Green Economy – An introduction
Given that Green Economy is one of the main themes at the Rio+20 UN Conference on Sustainable Development that will take place in June in Rio de Janeiro, in the following weeks we will post a collection of articles covering various aspects of this topic and with a wide geographic focus. The articles are reproduced without modifications from their respective sources, which will be indicated at the end of each article. The purpose of this excercise is not to reinvent the wheel and come up with things that have not been said before about green economy, but rather to gather together a large spectrum of information and make it available for everyone who does not have the time for an extensive research, in order to highlight the importance of this concept in the current global context.
Defining Green Economy
UNEP has developed a working definition of a green economy as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive.
Practically speaking, a green economy is one whose growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services. These investments need to be catalyzed and supported by targeted public expenditure, policy reforms and regulation changes. This development path should maintain, enhance and, where necessary, rebuild natural capital as a critical economic asset and source of public benefits, especially for poor people whose livelihoods and security depend strongly on nature.
WRI Managing Director Manish Bapna responds to some of the most commonly-asked questions regarding Green Economy
What is a Green Economy?
A Green Economy can be thought of as an alternative vision for growth and development; one that can generate growth and improvements in people’s lives in ways consistent with sustainable development. A Green Economy promotes a triple bottom line: sustaining and advancing economic, environmental and social well-being.
The prevailing economic growth model is focused on increasing GDP above all other goals. While this system has improved incomes and reduced poverty for hundreds of millions, it comes with significant and potentially irreversible social, environmental and economic costs. Poverty persists for as many as two and a half billion people, and the natural wealth of the planet is rapidly being drawn down. In a recent global assessment, approximately 60% of the world’s ecosystem services were found to be degraded or used unsustainably. The gap between the rich and poor is also increasing – between 1990 and 2005, income inequality (measured by the gap between the highest and lowest income earners) rose in more than two thirds of countries.
While the prevailing economic growth model focuses on increasing GDP above all other goals, a Green Economy promotes a triple bottom line: sustaining and advancing economic, environmental and social well-being.
The persistence of poverty and degradation of the environment can be traced to a series of market and institutional failures that make the prevailing economic model far less effective than it otherwise would be in advancing sustainable development goals. These market and institutional failures are well known to economists, but little progress has been made to address them. For example, there are not sufficient mechanisms to ensure that polluters pay the full cost of their pollution. There are “missing markets” – meaning that markets do not systematically account for the inherent value of services provided by nature, like water filtration or coastal protection. A “market economy” alone cannot provide public goods, like efficient electricity grids, sanitation or public transportation. And economic policy is often shaped by those who wield power, with strong vested interests, and rarely captures the voice and perspectives of those most at risk.
A Green Economy attempts to remedy these problems through a variety of institutional reforms and regulatory, tax, and expenditure-based economic policies and tools.
What does a Green Economy look like?
The transition to a Green Economy has a long way to go, but several countries are demonstrating leadership by adopting national “green growth” or “low carbon” economic strategies. And there are many examples of successful, large-scale programs that increase growth or productivity and do so in a sustainable manner. For example:
· The Republic of Korea has adopted a national strategy and a five-year plan for green growth for the period 2009–2013, allocating 2 per cent of its gross domestic product to investment in several green sectors such as renewable energy, energy efficiency, clean technology and water. The government has also launched the Global Green Growth Institute which aims to help countries (especially developing countries) develop green growth strategies.
· In Mexico City, crippling congestion led to a major effort to promote Bus Rapid Transit (BRT), a sophisticated bus system that uses dedicated lanes on city streets. Significant public investment in the BRT has reduced commuting times and air pollution and improved access to public transit for those less able to afford private cars. This remarkable success is now being replicated in cities across Mexico and has led to investment from the federal government in urban public transit for the first time.
· China now invests more than any other country in renewable energy. Its total installed wind capacity grew 64 percent in 2010. This growth is driven by a national policy that sees clean energy as a major market in the near future, and one in which China wants to gain a competitive edge.
· Namibia is managing its natural resources to generate economic, social, and environmental benefits. Local communities across the country are granted the right to use and capitalize on the benefits of using wildlife and other natural resources within the boundaries of “communal conservancies.” With an economic incentive to sustainably manage these areas, food and employment is being provided for hundreds of thousands of Namibians in rural areas. More than half of the jobs are filled by women, and wildlife populations have increased.
· Businesses are increasingly leading progress toward a Green Economy. For example, the carpet company Interface FLOR is improving its competitive positioning in this normally petroleum-intensive industry by focusing on how sustainability can enhance its business model. The company is working towards a closed loop system, meaning that its waste products are also its manufacturing inputs. Its company culture reinforces its goals – when employees know they are making a difference in the world, they tend to work harder and be better at their jobs, making the enterprise more productive. Interface’s CEO, Ray Anderson, has said “If we can do it, anyone can. And if anyone can, everyone can.”
How does Green Economy differ from previous efforts to promote sustainability – what is new?
In many ways, Green Economy objectives simply support those already articulated for the broader goal of sustainable development. But this new framing responds to two recent developments.
First, there is a deeper appreciation today by many governments, companies, civil society and the public that we are reaching planetary limits, not just in terms of greenhouse gas emissions but also in our use of water, land, forests and other natural resources. The environmental and social costs of our current economic model are becoming more and more apparent.
Past sustainability efforts have not focused sufficiently on fixing the failures of economic policies. But we now have a chance to tackle these challenging problems given the policy openings created by the response to the financial crisis.
Second, and perhaps even more important, the global recession has led to a reconsideration of key tenets of the current economic model – such as the primacy of growth and the belief in light-touch regulation. In openly questioning the strength of the status quo, many public- and private-sector leaders are seeking:
· Policies and regulations that can identify and manage financial and other risks more effectively
· New markets and industries that can create good, long-term jobs
· Public support for innovation to position a country to compete in tomorrow’s markets.
These developments point to the need for new sources of growth that are environmentally sustainable – for example, employment in high-growth sectors such as clean energy. Past sustainability efforts have not focused sufficiently on fixing the failures of economic policies such as pricing pollution. But we now have a chance to tackle these challenging problems given the policy openings created by the response to the financial crisis. A good example is Korea’s adoption of a national green growth strategy (described above).
Some see marrying sources of new growth with sustainability as the future. Why is China investing in wind? To win tomorrow’s markets, not necessarily to compete in today’s. As the late C. K. Prahalad – a visionary on corporate strategy ―was fond of saying, “we need to move from seeing sustainability as a cost or hindrance to realizing that it’s a key driver of innovation”.
What are some of the concerns and tensions with the concept of a Green Economy?
One question people ask is “can we afford this?” We’re still in the wake of the global financial crisis and many people perceive Green Economy solutions as expensive. The United States is asking itself whether it can afford to put a price on carbon today. Developing countries are concerned that transitioning to a Green Economy will hinder economic growth and the ability to reduce poverty.
Moreover, there will be short-term, nontrivial losses associated with changes in industry and market structure (e.g., a decline of the coal industry and related job losses.) Supporting those actors who will bear the brunt of the transition will be critical to building broad ownership for a Green Economy.
Some countries feel that they are lagging in green technology know-how and therefore will be at a competitive disadvantage in the race for future markets. Others feel that the Green Economy is a pretense for rich countries to erect “green” trade barriers on developing country exports. These are all legitimate concerns that deserve attention.
Ultimately, a hard-nosed economic analysis should inform decisions on what policies and investments to promote today. When the full costs and benefits over time are taken into account however, many Green Economy solutions will be seen as more attractive. Nevertheless, there will still be difficult choices and tradeoffs. For example, should India aggressively promote grid-connected, relatively expensive solar power when hundreds of millions in the country still have no access to electricity? And even where Green Economy solutions make economic sense, they may be politically challenging. The transition to a Green Economy will not be easy.
What are the challenges to a transition to a Green Economy, and what will make it possible?
The principal challenge is how we move towards an economic system that will benefit more people over the long run. Transitioning to a Green Economy will require a fundamental shift in thinking about growth and development, production of goods and services, and consumer habits. This transition will not happen solely because of better information on impacts, risks or good economic analysis; ultimately, it is about politics and changing the political economy of how big decisions are made.
The problem is vested interests. Those who benefit from the status quo are either overrepresented in or have greater access to institutions that manage natural resources and protect the environment. U.S. climate legislation, for example, was defeated in no small part by resistance from fossil-fuel based energy advocates.
The following steps would help create a more level policy-making playing field:
· Increase public awareness and the case for change. Greater visibility on the need for this transition can motivate voters and consumers - not just because of the costs but also the economic benefits generated by a Green Economy, such as new jobs and new markets. People will not adopt policies because they are green. They will do so when they believe it is in their interest.
· Promote new indicators that complement GDP. Planning agencies and finance ministries should adopt a more diverse and representative set of economic indicators that focus less exclusively on growth and track the pace and progress of development.
· Open up government decision-making processes to the public and civil society. This would help ensure policies are accountable to the public and not to vested and well-connected interests
· Identify and take advantage of political leadership when available as this will be crucial in order to limit the undue influence of “dirty” economic holdouts.
Timing is everything when it comes to big policy reforms. Green Economy advocates will need to be ready when that window of opportunity presents itself. Ultimately, the widespread transition to a Green Economy will depend on whether or not the long-term public interest is reflected in today’s economic policies.
Green Economy – best practice
The Nordic countries example
In the fall of 2010 the Nordic prime ministers collectively called for a global shift towards green growth. The Nordic countries will strive to create the conditions for a better climate while also creating economic growth and new green jobs.
A common borderless electricity market, energy-efficient innovative solutions in construction, and a continued focus on green R&D are priorities within the Nordic cooperation towards a green economy. The Nordic countries also aim at using their environmental technologies to enhance competitiveness while reducing oil imports and CO2 emissions.
The current focus areas of the Nordic cooperation on sustainable consumption and production more specifically are cleaner technologies and innovations, green public procurement, environmental information and sustainable lifestyles. These are all highly important areas in the transition to greener markets.
Priorities for resource efficiency and environmentally driven markets:
· Development of policy instruments and creation of conditions for increased material and energy efficiency through, for instance, Nordic contributions to the implementation of the EU directive on eco-design and to the new waste framework directive.
· Improvement in co-ordination and use of various environmental information instruments, for instance, between the Nordic Ecolabel (the Swan), the EU Ecolabel (the EU Flower), environmental and other labels.
· Stimulus of continued development of technology purchases and public procurement contributing to increasing the share of ecoinnovative and cost-effective goods and services in the market.
· Development of climate aspects within the framework of the Nordic Ecolabel.
· Promotion of sustainable consumption and production through the creation of legal conditions and economic policy instruments.
The Green Economy Coalition (GEC)
The Green Economy Coalition is a diverse set of organisations and sectors from NGOs, research institutes, UN organisations, business to trade unions. The coalition has come together because it recognises that our economy is failing to deliver either environmental sustainability or social equity. In short, our economic system is failing people and the planet.
Their vision is one of a resilient economy that provides a better quality of life for all within the ecological limits of the planet. Their mission is to accelerate the transition to a new green economy.
Every country around the world has its own set of ecological, economic and cultural contexts. The dimensions of a green economy - and the road towards achieving it - will be specific to that unique context.
To build the understanding of these different landscapes, the Coalition is supporting a series of national dialogues, seeking to engage national stakeholders and emphasise that we are about 'exploration, dialogue and shared action', not a set of external mandates. The process is
· informing about the reality of green economy debates and issues;
· helping to build a collective understanding of the challenges and opportunities of a transformation;
· directly shaping the messages that they take to governments ahead of Rio 2012
· and explicitly helping in-country civil society organisations gain access to international processes.
But it is also helping to kick-start the longer term deeper change, which goes beyond terminology. It is fundamental for the vitality and future of a green economy that it is owned, powered and defined by nations and their citizens.
The coalition member International Institute for Environement and Development (IIED) has worked closely with national partners to coordinate dialogues in Brazil, India, Mali and the Caribbean, and EcoUnion hosted a national dialogue in Spain to explore a green economy in the Euro-Mediterranean region.
Green Economy in Europe
Over the past decades, sustainable development has been promoted by a number of EU policies. For example, the EU has adopted binding climate targets together with the EU Emissions Trading Scheme, as well as range of legislative instruments on biodiversity, waste management, water and air quality. This has encouraged the growth of EU eco-industries, which now correspond to over 2.5% of EU GDP and provide jobs to over 3.4 million people. In 2001 the EU adopted an EU Sustainable Development Strategy (EU SDS), renewed in 2006.
Since the most recent EU SDS report in 2009, progress towards achieving sustainability in the EU has been assessed in various ways, including sustainability indicators and the State of the Environment Report of the European Environmental Agency. These publications show that while progress has been made many challenges still exist, in particular to make growth more sustainable.
A key policy development has been the adoption of the Europe 2020 Strategy in 2010. This aims to transform the EU into a knowledge-based, resource efficient and low-carbon economy and provide a sustainable response to the challenges facing the EU up to 2050. The Strategy seeks to mainstream and reinforce the role of sustainability in policy development by establishing the mutually reinforcing priorities of smart, sustainable and inclusive growth which are driven by five headline targets and seven flagship initiatives.
For example, the flagship initiative on resource efficiency aims to decouple the use of natural resources from economic growth and envisages a range of new policy measures including action on raw materials, energy efficiency, biodiversity, as well roadmaps to decarbonise the economy, energy and transport. It also advocates the stepping up of the use of market-based instruments, phasing out environmentally harmful subsidies and the “greening” of tax systems.
Twenty years after the Rio Summit, the world is still facing two major and interlinked challenges: meeting the demands for better lives for a global population set to grow by over a third by 2050, and addressing environmental pressures that if not tackled, will undermine the world's ability to meet those demands.
Responses to these challenges will not come from slowing growth, but rather from promoting the right kind of growth. There are compelling reasons to fundamentally rethink the conventional model of economic progress: simply working at the margins of an economic system that promotes inefficient use of natural capital and resources, will not be sufficient to bring about change. What is needed is an economy that can secure growth and development, while at the same time improving human well-being, providing decent jobs, reducing inequalities, tackling poverty and preserving the natural capital upon which we all depend. Such an economy – a green economy – offers an effective way of promoting sustainable development, eradicating poverty and addressing emerging challenges and outstanding implementation gaps.
Moving towards a green economynecessitates preserving and investing in the assets of key natural resources. This is essential for all economies, but applies in particular to developing countries, which have the opportunity to grow their economies, by building on the sustainable management of their natural capital. It also means making use of low-carbon and resource efficient solutions and stepping up efforts to promote sustainable consumption and production patterns. All this involves establishing the right regulatory frameworks, creating strong incentives for markets and innovation, leveraging financial resources, and promoting entrepreneurship and greater private sector involvement. It also involves the proper valuation of natural capital, and, in more general terms, a revision of the way in which we measure growth and progress.
In a green economy many challenges can be transformed into economic opportunities, not only reversing negative environmental trends, but also driving future growth and jobs. For instance, experience shows that market-based approaches such as emissions trading are not only cost effective tools to address environmental problems but are also a source for investment.
The green economy offers opportunities to all countries, irrespective of their level of development and the structure of their economies. While in many cases investments to move towards a green economy can result in short-term win-win solutions, in other cases a medium term perspective will be needed, and transitional costs will have to be addressed, including through “pro-poor” policies. Even though there is no “one-size-fits-all” model, there are common challenges and solutions, and countries will benefit from exchanging experience and improved international cooperation.
At the same time, moving towards the green economy does not start from zero. There are already a number of strategies in place that countries can build on, such as: climate change, biodiversity, sustainable consumption and production, research and innovation, all of which can contribute to enabling a green economy. Future national and international green economy strategies should build on and strengthen these, as is happening in Europe 2020 Strategy, and recently in the roadmap for moving to a competitive low carbon economy by 2050.
While Estonia was part of the Soviet Union its economy underwent robust industrialisation, the establishment of large-scale industry and the replacement of the formerly small-scale (farms)-based agriculture by industrial production (large state and collective farms, major dairy, pig and poultry farms). Large energy production capacity in energy based on local fuel – oil shale – was developed. The environmental impact of that type of production was naturally high, ecological problems became acute and awareness of them increased especially in the 1970s and 1980s. An economic restructuring process took place during the transition to market economy. A significant share of the large-scale production lost its markets – predominantly the former USSR – resulting in a steep decline in output volumes in industry as well as agriculture and later the emergence of a radically different economy. The steep fall of production volumes brought along a comparable decline in environmental impact and ecological problems lost their high profile in the public awareness compared to the problems faced by the people having to cope in the new market economic society. It is true that new ecological problems copped up at the same time as others declined: the steep rise in the number of automobiles meant increasing air pollution in the larger cities; intensive logging of forests, the increase of volume of everyday waste (packages etc.).
The ecological, sustainable worldview has quite deep roots in Estonia. This is partly based on an approach typical of the traditional Estonian peasant culture, where life and production had been rather harmoniously linked to the natural environment throughout centuries. Conscious nature protection traditions are also quite long in Estonia (the 100th anniversary of Estonian national nature protection was marked in 2010). After the restoration of independence Estonia came under the influence of the mentality prevailing in the neighbouring countries – Finland, Sweden and other Nordic countries – with strong ecological views. These neighbouring countries also extended considerable support to Estonia in the funding of environment recovery and the spreading of know-how of ecological technologies. This transfer of ecological viewpoints and know-how from the neighbouring countries made is somewhat easier for Estonia to meet the European Union environmental requirements when acceding to the EU.
However, it should be pointed out that the ideas of green economy, i.e. those concerning the more environmental and ecological organisation of production processes in general were transferred to Estonia less rapidly than the more traditional ideas and technologies concerning nature protection and the improvement of the state of environment. Accordingly the early years of transition saw intensified attention to the disposal of industrial and municipal waste (e.g. the construction of waste treatment plants for cities) rather than to the replacement of old technologies by new and ecological ones. The slowly recovering economy also lacked the sufficient resources or the awareness needed for introducing structural changes towards more ecological and economical production. Activities were launched in some sectors of green economy, e.g. organic farming, but as niche production based on a few enthusiasts.
When comparing the newly independent Estonia with other countries as to the indicators reflecting ecological aspects (the ecological footprint, the energy, material and “waste” intensity of products), Estonia would not rank high, especially to the background of the neighbouring Nordic countries. Yet according to most criteria Estonia’s ecological situation can be considered quite good with the problems of waste from the oil shale-based power stations mainly accounting for the negative aspects.
Activities in Estonia take place, although with varying intensity, in practically all spheres traditionally viewed as related to green economy: organic farming, bioenergy, energy efficiency related activities, sustainable transport etc. Considering the specific circumstances of Estonia the activities of primary importance are the various measures for more environmentally friendly and economical energy sector, the development of methods and technologies for more efficient and less environmentally harmful use of the most important local mineral – oil shale, and more complex and economical use of the forest resources.
These and other spheres of green economy offer huge opportunities for the Estonian enterprises undergoing restructuration, which was hastened by the international economic crisis. In some cases these opportunities are related to the so-called green export (e.g. the export of more environmentally friendly and efficient oil shale processing technologies) and participation in wider international value chains of green production (e.g. the already operating participation of several Estonian companies in the production of components for wind generators).
At least 15 national level sectoral development plans and other strategic documents presently concern green economy in Estonia. The more significant ones are the following: the Estonian Renewable Energy Development Plan until 2020 (which is currently in progress), the Estonian Rural Development Plan 2007–2013, the Organic Farming Action Plan 2007–2013 and the plan for its implementation, the Development Plan 2007−2013 for Enhancing the use of Biomass and Bioenergy. The measures through which the state supports the development of green economy or creates premises for it are the investments in infrastructure, measures related to production technologies, measures for the improvement of the corresponding awareness and the various types of financial support to companies. The support opportunities available via the EU structural funds play a very important role.
A more general basis for the green economy activities in Estonia is provided by such broader strategies as Sustainable Estonia 21 and The Estonian Environmental Strategy 2030. However, these documents have been formulated from the aspect of a general ecological or sustainability-based worldview rather than directly advancing green economy. Therefore they can be viewed as documents creating background for green economy yet they contain few statements, which would concern it directly. A strategy paper immediately concerning green economy is the Development Plan of Environmentally Friendly Economy, yet this document is predominantly a collection of targets and positions already previously expressed in various sectoral plans (Estonian Energy Sector Development Plan until 2020, Transport Development Plan 2006–2013 etc.), rather than an independent strategy document. Besides it does not cover all the spheres of green economy. Therefore it has to be admitted that present-day Estonia possesses a body of policies pertaining to green economy, not very closely related to each other, but not green economy as a strong and coherent political focus. The situation may be changed by the document Estonia 2020 currently in progress, which will perform the role of Estonia’s national strategy in linking to the completed Europe 2020 strategy of the EU.
Besides the ecological and economic impacts the development of green economy in Estonia will also provide a social impact in the form of additional employment and income, which is partly evident in agricultural areas (e.g. in case of organic farming and nature tourism), partly in the cities. However, most of the spheres of green economy would not provide major additional employment, being frequently limited to seasonal/part-time work and related opportunities for extra income. As an exception can be seen the various activities of the energy sector’s modernisation and changing the profile of oil shale mining as well as adapting the former mining areas for new functions, which concern the North-east Estonian industrial region and which would provide a significant amount of new employment opportunities, although these would have to compensate for the lost “old” jobs.
Positive factors in Latvia for Green economy:
· Traditions and values
· Negative net annual greenhouse gas emissions if the land use and land use change and forestry are included in the total net emissions
· 11 per cent of terrestrial land is the protected areas for biodiversity (in EU -13 per cent)
· We still have many species which are extinct in the rest of Europe
· Comparatively high rankings in different environmentally related indexes (EPI, HPI, ecological footprint).
Negative factors in Latvia for Green economy:
· Good environmental situation is a result of not doing rather than doing.
· High material and energy intensity of production, lack of clean technologies, underdeveloped waste management system.
· Insufficient interest in Green economics from government and lack of support from it.
· Disinterest of inhabitants and also business people in environmental issues.
· Market failures must be corrected by internalising the external costs, so that the incentives for ecological conduct would be built into the everyday economic life. The state can then function less as a police authority and more as a coordinator.
· Support mechanisms for renewable energy, waste management and other projects for the improvement of sustainability must be transparent, just and available to all interested parties.
· Rise in productivity inevitably reduces employment if the demand does not increase. As the resources are limited, an increased demand is not a sustainable solution. Employment in green jobs - in the sectors of renewable energy, organic agriculture, sustainable forestry, recycling, adaptation to climate change, education, and culture could be a solution in line with Green economics.
On April 6th 2010 Lithuanian minister of Environment has signed legislation establishing green investment scheme (GIS). Lithuanian GIS is rather innovative in the market as it is based on the revolving fund framework, where money from any carbon trade that is under government’s disposition is spent in the form of subsidies, soft loans and capitals investments in the climate change projects ensuring the sustainability of the programme.
Lithuania has a surplus of 50 million assigned amount units (AAUs) which it is willing to sell. In order to be eligible for international trade, Lithuania started to build its GIS when the new government came into power at the end of 2008. It is estimated that there is 9 billion of assigned amount units surplus in the market and the demand is calculated as being around 2 billion. The competition for the buyers, mainly Japanese firms is fierce and the country was trying to create what the minister of Environment Gediminas Kazlauskas calls a sustainable and self- replenishing GIS.
Lithuania rejected the straight forward idea of short term financial instrument which relies solemnly on the revenues from surplus AAUs trade, as seen in majority GIS in the market. “It took us longer as we have done a lot of research and considered many options for the scheme. We were aiming to create a sustainable framework that would serve in disbursing money generated from any Kyoto units trade now and in the future as well as revenues from auctioning of the EUAs from 2013” – says one of the architects of the Green Investment Scheme in Lithuania, adviser to the minister Laura Dzelzyte.
According to Lithuanian GIS at least 40% of the revenues from carbon trade must go to energy efficiency, 40% to renewable energy and the rest to other climate change projects. The money is distributed through subsidies, soft loans and capital investment ensuring fiscal returns to the programme and self-replenishing. The system also puts a requirement for guaranteed CO2 reductions per every euro spent on the financed project.
Lithuania is advocating international carbon trade regulation to ensure the transparency of the carbon dealing. “We built our GIS as a carbon trading tool to finance Lithuania’s long term climate change strategy that would underpin the way to green and sustainable economy. Carbon trade is a very important source of finance for the environmental projects especially in the face of economic downturn and we do not wish to see the market being discredited because of unfair or opaque dealings of other market players” – says Mr Kazlauskas.
Due to its heavy reliance on coal, Poland is often referred to as the country with the greatest potential for green energy. However, the country still lags behind its European partners in clean tech investment, EurActiv Poland reports.
Poland has considerable potential to develop wind power as an alternative energy source. Experts say conditions are favourable to developing wind turbines across a substantial proportion of its territory, especially near the Baltic Sea and in the mountainous South East, where wind speeds frequently exceed 5.5 metres per second at 50 metres above sea level.
At the turn of the millenium, wind power was hardly used at all in Poland. However, a steep rise was noted between 2000 and 2009, when the amount of power generated by Polish wind turbines multiplied 166 times.
The figure may appear high but in fact the starting level was low. In nominal terms, Polish wind power generation is not impressive. By the end of 2008, the power capacity of all the wind turbines in Germany amounted to almost 24,000 megawatts (MW) and reached nearly 17,000 MW in Spain. Meanwhile, in Poland, wind turbines were capable of generating a mere 472 MW.
Wind power forecasts in Poland are far more optimistic. In a report, the European Wind Energy Association (EWEA) predicted that by 2020, installed capacity will range between 10,500 MW (low scenario) and 12,500 MW (high scenario). This corresponds to between 12.5% and 14.8% of total energy consumption by 2020.
Funding still an issue
Renewable energy has many advantages and one weakness: it is still expensive, especially compared to coal, which is abundant in Poland.
To build a wind farm, a hydro-electric power station or a biomass power plant, companies in Poland may resort to European funding (Operational Programme Infrastructure and Environment). Each application is eligible to obtain 30-70% of the investment cost, provided that total costs exceed 20 million zloty, or five million euro.
The development of green energy in Poland would not be feasible without foreign investment. Currently, there are ten renewable energy investment projects pending at the Polish Agency for Information and Foreign Investment. Their total value amounts to 700 million euro. LM Glasfiber, a global corporation which is the world's leading supplier of blades for wind turbines, recently invested 60 million euro in a new plant in Goleniow, in the north of Poland, creating 460 new jobs.
The development of Polish green business would be almost impossible without foreign partnerships. Kolo, a leading manufacturer of sanitary and bathroom equipment which won a national environmental prize last year, has benefited from its membership of the Sanitec group. This bathroom solution provider invested over 100 million euro in the modernisation of Kolo's plants and the development of environmentally-friendly strategies.
However encouraging, these examples nevertheless remain isolated against the background of an underdeveloped Polish green economy. Analysts say this is caused by a lack of investment and know-how, as well as the persistence of legal barriers. Indeed, it can take up to four years for a new 'green' investment project to be implemented.
How green is official government policy?
However, the real source of problem may originate from higher up, experts point out. In February 2009, the deputy economy minister gave a national award to Polish power companies assembled in the Green Effort Group for their effectiveness and solidarity in implementing the EU's climate change policies.
The Green Effort Group, which brings together Polish power companies responsible for 90% of power generation, calls for the longest possible free allocation of emissions allowances under the European CO2 cap-and-trade scheme. It also fights against any new measures to ensure Polish compliance with national climate obligations.
The fact that the Green Effort Group was granted a national award demonstrates the government's close ties with industry and suggests that despite its public posturing, it will refrain from forcing a breakthrough on green policies. Until this changes, no revolution in Polish green business can be expected, environmentalists say.
The Czech Republic believes that there is a need to use a mix of instruments to facilitate the transition to a more resource‐efficient and innovative economy. Here is a selection of several examples using various instruments below, while the list is not all inclusive:
In the Czech Republic (similarly to some other countries, predominantly in Central Europe region), many blocks of flats were built using the concrete panel technology in the past. These buildings enabled a relatively good standard of housing to many people. Their lifetime, however, was limited and from the perspective of energy consumption these buildings were very inefficient. With the assistance of a programme called “PANEL” (the current version of the programme called “NEW PANEL”), which provides credit guarantees and grants for interest payments, more than 350,000 of flats were reconstructed and provided with thermal insulation during the time period 2001‐2010.
Since 2009, the Green Investment Scheme called “Green Light for Savings” has been focusing not only on support for heating installations utilising renewable energy sources, but also on investment in energy savings in reconstructions and new buildings. The programme supports quality insulation of family houses and non‐panel multiple‐dwelling houses, the replacement of environmentally unfriendly heating for low‐emission biomass‐fired boilers and efficient heat pumps, installations of these sources in new low‐energy buildings, as well as construction of new houses in the passive energy standard.
The scheme is funded by the sale of greenhouse gas emission credits under the Kyoto Protocol. The implementation of the scheme leads not only to CO2 emissions reductions, but also brings other benefits, such as reduction of energy consumption for heating and also replacement of coal, lignite or fuel‐oil boilers for renewable energy sources, contributing to air pollution reduction (caused particularly by dust, SO2 and NOx emissions). Further benefits of the programme: jobs (mainly in construction sector) kept or created during the time of economic recession and also savings for households concerning their payments for energy.
The programme EFEKT is designed to provide support to energy savings and use of renewable energy sources. The grants are determined for energy planning, minor investment actions and pilot projects and recipients can be private entities, non‐profit organizations, universities, cities, villages, districts, social and health facilities, public organizations and associations. In 2010, the grants stimulated launching of energy savings projects and investments of total value exceeding the total financial volume of the grants almost 1.7 times.
In 2011, the Ministry of the Environment concluded voluntary agreements with major industry enterprises in the Moravian‐Silesian district, which heavily suffers from air pollution. The agreements focus on reducing air pollution through concrete measures, including investments in most advanced technologies, which, in turn, contribute to greening the industrial production in exposed localities.
A recent example of promoting innovative solutions as well as cooperation among government, private sector, academia and R&D in the Czech Republic has been a joint project of the Ministry of Environment and the Academy of Sciences called „mart Solutions for the Environment“ (2010/2011), which encouraged talented high school and university students to join a competition with their path
‐breaking ideas for expert solutions to specific environmental problems (water treatment technologies, emissions reduction technologies, material and waste recycling, development of new analytical methods for detection of harmful substances).
The learning programme ”(Don´t) Buy It!“ for children comprises a package of entertaining activities, such as a test on household consumption; a modified card game focusing on most frequent logos used for consumer goods; a board game “Man, (don´t) buy it!”, which makes the children familiar with choices how through buying various goods reduce negative impacts on the environment; a game “Smart Household” focusing on household equipment; life cycle scheme of a spirit marker; and a questionnaire for calculation of ecological footprint. The package also includes a manual with instructions for individual activities and lots of ideas how to make consumption sustainable.
Supporting scientific knowledge and taking advantage of it in designing and adopting the practical measures is very important part of instrument mix. A relevant example is the recent study on Evaluation of Ecosystem Functions and Services in the Czech Republic completed by the Jan Evangelista Purkyně University in Ústí nad Labem (Faculty for the Environment), based on complex research in 2007‐2009. The purpose of the study was, first, to classify and to map the biotopes in the Czech Republic, taking into account the link between the extent of provision of selected ecosystem services and the value of their biodiversity; second, to describe the biotopes´ ability to provide ecosystem services at present and to deliver a prognosis for conditions of global environmental changes with regard to biodiversity protection; and third, to propose an evaluation method for ecosystem services.
Transboundary cooperation is a very important part of international cooperation and represents a basic fundament for neighbourhood relations. A recent example is the memorandum between the Ministry of the Environment of the Czech Republic and Ministry of the Environment of the Republic of Poland for improvement of air quality in the Czech‐Polish border region, signed on 29 September 2011. The memorandum aims, inter alia, at improvement of energy efficiency in dwelling buildings and use of local renewable energy sources.
In line with the Czech Republic´s Strategy for International Development Cooperation for the time period 2010‐2017, a special attention in development projects is devoted to improvement of the environment and promotion of environmentally‐friendly technologies and sustainable use of resources. The current projects focus, inter alia, on development of waste management, waste water treatment and use of renewable energy sources at municipal and local level (Balkan region), sustainable management of land, forest and water resources (African region), electrification of remote areas using sustainable (solar) technology of electricity generation (Caucasian region), waste water treatment and development of organic farming (Eastern European region), analysis of pollution and restoration of an industrial zone, building new water sources or restoration of the old ones, development of water resources management, and development of renewable energy sources for rural areas (Asian region).
Further reading: http://www.czp.cuni.cz/knihovna/GreenGrowthweb.pdf
Slovakia may seem to have been a late starter in developing renewable and green energies, but its economic players are catching up, using research as an instrument to promote cutting-edge technologies. Slovakia and the Czech Republic were two parts of a common federal state until 1993. Comparisons between the two countries are thus telling regarding trends in developing renewable and green technologies.
According to analysis by Peter Kolesár from Candole Partners, the Czech Republic has experienced a rapid growth in photovoltaic (PV) installations and wind projects: there are currently 411 MW of PV installations and 180 MW of wind turbines in the country (see EurActiv 26/02/10).
However, Slovakia only has 200 kW of PVs and five MW of wind turbines and investment in renewable energy resources has been low. The main reasons for these differences are the following:
· The Czech Republic has adopted a support scheme guaranteeing feed-in tariffs for 20 years or green bonuses paid together with the electricity price.
· The Czech Republic benefits from the presence of a Green Party in its parliament, which actively proposes policies on renewable energy resources.
· More pressure is exerted by energy investors in the Czech Republic to increase the feed-in tariffs. Feed-in tariffs are a policy mechanism designed to accelerate efforts to improve the competitiveness of renewable energy as a power source.
The situation is quite different in Slovakia, where the development of renewable energy policies has been slow. Reportedly, part of the reason for this is the lack of expertise and resources at the Economy Ministry and the transmission system operator (SEPS; Slovak Electricity Transmission System) for analysing current renewable trends.
In spring 2009, a new renewable energy law was introduced in Slovakia and since then the country has become more attractive for projects and investments in renewable energy. In particular, a large number of requests have been tabled for developing wind energy projects.
However, SEPS has officially declared that projects using renewable resources, such as wind or solar power, have a negative impact on the stability of the retransmission system because they are unpredictable and should therefore be limited. Furthermore, the expansion of renewable energy resources in Slovakia has other constraints, notably the fact that 23% of Slovakia comprises protected bird areas.
Moreover, there is a widespread view that renewable energy installations would hike consumer electricity prices and breed disputes with landowners – meaning that distribution companies wanting permits from the state would have real problems.
Public interest in solar collectors
As a part of an economic recovery package, the Slovak government agreed last year to promote the installation of renewable energy sources. For this it allocated an additional budget of 100 million Slovak korunas, or 3.3 million euros, to support biomass boiler and solar collector installations, which have been the main targets of plans for renewable energy since 2007. The first call for proposals began in April 2009. The partial budget for public funding in 2010 was eight million euros. Since the programme started, the Economy Ministry has received 1,500 applications – over 80% of which have been for solar collector installations.
Compressed natural gas is in fashion
The Slovak Gas Enterprise (SPP), the dominant, state-supported gas distributor in Slovakia, E.ON Ruhrgas and Gaz de France have started a programme to support the development of CNG (Compressed Natural Gas) as an alternative and clean motor fuel of the future. “In the long run, SPP supports the use of natural gas for fueling vehicles and it has really good reasons for that,” states the company on its CNG website. “When using compressed natural gas for powering the vehicles, no mechanical impurities are created, the fuel does not smell, and the vehicle produces 60–80% fewer gaseous emissions,” it adds.
CNG is promoted as a fuel for public transport in large Slovakian cities and citizens are also encouraged to buy personal vehicles running on bi-fuel engines, one of the fuels being CNG.
Research as a driving force
With EU backing, Ludovit Jelemensky and Frantisek Janicek, both from the Slovak Technical University, opened the National Centre for Research and Application of Renewable Energy Sources in June 2009. It is the first centre of excellence in Slovakia which focuses on renewable and new sources of energy at top academic level in cooperation with private companies. Its primary research topics are biomass, solar energy and hydro-energy resources.
There are three other innovative R&D projects supported by EU funds, but they are administrated by private companies. One is a new robotic platform for ultra-deep drilling – primarily geothermal, but also for hydrocarbon prospects.
The employment dimension of economy greening
Slovakia is a country with a strong environmental movement, the roots of which date back to the 1970s and 1980s when it embodied a platform of political resistanceand the efforts to resolve urgent environmental burdens. The ecological enthusiasm was one of the driving forces behind the social and political changes of 1989 and the general support translated into a strong position of green parties in the newly emerging political system. In the past twenty years, however, the level of society ‘greening’ gradually diminished and Slovakia became a standard market economy, where environmental impacts of economic and other policies are still proclaimed as important, yet in reality are paid relatively low attention. The economy underwent substantial structural changes, the effect of which – even if not intended in the first place – was a reduction of ecological burdens. The EU accession implied the adoption of new commitments in response to today's environmental challenges.
Climate change constitutes an important topic for political debate, and as suggested by survey, it resonates soundly also in the society. Slovakia acceded to all commitments following from EU's new energy and climate change package and participated actively in the negotiations at the European and global levels. Yet, the national policy debate is dominated by the energy policy, where fossil fuels and nuclear power continue playing a key role. By joining the international energy and climate packages, Slovakia in fact confirmed the efforts to green the economy. For the time being, this endeavour is a product of international agreements rather than a resolution of national policy makers to promote a low-carbon economy. A discussion about the impacts of green restructuring on the local labour market has not taken place. In this respect, the policy response to the current economic crisis indicates some progress, as part of recovery measures aim, in line with the EU's Economic Recovery Plan, to address energy efficiency with positive effects on employment. However, it is too early to consider these partial steps as a coherent strategy.
The potential of green employment in Slovakia in the near future is mainly in the 'greening' of traditional industries and occupations and, to a lesser extent, in newlyemerging green sectors. This is suggested by the existing structure of the economy, by the lack of green knowledge, and not least by fiscal restrictions. Nonetheless, shifts in employment towards greener jobs are likely to take place in several industries and possibly induce some growth of structural unemployment. The current set of labour market policies is neutral to economy greening and their potential is somewhat limited. Tax and state aid policies are playing a crucial role at present. Labour market policies could improve their role in promoting green employment by adjusting employment services, while the highest impact is to be achieved in conjunction with other economic and social policies.
Dr. István Teplán, Chief Advisor to the State Minister for Environment, Hungary
“The Hungarian government looks at green economy not as restriction or a constraint, rather as a great economic opportunity. After every crisis something naturally emerges as an engine for recovery and we believe that for small countries, like Hungary, greening the economy can serve as a new and energizing opportunity.
The Hungarian government launched the New Széchenyi Development Plan this year. The Plan aims at improving Hungary's competitiveness, creating one million new jobs within ten years along seven break-out points - one of them is the development of green economy. In the business promotion scheme a set of conditions presented, where sustainability, resource efficiency and environmental impact have high priority.
Green economy can especially be important for small and medium size enterprises where creativity and implementation of innovations can boost business. It is also an opportunity for local producers since the consumption of local products means reduced transportation needs, lower energy costs and pollution, helps local producers to market their products and can provide further green job opportunities.
The raising awareness and the growing demand for healthy organic food and other organic products call for greening the agriculture too. Organic production and the cultivation of traditional local sorts and species requires less or can even eliminate the use of pesticides and other chemicals. Hungary, being traditionally an agricultural country, has long traditions of and good potential for organic production.
Agricultural and forestry by-products and residues can perfectly be used as renewable energy sources. Considerable electricity producing capacity has been realized in the past few years transforming previously coal-fired power plant blocks to biomass utilization. Several Hungarian district heating companies switched to solid biomass based operation. Biogas production is based on agricultural and food industry waste and sludge, and mainly used in Hungary for heat and power production. We have great potential for the utilization of geothermal, solar and wind energy too.
In the Renewable Energy Action Plan the government had set an ambitious target of almost 15 % share of renewable energy in gross final energy consumption by 2020.
Large amount of energy wasted because of the inefficient buildings, especially due to bad insulation of blocks of flats. The government’s re-launched support scheme provides financial support for energy efficiency improvements of blocks of flats built in the communist era.
Transport is responsible for a considerable percentage of greenhouse-gas emissions. Promoting public transport modes (railway, sub-urban railway, urban public transport) and biking, discouraging the use of private cars in particular in city centers helps climate change mitigation and contributes to improving the quality of life of the urban population.
These are only a few selected examples of programs and measures aiming at implementing green economy in Hungary. And we have not even mentioned research, technology, innovations, training and education, awareness raising, sustainable consumption and production, which are of special importance in green economy too.”
Following the example of forerunners in different parts of the globe, Romania can obtain the significant benefits by lower energy costs, greater energy security, and creation of employment – including many new skilled jobs in green technology, products and services. As Romanian buildings utilize almost 40% of the energy and have a direct impact on the quality of life for all Romanians, improvements in the new and existing buildings represent a tremendous opportunity to achieve economic stimulus, improve the lives of the citizens, and achieve the full benefits of international and European climate change legislation. In particular, construction renovation efforts provide numerous local jobs ensuring an answer to growing unemployment in the construction and related sectors.
At the European level, the environmental industry was estimated to employ 3.4 million people in 2005. This was more jobs than those found in the automobile and chemical industry, demonstrating the potential of the “green market” to create immediate benefits for people in addition to achieving critical environmental stewardship in the long term. According to the European Renewable Energy Council, by raising the share of renewable energy to 20% of the EU’s energy consumption by 2020, the number of green jobs would rise by 2 million.
The costs of implementing energy efficiency and renewable energy measures are minimal as they are not cash expenditures but rather investments paid back by future, continuous energy savings. With already proven technologies that are currently available in Romania, the energy consumption in both new and old buildings can be cut by an 30-50 percent without significantly increasing the upfront investment cost. In addition, government or private loans can be utilized to improve energy efficiency and have the benefit that the reach of existing programs can be vastly expanded without undue strain on today’s budget.
Stronger legislation to promote energy efficiency is being implemented throughout Europe and the world. Romanian firms can prosper by developing the capabilities to service these needs domestically, regionally and internationally that are generated from these higher standards. Alternatively, Romanian firms can be left behind as other nations win these projects.
Most credible analysts predict continuously rising energy costs which will be transferred to the homeowners and businesses and hurt economic potential. More dramatic price increases can be expected as the global economic crisis turns again to growth. Therefore encouraging energy efficiency in buildings will provide economic safety and comfort to Romanians – particularly those most vulnerable to high energy bills. Measures to reduce carbon dioxide emissions obviously have the immediate and long term benefit require reducing dependence on fossil fuels. It is therefore important to also consider the value of avoiding the severe economic distress on families, businesses, regions, and economies as fossil fuel costs rise due to scarcity, increased human population, and economic growth.
New buildings have the main saving potential (both energy consumption and CO2 emissions). However, significant GHG reduction and future cost savings could be easily achieved with public investment in the existing building sector through thermal rehabilitation of buildings. In Romania 38% of the thermal energy consumption could be saved through minimal thermal rehabilitation of existing residential blocks. The CO2 emission reduction potential from the thermal rehabilitation of old blocks alone is 4 million tons of CO2 per year. Considering that starting with 2013 many of the thermal plants will be excluded from the EU-ETS scheme and will have to pay (and pass along the cost to consumers) for every CO2 tone emitted, the saving potential is appealing.
In addition, while opinions of causes may vary, it is a known fact that the citizenry is growing increasingly concerned about changing weather patterns – particularly those affecting agriculture and personal safety. According to a Eurobarometer survey from 2008, Romanians place climate change as the biggest global problem of the moment demonstrating a high level of concern for the matter. Impacts such as droughts and floods, increased temperatures would be highly disruptive to a country with such a strong agriculture sector. Many citizens would welcome strong action by government to understand and resolve the source of this problem.
Finding pathways to a green economy is both a global and European opportunity for overcoming the international economic problems, and this pursuit is accompanied by a much friendlier attitude to the exhaused natural environment. It is thus that economic profit will be able to meet the demand for both a higher employment rate and proper environmental protection at the same time.
As far as Bulgaria is concerned in particular, the pathway to a green economy is not a luxury. The green economy is rather a necessity, as the country avails of specific local opportunities for implementing different environmentally-friendly approaches.
The sparing consumption of raw materials, the reasonable management of agriculture, and the modern attitude to waste management can prove to be highly profitable. The technology-aided economy can be environmentally-friendly as long as it never stops the process of analyzing and inventing. The environmentally sustainable employment brings about a higher level of social responsibility. Remote territories also offer economic opportunities.
What business needs is the guidance and support of the government, in order to be able to step on the road leading to a more prospective destination.
Each EU member country, each business sector, and each individual company must establish and implement specific, autonomous, and locally oriented business strategies and tactics of its own. It would be unrealistic to expect that the Green New Treaty for Europe initiative could be some sort of a modern centralization of the national and sector-specific economic policies, some kind of a “taking the individual managerial and economic entities by the hand”. To run each individual business means to take individual business risks, whereby the environmentally-friendly approaches envisaged by the GNT will make no exception to this rule. Both the profits and the costs of every such business will depend on the managerial and economic decisions made by these entities and they will continue to make profits and incur losses “on their own behalf and at their own expense”. The Bulgarian managers and entrepreneurs have to pay special attention to this fact in view of the characteristic and markedly low level of managerial and entrepreneurial culture in this country. This situation has been revealed by a number of targeted surveys and by the empirical indicators they have produced on precisely these issues in Bulgaria, as well as by numerous other studies.
There is also another well substantiated reason for the Bulgarian institutions and businesses to get committed to their local specific approaches for utilizing new and environmentally-friendly economic opportunities. The different sectors of the national economy, and the Bulgarian economy as a whole, are ranking almost at the bottom of the index rating scale measuring the economic development of the EU member states. The pursuit of a conservative, compilatory, and imitative strategy (with almost no intensive innovations and the lack of any financial back-up for investments in such innovations) has limited the country’s resources, thus making it impossible for it to improve its current situation and move forward from a purely quantitative point of view. Such a strategy is incapable of changing the current situation in the country in qualitative terms either. This is the reason why the entire responsibility for the “green” present and future of the country is lying on the shoulders of Bulgarian business, no matter how undesirable this fact seems to be for Bulgarian businessmen at this particular point in time.
Last but not least, the current specific local peculiarities in this country would pose an insurmountable barrier to each mechanically introduced and non-adapted business strategy, which happens to have failed to take these peculiarities into consideration. What is meant here is not so much the geographic and climatic location of Bulgaria as the inherited current situation of the sector-specific structure of the national economy and the entrepreneurial models of doing business. This is especially true with respect to the intensity and success-rate in the area of research and development of innovations, and the topical trends both in the area of vocational training and on the Bulgarian labor market as well.
In 2010, a draft Climate Change Act and a draft Long-Term Climate (Low-Carbon) Strategy for Slovenia were prepared. The main aim of these documents is to provide a framework for long-term climate objectives and the implementation of a low-carbon society.
The global economic crisis has also affected Slovenia. Seeking to accelerate the economic recovery process, in the beginning of February 2010, the government adopted the Slovenian Exit Strategy for 2010–2013.
The Climate Change Act is part of Slovenia’s Exit Strategy, as efficient counter-climate change measures are expected to improve the long-term competitiveness of the economy and create new jobs with a higher added-value.
Government budget cuts have been announced. The government’s general deficit for 2010 has been revised to 5.6% of GDP (or just over €2bn). The government plans to cut the budget gap to 3.6% of GDP in 2012.
Expenditure related to the measure Regulation of efficient energy use and renewable energy increased 3.9% in 2011 compared to 2010. This budget is planned to grow by only 2% in 2012 and 0.4% in 2013. For 2010-2011, €0.4m a year has been allocated for the measure Regulation, control and care of the production and distribution of electricity. Expenditures of the Environmental Agency for environmental policy and general administrative matters also increased from €6.04m (2010) to €8.6m (2011).
The amendment of the Law on Motor Vehicles Tax adopted in January 2010, means that the tax level now depends upon the amount of CO2 emitted and the type of fuel used.
The Government plans to stimulate the green economy. Slovenia’s National Renewable Energy Action Plan for 2010-2020 determines various measures to stimulate renewable energy consumption. A new 600 MW coal plant has secured €770m worth of loans from European financial institutions. The proposed coal plant at Termoelektrarna Sostanj in Slovenia will replace five less-efficient units, which are due to close. The new plant will burn lignite.
Over the last period Slovenia implemented some positive climate and energy policies. Progress in encouraging the switch to renewables and greater energy efficiency has been made and access to EU funding is expected to improve. Slovenia introduced programmes to co-finance renewable heat in households, industry and district heating with biomass. An amendment to the Regulation on Support of Electricity Produced from Renewables, introduces a 10% annual decrease of support for photovoltaic (PV) installations until 2014. Slovenia is also improving the building certification process and conditions have been created for sustainable forest management.
The Association for Energy, Renewable Energy Resources, the Development of Energy Efficiency and Environmental Protection of Zagreb which provides information, promotes and performs activities for the harmonisation with energy and ecological EU policies as well as the development of the green economy, started a five-year national and international campaign Invest in Green Croatia together with the National Information Centre on Energy and Environmental Investment. Support for the development of the green economy in Croatia is connected with the goals of EU cohesion policy in order to create sustainable development, create new jobs and increase competitiveness.
The open market for investing in the green economy is crucial for creating long-term work and revitalising the national economy, and it is the basis of a dedicated battle against climate change. The openness of such a system contributes to the opening of new markets for the local economy, which will allow it to use all possibilities arising from the need to solve the problem of climate change and new potential sources of economic growth.
Such an approach and its numerous cross-border, transnational and inter-regional programmes, offers an important platform for new types of co-operation. The five-year national-information campaign Invest in Green Croatia was founded with the aim of promoting Croatia as a market open to investment and investors in the development of a green economy in all economic activities, from research, design, production, service industries and distribution. Within the framework of this campaign, the Association for energy in Zagreb opened a registry-catalogue of green economy investment where it is possible to present green projects as well as investors intending to invest in green projects.
The first Serbia-European Union Forum was held on September 9, 2011 in Belgrade, where the Minister of Environment, Mining and Spatial Planning, Oliver Dulic, stated that both Green Economy and Sustainable Development imply huge investments in this sector, which should contribute to new job openings and better living standards in the country, but also rationalize the use of natural resources.
In the past several years there were 8.000 new jobs opened in domestic recycling industry and renewable energy. By the end of this year there will be 10.000 employees. Green economy is the country's biggest potential and Serbia could solve an economy problem that faces some great investments in this sector, said Minister Dulic in his speech at the green economy panel relating to European integration.
Experts say that by producing biofuel, Serbia could cover expenses for about 2.5 million tons of oil. Serbia also possesses great potential in wind energy, hydropower, and other renewable energy sources. The green economy implies investing in energetic efficiency, reducing production expenses, along with greater competitiveness and sustainable economical growth.
The partnership with private and public sector is necessary in order to successfully conduct the concept of green economy. Serbia has made an important progress in European integrations, and achieving the standard in environmental protection and sustainable development area. In the final run of this Government another two laws should be adopted: Utility Activities Law and Public-Private Partnership Law, said Minister Dulic.
The Minister indicated that green economy and sustainable development are priority topics in all of the International meetings, and that “there is no global forum in which climate changes, energetic crises and natural resource reduction are not mentioned”.
The green economy and sustainable development panel was attended by 56 state institution representatives from Serbia and the region, as well as people representing: European Union, different international organizations, economy and industry, civil society organization, academics and other public experts. During the panel, all the participants have recognized the key regulations which will contribute to development of green economy and sustainability in the context of European integrations:
· The panel has strongly contributed to exchange of views, ideas and visions, in political, professional and business plan, for more successful following of European and international flows related to implementation of green economy concept and sustainable growth.
· A significant shift has been noted in the field of national politics development which has been accordant to sustainable development concept, sustainable production and consumption, as well as green economy, which furthermore reflects on legislature changes, strategic guidance, and economical instruments. However, there is a need for improvement of not only “greening” of existing economical practice, but also development of significant guidelines, instruments and practical politics in the partnership of public and private sector.
· It has been concluded that green economy needs to be based on adequate evaluation of natural capital, and followed by financial policy changes along with innovative professionally-political and technological measurement introduction.
· In context of regional European integration, it is important to provide sufficient terms of financing the program, projects, and activities which contribute to socio-responsible, sustainable and green growth, starting with infrastructural investments and ending with capacity development, both on local and national stage. European Union funds have vital importance for the region. It is important to provide access to international financial institutions, and to advance existing bilateral and multilateral financial mechanisms, according to the needs and priorities of regional countries and European integrations office.
· The green growth and sustainability in key economical sectors, from energetics to waste management and agriculture, gets realized by public and private sector partnership, local government, civil society organizations, scientific institutions, international and regional organizations, etc. According to this, an additional effort is needed for creating new “green” jobs and skills.
· Economical principles based on knowledge require adjustment and development of educational systems, as well as higher awareness of sustainability, adjustment to green economy requests, and market needs.
· Panel participants have supported the sustainable development and green economy concept, in context of upcoming World Summit on Sustainable Development (Rio +20) which will be held in Rio de Janeiro, 2012. The participants have also expressed commitment to European integrations and to the context of activities in organization of European Union, which relates to the use of green economical development process.
State investments into green economy are crucial, and easier to take place using European Union funds and European banks credit lines (European Investment Bank, European Bank for Reconstruction and Development, and others). Investing into the usage of renewable energy deserves special importance. For example, the local government spends about €40 million on standard public lighting, according to experiences from Paracin community, while using renewable energy could save the country up to €10 million.
The new legal framework in Serbia, which has been harmonized with European Union legislature, has enabled investing into environmental infrastructure, therefore, strengthening of European Union fund capacities are necessary.
A great example of successful business in Serbia and the region represents “Victoria Group,” a company that has been investing, since 2005, into technology development and facility construction of biofuel production made of agricultural waste, which is an annual company investment of about €3 million for environmental protection. Another 10,000 workers are expected to get hired in the harvest residues collection field, which represents a significant contribution toward creation of new “green” jobs.
Infrastructural projects represent a key step of green economy concept realization, since realization of these projects is a prerequisite for executing a heavy European Union investment directive in the industrial pollution area, waste management, and wastewater. It is estimated that the largest amount of money from the funds will go into environmental projects, both before and after becoming a European Union member.
The accession to the European Union plan has made the largest shift in environmental sector and sustainable development politics implementation, which represents an important condition for the use of green growth concept in context of upcoming 2012 World Summit on Sustainable Development (Rio +20).
The concept of green economy is generally understood as a way of achieving sustainable development and it includes social aspects such as poverty reduction, equitable regional development and building up of human capital.
Pollution charges are in place (although with limited effects) as a way of implementing polluter pays principle. Nevertheless there is still a need for more comprehensive and effective application of market based instruments for greening the economy. Legislation, strategies and action plans to improve resource efficiency are being developed, and specific projects are implemented in the areas such as energy and waste management. Incentives for energy efficiency improvements in small and medium sized enterprises, public buildings and housing sector are increasing both in number and scope.
Even though there is no integral strategy on the development of green economy, some fundamental concepts and principles have been established in the National Sustainable Development Strategy. Regional Development Strategy (2010) links reduction of development disparities (within the country) and increase in employment to the concept of low-carbon development in the main economic sectors and envisages introduction of measures for encouraging private investments into green businesses. Preparation of the new strategy for construction sector based on green standards is planned, and measures to promote sustainable growth have been recorded in various sectors (examples include organic agriculture, eco‐tourism, renewable energy sources etc.).
A diversified policy mix is needed to achieve green, inclusive and competitive economy. Market ‐based instruments include environmental taxes, charges and fees, tradable permits and subsidies. Carbon pricing, which comprises carbon taxes and emission‐trading schemes, has a central place in global attempts to achieve green economy. Non‐market instruments include regulatory and voluntary approaches. Legislative or regulatory instruments are based on performance standards, licensing and banning of certain products or practices, while voluntary approaches include ratings, labelling and certification. Within the EU accession process, Montenegro needs to develop adequate policy mix that will deliver results in its transition to a green economy in the context of sustainable development and poverty eradication.
Priority sectors for green economy development in Montenegro include energy, tourism, construction, agriculture and forestry. More specifically, opportunities exist for increased use of renewable energy sources (particularly sun and wind), improved energy efficiency, introduction of the environmental standards (low carbon buildings) into construction, development of rural, mountain and eco‐tourism, organic agriculture, rural development, sustainable forestry etc. Besides these, greening opportunities exist for transport (introduction of combined transport, improvements in public transportation systems) and waste management (waste minimisation reuse and recycling).
There are also untapped opportunities with sustainable public procurement (the new Law on Public Procurement has recently been adopted by the Government and it includes general provisions for introduction of both environmental and social criteria for the public procurement rules) and introduction of voluntary instruments such as labelling and eco‐certification schemes. Partnerships with scientific institutions and business sector need to be developed in order to support development of low‐carbon technologies and green jobs creation. Development of adequate human and technical capacity is a prerequisite for transition to a green economy. Availability of international assistance is also very important.
Discussions held during the national multi‐stakeholder conference on sustainable development (October 2011) confirmed Montenegrins aspirations to become a pilot country for thorough restructuring and greening of the national economy based on the principles of social equity, resource efficiency and preservation of the environment. The idea and possibility to secure support for such an endeavour has been tested during the 19th Session of UN Commission on Sustainable Development in May 2011, when it was generally evaluated in a positive manner. Rio+20 Conference is seen as an opportunity to pursue this idea further, marking the twentieth anniversary of the initial presentation of Montenegro as an ecological state at the Earth Summit in Rio in 1992.
As for the expectations from UNCSD, Montenegro holds a position that the existing momentum for green economy development should be utilised to re‐emphasise complementarity between economic growth, preservation of the natural environments and resources, and stimulating employment and social equity. The Conference should also provide guidelines for development of green economy and ensure commitment and support of developed countries to the developing ones through technology transfers, information sharing and continued financial assistance.
Sustainable development and green economy should not be understood as concepts that exclude or replace each other. The recommendations/guidelines for implementation of the green economy concept should be adjustable to individual countries’ contexts and include examples of best practices and successful instruments. Measurable indicators for monitoring results should be defined. Linked to this, definition of targets would be desirable.
Bosnia and Herzegovina
Green economy partnership development / UK- BiH
The project is intended to provide a significant increase the skills and capacity of public administration and industry representatives in Bosnia and Herzegovina in relation to the green economy in Bosnia and Herzegovina to address the challenges of accession. It is an integrated package of support providing skills and experience through training and mentoring to key organisations and individuals using UK expertise and delivered by a partnership between Green Council (BiH) and EPIC (UK).
The project will be a logical follow up to the seminar: “Lessons to Moving to Low Carbon Economy” organised by the British embassy in March 2011. The seminar has contributed to development of a UK/BiH partnership by stimulating the role of civil society and local actors in meeting the acquis requirements in the green economy. In addition, the aforementioned initiative promoted the EU 20/20/20 strategy and the Lisbon Criteria as an important strategic framework for economy growth and job creation. Conclusions of the seminar were: all interested parties should focus more seriously on the key issues facing Bosnia and Herzegovina and the region in relation to the green economy, and explore possibilities to develop both bilateral and regional cooperation with the UK. For this reason Green Council and EPIC have developed a partnership with Bicton Earth Centre to support exchange of experience in this sector.
In order to continue with the necessary activities this proposal will focus on the priorities related to the green economy and support partnership development. The proposed project will provide training, support and demonstration of EU best practices, thus applying coordinated and participatory approach in order to facilitate introduction and positive changes in BiH economy in general towards the green economy.
The project will increase awareness and understanding of future needs and opportunities for BiH among local key actors (public sector, business, chambers, CSOs) about the EU green economy regulation, policy and practice. The project will also initiate improvement of BiH competitiveness of sectors related to the green economy and will speed up the process of accession-readiness of all BiH government levels in accordance with the Lisbon agenda.
Not much, but something is moving. In Macedonia organic agriculture is gaining ground. The legislative framework matches European standards and funds are growing. Yet, a lot remains to be done. The sixth part of our investigation into organic agriculture in South East Europe.
In transition economies, the idea that organic agriculture could be a potentially significant sector, largely stems from the fact that agricultural systems here are characterised by the use of traditional inputs (soil, work, capital) and a relatively limited use of synthetically produced fertilisers, herbicides, pesticides, etc.
This is also true for Macedonia, where private agricultural businesses – the dominant type, now – are mostly family-owned and have an average size of 2.6 hectares, with over 50% below the 1.5 hectares.
Organic farming and 'green economy'
UNEP (United Nations Environmental Programme) is also in favour of a low-impact approach to agriculture in Macedonia and, within an initiative on green economy, has identified organic agriculture as a sector of special interest for supporting exports, jobs, and incomes in Eastern Europe and Central Asia.
Together with IFOAM (International Federation of Organic Agriculture Movements), UNEP has started to analyse the potential economic and environmental benefits of large-scale investments in the promotion of sustainable agricultural practices. According to Achim Steiner, UNEP General Director, there is increasing evidence regarding the organic sector's contribution to sustainability, in terms of water management, soil management, the protection of biodiversity and job opportunities in rural areas.
Organic agriculture has, in fact, become fully included in the range of practices that should support the transition to a green economy: from renewable energy, recycling and the reduction of greenhouse gases, to re-thinking consumer patterns.
Organic farming in Macedonia
Organic practices in Macedonia started in 2000, with the first inspections in 2003 and the issuing of the first certificate in 2004, thanks to a project financed by Swiss Cooperation together with FiBL, a research institute with branches in Austria, Germany, and Switzerland. The project was aimed at producing organic persimmons to be exported through the SIPPO programme – Swiss Import Promotion Programme.
At the same time, in 2001, a process aimed at defining a framework law started and was approved in 2004 along with 12 amendments, followed by others in 2005 and 2006. A proper revision of the legislative framework was carried out in 2009, with the introduction of law n.146 on Organic Agricultural Production, fully consistent with European Regulations 834/2007 and 889/2008.
At the institutional level, a significant step was undertaken with the approval of the National Strategy and Action Plan for organic agriculture in the Republic of Macedonia 2008-2011 that set important targets for 2011, such as 2% and 5% percent of the total agricultural surface, for organic agriculture and collection of wild plants, respectively; increasing the range of certified products and the number of businesses involved in their transformation; the consolidation of export channels and raising the awareness of local consumers about the ethics of organic farming. Other goals include the harmonisation of domestic laws with the European framework and the strengthening of the human and technical resources in the institutions involved in the certification and inspection processes.
Since 2005, there has been an increase in public support, the number of organic farmers, and an extension of the cultivated surface. Despite significant progress, the overall market is still underdeveloped.
Road towards renewable energy and sustainable economy — pilot project in Kukës, Albania
Duration: November 2011 - August 2012
Overview and objectives: The project consists on the developing of a vision study, which looks at how Kukës can secure its energy through renewable energy sources, and develop a sustainable, green economy in the process. The study shows the economic benefits for the area, the investments, methods and actual technology needed for the transition. The study also focuses on the employment opportunities and savings for the area if it goes renewable. The project aims to disseminate the findings of the study to other local governments in Albania and advocate the transition of Albania into renewables and green economy.
The project aims to:
· develop an economic model which is sustainable and creates green jobs, and will have multiple benefits;
· create a benchmark, a ready-made model for the development of the area, a model which can serve as a basis for attracting grants and investments in the future;
· lobby to governments in Albania on the benefits that a transition to renewable energy and green jobs can have for the country and in decreasing unemployment.
Green growth and development occupied pride of place in the Papandreou government’s Stability and Growth Programme, submitted to Brussels in January 2010. The green economy agenda was the first among the main policies aimed at enhancing economic growth and employment. The Programme reiterated the commitment to green growth and development as a »major priority for the country«, given the need to address the challenges of climate change and the country’s unexplored potential in renewable energy development (Ministry of Finance, Hellenic Stability and Growth Programme 2010: 40).
The green agenda was a horizontal strategy that cut across different sectors. The country’s green growth and sustainable development policy strategy seeked to change the energy mix by 2020, strengthen trade openness and upgrade the quality of products and services in a number of traditional and modern sectors, such as transportation, telecoms, port facilities, tourism and land development, culture, the agro-food industry, ICT and biotechnology (Ministry of Finance, Hellenic Stability and Growth Programme 2010: 40).
The effective implementation of the green strategy required important public investments in support activities, including education, research, innovative entrepreneurship, management of natural resources and public health. In addition to the national public investment budget, the green growth and development strategy was to be financed from EU structural funds (the National Support Reference Framework, 2007-13) and public–private partnerships.
The National Support Reference Framework (NSRF) was the key financial vehicle for supporting green development objectives; its importance was even greater given the government’s fiscal squeeze. The NSRF was scheduled to amount to 26.2 billion Euro (that is, corresponding to a little over 10 per cent of GDP) of co-financed public expenditure over the programme period 2007–13. However, a poor track record in the past suggested that actual absorption rates might end up being lower.
The government had committed itself to bringing to Parliament a new investment law on green development to provide further incentives for green growth and development activities, supporting energy-saving investments and greenfield investment in RSE, including the effective utilisation of water resources, modern waste management techniques and urban regeneration projects (ibid: 42). The government programme emphasised productive restructuring in sectors such as the agro-food industry, innovative start-ups, cluster development, ICT use and the promotion of exports. Given the expected recession, there was a strong emphasis on creating and retaining jobs, especially in areas with high unemployment.
A study commissioned by the Greek Confederation of Labour foresaw a possibility of 100,000 new jobs created by the green development strategy. These would mainly be jobs for skilled workers, if necessary, retrained before entering the job market. The estimate might have been on the optimistic side, but it indicated the potential of a green strategy. The promotion of sectors such as tourism and culture was also part of the green development strategy, through concerted policies and investment incentives for high-quality services, the diffusion of information and communication technologies, especially among small and medium-sized enterprises, modern transportation and communication infrastructure, port development and theme parks.
The Human Resource Development Authority of Cyprus (HRDA) has conducted a study entitled Identification of green skill needs in the Cyprus economy 2010-2013.
The study (available in Greek only) specifies the green economy of Cyprus, provides employment needs forecasts for sectors of economic activity and occupations of the green economy and identifies green skill needs for the period 2010-2013.
The results of the study confirm that the transition to the green economy will strongly affect sectors of economic activity and occupations, thus influencing the knowledge, skills and attitudes of the human resources. Consequently, to tackle the upcoming challenges and compete in a new economic environment, the enterprises need human resources that have the necessary green skills and competences.
In the study, forecasts are provided on employment, expansion, replacement and total demand in green sectors of economic activity and occupations for the period 2010-2013. Furthermore, green skills for both existing and new green occupations are identified.
The HRDA, in close cooperation with the Ministry of Labour and Social Insurance, has put forward a Special scheme for promoting green skills in the Cyprus economy, which includes a variety of targeted measures that are directed towards enterprises, employees and the unemployed in 3 interlinked action pillars:
· Promotion of green skills for the unemployed
· Promotion of green skills for enterprises and employees
· Enhancement of infrastructures and systems for the promotion of green skills
The HRDA has declared the year 2011 as the Year of Green Skills with the aim to effectively promote and publicise the importance of the acquisition of green skills.
A 10-year plan for Malta to address its environmental issues and establish a green economy was launched last September by Prime Minister Lawrence Gonzi and Environment Parliamentary Secretary Mario de Marco.
The draft National Environmental Policy spans practically every eco issue, ranging from climate change to noise pollution. It also talks about job creation and environmental taxation.
The government aims to double the number of green jobs (to 10,000) by 2015, when it will also ensure that half of all public procurement adheres to the EU’s Green Public Procurement criteria.
The plans include halting the loss of biodiversity and preparing the country for climate change and other environmental risks. The policy deals with conservation of resources such as stone, fresh water and soil, as well as the importance of improving the physical appearance of towns and villages through, for example, the creation of more open spaces and pedestrian zones.
The policy also puts into perspective the government’s plans for eco-Gozo, where most of the plans will be fast-tracked.
Many of the roughly 200 proposals are already being implemented but the document is intended to provide a holistic account of the government’s direction when it comes to the environment.
In a four-page supplement, The Times summarised the 100-page document, which can be found on www.opm.gov.mt/ambjent.
Turkey needs alternative finance models to integrate into the green economy while decreasing carbon emission and implementing international requirements, said the head of the Turkish Industry and Business Association, or TÜSİAD, during a meeting in Istanbul last year.
“In order to increase our global competitiveness, Turkey should start working toward to a greener economy,” said Ümit Boyner, talking at a conference on finance for green economy organized by Regional Environmental Center.
“Turkey’s competitiveness depends on the possible finance models enabling further investments in low carbon economy,” said Boyner, noting that the association target was to contribute to forming such an economic model.
Turkey’s fast economic growth will increase the dependency on energy sources, she said. “We will have to make some decisions considering Turkey’s energy supply security.” Boyner said more national resources might be used for green energy. “Since Turkey depends on energy imports; it is not so easy to achieve targets right away.” “In order to meet the rising energy demand of the country, we need to invest nearly $200 billion in next 10 years,” said Boyner, adding that Turkey moves into a new term that requires less carbon emission energy sources and economic growth at the same time.
Commenting on the Kyoto Protocol, Boyner said it was late for Turkey to sign the agreement in 2009. “We could have benefited from the finance models implemented for India and China.”
“Turkey needs to increase its financial sources allocated for the research and development facilities,” she said, adding that the public officials should make green economy one of the top priority while working on new policies.
She also said in order to create a sustainable green economy, nearly 85 percent of the investment in transition to low carbon business should come from the private sector. “Additional external finance models should also be provided for the use of private companies for such transition to low carbon economy,” she said.
In an effort to shift to a more low-carbon economy, Moldova is taking measures to convert more of its agricultural land from conventional to organic farming.
Organic farming differentiates itself from conventional farming by ensuring the restricted use of chemical and synthetic inputs, prohibition of genetically modified crops, and wide crop rotation. There is a growing wealth of evidence pointing to the environmental benefits of organic farming compared to conventional farming, making organic agriculture very attractive to agriculture-based economies wishing to make a transition to a green economy.
Moldova's economy relies heavily on agriculture. Agricultural production and food processing activities contribute to 30% of national GDP and 70% of exports. This is due to Moldova’s favourable climate, high quality black soil, and geographical location close to large markets.
Due to the increasing international demand for organic products coupled with the significant environmental benefits, the Moldovan government has taken significant steps towards promoting organic agriculture. In 2009, 600 tonnes of organic vegetables were sold on the local market with a 20% government subsidy, providing farmers with a premium price.
Ukrainian industries occupy the leading position among the post-Soviet countries in reducing emissions of harmful substances into the environment. Ukrainian companies are implementing the green economy concept, stated the chief researcher at the Ukrainian Institute of Market Problems and Economic-Ecological Research of National Academy of Sciences of Ukraine, professor Tatiana Galushkina at the International Environmental Forum Environment for Ukraine, held in April 2011 in Kyiv.
For instance, Ukrainian JSC Zaporizhstal is among the most successful industries in implementing the ecological programs. In the last ten years, Zaporizhstal managed to decrease the amount of dust emissions into the atmosphere by 41%, the discharge of sewage water – by 30%; also, the company increased the reutilization of industrial wastewater by 86%. Leadership of the company mentioned that Zaporizhstal has undergone a significant modernization within the last six years.
At the same Forum, Olav Berstad, the Norwegian Ambassador to Ukraine, stated that Norway should serve as a role model for Ukraine on its way to implement the green economy.
The green economy concept was shaped within the last two decades. The concept harmonizes the coordination between economic, social and environmental components of Ukraine’s development.
General Discussion on the Topic “Legislative Support of Transition to a Green Economy” was held at the Thirty Seventh Session of the PABSEC General Assembly in July 2011
Volodymyr Lytvyn, Chairman of the Verkhovna Rada of Ukraine, President of the Parliamentary Assembly of the Black Sea Economic Cooperation, opened the discussion. He declared that it is a timely event. “PABSEC member states made a common cause to strengthen a green economy and its environmental component,” V.Lytvyn stressed.
Mykola Yankovskyi, Head of the Ukrainian delegation in PABSEC, stated, “First and foremost, a green economy presupposes changing the economic philosophy, moving from the exploitation of natural resources to their sustainable use. A number of countries started the transition to the model of an environmentally friendly development. Our country should follow the suit.”
M. Yankovskyi stressed that transition to a green economy is vital for Ukraine in terms of making the industry environmentally friendly and implementing the international conventions and agreements. “Development of cleaner production remains topical. The concept of introduction and development of cleaner production by 2010 is being drafted. This issue is tackled by the inter-departmental working group including the experts of the United States Agency for International Development. The concept will shape the policy of economic eco-balancing and introduce a cleaner economy into the industrial, agrarian, transport and construction sectors. Legal acts on a green economy are being drafted,” the reporter informed. M. Yankovskyi named nearly ten laws and other normative acts aimed at the introduction and development of a green economy in Ukraine.
M. Yankovskyi admitted that numerous issues impede the development of a green economy. He stated that Ukraine has one of the most energy intensive and resource-consuming economies, rooted in the past, whose technological infrastructure pollutes the environment and shapes the negative image of our state. “Therefore, the transition from the industrial to a green economy faces numerous legislative, financial, technical and technological obstacles. Ukraine has chosen its way and realizes the deadlock of the current economic model which affects the future generations,” the reporter stressed.
M. Yankovskyi emphasized that Ukraine has an enormous potential for developing a green economy, solar and wind power engineering, establishing minihydro power plants, and producing biofuel. “Positive changes hold out hope that the legislator, the government and the president will support this initiative, so that Ukraine would change to sustainable development, successfully implementing the ‘green economy model.´ Then we will live in the country, which set the goal to become one of the leaders by the life quality and the Human Development Index in a decade,” the Head of the Ukrainian delegation concluded.
Other reporters stressed that development of a green economy is an essential means of supporting a healthy environment, while introduction of environmentally-safe practices will reorient the economy towards cleaner production.
The Ministry of Natural Resources and Environmental Protection of Belarus intends to begin developing principles of economy functioning through “green standards.” This was stated by head of the ministry Vladimir Tsalko in February 2012. According to him, such standards are implemented in Russia, Poland and Ukraine.
“This is particularly relevant after the European Conference of Ministers in Astana and before the upcoming 2012 World Summit on Sustainable Development “Rio +20,” which will be attended by heads of state around the world. A new model of economic development all over Europe – the “green economy” – is on agenda, he said, BelTA informs.
“The initiative of Kazakhstan - Partnership Program “Green Bridge” – is also noteworthy. Its purpose is to support voluntary and mutually beneficial cooperation between countries in Europe, Asia and the Pacific Ocean in the transition to a “green economy” to save the environment and eradicate poverty,” said Vladimir Tsalko. He ordered to determine the position of Belarus in international negotiations on this issue. “The main focus should be placed on creating incentives for the business community and international donors in environmental projects,” said the Minister.
Vladimir Tsalko also noted the need for greening the Belarusian people beginning from educational institutions to the business community, as well as the heads of enterprises and government officials.
Head of MNR says the ministry is implementing 10 projects of international technical assistance in the amount of more than $17 million. “Last year, successful negotiations were held to raise funds for new projects in the field of climate change, wind energy, biodiversity, land degradation, the “green economy” and water resources with a total budget of more than $36 million,” he said.
Vladimir Tsalko urged to better use the potential of Belarus in implementation of environmental projects and to attract large international companies to such projects. The Minister instructed the district committees at the regional and local levels to take part in the development of new projects. As for departments, they are tasked to begin work on attracting grants, while the heads of institutions - to develop plans to bring technical assistance to various sectors of environmental management within a month.
Environmentally-oriented modernisation of the Russian economy is moving on, albeit not exactly effortlessly. New projects are being implemented; both the business community and the government have really started doing something about this problem.
That’s the main conclusion one could make after the conference “Green Economy as Modern Russia’s Priority” which took place in March, 2011 attended by representatives of government agencies, public associations, large corporations and innovative companies.
What seems particularly worrying in terms of environmental risks in Russia? physical wear and tear of equipment at fuel and energy complex companies is as high as 60%; for oil and gas complex companies (production, transportation and storage), this figure is even higher: 70%-80%; about 90% of industrial waste is not recycled. Urgent steps need to be taken to reduce these risks, in all areas – investments in upgrading production facilities, improved legislation and, even more importantly, new attitude; many of the conference participants stressed this point.
But something is actually being done to bring about “green” modernisation of the country, and more than some may think. Many companies, ranging from financial and industrial giants to small innovative firms, presented their projects. Quite a few of them are of breakthrough nature, capable of making Russia one of the world leaders. Most importantly, they’re aimed at radically increasing the overall energy and resource efficiency of the Russian economy. Each of these projects deserves a detailed description, and we’re going to do just that soon; meanwhile here’s a short list of most interesting ones:
Projects aimed at “green” modernisation of the Russian economy:
· Russian Railways’ designs include the first-ever liquefied gas gas-turbine locomotive, and the “smart station” in Anapa. The company is systematically working to reduce overall energy consumption and negative environmental side-effects of railway transportation;
· Liotech is a joint venture of the Russian RUSNANO Corporation and the Chinese Thunder Sky; the company offers radically new energy storage solutions. In effect it’s a breakthrough both in power engineering and motor industry, facilitating the transition to hybrid and electric cars;
· Sollers is in the process of deep environmentally-oriented modernisation of the company’s car factories;
· Optogan – Onexim’s daughter – offers LEDs which, if applied on a sufficiently large scale, would reduce the country’s lighting system’s energy consumption by 80%;
· Profotech (also affiliated with Onexim) designed electric transformers which could work in a very wide range of conditions; according to the company’s spokesman, they’d prevent such accidents as happened at the Chagino substation in 2005 and the Sayano–Shushenskaya hydropower plant in 2009.
· Major projects such as the 2014 Sochi Olympics also involve environmentally-friendly solutions, based on best international practices – according to the spokesman of Sochi 2014 Organisational Committee. The same goes for facilities which will be constructed for the FIFA World Cup 2018.
However, the conference wasn’t just about answers: quite a few new questions were raised during the debates. In particular, development of “green” economy and innovation activities generally are hindered by low market demand; accordingly, ways should be found to increase it. One of the participants put this in a rather alarming way: our fundamental national programmes set an objective to increase the share of alternative energy sources in the overall national production to 4.5% by 2020; compare it with 20%-25% in Western Europe and North America. Note also that a few decades ago Russia (then the USSR) has been a world leader in the alternative energy field. Obviously we’re not approaching this issue ambitiously enough.
Another disturbing thing is an apparent gap between the systemic nature of problems and the individual solutions being proposed to deal with them, and to promote further development. On the one hand we have fundamentally obsolete production facilities and communal infrastructures, which is fraught with a major disaster; on the other – individual, even if breakthrough, technical solutions.
Also, as yet another conference participant noted, almost nothing has been said about alternative energy projects – wind, solar, small hydropower plants, or about recycling industrial and domestic waste either.
Still, it’s just a beginning. This event, in terms of its subject matter and the level of representation, was one of the first (if not the first) in Russia. The participants pledged to press on with their projects and meet regularly to discuss emerging problems and barriers, and submitted a memorandum to that effect to the RF President Dmitri Medvedev.
Green Economy in Asia and the Pacific
Green Economy Initiative
The Green Economy Initiative (GEI) is designed to assist governments in “greening” their economies by reshaping and refocusing policies, investments and spending towards a range of sectors, such as clean technologies, renewable energies, water services, green transportation, waste management, green buildings and sustainable agriculture and forests.
Greening the economy refers to the process of reconfiguring businesses and infrastructure to deliver better returns on natural, human and economic capital investments, while at the same time reducing greenhouse gas emissions, extracting and using less natural resources, creating less waste and reducing social disparities.
GEI activities include providing advisory services to countries interested in greening their economies, producing research products, and engaging partners to effectively promote and implement Green Economy strategies.
In Asia, UNEP works on national Green Economy initiatives in Indonesia, South Korea, Viet Nam, Cambodia, Lao, Philippines, and Papua New Guinea.
UNEP is working in partnership with the Government of the Republic of Korea to support the country's green economy strategy. Under the plan, UNEP has produced an interim report entitled, “Overview of the South Korean Green Growth National Vision.” This is an independent review of the country's “Green Growth National Vision” and five-year Green Growth Plan, and is the first in a series of national and regional initiatives.
Green Growth is a policy focus for the Asia and Pacific region that emphasizes environmentally sustainable economic progress to foster low-carbon, socially inclusive development.
Green Growth is a globally relevant approach to sustainable economic growth that was developed in Asia. It is impeartive that countries in the Asia and Pacific region continue their economic growth to alleviate poverty and to achieve social progress. However, increased environmental degradation, climate change and diminishing natural resources require an unconventional approach to support the export-driven economic activities of the region.
The Asia and Pacific region has been at the forefront of the 21st century surge in economic growth, a situation driven primarily by exports and which has led to expanded production requirements needed to fuel an ever increasing amount of trade. This has significantly compounded the environmental carrying capacity pressures of many countries in the region. These countries are now shouldering an increasingly greater share of regional and global environmental production-related burdens. Coupled with evolving production patterns, these impacts are driving changes in consumption patterns in these countries and policies are needed to ensure that these developments will be environmentally sustainable. The past axiom of “grow first, clean up later”, can not apply in a region that has such a limited natural resource base and a rapidly growing population directly dependent on natural resources. In light of the recent fuel, food and financial crisis is is now imperative for countries in the region to reassess their development paths.
In order to achieve Green Growth it is crucial to change development approaches from ‘grow first, clean up later’ to a more responsible long-term attitude. Governments can promote this by encouraging economic growth with an emphasis on environmental and social concerns.
UNESCAP’s Green Growth Programme has evolved to emphasize the Sustainable Livelihoods Approach (SLA), a rights-based approach that recognizes the poor as a key stakeholder in the development process. Green Growth encourages the use of participatory assessments which identify the main constraints, opportunities and concerns faced by the poor and to include them into the policy planning and implementation cycle. The SLA supports vulnerable communities by providing pro-poor social services and by creating an enabling environment for sustainable development.
The concept of sustainable livelihoods is used by some as a replacement term for sustainable employment and work in the formal and informal economies with reference to a person’s capacity to maintain and enhance their capability and assets both now and in the future, while not undermining the natural resource base. Adopting this approach allows Green Growth to work towards win-win solutions: addressing the environment in ways which enhance opportunities for the poor to participate more fully in society and thus improving their quality of life.
Green economy key to overcoming resource constraints in Asia-Pacific
Countries in the Asia-Pacific region could overcome the constraints of limited resources by making the transition from dependence on traditional means of production to a more sustainable green economy, according to a joint report unveiled today by the United Nations and the Asian Development Bank (ADB).
The region utilizes three times as much resources to produce $1 of gross domestic product (GDP) compared to the rest of the world, and resource use in the region grew by 50 per cent between 1995 and 2005, says the report, entitled Green Growth, Resources and Resilience: Environmental Sustainability in Asia and the Pacific.
Produced by the UN Economic and Social Commission for Asia and the Pacific (ESCAP), the UN Environment Programme (UNEP) and ADB ahead of the UN Conference on Sustainable Development (Rio+20) to be held in Brazil in June, the report emphasizes that the challenges of resource constraints are more serious in the Asia-Pacific region than anywhere else.
It rejects the assumption that technology advances will be able to solve the problems of resource constraints and proposes specific strategies for changing economic incentives to promote a green economy which uses resources much more efficiently.
“Countries of Asia and the Pacific have been at the forefront of implementing initiatives to green their economic growth and will reap the benefits of such investments economically, socially and environmentally,” said Young Woo Park, UNEP’s regional director.
With the global market for green goods and services expanding rapidly and the right policies and investments, the Asia-Pacific region could lead the world towards a more sustainable future, according to Nessim Ahmad, director of ADB’s Environment and Social Safeguards Division.
The report stresses that economic incentives to promote investments in resource efficiency and natural resource protection are key, but action on other fronts is also needed, including an integrated policy framework and approaches.
Governance must be more adaptive and inclusive and become more adept at harnessing knowledge from different sources and incorporating information from various stakeholders, the report stresses.
For developing countries, the massive investments in infrastructure, as well as the unmet needs for energy, water, transportation and housing, offer a window of opportunity to change the way that energy and other resources are used, it states.
The report addresses the two main Rio+20 themes – green economy in the context of sustainable development and poverty eradication, and institutional framework for sustainable development.
“Business as usual is no longer a feasible option, but many governments and other stakeholders still do not recognize the urgency of the challenge of improving the resource efficiency of economic growth,” said Rae Kwon Chung, director of ESCAP’s environment and development division.
The Asia-Pacific region’s resource and pollution-intensive growth trends means the region is at risk of not being able to sustain the growth needed to reduce poverty in the long term, the report points out.
Optimistic growth projections for the region do not factor in resource constraints sufficiently, Mr. Chung added. Green growth, he underlined, is a strategy to achieve sustainable development, addressing both resource constraints and the climate crisis.
Green Economy in South America
Sustainable Development, not “Green Economy”
Civil society in Latin America and the Caribbean is mustering its strength to defend the principles of sustainable development, as opposed to the model of a “green economy”, which it views as only benefiting the business interests of big companies.
“The green economy is the new international environmental vogue, but it has lost all vestiges of the concept of sustainable development and has taken another direction,” Maureen Santos, an expert on international issues at the Brazilian Federation of Agencies for Social and Educational Assistance (FASE), said. “It's an attempt to shore up the present system that is in crisis,” she said.
The goals of the Rio+20 conference are to secure renewed political commitment for sustainable development, assess the progress to date in the implementation of the outcomes of the major summits on sustainable development, and address new and emerging challenges. The conference will focus on building a green economy in the context of sustainable development and poverty eradication, and an institutional framework for sustainable development.
“Putting a price on nature is no solution, because it isn't a commodity,” Katu Arkonada, a researcher at Bolivia's Centre for Applied Studies on Economic, Social and Cultural Rights, said. “The green economy must not distort or divert the basic principles of sustainable development. It is a mistake to say that people will only look after goods if they have a price-tag and an owner and generate profits.”
Debate should focus on “the greening of growth, equity in a world of limits, and building resilience to shocks and stresses,” says a study titled “Making Rio 2012 Work: Setting the stage for global economic, social and ecological renewal” by Alex Evans and David Steven. The authors are academics with the Centre on International Cooperation at New York University, which published the document in June 2011.
Civil society organisations prefer to talk about greening the economy, rather than promoting a green economy. In fact, these definitions are already a cause of dissension between industrialised countries and developing nations. “The debate on the green economy is very diverse. Latin American positions are very fragmented,” said FASE's Santos, who is also a member of the Brazilian Network for Peoples' Integration (REBRIP).
“The two key challenges of sustainable development are, on the one hand, to overcome poverty and inequality, and on the other, to restore the balance of the Earth. Both goals are intrinsically linked, and one cannot be achieved without the other. Human beings and nature are at the centre of concerns for sustainable development,” Arkonada said.
The World Economic and Social Survey 2011: The Great Green Technological Transformation, by the U.N. Department of Economic and Social Affairs, recommends investing 1.9 trillion dollars a year in green technologies over the next 40 years, to combat the effects of climate change. “But the current green economy agenda lacks much real substance. To give it a harder edge, it should be focused more specifically on the issue of growth - above all, the growth path of emerging economies,” Evans and Steven's study says.
It argues that “emerging economies will account for the majority of additional demand between now and 2030; they are laboratories of the future; they are the model that other developing countries want to follow; and they have the potential to force rich countries to make belated efforts to upgrade their economies.”
Latin America defends sustainability and rejects “green economy”
Representatives of the governments of Latin America and the Caribbean who convened in October 2011 in Santiago de Chile didn’t include among their recommendations to the United Nations Conference on Sustainable Development, the concept of “green economy”.
On the other hand, the document of conclusions approved by the Regional Preparatory Meeting for Rio2012, reiterates that “the objective to be achieved is sustainable development, which should ensure the balance between these three interconnected pillars: social, economic and environmental, while maintaining the fundamental principles of common but differentiated responsibilities and equity”. A global institutional framework is necessary to achieve sustainable development “which is efficient and flexible and ensures the effective integration” of those pillars, it adds.
The delegates stated that a change in patterns of production and consumption must be achieved, in addition to better ways of measuring countries’ wealth that adequately reflect the social, economic and environmental dimensions, “while maintaining the fundamental principles of common but differentiated responsibilities and equity”.
Following three days of deliberations, the representatives examined the gaps still remaining since the 1992 Earth Summit for the achievement of sustainable development, which are even more pressing in the case of the small island States of the Caribbean.
Representatives of civil society organizations had called before and during the meeting to focus the debate on the principle of sustainable development and on the implementation of the commitments outlined 20 years ago in Rio de Janeiro, and not on the “green economy”, a concept that, as they warned, “has not reached a real consensus”. They also remarked on the importance of effective accountability, the observance of the agreements, participation, the precautionary principle and the improvement of institutions in charge of sustainable development.
Some governmental representatives (such as those from Barbados, Bolivia, Brazil, Ecuador, Nicaragua and Venezuela) opposed to the concept of green economy for various reasons, among them its recognition as an excessively economist approach and because of the rich countries’ technological advantages for the implementation of its policies, the absence of consensus and the perceived threat of privatization of social goods.
But other official delegations (among them the Dominican Republic, Guatemala and Mexico) perceived the green economy as a flexible means to reach a kind of sustainable development that is adaptable to national circumstances. However, the conclusions don’t include any reference to the concept.
In the conclusions of the meeting, the delegates stated that “some of the barriers to the achievement of sustainable development are the scientific and technological gap, the lack of sufficient financing and the fragmentation in implementation,” said Alicia Bárcena, executive secretary of ECLAC.
The document also indicates the need to achieve “the eradication of extreme poverty; new, additional, stable and predictable financing for supporting implementation activities in developing countries; the fulfilment of mitigation and adaptation commitments in relation to climate change and the building of resilience to its impacts; and greater South-South cooperation and exchange of successful experiences”.
They included the need for “full implementation of the right to access environmental information, participation and justice enshrined in Principle 10 of the Rio Declaration on Environment and Development”.
Furthermore, the representatives of the States of Latin America and the Caribbean expressed their firm determination to continue to work towards sustainable development, with the primordial purpose of eradicating poverty and achieving equality in societies, bearing in mind the particular characteristics of each of the States in the region.
They reaffirmed the commitment of the countries in the region to continue to contribute constructively to a successful outcome of Rio2012 and they thanked ECLAC for its constant efforts and the support it extends to Latin American and Caribbean countries.
Green Economy in Africa
Catalyzing a Green Economy in Africa
Countries still do not take full account of the costs of inaction on environmental challenges such as climate change, and inefficient use of energy and resources. Such cost of inaction can be considerable, especially for developing countries, Africa amongst them - whose economies rely more heavily on natural resources and where climate change is already hitting hardest. A new paradigm is needed to ensure that countries take better advantage of the larger potential benefits that can accompany the move towards greener economies. A paradigm which recognizes that to build a prosperous economy, “green” and “economy/growth” can no longer be considered in isolation.
In line with the principle of sustainable development, the green growth paradigm responds to the need for a new model of growth that is much less intensive in natural resources and that can lead to social well-being and poverty reduction in Africa. A major challenge in moving towards sustainable development is to balance and coordinate different interest: between economic growth/job creation and environmental integrity, between the rich and the poor, and between the present and the future generations. A green economy, by turning environmental imperatives into viable economic activities, helps reconcile the need for economic growth and the need to ensure the environmental basis for continued growth into the future. The green economy can contribute to the achievement of the MDG especially the achievement of the poverty eradication.
The Climate Change, Development & Adaptation Programme (CC DARE) jointly implemented by UNEP and UNDP and funded by the Danish Ministry of Foreign Affairs is using technical and financial assistance to respond to nationally defined needs of UN member states. The programme approach is premised on using timely, flexible and targeted actions which constitute a true recipe of a fiscal stimulus that offers the opportunity for triggering bigger actions within the bigger framework of national development in Africa. Using this approach in the continent has shown its appropriateness on how best to realize a low-carbon, resource efficient economy for the 21st century. The uniqueness of the programme to kick off and rollout self-driven national actions using technical and financial backstopping in overcoming immediate and urgent capacity gaps is creating an enabling environment which is most needed in spurring and fostering the green economy in the African continent and beyond. The peculiarity of the funding approach used by CC DARE is a stunning-truetestament that even with smaller funds, activities can still be implemented especially where they serves as a stimulus of targeted actions that foster green growth and remove barriers to bigger actions.
Effective green growth requires an enabling environment - one that grants the poor citizens the rights, resources and access they need to sustain and benefit from markets, natural resources amongst others. A key lesson from decades of development experience is the importance of creating appropriate policies and effective institutions at all levels to support people-centered, sustainable development, green growth. The lesson is important to apply to the green economy, given the significant overlap between the green economy and development and of course the achievement of the Millennium development goals. Granting the citizens resource rights, representation in governance processes, participation rights and fair access to markets can build the resilience of communities and help them to shift towards a sustainable economy while at the same time adapting to the changing climate. The CC DARE approach of engaging different actors/players through national and subnational levels have helped in the mobilization of national interest, national governments, civil societies which have helped created the type of enabling environment needed for the green economy in Africa. The simplified, practical, easy to implement approach utilized by this programme has shown that tackling multiple developmental needs; opportunities could emerge from the actions that fosters green growth.
Fostering a Green Economy transformation
At the 3rd African Ministerial Conference on Financing for Development in May 2009, in Kigali, Rwanda, African Ministers of Finance, Economic Planning, and Environment recognised the importance of placing the environment at the centre stage of Africa’s development process given the challenges it imposes on the continent’s achievement of the Millennium Development Goals. Ministers called for the creation of an enabling environment to support the transition towards a green economy and pursuing low carbon growth, as well as facilitating the private sector to play a crucial role in the transfer and adoption of clean technologies.
African Ministers of Environment who met at the 13th Session of the African Ministerial Conference on the Environment, in Bamako, Mali, in June 2010, similarly recognized the need to take advantage of the opportunities provided by a growth and development trajectory that embraces the green economy model.
Africa’s valuable natural capital assets are critical to wealth creation, vital for its economies, and essential for poverty reduction and sustainable development. In addition, such resources are of global importance, playing a key role in the conservation and sustainable use of the earth’s biological resources, and climate change mitigation and adaptation.
African governments recognise increasingly that investments in green economic sectors, ecosystem restoration and the nurturing of natural capital can be instrumental in halting environmental degradation and also create green jobs, secure sustainable livelihoods and contribute to poverty reduction and green growth.
Will the green-economy train take Africa to the right destination? - by Dianna Games
Africa faces particular challenges, given that it suffers from so many development challenges already, which some fear may be made worse by trying to keep pace with the global “green” drive. The sheer weight of funding and initiatives are good reason to believe something positive may emerge from the hysteria about the world’s condition. The expectation is that Africa will benefit from new investment in technologies and infrastructure that will improve the quality and sustainability of growth.
Global action on climate change also offers an opportunity for a new engagement with African governments and policy makers on improving economic efficiency. This is all good but perhaps unrealistic given that a lack of political will to improve the economic environment has been a brake on development in the past.
The fact that all African countries are confronting challenges as a result of climate change is not a sufficient driver of change in Africa. Countries have always faced climate challenges. In a key affected sector — agriculture — issues of land tenure and associated lack of collateral and access to credit still hamper Africans’ ability to have food security.
Two of the most serious problems attributed to climate change, deforestation and land degradation, are caused largely by unchecked commercial exploitation, rural energy needs and poor farming practices.
In short, neglect and policy failure are perhaps the greatest obstacles to the development of African agriculture. The question is whether the weight brought to bear on governments to tackle climate change will get them to be more proactive about improving the way this and other sectors are managed.
We would all like to live in a greener world so there are many upsides to the focus on greener economies. African analyst and author Paul Collier told the gathering that solar power would be the next big thing in Africa, leapfrogging current energy sources in the way that mobile phones had done, as the cost of the technology came down.
But there are also many unknowns. For example, what will the effect be of climate-change initiatives on growth on a continent where the biggest new investment is in the areas that climate change proponents suggest is causing the problem — resources. ADB chief economist Mthuli Ncube says there is no tension between a green economy and resources investment. The focus, he says, will not be on discouraging new investment but rather encouraging companies to be more aware of the environmental implications of their operations.
With all the hype about climate change, it is easy to forget the size and complexity of the challenges and the effect all of this may have on growth. A continent already hobbled by capacity constraints now faces a future filled with more complex policy challenges as countries are pushed to restructure their economies to fall in line with this global trend.
There are also concerns about other consequences of creating green economies, such as trade barriers, deindustrialisation and rising costs of doing business. And there is a lack of consensus on what a green economy actually is, which will compromise policy formulation.
But Africa is already on this fast-moving train. African ministers recently signed an agreement recognising the benefits to the continent of green economies. But it will be interesting to see if the political will to make this work matches the enthusiasm expressed in public forums.
Green Economy in Australia and North America
Australian governments at all levels have been developing and implementing policies to promote a re-engineering of the Australian economy towards lower carbon emissions, increased use of clean renewable sources of energy, the more efficient use of scarce resources, and reduced ecosystem impacts. Examples of recent policy initiatives at the Australian Government level include the Clean Energy initiative, Solar Flagships, Re-tooling for Climate Change, the Green Building Fund, and the Green Car Innovation Fund. State governments have responsibility for much of Australia’s environmental management and regulation and have a plethora of policy initiatives around environmental protection and sustainability of natural resources.
These policies broadly align with various international agreements and initiatives to promote the transition to a greener economy, including the United Nations Green Economy Initiative, the International Labour Organisation (ILO) Green Jobs Initiative, and the Organisation for Economic Cooperation and Development (OECD) Green Growth Strategy.
Green Economy Is Not Yet Made in U.S.A.
Manufacturing, long in decline in the United States, might rise again if the green economy were 100 percent homemade. But that big “if” is not what’s happening and seems unlikely. Rather than “made in America,” much of the green manufacturing to date is “assembled in America” from parts made overseas.
The Obama administration is trying to change that, offering generous tax credits to generate domestic production. But the impact has been modest, because assembly plants qualify for the credits.
“The act says that if you assemble in the United States, then you comply,” said Tom Dyer, vice president for marketing and government policy for Kyocera Solar, a Japanese company that will assemble solar panels in San Diego from imported Japanese solar cells. “That is what we are doing, and that is what a lot of people are doing.”
Very slowly, that reliance on imports might be changing. Gamesa North America, which is Spanish-owned, makes blades and nose cones in eastern Pennsylvania for assembly into wind turbines. A new company, SpectraWatt, a spinoff from Intel, started production of solar cells last month at a factory in Fishkill, N.Y., manufacturing a component of solar panels now often imported.
Andrew B. Wilson, chief executive of SpectraWatt and a former Intel executive, said the just-opened $50 million plant could not have been built without the $20 million in public subsidies and incentives that SpectraWatt received. “If we want green manufacturing to flourish in the United States,” Mr. Wilson said, “then government support, for the time being, is necessary.”
Yet fewer than 500 applications have been filed so far for the tax breaks, and if all were approved they would add just 75,000 green manufacturing jobs, according to Robert Pollin, an economist at the University of Massachusetts, Amherst, who has done studies for the administration estimating the impact. Still, he is optimistic. “Clean energy is a huge opportunity to revive manufacturing,” Mr. Pollin said.
In all, fewer than 200 factories in the United States are devoted to green production, employing no more than 15,000 workers. While the numbers are rising, many of the plants are foreign-owned, and several Democratic senators want the incentives stopped until Congress can change the law, restricting the subsidies to American-owned companies.
Whatever the ownership, assembly operations that rely on imported parts do relatively little to revive manufacturing, which represents less than 12 percent of the nation’s economic activity. (In the early 1950s, it was nearly 30 percent.) Employment in manufacturing similarly has fallen, to 11.5 million today from more than 16 million in 1953.
In the rise of green manufacturing, Asia, particularly China and Japan, dominates in solar, and Europe, particularly Germany and also Spain, in wind and high-speed rail, the latter a potentially giant industry that does not yet exist in the United States.
“Over the last 10 years we have not been competitive with Europe and Asia,” said Matt Rogers, a senior adviser in the Energy Department. “So many of the best manufacturers started there and we weren’t in the game.”
Ethan Zindler, the head of North American research for Bloomberg New Energy Finance, a consultancy, commented: “The reality is that the Europeans ramped up five years ago. And the Chinese in just the last two years have made the kind of progress that it took the Europeans five years to achieve.”
Green economy: Canada’s opportunity for prosperity
A green economy, in the context of sustainable development and poverty eradication, is one of the two central themes of the UN Conference on Sustainable Development scheduled for June 2012, or Rio+20.
A nation like Canada, with its Green Energy and Economy Act and Water Opportunities Act in Ontario alongside the engagement of several provinces in the Western Climate Initiative, underlines how the green shoots of a green economy are emerging everywhere.
The challenge facing governments, cities and the private sector is how to accelerate and scale-up such transitions over the coming 20 years in both developed but also developing economies and ones that are more state or more market-led.
In Canada, Ontario’s Green Energy Act has spurred the development of local renewable energy companies including more than $9 billion in private sector investment and creating an estimated 20,000 new jobs.