ensure the balanced participation of all stakeholders. Governments in the Global South need to invest in strengthening internal technical and scientific capacity for activities that provide added value to extraction, as in Chile’s new National Lithium Policy. There is also a need to ensure co-benefits for local communities, for example through a percentage of tax revenues to local governments to help finance health and education, as Peru’s “Mining Canon.”
The trade of agricultural commodities on the other hand can be guided by sustainable sourcing practices that prioritize environmental stewardship, scaling up technology where possible to optimize production while curbing deforestation. Improving access to credit to smallholders and coupling it with technical assistance can also increase productivity and lessen incentives to deforest sensitive areas for farms. This does not need to represent losses in exports: In 2023, Brazil exported a record 2.5 million tons of beef, while halving deforestation compared to 2022.
Finally, the G20 needs to consider an important question: Will the new multipolar order be defined by geopolitical tensions and continued unsustainable extraction for natural resources, exacerbating such tensions, or can it herald a new era where sustainability and local participation inform trade and investment decisions in the Global North and South, and boost South-South co-operation?
If the G20 summit is to deliver on its ambitious slogan, a new game plan is needed—one where countries need to balance their strategic and immediate interests with long term sustainable development imperatives that include social and environmental safeguards, as local and national economic growth is pursued.
After all, an unjust world and unsustainable planet is in no one’s interest.
Footnotes
[1] United Nations. 20204. Goal 2: Zero Hunger. Available at Goal 2: Hunger - United Nations Sustainable Development.
[2] International Energy Agency 2024. Batteries and Secure Energy Transitions. Available at Batteries and Secure Energy Transitions – Analysis - IEA.
[3] IPCC 2019. Climate Change and Land. Available at Special Report on Climate Change and Land — IPCC site.
[4] Garcia, Ana, Curty, Rodrigo and Lopes, Maria 2023. Investimentos, financiamento e cooperação do Brasil com Angola e Moçambique: evolução dos dados e um balanço do acordo de cooperação e facilitação de investimentos. Brasília: IPEA (Texto para Discussão 2857), fev. 2023. http://dx.doi.org/10.38116/td2857 and HRW - Human Rights Watch 2013. What is a House without Food? Mozambique’s Coal Mining Boom and Resettlements. Available at Human Rights Watch (hrw.org).
[5] Ibid; Tump, Rainder., Cassinda, Ernesto, and Duster, Daniel 2021. Sinergias e concorrências entre os setores agrícolas familiar e privado em Angola. Estudo da mesa redonda das ONGs alemãs que trabalham em Angola. Luanda: ISSA; Brot für die Welt; Misereor. Available at: https://bit.ly/4assGKh and UNCTAD – United Nations Conference on Trade and Development. Angola. Investment Policy Review. Geneva, 2019.
[6] United Nations 2024. UN experts call for meaningful consultations on Ecuador’s mining projects. Available at UN experts call for meaningful consultations on Ecuador’s mining projects | OHCHR.
[7] Watts, Jonathan, and Bedinelli, Talita 2023. How Illegal Mining Caused a Humanitarian Crisis in the Amazon Yale Environment 360. Available at How Illegal Mining Caused a Humanitarian Crisis in the Amazon - Yale E360.
[8] Fleck, Anna 2024. The Biggest Exporters of Beef in the World. Available at Chart: The Biggest Exporters of Beef in the World | Statista.
This piece is based on the 2024 T20 Policy Brief Sustainable commodities for climate, nature and people: Learning from the past, investing in the future, available at Policy brief - G20 | Future Horizons.