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UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

GreenIndustry:

Resourceandenergyproductivityforlowcarbonindustrydevelopment

Statementby

KandehK.Yumkella

DirectorGeneral

attheThirdNevskyInternationalEcologicalCongress

ECOLOGIZATIONOF

NATURE

MANAGEMENT

ABASISFORMODERNIZATIONOFECONOMYINBALANCEWITHNATURE

TavricheskiyPalace,St.Petersburg,RussianFederation

14May2010

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MrSpeaker,

Excellencies,

DistinguishedDelegates,

Ladies

and

Gentlemen,

IntroductionIt is a great pleasure and privilege to have been invited to address you today at this important

congress in the beautiful and historical city of St. Petersburg. I would like to thank the CIS

InterparliamentaryAssembly and the Federation Council of the FederalAssembly of the Russian

Federationforthisinvitationandtocongratulatethemfortheinitiativetheytooktwoyearsagoto

launchtheNevskyCongress.

Iwarmlycommendyouforhavingassumedthemissiontopromotethecreationofaninternational

system of ecological security by strengthening transborder cooperation and harmonization of

environmentallegislation

of

the

CIS

member

states

and

other

countries

of

the

world

community.

In

severalspeechesIhavegiveninrecentmonths,Ihavedrawnattentiontotheimportanceofglobal

megatrendsdevelopmentsintheworldeconomythatdonotrespectfrontiersandaffectallofus,

forgoodor ill. Thesemegatrends includethe food, fueland financialcrises,ofwhichthe lasthas

justrecentlyassumedanentirelynewdimensionwithasyetunpredictableconsequences. Theyalso

include the distinct but related issues of unprecedented demographic growth, especially in

developing countries,unequalglobalizationand thegrowthof the illiciteconomy throughout the

world.

Thesedevelopmentsaredwarfedbyavarietyofenvironmentalchallengesfacedbytheplanet,and

inparticular thepotential threatsof climatechange,whichare the focusof thiscongress. I fully

concurwith

the

central

thesis

of

the

congress

that

there

is

an

urgent

need

to

define

astrategy

for

ensuring thateconomic growth is sustained, inorder to continue toprovide the stilldesperately

impetusforwealthcreationandpovertyreduction,butthat it isalsoecologicallysustainable. AsI

have alsomentioned in severalofmy recent speeches, thiswillnecessitatejoint actionbymany

actors, in both the public and private sectors, and partnerships across national and regional

boundaries.

I therefore welcome the debate that this congress is seeking to generate on issues related to

expanding the use of renewable and alternative energy sources, promoting increased energy

efficiency,developinglowcarbonandlowresourceproductsandprocesses,andexploringeffective

approaches for abalanced growthprocess inwhichboth economic and environmental goals are

met.

In

short,

that

there

is

a

modernization

of

national

economies

in

balance

with

nature,

and

that

thisprocess isachieved inacoherentandcoordinatedwayacrosscountriesandregions,because

natureknowsnoboundaries.

It iswith greatpleasure that I can inform you thatmyOrganization,UNIDO, theUnitedNations

IndustrialOrganization,ismakingaconsciousefforttocontributetothisprocess. Whileweclearly

regardthedevelopmentoftheproductivesectors,and industry inparticular,asthemosteffective

means of poverty reduction, we also understand that this has to take place in the context of

environmentalsustainability. Promotingcleanproduction,aswellasaccesstocleanenergyandthe

efficientuseofenergy, isoneofour threeorganizationalpriorities,togetherwithsupport forthe

developmentofproductiveactivitiestoreducepoverty,andassistanceinbuildingthecapacitiesof

developingcountriestoparticipateeffectivelyininternationaltrade.

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By2030,worldenergydemandisprojectedtoincreaseby44%.Thiswillrequireabout$17trillionin

newinvestments.

Thereisampleevidencethatagreenenergyandindustrialrevolutionhasalreadystarted.

(1)HSBCandDeutscheBankestimatethatgreenenergyinvestmentswilltop$500billionayear

larger than theglobalaerospaceanddefence industriescombined!and that thecleanenergy

marketwillbeworth$2 trillion in ten years.According toMichaelNorthropof theRockefeller

BrothersFund,thisisbiggesteconomicopportunityeverquantified.

(2) From 20022007, we saw a sevenfold increase in investments into green energy solutions.

Investmentshavecontinued,eveniftheydippedin2009duetothefinancialcrisis.

(3)China

is

the

largest

market

for

wind

and

solar

energy.

China

intends

to

generate

15%

of

its

energyfromrenewables.Inthepastfourtofiveyearstheyhaveemergedasthesinglelargestmaker

ofwindturbinesandsolarpanels.

(4)TheEUmarketandits2020targetshavealsocreatedanewimpetus.Henceweseeprojectslike

DesertecandEuromedSolartogenerateelectricitythroughconcentratedsolartechnologyfromthe

SaharaforEuropeaneconomies.

(5)

President

Obama

says

the

US

should

lead

the

green

energy

revolution,

and

through

stimulus

measures,hehasallocatedabout$80billion ingreen investments includingabout$40billion for

R&D.

Between1998and2003RussiasR&Ddoubledand itsR&D/GDPratiorose from1.0%to1.3%,by

2005itstoodat1.1%

Incomparison,figures froma2008studysuggestthatIsraeldevoted4.7%of itsGDPtoR&D,and

wasleadingallcountries,followedbySwedenwith3.9%,Finlandwith3.5%,Japanwith3.2%andthe

Republicof Koreawith3%.

IsRussiaandtheCISregionpartofthisrevolution?Areyoureadytoleadandshapethisrevolution?

Russiahasalwayshadagreattraditionofscholarship,andgreatscientificminds.Itcanandshould

investmore intoresearchanddevelopment(R&D) inordertostrengthenthe innovationpipeline,

allowforrapidtakeupofexistingtechnologies,andtosupportnewbreakthroughtechnologies.

DistinguishedDelegates,

Ladiesand

Gentlemen,

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GlobalContextAswemeetheretoday,theCommissionforSustainableDevelopmentiswrappingupits18thsession,

during which it considered global progress towards the realization of the goals for Sustainable

ConsumptionandProductionthatwereoriginallyagreeduponattheUnitedNationsConferenceon

EnvironmentandDevelopmentinRiodeJaneiroin1992,andweresubsequentlyreaffirmedduring

the 2002 World Summit on Sustainable Development (WSSD). Sustainable Consumption and

Productionisabouthowhumanityproducesanadequatesupplyofgoodsandservicesforeveryone

while putting less pressure on the environment and ecosystems. In short it is about delinking

economicdevelopmentandsocialwellbeingfromenvironmentaldegradation.

Slide1: Worldecologicalfootprintrelativetobiocapacity

Letmefocusthediscussionbylookingatsomebasicstatistics.Theworldstotalecologicalfootprint

in1960was50%oftheglobalsupplyofbioproductiveland.Inthefollowing27years,thefootprint

doubled, so thatby 1987 thepressure exertedby global consumption equalled the regenerative

capacityofplanetearth.Buttheprocessdidnotstopthere. By2009,theovershootwas39%. To

putit

differently,

humanity

today

uses

the

equivalent

of

1.4

planets

to

provide

the

resources

we

use

andabsorbourwaste. Ifcurrentpopulationandconsumptiontrendscontinue, it isestimatedthat

bythemiddleofthenextdecadewewillneedtheequivalentoftwoEarthstosupportus. Ofcourse,

itwillcomeasnosurprisetoyouthatweonlyhaveoneEarth.

Slide2: EcologicalfootprintoftheRussianFederationrelativetobiocapacity

Internationalcomparisonsoftheecologicalfootprintareveryrevealing. Theecologicalfootprintof

the Russian Federation currently stands at around 4.5 ha per capita, well below the available

biocapacityofapproximately6.5hapercapitagivenbythecountrysvast landmassandrelatively

lowpopulationdensity. Bycontrast,theaveragefootprintinindustrializedcountriesliesabove6ha

percapita, inmiddleincomecountriesjustunder2hapercapitaand inthe lowincomecountries

below1ha

per

capita.

Theglobalfairsharewouldbeapproximately2hapercapita.Ifallglobalcitizensweretohavethe

same lifestyleas theaveragecitizenof the industrializedworld,wewouldneed theequivalentof

about five Earths to support us. These global disparities are immense, as illustrated with the

alternativeworldmapwhichdrawsthesizeofterritoriesbytheirtotalecologicalfootprintinsteadof

the size of their surface area. Viewed by ecological footprint, industrialised and emerging

economiesarefarlargerthentheirrelativesurfacearea.

Slide3: Ecologicalfootprintofnations(2006)

A comparison of this ecological footprint distributionmapwith the population distributionmap

revealsthetruescaleoftheglobalresourceconsumptionchallenges. Globalresourceconsumption

already exceeds ecological carrying capacity. The LDCs and low income countries have

disproportionately lowerresourceconsumptionandwillrequireaccesstomoreresourcestomeet

theirbasicneedsandimprovetheirstandardofliving. Thechallengethenistofacilitateaswiftshift

in unsustainable consumption and production patterns in order to get back within the carrying

capacitiesofecosystemswhileensuringupwardconvergenceinlivingstandardsacrosstheplanet.

Slide4: Globalpopulation(2006)

DistinguishedDelegates,

Ladiesand

Gentlemen,

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GreenIndustryAsthespecializedagencyforindustrialdevelopment,UNIDOisparticularlyconcernedhowindustrial

development contributes, or as the case might be, impedes progress towards Sustainable

Consumption and Production. Toemphasize thepositive contribution industry canmake, Imade

GreenIndustryanorganizationwidestrategicpriorityforUNIDO.

GreenIndustryisatwoprongedagenda:

Firstly, it isaboutassistingexistingandemerging industries to reduce theirenergy,waterandmaterials consumptionand reduce theiremissions towater,air and land.This is the

agendaforthegreeningof industries,whichwillhavetoensurethatall industriesproduce

more while using less resources and generating fewer emissions, year after year, as a

continuousimprovementprocessovertime.

Secondly, green industry includes the establishment of a vibrant and innovativeenvironmentalgoodsandservicessector.Theseincludetheprovidersofwastemanagement

and

recycling

techniques

and

services,

producers

of

environmental

technologies,

providers

of energy efficiency and renewable energy techniques and suppliers of environmental

monitoringservices.

InSeptember2009,UNIDOconvenedaGreenIndustryConferenceforAsia,hostedinManilabythe

GovernmentofthePhilippinesandattendedbysome1,200participants. Governmentsof21Asian

developing countries agreed on the Manila Declaration on Green Industry. The signatories

acknowledged thatmarkedlydifferent industrialdevelopmentpathwaysareurgentlyneeded,and

calleduponUNIDOandtheotherintergovernmentalorganizationstosupportdevelopingcountries

in the challenging but necessary endeavour to achieve lowresource, low carbon patterns of

industrialdevelopment.

UNIDOis

actively

pursuing

the

Green

Industry

agenda.

Together

with

the

United

Nations

Environment Programme,UNEP,we establish and support a global network ofNational Cleaner

ProductionCentres,orNCPCs. TheseCentresdeliverinformation,assessmentandadvisoryservices

to businesses, governments and other stakeholders for the adaptation and adoption of cleaner

production methods, practices and technologies. The first eight NCPCs were established during

19941995 and since then the programme has expanded to currently some 50 developing and

transitioncountries.

Following and extensive evaluation of the NCPC programme in 2007/2008, UNIDO and UNEP

formulatedastrategyforscalingupandmainstreamingtheactivitiesandimpactsoftheNCPCsand

similar initiatives. As a result, the programmes focus has expanded to Resource Efficient and

CleanerProduction

to

underpin

the

message

that

the

same

preventive

environmental

and

productivitymethodscontributetothreesustainabilitydimensions:

(i) theproductiveuseofnaturalresources,includingenergy,materialsandwater;(ii) theminimizationofgenerationofwastesandpollutants;and(iii)safeandresponsibleproduction.

IwaspleasedtowitnessfirsthandthevibrancyanddedicationoftheNCPCswhenIattendedtheir

2009globalnetworkingmeetinginLuzern,Switzerland.

OneoftheCentresundertheProgramme isbased inthishistoriccityofStPetersburg.TheNorth

Western International Cleaner Production Centre has been an active partner for UNIDO with aparticular focusof its activitiesonwatermanagement.Moreover theCentreplayedapioneering

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role in the promotion and application of chemical leasing to several local companies including

Vodokanal.Chemicalleasingintroducesaservicebasedbusinessmodelforchemicalsmanagement.

It aligns the interests of the chemical supplier and the chemicals user to use the least possible

amountofthemostbenignchemicalsforanyapplication,asthechemicalssupplierisbeingpaidon

thebasisoffinishedproductsinsteadofchemicalssupplied.

Inaddition,UNIDOhasalsobeenworkingoncreatingenablingpolicyframeworksforgreenindustry,

whichwillbe released shortly.Environmental legislation isnowgenerally inplace,but theefforts

devotedtoimplementationandenforcement,andhencetheaveragelevelsofindustrycompliance,

vary greatly. The unfortunate result is that companies operating in lax enforcement regimes

experience that noncompliance remains cheaper then compliance, a situation that has been

systematicallyruledoutinWesternEurope,NorthAmericaandJapansincethemid1980s.

AlthoughUNIDO recognizes that firmsmay find it difficult and costly to complywith applicable

environmental legislation, compliance should be treated as a nonnegotiable condition for doing

business as a matter of principle, regardless of the business location. Buyers, investors and

regulatorsandthe internationalcommunityshould therefore focusonmaking iteasier toachieve

complianceby

providing

technical

and

managerial

assistance,

risk

sharing,

and

investment

support.

DistinguishedDelegates,

LadiesandGentlemen,

EnergyandclimateThe development of a sustainable, longterm solution tomeeting theworlds energy needs is a

defining issueofour time.Energy isdirectly linkedwith thekeyglobal challenges that theworld

faces povertyreduction,climatechange,andglobal,environmentalandfoodsecurity.

Currentenergy systemsare failing tomeet theneedsof theworldspoor.Worldwide,2.6billion

peoplerelyontraditionalbiomassforcookingand1.6billionpeopleaboutaquarterofthehuman

race donothave access to electricity. Theprojected cumulative investment requiredbetween

2005 and 2030 tomeet energy needs is almostUS$ 20.1 trillion, but even if this investment is

securedoverthenextthirtyyears,1.4billionpeoplewillstilllackaccesstoelectricityin2030and2.7

billionwillstillrelyontraditionalbiomassforcookingandheating.

Globalenergyrelated carbondioxide (CO2)emissionswill increaseby some50per centbetween

2004and2030unlessmajorpolicyreformsandtechnologiesare introducedtotransformtheway

energy isproducedandconsumed.Coalhasovertakenoilasthe leadingcontributortoglobalCO2

emissions.Developing countrieswill account for threequartersof the increase in carbondioxide

emissionsbetween

2004

and

2030

unless

major

transformative

policies

and

technologies

are

introducedinthenextfewyears.

Percapitaemissions indeveloping countrieswill remain smallcomparedwith those indeveloped

countries.Yet,theshareofdevelopingcountryemissionsisexpectedtorisefrom39percentin2004

tooverhalfof the totalworldemissions in2030unlessmitigatedbypolicies thatpromotemore

efficientproductionanduseofenergy,switchingtocleanerfuels,moreefficienttransportation,and

cleaner electricity supply.Many fastgrowing developing countrieswillmake theirmajor energy

relatedinvestmentsinthenextdecade. Thereisashortwindowofopportunitytoensurethatthe

energyinfrastructureandindustrialfacilitiesareasenergyefficientaspossible.

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Atthegloballevel,theenergysystemsupply,transformation,deliveryanduse isthedominant

contributor to climate change, representing around 60 per cent of total current greenhouse gas

(GHG) emissions.Currentpatternsof energyproduction and consumption areunsustainable and

threatentheenvironmentonboth localandglobalscales.Emissionsfromthecombustionoffossil

fuels are major contributors to the unpredictable effects of climate change, and to urban air

pollutionandacidificationoflandandwater.

Reducingthecarbonintensityofenergythatis,theamountofcarbonemittedperunitofenergy

consumedisakeyobjectiveinreachinglongtermclimategoals.Aslongastheprimaryenergymix

isbiased towards fossil fuels, thiswouldbedifficult toachievewithcurrentlyavailable fossil fuel

basedenergytechnologies.Giventhattheworldeconomyisexpectedtodoubleinsizeoverthenext

twenty years, theworlds consumptionof energywill also increase significantly if energy supply,

conversionandusecontinuetobe inefficient.Energysystemdesign,providingstronger incentives

forreducedGHGemissions insupplyand increasedenduseefficiency,willthereforebecriticalfor

reducingtheriskofirreversible,catastrophicclimatechange.

It iswithinthiscontextthattheUNSecretaryGeneralconvenedanAdvisoryGrouponEnergyand

ClimateChange(AGECC)in2009toaddressthedualchallengesofmeetingtheworldsenergyneeds

fordevelopmentwhilecontributingtoareductioninGHGs. TheGroup,whichIhavetheprivilegeto

chair,carriedoutthistaskinarapidlychangingenvironmentinwhichenergywasoftenakeyfactor:

thesensitivityoftheglobaleconomytoenergypricespikes;increasedcompetitionforscarcenatural

resources;andtheneedtoaccelerateprogresstowardsachievementoftheMDGs.

TheGroupsubmitted itsreporttotheSecretaryGeneral inApril2010. Thereportsetsoutforthe

firsttimetwoambitious,butachievable,globalenergygoals.

Goal1:Ensureuniversalaccesstomodernenergyservicesby2030

Goal 2:Reduce global energy intensity thequantityof energyperunitof economic activityor

output(GDP)by40percentby2030

Oneofthechallengesfacingtheglobaldevelopmentcommunityisthatthereisnoclearconsensus

onwhataccessmeansandonaccess indicators. TheAGECC reportdefinesaccessasaccess to

clean, lowGHG emitting and affordable energy services for cooking and heating, lighting and

communicationandproductiveuses.

Wehave

adopted

this

broader

definition

because

access

to

sufficient

energy

for

basic

services

and

productive uses represents the level of energy access needed to help sustainable improve

livelihoodsinthepoorestcountriesanddrivelocaleconomicdevelopment.

Pleasenote,however,thatenergyaccessisnotanallornothingissue,andshouldbeconsideredin

stages.TheAGECCreportconsidersthree incremental levelsassociatedwithmeetingbasicneeds,

supportingproductiveuses,andmeetingtheneedsofmodernsociety.ClearlytheGHGimpactsare

differentateachlevel.

This iswhy it isvery importantthatexpandingaccess isdone inthecleanestandmostsustainable

waypossible.

Countries

should

be

helped

to

establish

alow

carbon

route

to

development

by

driving

down the costsof lowemissions technologies inorder to facilitate theiraccelerateddeployment,

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bothonthesupplyside(including loweremissionsfossilfuelbasedtechnologies)andthedemand

side,whereenergyefficientendusedevicesreducetheamountofpowerconsumed.

Furthermore,thereisastrongcorrelationbetweenenergyconsumptionandeconomicgrowth.The

termenergy intensityprovidesawayofunderstanding theevolutionof this relationship. Since

1990,global

energy

intensity

has

decreased

at

the

rate

of

about

1.3

per

cent

per

year.

The

AGECC

reportcallsforadoublingofthisrate.Achievingthisgoalwillrequiretheinternationalcommunityto

harmonize technical standards for key energyconsuming products and equipment. It will also

requireatransferofknowhowandgoodpractices,andthedevelopmentofcapacitiestoimplement

them. Investment in energy efficiency also needs to be encouraged. The AGECC report calls for

energyefficiencytobeprioritizedintheshortandmediumtermasamitigationmeasure.

DistinguishedDelegates,

LadiesandGentlemen,

Closingremarks

Theexpandingevidencebaseon the interrelatednessandscalesof resourceconsumption,water

scarcity,peakoil,climatechange,andotherchemicalandenvironmentalrisksunderlinestheurgent

need for an effective response. The risks and costs of nonaction are higher than the costs of

prudentearlyaction,aswasprofoundlydemonstratedbytheSternReviewonClimateChange.

Amidst the gloomy news on the environment and climate that surrounds us, UNIDO remains

optimisticthatopportunitiesareavailabletoactnow.TheNationalCleanerProductionCentresand

other initiatives have proven beyond doubt that taking care of resources, energy and the

environment isgenerallygoodforbusiness,theenvironmentanddevelopmentat large. Thetime

has come forus tomove frompilotanddemonstrationprojects to thewidespreadadoptionand

adaptationofbestpractices,andtothescalingupandmainstreamingofgreen industry initiatives.

Thiswillrequire(i)theprioritizationandtargetsettingforgreen industry innationaldevelopment

policies; (ii) the implementation and enforcement of appropriate industrial and environmental

policies; (iii) the dissemination of relevant knowledge, technology and information in locally

appropriate forms; and (iv) the effective utilization of already available human and institutional

resourcesandexperiences.

Iamencouragedtoseethattheseissuesarebeingpickedupwithsomuchcommitmentandresolve

at thisCongress,and Iwishyouall thebest foryourdeliberations. Iam confident that theywill

make a significant contribution to addressing the challenges of modernizing your national

economies,andindeedtheglobaleconomy,inbalancewithnature.

Thankyou.