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Green Economy Research Agenda

Green Economy Research Agenda

FOREWORD

Foreword

We associate Green Economy with the goal of estab-lishing a sustainable economy, an economy which is environmentally and socially compatible, as well as being competitive. In 2012, the international commu-nity took further steps to realise the Green Economy at the Rio+20 Earth Summit, with the ultimate goal of meeting the global challenges posed by climate change, limited resources and environmental pollution with economically viable solutions.

We are keen to address these challenges and at the same time to grasp the opportunities a Green Economy can offer Germany. It was to this end that we initiated the Green Economy agenda process in 2012, with the aim of supporting and shaping the Green Economy through technological, social and economic innova-tion. The tasks are wide-ranging and cover a broad spectrum of Action fields, from careful management of energy, raw materials and other resources, through issues of sustainability in the financial sector, alter-native approaches to consumption, to the sustainable shaping of mobility and infrastructures in our cities and regions. We must also ask ourselves what changes the Green Economy will entail for the working envi-ronment and what new demands will arise for training and education.

The present research agenda is an important milestone in the Green Economy agenda process. The special factor here is that from the very outset we have driven this as a joint process in dialogue with the major German business associations, trade unions, consumer

organisations and NGOs, who are making valuable contributions and will ensure the best possible imple-mentation of the research agenda results. These results should be directly applicable to the transformation to the Green Economy.

Sustainable economic management is firmly em-bedded in the Federal Government’s new High-Tech Strategy as a priority for the future. The Green Economy Research Agenda lays the foundations for the collaboration of the various government departments involved; we will approach this task with a “seamless innovation policy”.

Our thanks go to all the experts and stakeholders who have actively participated in the development of the research agenda. We now need to tackle these research issues and apply ourselves to these projects alongside users and stakeholders. We intend to continue down this path in the future, so that generations to come have an intact environment and healthy economy on which to base their prosperity.

Prof. Dr. Johanna Wanka Federal Minister of Education and Research

1CONTENT

Content

Foreword

1 On the road to the Green Economy 3

2 Players in the Green Economy 5

3 Research for the Green Economy 8

4 Action fields for the Green Economy 9

4.1 Production and resources: raw materials, water and land 10

4.2 Sustainability and financial services 20

4.3 Sustainable consumption 25

4.4 Sustainable supply und use of energy in the economy 28

4.5 Sustainable mobility systems 31

4.6 Infrastructures and intelligent supply systems for the City of the Future 33

5 Work and qualification in the Green Economy 36

6 Green Economy worldwide 38

List of end notes 40

3ON THE ROAD TO THE GREEN ECONOMY

1 On the road to the Green Economy

The vision of the Green Economy is an internationally competitive economy that is both environmentally and socially compatible. This concept forges a real link between ecology and economy, with the Green Economy increasing social welfare and combating poverty while striving for social justice. In light of ac-knowledged ecological constraints, the aim is to make environmentally acceptable, qualitative and therefore sustainable growth possible, based on a comprehensive understanding of the interrelationships between eco-nomics, finance and politics. The ultimate goal is the development of diversified and sustainable production and consumption patterns which assure prosperity and a high quality of life worldwide, and in particular for future generations. As well as the positive impact on the environment and society, this will also reinforce the competitiveness and resilience of Germany as a whole.

The road to the Green Economy requires a process of change that affects all of society. It involves plan-ning for a comprehensive ecological modernisation of the entire economy and its various sectors, in particular with regard to use of resources, emissions reduction, improved energy and raw material pro-ductivity, and the sustainable shaping of products, supply systems and infrastructures. Questions about living and working conditions, consumer behaviour, product life cycles and funding models are directly connected to these issues. The relevant value creation chains and networks must be viewed holistically, with the complex interactions and relations between the players involved being taken into consideration. Only a systematic approach allows the development of eco-nomically successful and innovative solutions to face global challenges, such as limited resources, threatened ecosystems, climate change and demographic devel-opments. As well as technical progress, both organisa-tional and social innovations are necessary to achieve the transformation to a Green Economy.

The solutions being developed must take into account the complexity and diversity of interdependencies and connections between the different interacting systems. Interactions between technological leaps in innovation, market dynamics, consumer psycholo-gy and reacting ecosystems can lead to unforeseen

changes in the framework conditions for the transfor-mational process. It is important to shape the steps in innovation to enable changing framework conditions to be responded to flexibly, without becoming bogged down in pathway dependencies.

An exclusively national vision cannot deliver such sustainable development; social sustainability, envi-ronmental compatibility and competitiveness must be analysed in global value chains. Green Economy was a core theme at the Rio+20 Earth Summit in June 2012, and according to the United Nations Environment Programme (UNEP) the transition to a social-ecolog-ical market economy can only be accomplished if 2% of global gross domestic product (GDP) – currently around 1.3 trillion US dollars – is invested annually until 2050 in the ecological transition of key sectors such as agriculture, construction, energy supply, indus-try, transport or the waste and the water sector. These investments can only be effective however if they are accompanied by systemic innovations, founded on ev-idence-based knowledge, along with political reforms at national and international level.

To progress the discussions following Rio+20 the Federal Ministry of Education and Research (BMBF), together with the Federal Ministry for the Environ-ment, Nature Conservation, Building and Nuclear Safety (BMUB), has set up an agenda process for the Green Economy, with the aim of supporting and shap-ing the Green Economy transition process through application-related research involving the relevant stakeholders and players. This process encompasses aspects of the economy, science, administration and social groups. Having begun in September 2012 with the Conference “Green Economy – A New Economic Miracle?” and set forth in a series of agenda work-shops, research questions in six action fields were developed in dialogue with experts and stakeholders from research institutions, businesses, associations, trade unions, local communities and civil society groups.

The current research agenda presents the results of this process. An initial pilot phase formalises and imple-ments measures for selected issues in the action fields, the aim being also to further enhance the image of the

4 ON THE ROAD TO THE GREEN ECONOMY

Green Economy and continuously extend the context for action.

The Green Economy Research Agenda is embedded as a flagship initiative in the third Framework Pro-gramme “Research for Sustainable Development – FONA³”. Simultaneously, measures from other BMBF funding fields such as the bio-based economy, research for production, new materials or electronic systems are also being applied.

Not only was the Green Economy agenda process developed through crossdepartmental collaboration within the BMBF but it is an interministerial initiative on th Federal level. The research topics in the agen-da address core targets in the Federal Government’s sustainability strategy, which describes sustainability as a governing principle [1] of policy. In addition, the Green Economy Research Agenda is part of the Federal Government’s new High-Tech Strategy which firmly

embeds “sustainable economic management” as one of six priority future challenges for a “seamless” innova-tion policy [2]. This means that operationalising the research agenda also factors into the feasibility of the Federal Government’s environmental and economic policy.

Live link to Achim Steiner, Executive Director of the United Nations Environment Programme (UNEP) during the Green Economy Conference in 2012

5PLAYERS IN THE GREEN ECONOMY

2 Players in the Green Economy

The Green Economy Research Agenda involves aspects from economy, science and civil society, encompassing every field of economic activity both in Germany and in an international context – finance, labour, produc-tion and consumption. Through collaboration between the players and stakeholders involved in the respective action fields, various aspects and interests are included in the transformation process towards a Green Econ-omy, which enables the joint development of solution strategies.

Business

The transition to the Green Economy affects every industrial sector, from the raw materials industry through construction and the manufacturing sec-tor to the trade und services sectors. In addition to a range of incremental developments, such as increased efficiency, this is primarily about developing new or refined business models and implementing innova-tions commercially. This often requires longer-term thinking and the development of long-term strategies in business, as the targets related to transforming to the Green Economy generally span periods of sev-eral decades. Businesses should be supported in the research and development work this requires. As key users and effectors of innovations for sustainable economy, businesses are involved in the development and application of research projects from the outset. The focus here is on the promotion of promising innovations that have to some extent already matured and are close to potential economic implementation. This often means taking results from research and development that have been successfully developed on a laboratory scale through the “valley of death” into in-dustrial application, making that crucial last step in the innovation process possible. Small and medium sized enterprises (SMEs) in particular, which play a major role in driving forward the development of sustainable products and processes in many areas, often face major challenges in terms of the costs and risks associated with this step and it is therefore important to provide SMEs with appropriate and practicable funding instru-ments.

Particular attention should also be paid to entrepre-neurs and start-ups with innovative business models,

models that can play an important role in shaping the Green Economy through their particular dynamics, flexibility and capacity for innovation. An interesting question is: with what pre-conditions and groupings of players are such start-ups particularly successful and relevant for the Green Economy? For example, more than half the start-ups of co-operatives in recent years have been in the energy, environmental and water sectors. This increasingly-popular organisational structure makes it possible for various players to act together locally, bringing together ecological, social and economic interests.

Science

Research for the development of the Green Econo-my should be application-oriented and need-driven, meaning that science develops the solutions to those research questions arising from the specific needs of users and stakeholders, identified and formulated through participatory processes. Building upon this, the research should develop the highest possible rele-vance for the transformation to the Green Economy.

The road to the Green Economy must go via techno-logical and social innovation because only those inno-vations that are socially accepted and broadly adopted can be significant to a sustainable way of life and eco-nomic management. This means there is just as strong a call upon the social sciences as there is upon the natural and technical sciences when it comes to sup-porting users in the development and implementation of sustainable innovations. Promising new approaches are often found at the interfaces between individual technical disciplines and fields of technology. It is im-portant to develop solution concepts resulting from interdisciplinary collaboration and holistic approaches to research that make system innovation possible and so contribute significantly to the Green Economy. This requires the definition of the context to be considered, and the question of how system boundaries are to be set meaningfully to be asked.

Incremental innovations, such as in increased efficien-cy, are a key element for the development towards the Green Economy – provided that they can be readily transferred and find broad application in order to sig-

6 PLAYERS IN THE GREEN ECONOMY

nificantly affect the transformation process. Potentially disruptive innovations should also attract particular scientific attention, as quantum leap innovations, which massively change an existing market or industry can be critical steps on the road to the Green Economy, bringing in new players to the game, enabling new business models to be established, stimulating differ-ent behaviours or fundamentally changing framework conditions. The Green Economy Research Agenda aims for both types of innovation in the various action fields.

Policy

Research alone is not enough to develop the Green Economy. The change process for society as a whole needs governance that sets appropriate framework conditions both nationally and internationally, at federal state and local authority level, and that in-volves the stakeholders. The State must stimulate and support these concepts of responsibility and action at every level through corresponding measures of legal, organisational, advisory and funding tools. By do-ing so, the State allows as much scope as possible for market forces, competition and individual creativity, with the result that the opportunities and potential of the Green Economy can, through the creativity of the market, be more fully and more quickly exploited.

Progressing the transformation to a Green Economy that has in some respects already begun, requires fur-ther definition of the regulatory framework. It must be developed further so that damage to the environment is avoided, primarily by increasingly pricing-in the ex-ternal costs of environmental pollution, resource usage and damage to natural capital on a “user pays” basis, and continuously cutting back environmentally harm-ful subsidies. Measures for increasing resource efficien-cy have to date often failed to pay-off economically or to do so only after much time has passed – for example when investment in appropriate production plants is recouped by reduced resource consumption only after several years. Policy here must shape the framework conditions for investment so that positive effects for society as a whole are also reflected in the short- and medium-term economic viability of the measures.

An effective and efficient political shaping of the transformation towards a Green Economy can only be achieved by coherent collaboration at all political lev-els and a “seamless” innovation policy. This is the aim of the Federal Government’s new High-Tech Strategy. At federal level this calls for close interdepartmental coordination at an early stage in order to make the conversion of research results into sustainable inno-vations possible. Tools for promoting and shaping the framework that fall under the various fields of respon-sibility should be coordinated so that they comple-ment each other and mesh together. This also relates to involvement in international programmes and initiatives both at European level and globally. Another important aspect is the speed with which innovation strategies can be implemented; it is important to note, within the governance framework of the transforma-tion process, whether a tracked innovation strategy is able to achieve the goals that have been set, for exam-ple on the basis of international agreements, within a stipulated period.

Civil society

The transformation to the Green Economy affects the whole of society. It is not just a question of explaining the research results and innovation processes and the changes needed to, for example, raise acceptance of particular projects or technologies to the public. It is increasingly a question of the public becoming part of the innovation process since it is actively involved at every stage. The views of individual members of the public are being sought along with those of associa-tions and other social organisations. This involvement begins with formulating the need for research and ranges from participation in research projects through to the active implementation of research results into innovations. Put another way, members of the public are putting their interests and needs into agenda pro-cesses and public dialogue. They even contribute to ob-taining research data and results, for example through new types of public research (“Citizen Science”), and take on new roles in the Green Economy, such as financing in crowd funding projects, participating in co-operatives, or as providers and users of products and services as part of alternative forms of ownership and consumption based on a culture of exchanging and sharing.

7PLAYERS IN THE GREEN ECONOMY

In addition to this, the participation of employees in businesses is a key performance indicator for a success-ful transformation to the Green Economy. Fair and well-paid work ensures social harmony, and in private consumption sets the material pre-conditions for tak-ing sustainability aspects into account. Together with suitable qualification, this is an important element for the competitiveness of an economy that moves at a high technological level and demands permanent innovative capability.

“The ‘Made in Germany’ concept helps to harmonise economic growth and environmental protection globally. Such a ‘Green Economy’ succeeds with strongly innovative enterprise. It is furthermore based, on the one hand, on good basic research and, on the other, on sufficient freedom for the private economic sector in implementation. Clever research ideas can then produce successful products for a Green Economy. The German Chamber of Com-merce and Industry supports businesses in the Green Economy. In Germany for example, as part of the Partnership for Climate Protection and Energy Efficiency, over 5,600 enterprises act as advisers on how energy consumption can be improved.”

Dr. Achim Dercks, Deputy Chief Executive of DIHK (German Chamber of Commerce and Industry)

8 RESEARCH FOR THE GREEN ECONOMY

3 Research for the Green Economy

In addition to particular goals in terms of content, funding activities for the Green Economy should fea-ture specific approaches for the funding instruments and meet certain criteria. For this reason, funding measures can be implemented as part of the research agenda that:

• relate closely to the application and make users/stakeholders integral to the development;

• systematically consider their contribution to sustainable development; and

• anticipate a discernible leverage effect on the economic development of the Green Economy.

Implementation of the Green Economy agenda is to proceed in phases.

1. First there will be a pilot phase in which selected topics will be addressed and processed through funding projects or studies. The goal is also to devel-op a clearer picture of the Green Economy. A period of two years is scheduled for the pilot phase.

2. The further development of Green Economy fund-ing and the arrangement of the subsequent phases form part of the pilot phase, taking the initial results and experiences into consideration through an ongoing participatory process.

New topics can also be added to the agenda on an on-going basis as part of a “learning programme”. Results from the projects are presented at a Green Economy conference held every two years which also provide an opportunity to discuss new research issues and approaches.

Funding instruments:

A raft of funding instruments is available, addressing the various aims of the agenda directly and tackling the research tasks set out below. These components broadly anchor Green Economy as a cross-cutting issue in funding and provide the gateway to policy areas beyond research and development. The funda-mental principle here is always: research to support transformation to the Green Economy with real-world application and the involvement of stakeholders/users.

Research tasks and structural characteristics

1. Systemic analyses for the Green Economy (Research gives stakeholders the knowledge to make decisions, particularly in terms of policy)

• Studies and research projects on systemic questions and achieving goals on the road to the Green Economy

• Formulation of questions, jointly with stake-holders

• Examination of conditions for success and governance of the transformation process

2. Research for green innovations, technological and social (Research develops green innovations jointly with users)

• Transdisciplinary projects with the involvement of stakeholders; joint funding

• System examination along the relevant value chains with regard to the aims of a Green Econ-omy

3. Stakeholder dialogues for practical implementation of the Green Economy (Research supports stakeholders’ implementation processes)

• Examination of core or exemplary projects for the implementation of the Green Economy, which fail to progress because stakeholders are mutually blocking

• Advice on the implementation process, prepa-ration of question formulations in conjunction with the stakeholders and provision of objective knowledge for decision taking

9ACTION FIELDS FOR THE GREEN ECONOMY

4 Action fields for the Green Economy

Realisation of the Green Economy requires changes to production and consumption habits to become sustainable, factoring in megatrends in order to ensure prosperity and high quality of life both globally and also for future generations. The interactions between the various groups of players, for instance between producers and consumers or between the financial sector and the real economy, play a major role. This demands interdisciplinary research approaches and in many cases means looking beyond individual industri-al sectors and state borders.

Within the research agenda, development for the Green Economy should be supported in the following six Action fields by application related research:

• Production and resources: raw materials, water and land

• Sustainability and financial services

• Sustainable consumption

• Sustainable energy supply and use in the economy

• Sustainable mobility systems

• Infrastructures and intelligent supply systems for the City of the Future

Transforming the entire national economy to a Green Economy is a long process affecting the whole of soci-ety, consisting of a large number of individual devel-opments. To improve control, it is important to record the extent to which the ultimate aims are actually being achieved. The overall economic success of a national economy is conventionally reflected through growth in gross domestic product (GDP). It is however self-evi-dent that this value alone is insufficient to measure the success of a Green Economy, an economy focussed on sustainability. In the context of discussion on sustaina-ble development, prosperity and quality of life, various bodies at national and international level are discussing what indicators over and above GDP are suitable to track the process of change toward the Green Economy. A set of indicators is needed in which the economic, ecological and social aims of the Green Economy are included equally. The consequences for future genera-tions must also be incorporated into current decision making processes. Various commissions have, with scientific support, been working on the development

of such a set of indicators. For example, the Study Commission on “Growth, prosperity and quality of life – roads to sustainable economies and social progress in the social market economy” has drafted a proposal for a holistic set of prosperity and progress indicators. The National Strategy for Sustainable Development is based on a set of 21 indicators measuring the progress in innovation on the road to a sustainable society. The following graph showing the Action fields clearly illus-trates the progress of the transformation to the Green Economy through a selection of these 21 indicators.

5

10

15

20

25

30

35

GDP per inhabitantadjusted for price changes, in prices for 2005 in thousand euros

1995 2000 2005 2010 2013

Status:

The gross domestic product (GDP) represents the total value of the domestic economic performance and is the key indicator for economic growth and business. The decoupling of economic growth and pollution is an essential basis for sustainable eco-nomic management.

Source: Statistisches Bundesamt (Federal Bureau of Statistics), Nachhaltige Entwicklung in Deutschland (Sustainable Develop-ment in Germany), Indicator Report 2014

Indicator of the Sustainability Strategy

10 PRODUCTION AND RESOURCES: RAW MATERIALS, WATER AND LAND

4.1 Production and resources: raw materials, water and land

Current situation

One of the core issues of a Green Economy is the careful management of finite resources in the pro-duction of consumer and investment goods. The aim of the Federal Government is to double raw material productivity by 2020 as against 1994, and to decouple resource use from economic growth and environmen-tal impact (National Sustainability Strategy 2002). The German economy processes around 1.25 billion tonnes of mineral raw materials annually, i.e. minerals, (fossil) energy-producing raw materials and metals. While the domestic and foreign extraction of raw materials in-curs increasing costs – and sometimes severe pollution – during extraction and processing, secure supply of raw materials is nevertheless the basis of our manu-facturing industry in Germany and ultimately of our future prosperity. In addition, future sustainable eco-nomic management must be based less on fossil raw materials and more on sustainably produced renewa-ble resources and products as well as natural material cycles. This raises questions of sustainable production and procurement of raw materials, transparency and compliance with social standards in the extraction of raw materials, land consumption, product design and re-use and recycling. Additionally, when looking at the entire cycle, different user phases and consumer habits must be taken into consideration. For a number of earth system processes impacted by mankind, the limiting factors are not the availability of raw material deposits, but are primarily the impact on the environ-

ment during refining as well as the capacity of sinks, for example of CO2 in the atmosphere or the discharge of phosphorus and nitrogen from the soil into bodies of water.

In the context of a Green Economy, an environmen-tally compatible raw material economy must set its sights on both relative and absolute decoupling. On the one hand, higher efficiency and technical innovation should achieve decoupling of prosperity and economic growth from raw material consumption (decoupling in the narrower sense), and on the other prosperity should be decoupled from pollution (decoupling in the wider sense). Specifics for decoupling measures such as this lie, for example, in increasing raw material and energy productivity, increased re-use of raw materials, substitution by renewable raw materials or adaptation of consumer habits and systemic innovations. Demand for economically strategic raw materials, for example, rare earths, will rise in the future as they will be needed for the implementation of energy system transfor-mation, sustainable environmental technologies and many high-tech applications. Secondary raw material sources will be unable to meet this demand in the fore-seeable future. Innovative raw material technologies are needed that have low environmental impact in the extraction and processing of primary raw materials, and scientists and users are asked to develop joint solu-tions. In particular, the implementation of promising research and development results through to initial industrial implementation with accompanying indus-

National Research Strategy BioEconomy 2030 and Policy Strategy BioeconomyThe development of an internationally competitive bio-based economic management or even bio-based economy is an important pillar of the Green Economy. The Federal Government created a research policy basis back in 2010 in the “National Research Strategy BioEconomy 2030” [3] and set the initial course for a process of change towards a bio-based economy. In terms of coherent policy-mak-ing, these decisions were supplemented by the “National Policy Strategy on Bioeconomy” [4] with further policy framework conditions and Action fields (industrial and energy policy, agricultural, forestry and fisheries policy, climate and environmental policy, and research and development policy). Whilst the bioeconomy uses and further develops biological processes and resources and in doing so makes them more efficient, technology, economy and ecology are systemically and sustainably linked – in line with the aims and guidelines of a Green Economy.

11PRODUCTION AND RESOURCES: RAW MATERIALS, WATER AND LAND

trial research should be promoted, to help innovations for greater sustainability negotiate the so called “valley of death”.

While businesses are undoubtedly active in a number of ways with respect to resource efficiency, this is for very different reasons – mainly because of the associ-ated cost savings, but also because this is demanded by customers, from a recruitment perspective or, for example, as a result of the interest and commitment of the owner. To achieve any significant reduction in non-renewable resources usage businesses have to consider entire value chains and networks. It must be remembered that many of the value chains relevant to Germany are based outside the country, meaning that new approaches need to be developed for collab-orative implementation between German businesses and foreign suppliers in order to improve demand for or consumption of resources, to reduce emissions and environmental impact throughout the value chain, and also to improve working conditions.

It is also important to the development of the Green Economy to clarify how biodiversity and ecosystem services can be appropriately (economically) evalu-ated and better factored into business and national economic processes. This entails the development of corresponding concepts, models and management tools. Further, appropriate attention has not been ac-corded in national economic analyses to underground facilities that are of major importance as groundwater reservoirs, storage facilities for energy resources and mineral raw materials, and energy reservoirs.

Examples of funding areas

Research on the non-energy use of biomassThe substitution of mineral and fossil raw materials by sustainably produced biomass can contribute signifi-cantly to the careful management of finite resources in the bioeconomy and in the Green Economy, but it is also important to ensure that production along the length of the value chain (soil, plants, conversion pro-cess and products) is sustainable. This has a bearing not only on technical innovations such as the avoidance of harvest losses and residues or the integrated produc-tion of various products through the total processing of various types of biomass, including food waste. The value chains of bioeconomic products, for example, are increasingly interlinked or interlinkable with each other in the various industries, so that the re-use of by-products and residues can be maximised in biore-fineries or in the use of by-products and biocascading concepts. Material use may for example be subordinate to energy use in the re-use of agricultural residues in biorefineries. Equally important are systemic consider-ations such as the avoidance of competition for the use of agricultural areas.

The brochure “Destination Bioeconomy – Research for a Biobased and Sustainable Economic Growth” [5] sets out the BMBF’s research agenda for the bio-based economy in coming years. Under the umbrella of the “National Research Strategy BioEconomy 2030” wide-ranging funding priorities are created which provide incentives for holistic research approaches, drive forward the trans-formation process through to bio-based economic man-agement and develop new free space for innovations.

“Careful management of global resources is a key challenge for the economy, politics, society and science. It is crucial to achieve a balance between the use of dwindling resources and the need to expand economic growth to emerging and developing countries. A research agenda in this area must support the raising of the great innovation potential for a Green Economy that exists with-in the economy. Multinational enterprises in turn ensure that resource-con-serving innovations can find global application.”

Dr. Wolfgang Große Entrup, Chairman of the Board of econsense – Forum Nachhaltige Entwicklung der Deutschen Wirtschaft e. V. (Forum for the Sustainable Development of German Business)


One priority is the development of future agricultural systems. The preservation of environmental resources and renewable raw materials, their sustainable use and the long-term safeguarding of the availability of re-sources are key challenges for the bio-based economy. Sustainable intensification of agricultural production requires systemic approaches using advanced tech-nologies and incorporating specific locational require-ments. New opportunities for agricultural production and application are emerging from the systemic review of agricultural production and all upstream and down-stream areas. In terms of system orientation, mate-rial streams, along with environmental and location factors, are just as important as incorporating relevant

aspects of associated scientific and economic areas into comprehensive agricultural systems. The aim is to increase the sustainability, resilience and economic viability of innovative new agricultural systems along increasingly interlinked value chains, reinforce the innovative strength of German agricultural research and promote the development of corresponding key innovations. To achieve this, another priority lies in the creation of free spaces for innovations. Climate and resource conservation along with economic com-petitiveness are, to a large extent, dependent on the development and industrial application of innovative technologies. New innovative products and system solutions with a high level of value-added potential should come onto the markets as quickly and efficient-ly as possible. Improving the handling of this critical point in the innovation process requires the lowering of innovation hurdles and the supporting of inno-vation management. Free spaces should therefore be created for new forms of collaboration, networks and platforms in which innovation processes are boosted and thereby accelerated. The aim is to coordinate rele-vant research work with the requirements of industrial production in a timely manner and to increase private investment in bioeconomical research.

Raw material productivity shows how much gross domestic product is generated per tonne of abiotic primary material used. The aim of the national sustainability strategy is to double raw material productivity by 2020 as against 1994. The indicator is rising, but if it continues at this rate the target clearly will not be met.

Source: Federal Statistical Office, Sustainable Development in Germany, Indicator Report 2014

The future of the bio-based economy begins in Central Germany at the Fraunhofer Center for Chemical-Biotechnological Process-es CBP where a pilot scale system recovers basic chemicals from timber industry residues.


1 abiotic

80

100

120

140

160

180

200

Raw material productivity and economic growth1994 = 100

1994 2000 2005 2010 ‘12

Raw material productivity1

Raw material extraction and imports1

Gross domestic product (after price adjustment)

85,6

127,6

149,2

Status:

Target year2020

Target:200


Research into CO2 as a new source of carbonThe reduction of CO2 emissions presents enormous challenges to policy, society and the economy. One particular problem – aside from industrial feasibili-ty – is economic viability. CO2 abatement (mitigation) is comparatively expensive, due primarily to the low price of emissions certificates, while the use of CO2 as a raw material has not to date been an economic alter-native; this situation may however change suddenly with application in industrial manufacturing process-es. The burden of additional greenhouse gases on the atmosphere should be eased and the anthropogenic carbon cycle closed or reduced by the separation of CO2 close to source, for example from the cement, steel and chemical industries, biogas plants, waste incin-eration and coal-fired power plants and subsequent non-energy use, including chemical energy storage (power to gas, power to liquids, power to products).

Today it appears possible to extract large quantities of CO2 from, for example, foundry gases, for use as a new recyclable material for the chemical industry or for generating syngas. As a result CO2 would clearly become of greater value and would be an important element in the diversification of raw material sources for chemicals, fuels and energy. Research is required for the development of technologies for the efficient provision of CO2, and of the hydrogen needed for the production of methane gas from CO2 which can then in turn be fed into the existing natural gas network. The technology must be made more efficient for this to be economically usable. Equally important for imple-mentation are solutions for the intelligent linking of the sub-processes and the building of industrial plants.

The funding measure “Chemical processes and non-energy use of CO2” (running from 2009 to 2016, with approximately 100 million Euros of funding with around a further 50 million Euros from industry) will address the non-energy use of CO2, chemical energy storage and the energy efficiency of energy-intensive processes. An initial balance of the results shows very promising potential in the field of energy efficiency, the reduction of greenhouse gases and the provision of raw materials from non-fossil sources (“away from oil”). Future priorities in research topics in the field of the non-energy use of CO2 include increasing raw material productivity and broadening the raw mate-rial base by direct and indirect inclusion of CO2 in the value chain and the coupling of renewable energy and the direct use of CO2 in the production of chemical substances. The three major challenges facing soci-ety – resource efficiency, climate change and energy transformation – are for the first time being jointly ad-dressed as a mutual dependency issue in the search for innovative solutions. Intelligent linking of CO2 materi-al flows through cross-sector collaborative projects and a life cycle approach/ecological balance are important overall topics. Especially in the field of chemical energy storage, many projects have already advanced into the demonstration phase.

Research for closed-loop material management (includ-ing waste avoidance and reuse)The closing of material cycles is an important building block in the Green Economy. A number of products and raw materials are facing different challenges


Germany has more than fulfilled its Kyoto target, lowering its total emissions of greenhouse gases by 23.6% as against the base year of the Kyoto Protocol (1990/1995), but increased efforts are required to achieve a 40% reduction over the base year by 2020.


1020

40

60

30

50

708090

100

Greenhouse gas emissions in CO2-equivalents*Base year = 1990 = 100

1995 2000 2005 2010 Target year2020 2050

* six Kyoto gases

Status:

Target:60

Target:20 - 5


which, on the one hand require technological inno-vations such as tracing and tracking of raw materials or pre-separation or pre-concentration of certain substances in products with a complex structure. On the other hand, the lack of a practicable collection and return system for used products is often a seri-ous obstacle to closed-loop processes. Product design should also factor in the reparability and reusability of products to a greater extent, and better recyclability can also benefit from a modular product structure.

For example, the funding measure “r4 – Innovative Technologies for Resource Efficiency – Research into the provision of economically strategic raw mate-rials” is aimed at increasing the supply of essential raw materials for the high-tech industry, such as rare earths, metals for electronics or steel stabilisers. These are often used at low concentrations in mixtures of substances and in dissipative ways and so currently have recycling rates of normally less than 1%. Innova-tive approaches and technologies are being developed to address this as part of r4, for recycling end-of-life products and for mobilising treatment and production residues. Innovative recycling technologies are regular-ly incorporated into innovative logistics solutions and new business models in order to safeguard the eco-nomic return of recyclable materials in a closed cycle.

Along with economically strategic raw materials, re-search on closed-loop cycles is particularly important in raw material intensive industries where huge quantities of raw materials are used, so that efficiency increases have a major leveraging effect on increases

in raw material and energy productivity. The industrial implementation of this massive potential is under-pinned by the BMBF’s “r+Impuls” funding measure.

Research for efficient technologies and processesThe product manufacturing process generates 80% of product costs. In today’s manufacturing process-es, energy and material losses are often accepted as a necessary evil of high-quality production. Particular attention should be paid to processes that involve heat treatment or high material losses. The production en-vironment including the transport of goods accounts for over 40% of the total energy consumption and is one of Germany’s most important energy consumers. The German economy can improve its raw material and energy productivity – and ease the burden on the environment – through the development and imple-mentation of innovative efficiency technologies. The resulting cost and competitive benefits strengthen German businesses internationally and form the basis of sustainable economic growth. Potential savings in energy and raw materials can be realised by every party in the value chains and networks. Approaches range from the optimisation of industrial process control, for example the use of innovative dynamic measurement, control and regulating technology, or technologies for finely controlling material and fluid usage, through to logistics innovations such as new technologies for intelligent storage and delivery. Process simulation, which is becoming ever more representative of reality, can also contribute to increased efficiency.

“The ‘Green Economy’ process has been under way in Germany for some considerable time and encompasses the whole of the industrial supply chain. The field of production and resources must therefore be broadly set, and cannot distinguish between ‘good’ and ‘bad’ industrial sectors. It is primarily a matter of targeting public research to reinforce the most important source for efficient use of resources; the innovative strength of industrial enterprise in Germany. This will then benefit both German export strength and the global protection of resources.”

Holger Lösch, member of the Executive Board of the Federation of German Industries (BDI)


An interesting research question lies in understanding the effects of the “Industry 4.0” innovation trend on the Green Economy. Does the intelligent networking of production units and the use of associated novel cyber-physical production systems make production more resource-efficient and environmentally safer overall?

Resource-efficient production requires comprehen-sive recording of all sources and sinks. Many cases of resource exploitation cannot currently be addressed adequately as they cannot be pinpointed or measured. Tools and methods need to be developed to capture, as comprehensively as possible, the energy and material demands in the planning of factories and plants to enable the assessment, planning and optimisation of consumption both in the investment and operating phases. The programme “Innovations for manufactur-ing, services and work from tomorrow” funds appro-priate R&D projects to develop innovative value-added systems and resource-efficient production and so sustainably ensure growth and employment.

A key factor in the economic effect of new efficient technologies as a whole is their dissemination. Effi-ciency technologies only demonstrate a significant ef-fect when widely used. Special attention should there-fore be paid to developing practicable, needs-driven solutions and to supporting users through to the implementation phase.

The participation of employees is another major resource in transferring new technologies. More and more businesses are recognising that employees, as “problem identifiers and idea generators on the ground” together with works councils as “commu-nications management in the enterprise”, are best placed to be aware of where and how energy and other resources can be used more effectively and more effi-

“In many sectors of German industry well over 50% of CO2 emissions have already been produced in the upstream value chain before the actual activities such as processing or logistics take place. In fact so far only a small number of German businesses have systematically tackled the issue of climate protection in the value chain. There is clearly a great need for information and for robust methods for cooperative and comprehensive CO2 abatement. There is accordingly a great need for research into the question of what methods and tools German businesses, in collaboration with their interna-tional partners in the supply chains, can use for this and whether feasible mechanisms exist for taking these CO2 abatements into account in national reduction plans.”

Max Schön, Director 2° Foundation

An environmentally-friendly cement which can increase resource efficiency in cement production is being developed as part of the “Celitement” collaborative project.


ciently. Their involvement in companies’ innovation processes therefore not only reinforces acceptance but also contributes towards raising existing potential for energy and resource efficiency. Existing structures such as creativity management, group work and com-pany suggestion systems can be usefully employed on projects for increasing energy efficiency. It becomes quite clear at this point just how closely technical and

social innovations must be dovetailed into the trans-formation process to produce sustainable economic management.

Urban productionNew processes that ensure production can be virtually emission-free allow production even in densely popu-lated areas. The long routes that often existed between

“r+Impuls” pilot measureIn order to raise resource efficiency potential it is vital to improve the transfer of promising R&D results into practical industrial conditions so that they can be quickly turned into innovations. It is therefore becoming increasingly important to closely integrate research and development with subsequent application and testing in prototype, pilot and demonstration plants as a precondition for introducing new technologies onto the market. Transferring results from laboratory to industrial scale is often not possible without accompanying scaling up of the research and development that goes with it and ad-ditionally – while linked with environmental benefits and simultaneous expectations of profit – is also linked with high financial and technical risks that the individual businesses cannot support alone.

With its funding measure “r+Impuls – Innovative technologies for resource efficiency – Impetus for industrial resource efficiency” as part of the “Research for sustainable development (FONA)” framework programme, the BMBF is pursuing the goal of overcoming existing impediments to the development and dissemination of industrial efficiency technologies through targeted R&D impetus, and in so doing helping to deliver a “Green Economy”.

Example: Green Carbody Technologies (InnoCaT) – Innovations for Green Car ProductionThe “Energy efficiency in production – investigation into needs for action and research” study commis-sioned by the BMBF found that in high-quality investment goods the energy saving potential is around 30% or approximately 210 petajoules per year, corresponding to roughly half the power consumption of private households in Germany or four 1.4 GW power plants. A systemic approach was adopted in the Green Carbody Technologies (InnoCaT) innovation alliance, funded by the BMBF, to review the entire value chain through the “toolmaking”, “pressing plant”, “bodywork” and “paintshop” technolog-ical sub-sectors as well as the upstream “planning” and “production control” sectors, where significant energy savings can be made in manufacturing bodywork. In milling for example it was possible to increase the accuracy and productivity of processes using new strategies and methods to achieve time and energy reductions of 50%

The BMBF is accordingly promoting the development of intelligent process monitoring and control strategies along with energy- and raw material-efficient manufacturing technologies and production systems in order to achieve virtually self-sufficient and emission-free production, which also increases process stability and reduces rejects and rework. This improves production operating efficiency to result in “green plants”.


the production location and residential areas can be greatly shortened, enabling new production structures, new procedures and flexible staff deployment to be introduced in the producing business.

In light of increasing urbanisation, concepts for local urban production, and where appropriate within the context of “megacities”, can be developed and imple-mented. All technical framework conditions regard-ing noise, waste gas, other waste, CO2 emissions and water/wastewater must be planned in just as much detail as the architectural integration in the residential area next door. Production activities must place no greater stress on the environment than modern living does. Innovative production technologies can permit large-volume production to be consolidated in an urban environment.

Innovative system solutions for the water sector – Blue Innovations for a Green EconomyThe annual increase in global per capita consumption of water is 2.5%, i.e. double the rate of population growth. Around 900 million people currently have no access to clean water and around 2.5 billion people have no access to basic sanitation. Some 5 million peo-ple around the world die annually from water-related diseases, 2 million of them children under the age of five.

The BMBF is therefore adopting a remit of social provision and responsibility to protect livelihoods on the one hand, and on the other is supporting German business in adapting to changing international markets and conditions of competition.

The anticipated drastic shortage of water reserves mean that innovative system solutions (blue innova-tions) are needed throughout the whole of the water sector. It is vital to develop new types of efficient pro-cesses and demonstrate their benefits and practicality, for example at national and international demonstra-tion sites. Fair distribution in terms of social, ecological and economic aspects to balance competing needs requires effective management of water demand.

Tapping into alternative water resources is an im-portant starting point and poses a major challenge in sustainably securing drinking water supply, household water provision, and the ecosystems. Reusing wa-ter can be key in increasing water availability. These questions are tackled in a new BMBF funding call on “Water reuse and desalination – WavE” (published in the 4th quarter of 2014). The aim of this is to develop innovative technologies, process concepts and man-agement strategies for the resource- and energy-effi-cient reuse and desalination of water through collabo-

Example: European pilot measure for the accompanying ecological research into deep seabed miningIn order to provide details of the considerable incursion into the marine habitat that can be expected due to the extraction of manganese nodules, as part of a European “Joint Program Initiative Ocean” the BMBF has initiated the multidisciplinary pilot action EcoMining – Ecological Aspects of Deep Sea Min-ing in which three expeditions into the equatorial eastern Pacific using the new research vessel SONNE are being launched in 2015 under German lead responsibility. People from some 30 European research institutions from 11 nations will conduct investigations in what is known as the Clarion Clipperton Zone – at approximately 9 million km2, the largest area in the world with deposits of manganese nodules – into the biodiversity of previously undisturbed tracts of ocean floor in various areas claimed by different nations, and draw a comparison with the DISCOL Experimental Area (DEA) in the Peru Basin, an area of approximately 10 km2 containing manganese nodules in which the ocean floor was artificially disturbed in 1989 as part of the “Disturbance and Recolonization Experiment” using deep dredging gear. Results on the extent of the benthic resettlement of ecosystems that have suffered considerable disturbance due to mining activities are also being made available to the ISA (International Seabed Authority, Jamai-ca) and form the basis for the further development of the Mining Code which is the international code governing the extraction of raw materials in deep ocean areas and is ultimately binding for the granting of mining rights by the ISA.


rative research projects with input from the scientific, business and practical sectors. Major potential is forecast in both municipal sewage and industrial water streams. Measures for capacity development are also needed, as well as technological solutions and intelli-gent management of waste streams.

Food and raw materials from the seaThere is a significant need for research into the devel-opment of sustainable methods and technologies for ecologically responsible and sustainable exploitation of marine resources. The BMBF is committed to the im-plementation of these aims in partnership with other ministries as part of the MARE:N programme (Coastal, marine and polar research for sustainability) at both national and international levels.

The economic utilisation of mineral raw materials from marine sources has been highlighted by rising raw material prices and global shortage scenarios for certain raw materials and could become even more significant in the medium term, such as in expanding the renewable energy sector. Accordingly, the Federal Ministry for Economic Affairs and Energy (BMWi) has made the development of technologies that allow ores in the form of manganese nodules, cobalt crusts and massive sulphides to be extracted from the sea at depths of up to 5,000 metres part of its “National Mas-terplan for Maritime Technologies” [6].

Although enormous potential is forecast for raw ma-terials in the sea, as described in the recently published “World Ocean Review III – Raw materials from the sea”,

there has not to date been any commercial deep seabed mining for metals. A number of countries including Germany, together with private companies, are how-ever on the starting blocks and have acquired rights to conduct exploration for a medium-term, although cost-intensive, extraction of resources.

As part of a pilot project, the BMBF is accompanying explorations for medium-term deep seabed mining and focussing on environmental aspects. All actors are aware that extraction is always linked with risks and pollution which needs to be minimised.

Biodiversity and ecosystem servicesProtecting and maintaining biodiversity is one of the core targets of sustainable development, and it is also important to be aware that the economic performance and prosperity of a country depend substantially on the state of its “natural capital”. Biodiversity and intact (functioning) ecosystems, for example, form the basis for plant and animal raw materials, food production, availability of water, and also health and tourism. The shrinkage or loss of biological variety and the ecosys-tem services reflects fundamental risks for the long-term economic success of businesses and national economies and therefore for quality of life.

The services provided by nature have (with the excep-tion of “made” products, such as timber and food) until now been largely freely available and without definable ownership rights. Accordingly they are not integrated into the economic valuation system. As a result, despite legal requirements for the protection of nature, the

“The Green Economy Research Agenda should produce a leveraging effect on the transformation to a Green Economy. Moving away from unsustainable production and consumption patterns will continue to be a decisive factor in this process. To achieve this, the Federal Government must orient the entire High-Tech Strategy consistently and firmly towards the requirements of sus-tainability, bearing in mind that the High-Tech Strategy as a whole has con-siderably greater financial potential than the framework programme Research for Sustainable Development (FONA).”

Dr Helmut Röscheisen, General Secretary of the German League for Nature, Animal Protection and Environment – DNR


value of ecosystem services is not adequately consid-ered in political and economic decisions.

In light of the above there is an urgent need for ap-propriate evaluation concepts, evaluation methods and tools, as well as tools for forecasting. These should make the assessment of the relevance of biodiversity and ecosystem services and the estimation of costs incurred by the loss in various development scenari-os possible. It is also important to evaluate potential counter-measures.

This is not a question of putting price tags on plants and animals, but should, rather, show comprehensively how the use of biodiversity and ecosystem services in a study of the economy as a whole, as well as in the management of enterprises, can be increased. Ac-cordingly, a) action models for optimising sustainable economic running of businesses should be developed and b) national economy framework conditions and tools for conserving and regenerating biodiversity and ecosystem services should be analysed. Incorporating economic perspectives together with their effects should ensure that practically-relevant, needs-driven concepts and action options are developed.

In collaboration with local players on the ground, the BMBF-funded LEGATO project looks at the opportunities for sustainable develop-ment in rice-growing systems in south-west Asia by bolstering the ecosystem services, for example land fertility and pest control, using biological variety.

20 SUSTAINABILITY AND FINANCIAL SERVICES

4.2 Sustainability and financial services

Current situation

The financing and insuring of new technologies and infrastructures are central pillars of a “Green Econo-my”. It involves providing long-term secured financial resources for innovations, businesses, business models, large-scale projects and infrastructures in the clean-tech sector. Additionally financing and investment decisions are determining how sustainably production and consumption evolve in traditional industries, since financial service providers such as credit institutions, investors and insurers generally play a key role in the economy as a whole in their function as providers of capital and even insurers. Sustainable forms of energy supply, energy and resource efficiency, climate pro-tection and adaptation to changes in climate, together with investment and infrastructures which protect biodiversity or use ecosystem services in an environ-mentally safe and socially compatible way, are of major importance. It is here that the very different players in the economy, political officeholders and interest groups come into conflict. They are characterised by different ambitions, added value models, business cul-tures, time horizons, risk profiles, rate of return expec-tations, refinancing options and regulatory frames of reference. Their interests should be coordinated and – bearing in mind the uncertainty following the financial crisis – be accompanied by broader dialogue between civil societies. To develop innovative solutions and at the same time provide information, transparency and acceptance, requires dialogue with the industries and players in the financial economy as well as relevant sectors in the real economy, state decision-makers such as local communities and authorities and not least civil society “stakeholders”. The primary objective is to firmly embed sustainability aspects and criteria in the regular decision-making, business processes and markets of the financial economy. The BMBF can promote this dialogue and support it by providing information to aid decisions.

Examples of funding topics

From financed emissions to Green Economy indicatorsImportant directions regarding the extent of decar-bonisation in production and consumption are being set through financing and investment decisions. As

a result of their position as capital providers and as insurers, financial service providers such as credit institutions, investors and insurers play a key role in the economy as a whole, for example increasing energy efficiency or expanding renewable energies. Examples of this include higher energy efficiency rates being financed specifically via credit facilities, and portfo-lio management advice recommending particular securities that have comparatively favourable carbon footprints from environmental or risk considerations.

The requirements on sustainability reporting by fi-nance service providers are also increasing with regard to this key function. Climate reporting, to which finan-

1 General government lending in % of the GDP2 Not including UMTS proceeds

-5

-4

-3

-2

-1

0

1

2

State de�citin % of gross domestic product

1995 20002 2005 2010 2013

State de�cit1

0,7

0,0

Status:

Structural de�cit

A sustainable financial policy calls for sound public finances that will not burden future generations with excessive new debt. The European Union’s “Maastricht Criteria” provide for a limit on the State deficit of 3% of gross domestic product.



21SUSTAINABILITY AND FINANCIAL SERVICES

cial service providers must subscribe, fundamentally provides for disclosure of the “financed emissions”. This aspect plays a part, for example, in sustainability ratings, in reporting on the “Carbon Disclosure Project” or for questions from individual stakeholder groups.

At the same time there are, to date, no adequate resil-ient models or instruments on how these “financed greenhouse gas emissions” can be ascertained and quantified in practice. This is especially true in financ-ing for small and medium-sized enterprises which often do not have their own greenhouse gas data. Efficient accounting and informative reporting is not yet possible. Overall, therefore, an important lever to effectively link macroeconomic climate change targets with microeconomic portfolio decisions in the finan-cial sector remains unused.

In this light, appropriate practical survey models, processes and tools are to be developed in a pilot project with the active involvement of banks and insurance companies. This may also provide impetus for adjustments to the risk management and develop-ment of international standards for climate reporting. Parallel to this, questions are arising on how financed emissions data can be used in conjunction with other indicators as a kind of Green Economy indicator. How

5

10

15

20

35

Percentage of gross �xed capital formation in GDPin %

1995 2000 2005 2010 2013

Status:

Gross fixed capital formation includes buildings, equipment and other installations, and investment in research and develop-ment also makes an important contribution to sustainable eco-nomic development. The Federal Government’s sustainability strategy is working to increase the proportion of the gross fixed capital formation in gross domestic product (the investment rate). Recent years however have seen a development in the opposite direction.


“The financial sector plays a major role on the road to a sustainable economy, the ‘Green Economy’. The financial institutions – banks, savings banks, insurance compa-nies, etc. – can specifically support and be involved in economic processes leading to sustainable development, but can also neglect or even obstruct them.

Financial institutions can grant credit, finance projects and structure financial prod-ucts all subject to sustainability criteria. They can make the sustainability of financial products for private savers, institutional investors and other investors transparent.

The association of financial service providers, the VfU, has set itself the target of actively supporting sustainable economic management by method development and transparency and by the networking of committed financial institutions and other partners.”

Prof. Dr. Bernd Wagner, Chairman of the Verein für Umweltmanagement und Nachhältigkeit in Finanzinstituten e. V. (VfU) (Association for Environmental Management and Sustainability in Financial Institutions)



can financed emissions be merged with other param-eters to form a Green Economy proxy? What informa-tion can an investor, looking mainly at the impact of Green Economy, gain from this information? How do financed emissions provide information that the port-folio manager’s actions are having the best possible effect on financing for 2°-compatible investment?

Urban financeFinancing sustainable urban infrastructures and sectors is a key issue in urban development worldwide, but is of the utmost urgency in towns and cities and in urban areas in developing and newly industrialised countries. This is increasingly being voiced by, for example, urban decision makers, urban authorities and organisations in civil society. It is particularly critical because invest-ments made in buildings and infrastructures with a long lifespan determine the ecological, economic and social sustainability and the green growth potential of a town or city for many decades to come.

The global investment requirement for urban infra-structures up to 2030 is estimated at 35 to 40 trillion

dollars. A review of the situation by the OECD implies that if current trends are projected, half these funds at most can be raised. This opens up a considerable and precarious gap in infrastructure investment. Here

“In the next 15 years, billions of euros will be invested in the EU in new or re-newed infrastructure. If this money is invested intelligently, the road towards climate protection, energy security and an innovative economy and sustain-able jobs can be smoother. This forward-looking collaboration in the energy and transport sectors could be the key to a renewed EU identity.

However, the money can also be invested in such a way that we lock ourselves into the past, obstructing the routes to climate protection and energy security.

Businesses with strong innovative capability are not created if they are perma-nently surrounded by a protective shield. The transformation needed requires the interaction of short-term protection, public-private research and clear frameworks with the necessary price signals or command and control projects that create sufficient investment security. There is no lack of private money for the necessary investment – life assurers and pension funds are desperate for long-term investment opportunities in the real economy – but there is no clear framework setting out whether the right direction is being set for the fu-ture. There is no collaborative research bringing together central government and private enterprise.”

Christoph Bals, Political Director, Germanwatch e. V.

Sustainable transport infrastructures in a densely-populated area in South America

23SUSTAINABILITY AND FINANCIAL SERVICES

private investors can contribute to the building of new infrastructures as well as to the restructuring and upgrading of existing infrastructures. The provision of “patient” capital which is tied up for lengthy periods is an ambitious undertaking for financial markets and investors, all the more so when it relates to sustaina-ble infrastructures whose profitability – and not only at the monetary level – need not be demonstrated until a later date. Another factor in the investment backlog is the fact that financial constraints and local government debt are also a global problem in econom-ically rapidly growing megacities in countries with an emerging economy.

The financing of urban infrastructures is already the subject of lively international debate, which is however hampered by the division of expertise on urbanisation, technology and financial market interests and requires in depth dialogue between cities, science, the financial sector, industry and civil society. Experience relat-ed to the financing of investment in infrastructures for renewable energy suggests that purely financial subsidisation of investment activities is not sufficiently functional.

Following on from the BMBF’s funding priority “Fu-ture Megacities” and from dialogues with the financial sector, the next step is to set up an overview study on viable financing options and models for urban sectors and infrastructures together with the urgent research and innovation requirements, which should then be

validated in collaboration with stakeholders. This will assess the possibility of profiling Germany as a poten-tial leading market for financing solutions – such as lo-cal authority models (e.g. public services), cooperation arrangements (such as public-private partnerships), foundation solutions or citizen-oriented or self-or-ganised alliances (citizen/energy cooperatives). This requires a set of tools that can be used to evaluate the medium- and long-term sustainability effects of new financing solutions from an economic, ecological and social point of view.

Resilient financial systemHow is it possible to prevent banks from taking in-calculable risks, or from encouraging other players in the market (consumers, local communities, borrowers etc.) to take corresponding risks? What regulations are needed from the State? How can rules be enforced internationally?

The starting point of the “Financial System and Society” funding measure established in the BMBF’s “Humanities, Social Sciences and Cultural Scienc-es” framework programme is to recognise that the importance and function of the financial sector for the economy, policy and society fundamentally changed in the decades leading up to the global financial crisis that has been ongoing since 2008. Much of the deregu-lation, which is seen as the cause of the crisis, originally served to solve economic and social problems. New ap-proaches in research should help to better understand

“At the last Rio follow-up conference, the international community clear-ly underlined the fact that the Green Economy is an important means for achieving sustainable development. The banks have declared support for this vision of a sustainable development, and a number of them are already inte-grating ecological interests into their operational business on the basis of the developments in environmental and climate protection and are looking at the ecological sustainability aspects both in lending and in the capital investment business. This transition to a Green Economy is also accompanied by a grow-ing need for research – a requirement that will be addressed by the BMBF’s Green Economy Research Agenda.”

Andreas Krautscheid, Member of the Board of Management of the Associa-tion of German Banks


the interactions between the financial system and society in an ever more complex economic and social environment, allowing measures to be developed to help provide more stable development of the financial sector in the future or reduce society’s vulnerability to crises caused by the financial system.

These may relate to regulatory issues and the service function of the financial market for the real economy. Greater transparency would be needed with regard to the impact of investment on the real economy, in particular information on how far social and ecological criteria are taken into account. This kind of informa-tion puts investors in a position to make an informed decision on sustainable investment. In this way gov-ernment regulation could introduce greater stability into the financial markets since sustainable investment reduces willingness to take risks and secures moder-ate anticipated returns. In light of this, the need for research can tackle the question of how far sustainable investment can go to help build a more resilient fi-nancial system. It is furthermore vital to examine how sustainable investment can be made more mainstream (it currently has a market share of less than 2%) and the extent to which a marked increase in the sustainable investment volume also contributes towards more sustainable economic management.

25SUSTAINABLE CONSUMPTION

4.3 Sustainable consumption

Current situation

Sustainable management of resources in the Green Economy cannot be achieved simply through effi-cient production processes and new resource-efficient technologies. Each individual must also look closely at his/her attitude to adopting sustainable consumer behaviour and if necessary be prepared to change. The object of research into promoting sustainable consumption is to seek out ways to change behaviour in society as a whole towards a sustainable lifestyle. A key role in this is the interaction and communication between producers and consumers. Extending product labelling and certification is not particularly helpful as people can be overwhelmed by this. Research on sus-tainable consumption includes better understanding of consumer behaviour and new ways to communicate

with consumers. Topics include trialling new business models of sustainable economic management and evaluation processes for the sustainability of produc-tion together with products and services (see “Sus-tainable economic management” box). Efforts are also focussed on investigating rebound effects, on regional consumption patterns and on microplastics as an ex-ample of the concrete impact on consumption.

The “Sustainability Indicators” Inter-Ministerial Work-ing Group examined various proposals for indicators regarding “sustainable consumption”, but no indicator could be identified for this area that provided robust and consistent data. Research work on developing one or more suitable indicators for “sustainable consump-tion” is therefore needed.

“Sustainable economic management” pilot measure as part of Social-Ecological Research (SER)The production and consumption of goods and services contribute to prosperity and quality of life, but by the same token are a major cause of social-ecological problems. In light of this, a number of businesses and many consumers are successfully seeking and testing new forms of sustainable produc-tion and consumption. Despite the progress that has been made and numerous examples of sustainable corporate governance, the overall vision of a Green Economy – particularly on a global scale – has not yet been realised, nor have sustainable consumer behaviours been conclusively accomplished.

The pilot measure is therefore aimed at both businesses and consumers as key players who can pro-mote sustainable economic management by their actions. Technical innovations alone are not enough to achieve the goal of an ecologically acceptable, socially inclusive and competitive economy; social structures must also be steered towards a path of sustainable development. To this end, sustainable economic management projects are developing a variety of new business models and social innova-tions, which are being trialled in practice. At the same time, improved measurement and evaluation opportunities must be developed and tested to progress a sustainable economy both for individual businesses along the value chain and also for the Green Economy as a whole. In tandem with the “Sus-tainable Consumption – From Knowledge to Action” SER funding measure (2008-2013), consumer be-haviour should be even better understood in order to provide more specific information on sustainable products and services for consumers and to be able to promote sustainable consumption. In addition to this, a review of which political instruments can provide efficient and effective incentives needs to be conducted in order to persuade businesses and consumers to modify their behaviours toward more sustainable economic management.

With its “Sustainable economic management” pilot measure as part of social-ecological research, the BMBF is pursuing the goal of accompanying and/or supporting social transformation processes for sustainable economic management and so further expanding Germany’s leading role on the road to a Green Economy.

26 SUSTAINABLE CONSUMPTION

Examples of funding projects

Research on evaluation systemsWhen is a product, a service or the work of a busi-ness sustainable as a whole? To give a resilient overall picture it is necessary to record and make available a range of extremely heterogeneous data. Depending on the economic sector under review, the spectrum can range from proof of origin, for example for food or raw materials, using new technologies such as gene testing or isotope analysis, through the recording of resources usage and emissions over the whole life cycle, to the evaluation of social questions, such as working condi-tions along global value chains. Numerous approaches to life cycle analyses (LCA) and other methods for evaluating sustainability already exist, but there is often no corresponding accounting data and necessary information.

A particular focus should be placed on more compre-hensive recording of the relevant data and sustainabil-ity aspects (in terms of hotspots) for a product group, a sector or a service in order to be able to evaluate their sustainability. This is a major challenge, particularly with products that have a complex composition, and it is important to develop suitable methods and best practice examples for checking adherence to sustain-ability standards, particularly for labelling and certi-fication systems whose award criteria comprise many stages in a supply chain. This could help to identify credible and trustworthy sustainability labelling. The labelling and recommendation of a few such indica-tors would make it easier for consumers to make an informed decision without being overwhelmed by ever more certificates and seals – there are currently over 450 ecolabels in use worldwide for various product categories and markets [7].

Analysis of rebound effectsIt has long been known that efficiency gains result-ing from new technologies alone are not enough to achieve resource efficiency. Rebound effects mean that a proportion of the efficiency gain is partially cancelled out by increased consumption elsewhere or is even overcompensated (backfire). One example that illustrates the different mechanisms involved is the automotive sector. The development of increasingly efficient engines in recent decades has only partly

led to lower fuel consumption. A large percentage of potential savings has been exhausted by increasingly larger, heavier and more powerful vehicles. If consum-ers do opt for very fuel-efficient vehicles such as three litre cars or hybrid vehicles, they are able to travel more or spend the money saved by lower consump-tion on other products or services, which themselves then exploit resources and pollute the environment. Additionally, since their intention when buying the economical car is to make a particular contribution to protecting the environment, the possibility exists that the consumer, who is eco-conscious, will be less aware of saving energy and resources elsewhere (psychologi-cal rebound effect).

Although researchers have long been aware of the rebound effect, until now very little has been done to examine it. Where any quantifiable information does exist, it relates at most to direct rebound effects. It is certain that the interacting effects of efficiency gains, price movements and consumer behaviour – and therefore the causes and manifestations of rebound ef-fects – are greatly dependent on the economic activity under consideration (energy, transport, food, cloth-ing, etc.). At this point it would be useful to identify, together with stakeholders, consumer sectors where rebound effects are particularly common and where suitable countermeasures can provide a corresponding contribution to the Green Economy. Tools for avoiding rebound effects can then be developed in sector-spe-cific projects. Fundamentals are the development of methods for ascertaining rebound effects, their analy-sis and quantification and the motivation and decision research of the consumers. A key question here is also which political tools (for example incentive systems, standards, taxes, and regulatory measures) can create framework conditions for avoiding rebound effects.

Local consumptionMost consumers are familiar with locally sourced food products. Local implies short transport routes, an intact environment and regional jobs, but, as with any other product, whether a local product is also sus-tainable must be determined by evaluation (life cycle analysis, for example). Under what conditions are local products and commodity flows sustainable? How can such sustainable products and commodity flows be supported? What models exist to involve consumers in

27

the development and financing of these innovations? These questions need to be tackled in dialogue with players “on the ground” in structurally different areas. Opportunities and risks for the development of flexible consumption and ownership models in this respect need to be analysed as part of an innovation and tech-nical analysis.

Ecological impact of microplasticsPlastic waste that is carried around the world by the wind and currents and as a result breaks into increas-ingly smaller fragments through a variety of processes leads to a build-up of microplastics, particularly in the sea. Research into the location, quantities and compo-sitions of microplastics in the sea is needed, focussing primarily on the impact of microplastics on ecosys-tems, food chains and organisms. The current prima-ry scientific objective is to record and evaluate the anthropogenic causes of pollution and the impact on the ocean and coastal areas resulting from microplas-tics. Germany, together with eleven partner countries, is initiating a number of other schemes at a European level including ecological pilot studies for harmonising methods and establishing the ecological effects of mi-croplastics as part of the Joint Programming Initiative “OCEANS” (JPI OCEANS).

In the systemic context, the problem of the ultimately visible impact of marine pollution leads to the source: the goal of implementing sustainable production and consumer patterns in the production of plastics at an international level. In a cross-sectoral approach the BMBF can track questions of the negative impact of pollutants on ecosystems, food networks and the economy along the entire chain of effect through to the consumer. Through its participatory research ap-proach, the sustainability research in the FONA frame-work programme offers the opportunity to prepare research questions with players from business, politics and civil society. In this way, earth system research can provide innovative information for decision-making and raise awareness in political agendas for sustaina-ble and interministerial solution strategies – from the source of plastic production, through issues of use and consumption, to the location of marine pollution in the world’s oceans.

“Green Economy promises ecological economic management through technical innovation and resource efficiency. Naturally it is reasonable to organise goods and services in an environmentally acceptable way, but the Green Economy is also based on the growth of consumption. It is debatable whether this growth target helps to forge sustainable lifestyles. This is where consumer research comes into play. In addition to ecological, economic and technical factors that define the debate on the Green Economy, it also ex-amines the social dimension. How do consumers behave? How do processes, and what the Green Economy has to offer, impact on lifestyles and the culture of consumerism? Social-ecological research such as this provides important impetus. It helps to define the growth of the Green Economy not only using economic criteria, but by putting people in a position to implement sustaina-ble consumption.”

Wolfgang Schuldzinski, Board of the Verbraucherzentrale Nordrhein- Westfalen e. V. (North-Rhine-Westphalia Consumer Organisation)

SUSTAINABLE CONSUMPTION

28 SUSTAINABLE SUPPLY UND USE OF ENERGY IN THE ECONOMY

4.4 Sustainable supply und use of energy in the economy

Current situation

The Federal Government’s energy concept aims to reduce primary energy consumption by 50% by 2050 [8]. The industrial, commercial, services and trade sectors account for over 40% of total energy consump-tion and around 70% of power consumption. Improved resource and energy efficiency offer opportunities for the economy and open up new possibilities in global markets, making them key to creating a Green Economy. Innovations in every sector of industry and throughout the value chain are needed to raise the efficiency potentials, but in addition to technological innovations economic and social-ecological cross-cut-ting analyses are required to create a knowledge base taking the complex associations and path dependen-cies into account to support strategic decisions both in businesses and at the political level.


Research for networked energy supply systemsThe Federal Government’s climate and sustainability targets anticipate a rise in energy efficiency and energy productivity. This includes reduced use of prima-ry energy, achieved for example through improved recovery of generated energy such as power and heat, and the reduction of individual consumption in the manufacturing and services sectors. Efficient controls and low consumption energy units are becoming more important. The physical, temporal and material networking of power supply systems, which has, up to now, received insufficient attention, appears to be a promising new approach. In a networked (decentral-ised) energy system excess energy can be specifically directed to alternative uses and may substitute costly long-term energy sources, while reducing dependence on raw materials. Intelligent control of energy flows calls for a control technology that balances supply and demand. The optimisation of production process-es with respect to in-house energy sources (such as CHP-driven or renewable energy-based production) may be a new approach for increased energy efficien-cy. In the future efficient, durable and flexible energy converters are an option for storage units for power, heat and fuels (for example power-to-heat, power-to-

gas, power-to-chemistry, flexible fuel cell). Research can help increase understanding of the systems and make the complex nature of networked energy supply systems manageable.

Renewable energies include hydropower, land-based and offshore wind power, solar energy, geothermal energy and bio-mass. By 2020 their percentage of gross final energy consump-tion should rise to 18%, and by 2050 to 60%. According to the coalition agreement, the percentage of power obtained from renewable energy sources in total power consumption should be increased to 40-45% by 2025 and to at least 80% by 2050.


1 Gross �nal energy consumption2 Provisional data

10

20

30

40

50

60

70

80

Percentage of renewable energies in energy consumption, %

1995 2000 2005 2010 ‘132 Target year‘20

Target:18

‘20

Target:40-45

‘50

Target:60

Target:80

Percentage of (gross) power consumption

Percentage of �nal energy consumption1

Status:


29

Research on the use of waste heat in different industry sectorsIn 2012, process heat provision accounted for just under 75% of end energy consumption in German industry. As a consequence industrial waste heat is of growing in importance in Germany and in other developed economies. Accordingly leverage for the case for sustainable and needs-based management of this resource is equally important. On the one hand, greenhouse gases can be reduced by the efficient use of waste heat (such as for downstream processes and cooling) and the associated resource savings, in line with the Federal Government’s sustainability and cli-mate targets. On the other, the use of industrial waste heat opens up opportunities for operating facilities more economically.

One element of sustainably dealing with industrial waste heat is the improved transfer and storage of heat, along with the transformation of excess thermal energy into alternative energy sources such as electric-ity (power generation), meaning that in future we need to exploit the use of weaker thermal energy sources through, for example, the use of improved heat pumps and compressors.

Research on power electronics – a pioneer in energy efficiencyPower electronics provides a key to energy savings in virtually every area in which electrical energy is converted. In industry this mainly involves generators, transformers and electric motors, together with feed-in and distribution of power in energy networks. In-telligent circuits, higher performance semi-conductor materials and improved structural and interconnec-tion technology can achieve significant efficiency gains in power electronics. These topics have already been the subject of several announcements by the BMBF.

Additionally, energy-saving electronic systems can open up new application areas such as Industry 4.0 and the Internet of Things, which, amongst other benefits, offer intelligent control and networking of industri-al plants to yield greater flexibility and energy and resource efficiency in production processes.

Research for economic perspectivesIn addition to technical solutions, a prime requirement of sustainable supply and use of energy is economic concepts that are economically sustainable in the long term. In this, an important task is the analysis and evaluation of the effectivity and efficiency of energy and climate policy tools and measures. Of particular interest here are the effects on both the wider econ-omy (growth, impact on jobs etc.) and on individual sectors, nations or population groups, involving both short-term effects (such as stress and relief) and long-term effects and dynamics (such as innovation and transformation, structural change). The entire energy system must be considered in this context.

SUSTAINABLE SUPPLY UND USE OF ENERGY IN THE ECONOMY

“Transformation of the energy system should become the driving force behind the social and ecological modernisation of society, and this makes it an important building block in the Green Economy. We can use technolog-ical and social innovations to drive forward the implementation of energy transformation and at the same time open up a wide variety of employment opportunities. Newly created jobs must be in line with the Good Work Index.”

Stefan Körzell, Member of the Federal Executive Board of the German Trade Union Confederation (DGB)

30 SUSTAINABLE SUPPLY UND USE OF ENERGY IN THE ECONOMY

Environmentally and socially compatible transformation of the energy system” pilot measureThe measure introduced in the “Social-ecological research” priority extends the technical component of energy transformation to the social-ecological connections. This is an integrated perspective that links technological aspects with economic, social and ecological questions and brings the relevant players together for the purpose of transdisciplinary research. The project contributes to the implementation of the “Energy technologies for the future” public dialogue. In 2011, the BMBF invited the public to dis-cuss their expectations and thoughts with experts from the scientific, economic and political commu-nities. In the pilot measure, knowledge and recommendations for action are being prepared for public participation in planning and decision-making processes in the transformation of the energy system, governance of transformation processes and development options for the energy system. Subjects addressed included questions on participation in grid expansion, acceptance of costs and participation (equity) of the transformation of the energy system, conflict resolution in the planning of renewable energies, new business models for the energy supplier, the role of energy cooperatives and private households, and the upgrading of buildings’ energy systems.

Components of these analyses include the practices and incentive structures of fossil energy resources suppliers, the development and operational methods of fossil energy markets, and the structure of emissions trading or effects with respect to the energy policy “triad” and climate policy goals.

These questions are being addressed in connection with the BMBF’s funding priority “Economics of climate change” [9], [10], core aspects of which are the thematic priorities “Shaping and effects of climate change measures and tools” and “Energy resources and climate-friendly energy supply”. The “Dialogue on climate economics” communications platform, which offers stakeholders from the economy, politics and civil society the opportunity to bring-in topics and questions of particular relevance to their point of view, was launched to support exchange between research and practical applications.

31

4.5 Sustainable mobility systems

Current situation

In the past few years traffic flows in Germany – par-ticularly goods traffic – have risen tremendously; a trend that according to current forecasts looks set to continue in the future. The challenge for a Green Econ-omy is to find areas where traffic can be avoided or at least can be so arranged as to make it more environ-mentally compatible. The increase in goods traffic is primarily attributed to a reduction in the extent of ver-tical manufacturing, meaning that businesses are in-creasingly acquiring precursor products from domestic and foreign suppliers. Increased online shopping is also an important factor in the transport of goods in urban areas. For years the dominant factor regarding personal transport, has been private transport, which accounts for some 80%, the majority of which – around 35% – is leisure-related, followed by business traffic at around 20% (Sustainable Development in Germany, Indicator Report 2014; Federal Statistical Office 2014). This sub-ject will see close involvement of other departments.


Research on the impact of developments relating to society as a wholeThere are a number of social developments that will directly or indirectly impact the traffic environment. These include the trend, increasingly observed in the younger generation, of turning away from the car, but also changing personal preferences regarding mobility use. It is important to a Green Economy to find evalu-ation criteria for “good” mobility and provide reliable data for decisions on mobility provider selection. This also includes the analysis of decision-making processes to identify action points for change (upheaval situa-tions).

Research on efficient logistics and shorter supply chainsThe extent of vertical manufacturing in many busi-nesses has fallen in recent years. As a result increasing volumes of precursor products are being acquired from both domestic and foreign suppliers, resulting in more complex supply chains and increasing goods traffic. The question is whether this trend is irreversible or whether the extent of vertical manufacturing in busi-nesses can be increased through appropriate incentives

or new technologies, particularly in view of develop-ments such as Industry 4.0 and 3-D printing.

The total domestic goods transport performance (road traffic, rail traffic, inland navigation traffic, pipelines and aviation) in ton-kilometres in relation to gross domestic product is referred to as goods transport intensity. The Federal Government’s target for 2020 is to reduce goods transport intensity by 5% as against 1999. This goal will not be achieved if current develop-ment continues at the same rate.



SUSTAINABLE MOBILITY SYSTEMS

2 Provisional data

1 Data not including air traf�c, pipelines and light commercial vehicle traf�c (< 3.5 t permitted total weight)

80

90

100

110

120

130

140

Goods transport economy1999 = 100

2000 2005 2010 ‘122

80,3

108,0

118,0

127,4

Status:

Target year2020

Target: 95

End energy consumption per ton-kilometre1

Gross domestic product (adapted for price changes)

Goods transport performance

Goods transport intensity

32 SUSTAINABLE MOBILITY SYSTEMS

Electromobility for sustainable individual mobilityThe increasing electrification of vehicle drive systems culminating in fully electric drives may be an im-portant element in reducing CO2 emissions and the de-pendence on oil. Electromobility offers the opportuni-ty to utilise renewable energies for individual mobility. Science and business are therefore working to develop an attractive electric vehicle that combines affordabil-ity, safety and comfort and a sensible range. The prime

requirements are better energy storage, more efficient components and systems, and high-performance ICT for connectivity between vehicles and automo-tive-based transport services. Research will help in this by providing innovative and sustainable solutions that offer lower energy consumption and appropriate rang-es. However electromobility also requires innovative users, beginning with the question of how individual mobility is formed, what usage patterns are demon-strated and how flexible users are prepared to be when choosing between different mobility options – their own car, public transport or car sharing.

Electromobility and logistics in an urban environmentElectromobility is not simply about replacing conven-tional drive systems, but also – and primarily – about examining how possible applications which may yield critical benefits can be achieved. One example is trialling alternative commercial vehicle concepts in cities and large conurbations (report on the state of implementation of the Freight Transport and Logistics Action Plan – Logistics Initiative for Germany, BMVI 2011). The rise in online shopping and accompanying returns has led to a significant increase in commercial traffic in German town centres. Electromobility makes it possible to combine new concepts in logistics with low-emission drive systems and so reduce the overall pollution caused by goods traffic in town centres. New visions, such as urban production, are also emerging for researching and trialling these systems.

Electric cars from a car sharing provider at a charging point in Berlin

The passenger transport intensity shows the passenger trans-port performance in passenger kilometres as a ratio of the gross domestic product. The Federal Government’s target for 2020 is to reduce passenger transport intensity by 20% as against 1999. This goal cannot be achieved if the development of recent years continues.



1 Provisional data

85

90

95

100

105

110

115

120

Passenger transport intensity1999 = 100

2000 2005 2010 ‘121

87,3

107,4

91,0

118,0

Status:

Target year2020

Target:80

Final energy consumption per ton-kilometre1

Gross domestic product (adapted for price changes)

Passenger transport performance

Passenger transport intensity

33

4.6 Infrastructures and intelligent supply systems for the City of the Future

Current situation

Urbanisation is currently a global development trend, which it must be assumed will continue into the future. This makes it all the more important to ensure today, for the purposes of intergenerational fairness, that our descendants can lead stable and prosperous life in an intact environment. It is essential to shape the associated infrastructures and supply systems in line with the goals of sustainable settlement develop-ment. Instead of building more and increasing capac-ity, the priority should be to use existing substances, to preserve the existing environmental and supply quality and to focus on renewal, while taking into con-sideration the foreseeable challenges of the future (cli-mate change, energy/resource efficiency, demographic change, the financial situation of communities, investment backlog) and using the new technological working arrangements and control options (Internet of Things and Services, cyber-physical systems, sensor technology and actuator technology, City OS).


The need for research arising from the goals of the Green Economy is being channelled into the intermin-isterial “City of the Future” flagship initiative, which is being run in parallel.

Research on intelligent networksNew intelligent system solutions – crossing all in-frastructures – and the identification and upgrading of synergy effects in the intelligent linking of infra-structures have the potential for greater energy and resource efficiency together with better coordination of supply and demand in the course of social change. This means integrating intelligent networks into existing structures as well as using present structures intelligently. Research must support cities in the conception, trialling and implementation of intelligent systems that are able to react flexibly to rapidly chang-ing requirements and possess a degree of openness for technological sophistication.

Research on resilient supply systemsUrban spatial structures and infrastructures must adapt to climate change, demographic and economic structure change, and changing claims on use by the public and businesses. It is important for resilient sup-ply systems to cater for settlements, the countryside and infrastructure as a whole and to be equally stable and flexible with respect to future upheaval in all three sectors. It involves innovative techniques and services for adaptation processes and compatible solutions for different cities and local communities. Key systems

The expansion of settlement and traffic areas is leading to the loss of natural ground functions through sealing of the soil and reduced agricultural and near-virgin land. The growth trend in settlement and traffic areas has declined perceptibly in recent years, but not enough to achieve the goal set for 2020.


INFRASTRUCTURES AND INTELLIGENT SUPPLY SYSTEMS FOR THE CITY OF THE FUTURE

40

80

120

160

1993-1996

2000 2005 2010 Target year2050

Target:30

Rise in settlement and traf�c areasin ha per day

Building areas and open spaces, plant areas1

Status:

Traf�c areasRecreation areas, cemeteries

1 excluding land used for mining operations


34 INFRASTRUCTURES AND INTELLIGENT SUPPLY SYSTEMS FOR THE CITY OF THE FUTURE

and the risks they face should be identified in order to seek out technical and economic alternatives. The development of systemic solutions should enable the specific decoupling of sub-systems and the creation of flexible modular and/or devolved network structures.

Application-oriented research on system solutionsLooking at urban spatial structures and infrastructures from a system point of view reveals various depend-ences between sub-systems. Analysis of the impact of measures in one sector on all other sectors (social, eco-nomic, technical, ecological) can identify synergy ef-fects (for example working and living, ecologically and economically efficient ICT solutions) which can then be trialled and investigated in suitable test areas. This is no longer simply a question of understanding and describing relevant system models, but is increasingly about the active change of existing systems through system innovations in a “system of systems”.

Research on control toolsThe roles of politics and administration, economics and civil society are changing. Hierarchical systems of control are giving way to a greater understanding of

comprehensive Governance through network coor-dination, participation, responsibility and integrated concepts alongside the formal democratic processes. The macroeconomic impact of centralised and de-centralised control should be investigated with this in mind. Further topics for research include the provision of data on climate protection (CO2 emissions per city) and the assessment and evaluation of subsequent costs resulting from changes in land use. Economic incen-tive systems for controlling infrastructure investments (such as certificates) can subsequently be developed and evaluated.

“For towns and cities with their multitude of functions, an ecologically-ori-ented economic policy will not only help improve the environmental situation in towns and cities; Green Economy uses innovative stimuli to place business within urban locations. The urban package of measures covers a number of areas including mobility/transport, water, waste disposal and energy. As the major public contractor of environmentally friendly goods and investments and as the supplier of power and heat through local energy suppliers, towns and cities become key players in the successful implementation of energy system transformation. At the same time towns and cities, with their eco-nomic development facilities, are important contact points for local business-es – particularly small and medium-sized and craft enterprises. They assist businesses on their way to a sustainable Green Economy, offering advice on resource and energy efficiency matters and acting as intermediaries in subsidy programmes and activities of the EU, the Federal Government and the Federal States. In this way, towns and cities support an application-oriented Green Economy Research Agenda which can jump-start sustainable economic man-agement at a local level.”

Dr. Ulrich Maly, President of the Association of German Towns and Cities, Mayor of Nuremberg

35

Example: Water sector – water in urban areas Much of the existing German municipal water management infrastructure has been in service for many years, resulting in a significant need for reinvestment in the near and medium-term future. The investment need in Germany alone is estimated to be as much as 8 billion euros annually over the next few years. At the same time, the complex water supply and sewage treatment system that has grown up over decades is facing increasing pressure for change. The demands on resource efficiency, eco-logical sustainability and economic viability are rising, and municipal water management is also facing growing challenges in terms of climate and demographic changes. The adaptation of municipal water management to meet these changes desperately needs new cross-sector system solutions. Cooperation between large and growing conurbations and their surrounding areas will, in the future, be a key issue in regional resource management with a corresponding need for research and development.

Scientific studies confirm a strong innovation dynamic and good export potential (see water man-agement innovation report) for devolved/semi-devolved water infrastructure systems and the trace material elimination sector. In particular, ongoing concepts for adaptation to sometimes extremely rapid demographic changes need to be developed. Internationally, metro-regions (among others) offer research opportunities for the potential implementation of devolved or semi-devolved systems. In Ger-many in the medium term, demographic change is primarily affecting the shrinking regions in the new Federal States, but will, in the long term, also impact the old Federal States.

INFRASTRUCTURES AND INTELLIGENT SUPPLY SYSTEMS FOR THE CITY OF THE FUTURE

36 WORK AND QUALIFICATION IN THE GREEN ECONOMY

5 Work and qualification in the Green Economy

The structural changes associated with the move to-wards the Green Economy have a major qualitative and quantitative impact on the world of work. It is evident that society wide transformations such as this will also give rise to changes in the labour market. Additional jobs are created, others are lost or reorganised.

For years there has been continuous, EU-wide, growth in jobs in areas more or less directly related to the environmental goals of a Green Economy, including renewable energies, waste and water resources man-agement, and air quality, together with the restoration and conservation of biodiversity. Energy efficiency measures and the building of a green infrastructure also positively impact the labour market [11].

These changes do not however play out predominantly in those sectors of industry directly associated with environmental protection; to a far greater extent, work content is being changed by the ecological moderni-sation of production and services in every industrial sector throughout the value chain. Requirements linked to the transformation to the Green Econo-my, such as those for energy and resource efficiency, affect virtually every sector of industry; raw materials, through manufacturing, to construction, services and agriculture.

To date there has been limited output from research and little concrete data on the impact of this develop-ment on employment. We must, therefore, investigate the effects on jobs across individual areas of the value chains and develop scenarios for the job gains and losses that can be anticipated. What net effects the process of transformation to the Green Economy will bring with it is a question that has not yet been fully answered.

Research questions also exist regarding the quality of work. What quality do the jobs created through sustainable innovation, or those where working con-ditions are changed, have? The relationship between ecological and social development must be illuminat-ed by research and discussed in dialogue with stake-holders. It cannot however be taken as read that these changes will automatically lead to better working conditions and “good work”; health and safety aspects are important because the changeover to “greener” technologies, products and processes may also bring with it new risks.

Changes to work content also place new demands on the qualification of the workforce. The main point here is to structure training so that it mirrors prac-tical applications as closely as possible and is geared to the needs of the labour market, to prevent “skills mismatches”. The introduction of energy- and re-

“The changeover to a Green Economy is an opportunity and a challenge, not just for the environment industry but for the economy as a whole. It would be quite wrong to divide jobs into ‘green’ and ‘non-green’, in other words into good and bad. To fully exploit the high employment potential of a Green Economy requires a comprehensive approach underpinning the ecological modernisation of all sectors of industry along the whole value chain. This requires dependable energy policy with globally competitive energy prices, predictable and investment-friendly framework conditions, and innovation in environmental protection and energy efficiency. Only if such ‘greening of the economy’ receives real focus as being a process for the entire economy can ecological change become the driving force for growth and employment.”

Peter Clever, Member of the Board of Management, Confederation of German Employers’ Associations (BDA)

37

source-conserving innovations demands new, often higher qualifications. But what qualifications are need-ed to be able to master the transformation to a Green Economy? Are specialisms or cross-cutting qualifica-tions called for? Is it only areas of work that change, or are new professions being created? The ability to transformation to the Green Economy through suit-ably qualified workforces necessitates better predic-tions of developments in qualification needs across all sectors and branches of industry. In addition, clarifi-cation is required on how training needs for environ-mentally-friendly innovation can be integrated into both emerging and established curricula in training and education programmes in every affected sector. The dual education system and involvement of social partners form a solid basis for this.

Innovation capability through design solutions for ecological workingThe development of integrated package solutions for an ecological business restructure can generate impetus to combine the exploitation of sustainability potential with increased innovation capability for the business as well as high quality of work and motiva-tion for employees. Development of competence and the mobilisation of both expertise and experience for ecological innovation are key considerations. Design solutions for ecological working such as these can be successful only if they offer businesses economic ben-efits. Added to this, individual businesses often need support, for example in funding ecological innovation and participation competence in design processes for ecological working. Regional platforms with players from businesses, associations, and the political and ad-ministrative sectors can raise the innovation capability of individual businesses through additional learning and innovation impetus and support the application of innovative approaches at the interface between quality of work and ecology.

WORK AND QUALIFICATION IN THE GREEN ECONOMY

38 GREEN ECONOMY WORLDWIDE

6 Green Economy worldwide

Today, value chains and networks and their associated emissions and pollution are widely distributed across the world. Sustainable economic management is there-fore a global issue and international responsibility has to be accepted.

A wide range of efforts are already underway world-wide to drive forward the development of a Green Economy, and the associated activities at international level have primarily been accelerated by the Green Economy Report [12] produced by the 2011 United Nations Environment Programme (UNEP) and through the Rio+20 World Sustainability Summit in 2012, at which Green Economy was the main topic of debate and was discussed as a milestone on the road to sus-tainable development and the reduction of poverty.

The UNEP sees two core tasks for its Green Econo-my initiative. In a first step, individual countries are advised on their national processes for the develop-ment of a Green Economy. As a result 30 countries are being supported, until 2020 as part of the “Partnership for Action on Green Economy” (PAGE), in developing national Green Economy strategies to create new jobs, deploy environmental technologies and so reduce pollution and poverty [13]. The second step is to forge links between scientific and economic communities, NGOs and international partner organisations in order to drive forward the development of a Green Economy worldwide. At the 2012 Green Economy Conference in Berlin, Executive Director of UNEP Achim Steiner stressed the importance of concentrating on bringing the Green Economy to the fore in international coop-

eration over the next few years. In addition to UNEP, over 20 other UN organisation units are involved in similar activities.

Closely related to the Green Economy concept is the Green Growth Initiative launched in 2009 by the OECD with the aim of “developing a strategy for environ-mentally compatible growth that combines economic, ecological, social, technological and development-spe-cific aspects in a comprehensive conceptual frame-work.” [14] The strategy is based on an economic and environmental policy that takes into account the value of natural capital as a factor in production and aims to reduce pollution through cost-efficient methods. This makes allowances for the fact that there is no quick fix for implementing this strategy. Environmentally com-patible growth is regarded as an underlying concept for sustainable development. The primary aim is to find a suitable design for the general political frame-work conditions and market-based tools for making pollution and resource consumption more costly, and funding innovations with the focus on efficiency tech-nologies. Current activities are brought together on the “Green Growth Knowledge Platform” (GGKP) [15].

At European level, the next few years will, as part of the new EU research framework programme “Horizon 2020”, see innovations that are aimed at the devel-opment of a Green Economy. Topics announced for the social challenge “Climate, environment, resource efficiency and raw materials” include a number of tie-ins with topics on the Green Economy Research Agenda, in particular current EU Calls on the topics

“I hope that the conference in Berlin [Green Economy Conference, “A New Economic Miracle?”] will inspire greater confidence in not just the future of the Green Economy in Germany, but also in the role of Germany in the inter-national community in the development of this concept.”

Achim Steiner, Executive Director of UNEP, at the “Green Economy – A New Economic Miracle?” Conference on 4 September 2012 in Berlin

39

“Waste: A Resource to Recycle, Reuse and Recover Raw Materials”, “Water Innovation: Boosting its value for Europe” and “Growing a Low Carbon, Resource Efficient Economy with a Sustainable Supply of Raw Materials” [16]. The focuses set at national level in the present research agenda should be linked with the corresponding initiatives at EU level. A “Knowledge and Innovation Community Raw Materials” (KIC) with German involvement, for example, is in preparation as part of the European cooperation.

International cooperation arrangements in research projects can be a first step to reinforcing economic col-laboration with other countries which in turn acceler-ates environmental and socially compatible economic management. Bi- and multilateral cooperation play an important role in the development and implementa-tion of sustainable innovations, particularly coopera-tion with developing and newly industrialised coun-tries. Germany is taking international responsibility at each stage of the value chains that contribute to our prosperity. These cooperations also create opportuni-ties for German players to find new international part-ners and gain a foothold in new markets. The BMBF is already funding a number of international projects and will continue to expand funding. For example, it has been supporting the development and implemen-

tation of sustainable solutions for sustainable water and land management, climate protection and efficient resource use in various partner countries totalling around 60 million euros (planned) since 2010 as part of the “International partnerships for sustainable climate and environmental technologies and services (CLIENT)” funding measure. The idea is to strategically boost international partnerships as part of a new fund-ing measure, CLIENT II, from 2015.

Example of CLIENT: Research cooperation with China: Demonstration site in the sewage treatment areaThe world’s first “SEMIZENTRAL” sewage treatment plant was built at Qingdao in China. The inno-vative supply and disposal system is highly energy and resource efficient and is geared to the needs of the rapidly growing urban areas in newly industrialised countries, particularly in regions suffering from water shortages. The recently built plant is part of the long-established German-Chinese cooperation in research and development and is funded by China and the Federal Ministry of Education and Research (BMBF), each contributing around 7 million euros.

A semi-centralised plant makes the treatment of water in towns and cities with populations of 10,000 to 100,000 inhabitants possible. Grey water, in other words low-level contamination waste water from showers and washing machines, is treated and used to flush toilets providing water savings of up to 40%, in addition to which biowaste is treated along with the residual wastewater or black water ena-bling energy in the form of biogas to be obtained. This allows the entire plant to be self-powered. The raw materials phosphorus and nitrogen are recovered, and together with the sanitised sewage can be recycled for agricultural purposes. The entire plant is a modular structure enabling it to grow as the city develops.

Semizentral plant at the site of the World Horticultural Exposition at Qingdao, China

GREEN ECONOMY WORLDWIDE

40 LIST OF END NOTES

List of end notes

[1] Federal Government: “Perspectives for Germany – Our Strategy for Sustainable Development”, URL: http://www.bundesregierung.de/Content/EN/StatischeSeiten/Schwerpunkte/Nachhal-tigkeit/nachhaltigkeit-2006-07-27-die-nation-ale-nachhaltigkeitsstrategie.html (last accessed on 04.02.2015)

[2] Federal Government (2014): “The new High-Tech Strategy”, URL: http://www.hightech-strategie.de/de/The-new-High-Tech-Strategy-390.php (last accessed on 04.02.2014)

[3] Federal Ministry of Education and Research (2010): “National Research Strategy BioEconomy 2030”, URL: http://www.bmbf.de/pub/Natinal_Research_Strategy_BioEconomy_2030.pdf (last accessed on 04.02.2015)

[4] Federal Ministry of Food and Agriculture (2013): “National Policy Strategy on Bioeconomy”, URL: http://www.bmel.de/SharedDocs/Down-loads/EN/Publications/NatPolicyStrategyBioecon-omy.html (last accessed on 04.02.2015)

[5] BMBF (2014): “Destionation Bioeconomy – Re-search for a Biobased and Sustainable Economic Growth”, URL: http://www.bmbf.de/pub/Des-tination_Bioeconomy_bf.pdf (last accessed on 04.02.2015)

[6] National Masterplan Maritime Technologies, URL: http://www.nmmt.de (only available in Ger-man, last accessed on 04.02.2015)

[7] Ecolabel Index, URL: http://www.ecolabelindex.com/ (last accessed on 04.02.2015)

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