For the production of basic materials a deep decarbonization fundamentally requires the development of new process technologies. However, the climate policies currently adopted in G8 countries mainly reward incremental improvements and preserve industrial structures rather than induce innovation and preparations for a low-carbon transition. The current policy approach is motivated by fear of carbon leakage and loss of competitiveness but will not be very effective in the longer term as carbon costs increase. There are several reasons why maintaining production capacity of basic materials in developed economies is a necessary strategy. These include technology development, keeping integrated value chains intact, protecting employment, and taking a responsibility from a consumption perspective. We argue that G8 countries should take the initiative to get a global policy response that shifts the current focus beyond short-term problems to a long-term innovation focus for developing zero-carbon process technologies
