Better Growth, Better Climate - event 3.3.2015

Opening and welcomeMari Pantsar, Director, SitraJouni Keronen, Executive Director, Climate Leadership Council

The New Climate Economy for FinlandJeremy Oppenheim, Programme Director, Global Commission on the Economy and Climate

Climate change and businessPertti Korhonen, CEO, Outotec; Chairman, Climate LeadershipCouncil

Panel discussion: Climate change - the Growth Engine for Finland moderated by Jouni Keronen and Mari Pantsar

Jussi Pajunen, Mayor of HelsinkiTimo Ritakallio, CEO, Ilmarinen Henrik Ehrnrooth, Chairman, Caverion and PöyryPertti KorhonenJeremy Oppenheim

Road to ParisSanni Grahn-Laasonen, Minister of the Environment

Closing wordsMikko Kosonen, President, Sitra

#bettergrowth ProgrammeBetter Growth, Better Climate

Climate Leadership Council ryCaverion│Fortum│Kone│Neste Oil│Outotec │Sitra│ St1 │Gasum │Kemira │Nokia │Finnair

Ilmarinen │ Lappeenranta University of Technology │ Nordea │ Porvoon energia │ Vaisala │VVO

75 %

”Carbon neutrality is an important strategic driverfor our competitiveness”

83 %

”Climate change significantfor our operating environment”

Finnish companies:Taloustutkimus 2015

Finnish companies: The biggest obstacles in pursuing carbon neutrality

38% No clear economic benefit

32% Lack of financing

27% Legislation and lack of political support

Taloustutkimus 2015

The Global Commission on the Economy and ClimateJeremy OppenheimProgramme Director, Global Commission on the Economy and Climate

#bettergrowth

Better Growth, Better Climate

6

Purpose of the Global Commission

• Reframe the debate about economic growth and climate change

• Provide practical lessons to economic decision-makers in both public and private sectors

▪ Based on economic decision-maker perspective

▪ Strategic rather than comprehensive

▪ Report was published on September 16th 2014

7

The New Climate Economy Partnership:

Global Commission24 global leaders : ex-Presidents and Finance

Ministers, major CEOs, heads of the main

international economic Organisations

Chaired by former President of Mexico

Felipe Calderón

Economic Advisory Panel14 world leading economists, chaired by

Professor Lord Nicholas Stern

Includes:

Two Nobel prize winners:

Daniel Kahneman and Michael Spence

7 Commissioning Countries

Colombia

Ethiopia

Indonesia

Norway

Sweden

South Korea

United Kingdom

8 Partner Research Institutes

Climate Policy Initiative (USA)

Ethiopian Development and Research Institute

Indian Centre for Research on Economic Relations

Global Green Growth Institute (South Korea)

Overseas Development Institute (UK)

Stockholm Environment Institute (Sweden)

Tsinghua University (China)

World Resources Institute (USA)

8

Climate performance off track: next 15 years critical

Source: IPCC

9

INVESTMENT: Infrastructure capital spend is estimated to

be marginally higher in a low-carbon scenario

Source: OECD (2006, 2012), IEA ETP (2012), modelling by Climate Policy Initiative (CPI) for New Climate Economy, and New Climate Economy analysis.

Actions with economic benefits could deliver most of the

greenhouse gas abatement needed by 2030

Source: Emissions estimates: IPCC AR5; New Climate Economy analysis based on expert input and multiple data sources

11

Key drivers of growth and climate performance

RESOURCE

EFFICIENCY

INNOVATION

INFRASTRUCTURE

INVESTMENT

HIGH QUALITY, RESILIENT, INCLUSIVE = BETTER GROWTH

ENERGYLAND

USECITIES

WIDER

ECONOMY

12

Cities driving decarbonized economy

– and growth, jobs and investment

Portland

Vancouver Copenhagen

• City carbon-neutrality plan by

2025

• Decoupling economic growth

and emissions

• Strong cleantech cluster: 610 cleantech companies

78,000 employees

Total turnover ca. €30 billion

• ”Greenest city 2020” action

plan on track to : Double green jobs by 2020

Make all buildings carbon-

neutral

Reduce GHG emissions,

ecological footprint and

water consumption by 33%

• Economic development strategy to: Create jobs

Attract investment

Drive innovation

Improve resource efficiency

Promote leadership

13

A range of smart transport systems have taken off in

numerous cities worldwide since 2000

Source: Sustainable Transport Adoption Curves, Embarq 2013

14

Smart parking – one example of new business platforms

Sensors & camera technologies

Data aggregators

Data analytics providers

SW Middle ware

End user applications (mobile,

connected vehicles, larger systems)

End consumersTraffic

authorities

Establish monetization model(s) across the play and target markets where solution is relevant

▪ Embedded real-time sensors identifies

parking lots that are available

▪ Central database monitors parking

occupancy and analyzes historical parking

occupancy and usage patterns by location to

make data-driven pricing decisions

▪ Price revisions are readily communicated to

the public

▪ Rates are adjusted no more than 50 cents

down per hour or 25 cents up per hour, and

no more than once per month

▪ Drivers can easily visualize parking

availability and prices online and can plan

their journeys using their smart phones

//upload.wikimedia.org/wikipedia/commons/1/1f/P3030027ParkingLot_wb.jpg

//upload.wikimedia.org/wikipedia/commons/1/1f/P3030027ParkingLot_wb.jpg

//upload.wikimedia.org/wikipedia/commons/0/06/Traffic_camera_-_Lake_Albert_Road_and_Sturt_Highway.jpg

//upload.wikimedia.org/wikipedia/commons/0/06/Traffic_camera_-_Lake_Albert_Road_and_Sturt_Highway.jpg

15

ENERGY: Wind and solar power have become cost-

competitive in several markets, even without subsidies

Source: REN21 Renewables 2014 Global Status Report; Deutsche Bank Markets Research; IEA 2013 Wind Roadmap.

Chile:

First solar plant with no govt. support

U.S. southwest:

Solar plant at ~8 ¢/kWh, competitive with coal

South Africa:

7 ¢/kWh wind, 30% cheaper than new coal

Brazil:

4.5 ¢/kWh wind, cheaper than any other source

Parts of India:

Wind at 6-10 ¢/kWh, close to coal at 5-8 ¢/kWh

U.S.

Wind at 5-8 ¢/kWh, cheaper than new coal

Wind also reported competitive with coal in Australia, Chile, Mexico, New Zealand, Turkey.

Rooftop solar cheaper than electricity retail rates in at least 11 countries

16

0

100

200

300

400

500

600

700

800

900

1 000

1 100

1 200

1 300

1995 201020001990 20142005

USD/MWh

Current fossil fuel

range, indicative

Solar PV, historical

Best utility-scale

project, 2014

Sources: Citi Research 2012; IEA World Energy Outlook 2013; G. F Nemet, “Beyond the learning curve”, Energy Policy 34, 3218-3232 (2006)

Fraunhofer-Institute for Solar Energy Systems & Agora Energiewende 2015, “Current and Future Cost of Photovoltaics “

The cost of Solar PV is dropping fast

Solar PV, forecast1

2025 2050

2025: $57/MWh

2050: $34/MWh

17

The Finnish power generation mix:

Renewables 36%, nuclear 33% and fossil fuels 30%

Oil0,3 %

Hydro18,6 %

Wind1,1 %

Biomass16,6 %

Waste1,1 %

Nuclear33,2 %

Peat4,4 %

Natural Gas9,5 %

Coal15,2 %

70%

CO2-free

41%

Domestic

36%

Renewables

33%

Nuclear

30%

Fossil

Sources: Finnish Energy Industries, 2013 data

18

Finland has the potential to build a bio-economy on similar lines

to Canada

The Forest Products Association

of Canada (FPAC) wanted to

determine how to best support

the forest products industry by

identifying the right

transformational strategies

In 2009/2010 FPAC and

FPInnovations examined 16

traditional and 11 emerging bio-

industries to assess how wood

fiber could create bio-energy, bio-

chemicals, and other bio-

products

Subsequently, more specific

initiatives have started, e.g.,

Construction pathways

19

Source: Tesla motors website, scdigest.com, autonews.com

Triggering competitive

response

Transforming the auto industry

Tesla market cap: $26bn

~25,000 cars sold in 2013

GM market cap: $54bn

~9.7 million cars sold in 2013

Promoting new

materials

Pioneering batteries

and energy storage

Tesla motors is challenging the status quo in many industries,

and creating huge wealth in the process

20

Google is becoming one of the biggest “clean tech” companies

on the planet

Source: Google, Greentech Media

21

Finland’s performance in different global cleantech and

environmental policy rankings varies from poor to great

Index

The Global

Cleantech

Innovation Index

2014

The Global Green

Economy Index

2014

Environmental

Performance Index

The Climate

Change

Performance Index

2015

EY Renewable

energy country

attractiveness

index (9/2014)

Index

provider

Cleantech Group,

WWF,

Tillväxtverket

Dual Citizen LLC Yale University

Germanwatch &

Climate Action

Network Europe

EY

Index

description

Assessment of

countries’

potential and

conditions for

developing

cleantech

innovations.

Assessment of

countries'

performance in

Green Economy.

Country

assessment based

on 20 national

environmental

indicators.

Assessment of

countries’ climate

policy and success

in tackling climate

issues.

Assessment of the

attractiveness of

countries’

renewable energy

investment and

deployment

opportunities.

Finland’s

ranking2./40 8./60 18./178

32./61*

(Grade: Poor)37./40

Top3 –

countries

1. Israel

2. Finland

3. USA

1. Sweden

2. Norway

3. Costa Rica

1. Switzerland

2. Luxembourg

3. Australia

1. Denmark (4.)

2. Sweden (5.)

3. UK (6.)*

1. China

2. USA

3. Germany

Countries

ranked

next to

Finland

Sweden (4.),

Denmark (5.),

UK (6.),

Canada (7.),

Switzerland (8.),

Germany (9.)

Switzerland (6.),

Austria (7.),

Iceland (9.),

Spain (10.),

Ireland (11.),

New Zealand

(12.)

New Zealand (16.)

Portugal (17.)

Ireland (19.)

Estonia (20.)

Slovakia (21.)

Italy (22.)

Ukraine (30.),

India (31.),

Latvia (33.),

Croatia(34.),

Greece (35.),

Austria (36.)

Philippines (34.),

Saudi Arabia

(35.),

Kenya (36.),

Russia (38.),

Indonesia (39.),

Ukraine (40.)

*None of the countries achieved positions one to three.

22

Finland especially strong in green buildings sectorFinland has the most LEED and BREEAM certified buildings in the Nordics

Cumulative LEED certifications in the Nordics

15

13

2 21

0

2

4

6

8

10

12

14

16

Finland Sweden Norway Iceland Denmark

BREEAM certifications in the Nordics

Finnish cleantech sector in brief

Source: Cleantech Finland

24

57%

16%

SOURCE: Company web sites; annual reports; GBI Research Report; McKinsey

While Philips moved ahead acquiring several players, its

competitor Osram acted slowly and spent energy on its IPO

1 Share in European LED lighting revenues

2002 03 04 05 06 07 08 09 10 11 12 2013

LED market shares1

2011

Company Important events

Comfortable market

position in the tradi-

tional lighting market;

EU announces ban of

incandescent bulbs

Slow adjustment of product portfolio with

only three small- to medium-sized acquisitions

Spin-off from Siemens, restructuring

efforts to prepare IPO (fails in autumn)

IPO finally takes place; Osram launches

LED bulb at EUR 10 (USD 13.1)

Further acquisitions, most notably Genlyte,

a US player, for USD 2.7 billion in 2008

Philips CEO intends to translate

product/cost innovation and higher

volumes into lower prices for LED bulbs

Philips offers the first LED light bulb

for less than USD 5 (at Home Depot)

Targeted acquisition

of players along the

LED value chain (to

be vertically integrated)

25

Leading country strategies combine emissions reductions,

energy transformation and green growth

Denmark: Energy Strategy 2050:

Independence of fossil fuels by 2050

• Outlines the energy policy instruments to

transform Denmark into a green sustainable

society with stable energy supply

• Independence from fossil fuels, radical

improvements in energy efficiency

• Bolsters Danish growth and wealth,

strengthens opportunities for innovation and

demonstration of new green solutions.

Consumption of coal, oil and natural gas 1990-2050

Sources: Denmark Energy Strategy 2050, Danish Energy

Agency

Denmark cleantech exports have

outperformed EU averageSweden’s transition plan to fossil-free

transport: “Fossilfrihet på väg”

Detailed economic and technical plan including

the most effective guidance mechanisms:

• Fuel selection (bio&electricity),

• Vehicle development

• Electrification of transport

• City development and infrastructure

• Traffic legislation

Sources: Fossilfrihet på väg-report (2013), Government

Offices of Sweden

Control points

Reference scenario

Goal

Action potential

History

Guidance effect

Shift effect

26

Climate Change as a Growth Engine for the Finnish Economy

Government:

Be a player on

the global

stage

Cities:

Turn cities into

drivers of a high-

performing,

decarbonized

economy

Take an overarching strategic approach to

combining climate and energy issues with

clean economic growth

Make efficient, smart and clean urban

development a key imperative to create

growth, jobs and investment. Turn Helsinki into

one of the world’s clean-tech hot-spots

1

2

Companies: Develop

clean-tech and bio-

economy into a

strategic competitive

advantage

Translate climate action into a new set of

business opportunities, both for existing

sectors and new clusters

Climate change and businessPertti KorhonenCEO, OutotecChairman, Climate Leadership Council ry

#bettergrowth


© Outotec – All rights reserved© Outotec – All rights reserved

There is no Plan(et) B, and thereforecompanies must revisit their strategies

March 3, 2015 CLC | Pertti Korhonen28

Source: Stockholm Resilience CenterSource: World Wildlife Foundation WWF


Climate Change: what does it mean for yourbusiness?


Map risks,

prepare and

mitigateMap

opportunities,

prepare and

capture


Green economy – next innovation wave

CLC | Pertti KorhonenMarch 3, 201530


The best return on customers' investments through industry leading sustainable process technology solutions and services

March 3, 201531 CLC | Pertti Korhonen


Outotec’s business is based on addressing the global sustainability challenges


Eco-e

ffic

iency

Sustainable

technology


What drives sustainability today?

Corporateresponsibility

Customers, customers’ customers

Regulators, reporting

NGOs and local

communities

Currentand futureemployees

Investorsand

financiers

Media

33

Future

generations

Planet Earth

March 3, 2015 CLC | Pertti Korhonen

Panel discussionmoderated by Jouni Keronen and Mari Pantsar

Jussi Pajunen, Mayor of HelsinkiTimo Ritakallio, CEO, Ilmarinen Henrik Ehrnrooth, Chairman, Caverion and Pöyry

Pertti Korhonen, Chairman, CLC; CEO, OutotecJeremy Oppenheim, Programme Director, Global Commission on the Economy and Climate

Climate change- the Growth Engine for Finland

#bettergrowth


FINNISH STRATEGY

ARE WE SUFFICIENTLY ARMED TO BE AMONG THE

WINNERS IN THE NEW ECONOMY?3.3.2015

Henrik Ehrnrooth

Chairman of the Board of Directors, Pöyry

WE ARE RIDING THE FOURTH WAVE OF BIOECONOMY…

First wave:

Efficient use of

local raw materials

as tar and

sawnwood

Second wave:

Paper

technology

takes hold

Time

Third wave:

Modern pulp

and paper

industry

Fourth wave:

Modern

bioeconomy

(e.g. carbon,

sugar)

Now

COPYRIGHT©PÖYRY

… WITH A RICH, GROWING ”FINNISH GREEN CAPITAL FUND”…

Norway has its Oil Fund, Finland has accumulated capital in the forests. Can this

”Finnish Green Capital Fund” divest some assets to boost the bioeconomy?

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

Finnish forest capital has

grown, since growth has

exceeded harvesting

Wood vol. in Finnish forests, mill. m3 Finnish forest capital,

if similar harvesting

continues

Forest capital, if

largest sustainable

volume harvested

Forest capital, if about 300

mill. m3 used over 30 years, i.e.

a limited period of exceeding

largest sustainable harvesting

volume

Source: Metla, Pöyry

Annual

growth:

104 mill. m3

Annual

wood use:

About 65

mill. m3

COPYRIGHT©PÖYRY

… WITH SPEARHEADS IN BIOECONOMY, CLEANTECH AND

DIGITALIZATION…

Bioeconomy combines all three – an example being printed electronics

Magnus Bergren : perinted electronics (MWP 2014)

Graphene ; nobel

Printed electronics: Marcus Wallenberg Prize 2014 to Prof. Magnus Berggren of Linköping University for printed electronics (e.g.

sensors and displays) on paper and board.

Graphene: Nobel Prize 2010 to Andre Geim and Konstantin Novoselov for “groundbreaking experiments regarding the

two-dimensional material graphene"

Roll-to-roll printed electronics 3D printing graphene batteries – on paper?

http://3dprint.com/13788/3d-printed-graphene-batteries/

COPYRIGHT©PÖYRY

… IN A BIOECONOMY DOWN TO THE NANOLEVEL AND…

Out of 100 mill. m3 of annual wood growth: from fibres to nanofibril and

nanocrystalline cellulose

COPYRIGHT©PÖYRY

… TO THE MOLECULAR LEVEL

Out of 100 mill. m3 of annual wood growth

Cellulose 39.5

mill. m3

3d sugar

construct

C6

Hemi-

cellulose

30.6

mill. m3

C5 & C6 –

good sugar

platform

Lignin 27.5

mill. m3

Poorly

known

structure

Lignin

C5

Cellulose

Panel discussionmoderated by Jouni Keronen and Mari Pantsar

Jussi Pajunen, Mayor of HelsinkiTimo Ritakallio, CEO, Ilmarinen Henrik Ehrnrooth, Chairman, Caverion and Pöyry

Pertti Korhonen, Chairman, CLC; CEO, OutotecJeremy Oppenheim, Programme Director, Global Commission on the Economy and Climate

Climate change- the Growth Engine for Finland

#bettergrowth


44

#bettergrowth


Road to ParisSanni Grahn-LaasonenMinister of the Environment

Opening and welcomeMari Pantsar, Director, SitraJouni Keronen, Executive Director, Climate Leadership Council

The New Climate Economy for FinlandJeremy Oppenheim, Programme Director, Global Commission on the Economy and Climate

Climate change and businessPertti Korhonen, CEO, Outotec; Chairman, Climate LeadershipCouncil

Panel discussion: Climate change - the Growth Engine for Finland moderated by Jouni Keronen and Mari Pantsar

Jussi Pajunen, Mayor of HelsinkiTimo Ritakallio, CEO, Ilmarinen Henrik Ehrnrooth, Chairman, Caverion and PöyryPertti KorhonenJeremy Oppenheim

Road to ParisSanni Grahn-Laasonen, Minister of the Environment

Closing wordsMikko Kosonen, President, Sitra

#bettergrowth ProgrammeBetter Growth, Better Climate

Better Growth, Better Climate - event 3.3.2015

Economy & Finance

Transcript of Better Growth, Better Climate - event 3.3.2015