Emergence of Green economy as a ConceptAnd Its Relevance To Corporate Strategy

Why are we talking about Green Economy?

• Global warming and Climate change

- Rising sea levels

• “The Death of Birth”

• Fresh water shortages

• Ecological Footprint

• Growing Unemployment

• Ecological Footprint’ already exceeds Earth’s regenerative capacity… our demands on the planet have doubled over the last 40 years…

Social Justice and Crises

– Poverty widespread, 3 billion under $2 per day: 9.1 billion by 2050, biggest increase in developing countries

– Almost 1 billion people chronically undernourished

– Wealth of 3 rich = 600 million poor

– No schooling for 1 in 5 children

– Most population growth in poorest regions

– 80 countries poorer than 20 years ago

Homes are now more energy efficient, but also much larger, increasing pressures on land, water and materials

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Index 1990 = 1 Total energyconsumption ofhousing stock forspace heating

Energy consumptionper dwelling forspace heating

Energy consumptionper m2 for spaceheating

Growth in floor areaof housing (19 EUcountries)

Resource use

Efficiency gains

Consumption

Cars are more efficient but contribute to a range of negative impacts on people’s quality of life in cities

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Index, 1990 = 100

GDP (fixed prices)

Total car km travelled

Total fuel consumption ofprivate cars

Specific fuel consumptionof average car (litres/km)

Total CO2 emissions ofcars

Stock of cars

Resource use

Efficiency gains

Consumptio

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Copyright: Tesla

nor new technologies only ...

To reach ambitious environmental visions

Not just incremental efficiency gains ...

Energy efficiency has increased, but we are far from a low-carbon economy

Economic

growth

Resource use

Efficiency gains

What is Green Economy?

Green Economy

Low Carbon

Resource EfficientSocially Inclusive

A green economy is one that results in improved humanwell-being and social equity, while significantly reducingenvironmental risks and ecological scarcities.

Green Economy: Living well within ecological limits

Ecosystem

services

ECOSYSTEMS

Policy

Values

Technology

Scienc

e

Market

Industry

SOCIO-TECHNICAL SYSTEMSproviding social needs and value

Environment

al

externalities

Withdrawals from the ecosystems

Deposits Emissions Pollution

system

system system

Foodsystem

Energysystem

Mobilitysystem

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Demonstrating that Greening is a new engine for growth,

addressing hurdles & enabling conditions

ecosystems & biodiversity, capturing these values, and

Green Economy Report

TEEB

Green

Growth

Knowledge

Platform

Networking

with Civil

Society and

Private Sector

Inter-agency

Partnerships

Advisory

Services

Green Jobs

Initiative

UNEP, WB,

OECD, GGGI

ILO, ITUC,

IOE, UNEP

UNEP, UNDP, ILO,

Governments, National

Institutions

UNEP working with 40

Agencies in the UN

system

GEC, GGGF, UN Global

Compact

GEC Green Economy Coalition ITUC International Trade Union Confederation

GGGF Global Green Growth Forum OECD Organization of Economic Cooperation &

Development

GGGI Global Green Growth Institute UNDP United Nations Development Programme

ILO International Labour Organization WB World Bank

IOE International Organization of Employers

PAGE – Partnership for Action on Green Economy

Why do we need a Global Green New Deal ?

• Fiscal stimulus is agreed as the way forward, but how sustainable is the growth that follows ?

• “Green Investment” beats a “Shopping Spree”

• “Win-Win-Win” solutions exist : Decent Jobs, Lower Risks, Higher Returns

• Globalization means success lies in coordinated actions, not ‘beggar thy neighbor’

What are the Objectives of a Global Green New Deal ?

• Revive the world economy, create new and decent jobs, and protect the vulnerable

• Reduce carbon dependency, ecosystem degradation, and water scarcity

• Eliminate persistent poverty by 2025…. Help achieve the MDG’s

Stages of Sustainability Strategies

• Early, compliance-driven ― focuses on reputable business practices (e.g., laws, regulations, contracts)

• Midpoint, responsiveness-driven ― moves beyond mere compliance to concerns for customer expectations (e.g., quality) and employee needs (e.g., health, safety, quality of work life)

• Advanced, integrative ― takes strategic approach infused with purpose and passion and marked by environmental stewardship and deep concerns for community needs

Greater pressure on

Environment & resources

Environmental soundness

critical for enhancing

national competitiveness

New solution,

“Green Growth”

Global population growth

rapid expansion of BRICs

economies =>

accelerated pressure on

energy & resources

Climate change-induced

environmental &

socioeconomic problems

on the rise

energy & resource

security become

decisive factor for

national competitiveness

Developed countries

formulate strategies to

promote green industry

as a growth driver

Past economic

development paradigm

is no longer viable

Low carbon,

eco-friendliness accepted

as key to promote new

growth

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Developing Countries can not slow down thedevelopment agenda but they need to align their strategies……

Government of India has

allocated 70.6 billion

(USD 1.2 billion) for Smart

Cities in Budget 2014-15

India plans 100 new smart

cities and will develop

modern satellite towns

around existing cities under

the smart city program

Case of Montreal Protocol and CFCs

Many SMEs used CFCs (chlorofluorocarbons) to manufacturefoam insulation products such as jugs and flasks,requiring low-cost simple machines andproviding employment for semi-skilled workers.

Under the Montreal Protocol, India had to reduce CFC usein the foam industry.

A UNDP initiative1/ helped India develop a group approachto eliminate CFC use in 80 SMEs employing 2,000 workers.Customized low cost, low-output non-CFC foaming equipmentwas designed for easy, economic and efficient operationand maintenance by workers.

Exemplary Award was for saving 150 SMEs from bankruptcyand preventing 3,500 workers (and their dependents) fromlosing theirlivelihoods.

Green Buildings

Energy efficient buildings: Investments in improved energy efficient buildings = 2-3.5m jobs in Europe & USA.

In Australia a proposed US$ 3b green housing over 4 years is expected to reduce green house gas emissions by 3.8mtons/year = 160,000 jobs

In the US it is estimated that US$ 100b to improve energy efficiency of building & cities over 4 years will generate 2m new jobs.

Governments are encouraged to include the greening and

weatherizing of buildings in their stimulus packages

and provide tax incentives to private companies and

individual households for improving insulation and

installing energy and resource efficient appliances in

office and residential buildings.

Buildings are responsible for 30-40 percent of all

energy use, greenhouse gases and waste generation.

In the long run, governments are encouraged to include

zero emission buildings policies and energy- and

resource-efficient buildings

Regulatory Framework for energy efficiency in India

• Energy Conservation Act, 2001

Created Bureau of Energy Efficiency

Appliance standards and labeling

Energy consumption norms, and energy-use reporting requirements for energy-intensive industrial units

Energy Conservation Building Code for commercial buildings

Certified Energy Managers and auditors

• National Action Plan for Climate Change, 2008

National Mission on Enhanced Energy Efficiency provides mandate for market-based mechanisms to promote energy efficiency

National Mission on Sustainable Habitat seeks to incorporate energy-efficiency requirements in building byelaws

Technological change is the key

• Installation of energy-efficient infrastructure, equipment and appliances is essential for

– Meeting energy demand

– Managing energy security, and

– Meeting climate goals

• Technological transitions – both deployment and development - are important in

– Power generation

– Buildings, especially commercial buildings

– Equipment and appliances

– Industry

– Mobility

Information helps consumer decisions

STAR RATING FOR

BUILDINGS

Energy Performance Index:

Category of Building :

Type :

Climatic Zone :

Connected Load :Build up Area :

Name of the Building :

kWh/ sq m/ year

Bachat Lamp Yojna (Lamp Savings Project)– Of the approximately 1 billion light points in India,

about 600 million use CFLs

– CFL penetration in commercial sector is almost complete – but low in household sector

– “Bachat Lamp Yojana” facilitates firms in providing CFLs to households at the price of incandescent bulbs

– The difference in cost would be recovered through the carbon credits that accrue because of their lower energy use

Renewable Energy

• About 2.3 million jobs in

renewable energy sector in

comparison to 2 m employed

in oil & gas refining

industry in ’99.

• Projected investments of

US$ 630b in renewable energy

sector by 2030 would

translate into at least 20 m

jobs.

Renewable energy: case study

• China: RE sector generates output worth US $ 17 bill & employs 1 mill.

• Nigeria: a biofuels industry based on casava & sugar can provide 200,000 jobs

• India: 900,00 jobs could be created in the biomass gasification by 2025

• Bangladesh: At least 20,000 jobs have been created with the uptake of 3 renewable energy technologies (PV solar home systems biogas facilities, & improved cooking stoves)

But environmental taxes are an under-used tool in the EU

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energy taxation transport taxation resource/pollution taxation

Environmental taxation as a percentage of GDP (distinguished between energy, transport and pollution/resource) in the EU-27.

We are no longer an Isolated State?

”अयं बन्धुरयं नेति गणना लघुचेिसाम ् | उदारचररिानां िुवसुधैव कुटुम्बकम ् || ”.

Economic Sustainability

“The major challenge—andopportunity—of our timeis to create a form ofcommerce that upliftsthe entire humancommunity of 6.5billion and does so ina way that respectsboth natural andcultural diversity.Indeed, that is theonly realistic andviable pathway to asustainable world, Andbusiness can—and must—lead the way.”

Stuart