1. Seite 1 Götz von Stumpfedt 10.03.2013 International Experiences and GIZ’s Contribution to a Shift towards Green Economic Development ProGED Start Up Event 11 to 13 March 2013 Marco Polo Hotel, Cebu City Götz von Stumpfeldt, GIZ Economic Policy and Private Sector Development - Green Economy -

2. Seite 2 Götz von Stumpfedt 10.03.2013 Content I.Green economy: What is it? II.Concept of ecological footprint III.The eco-efficiency revolution: Decoupling growth from resource inputs IV. Success factors for green economy strategies V.GIZs approach: Greening economic policy advice

3. Seite 3 Götz von Stumpfedt 10.03.2013 Green Economy “An economy that improves human well-being and social equity while simultaneously reducing environmental risks and ecological scarcities.“ (UNEP) Green Growth „ Green Growth describes a growth strategy that shapes economic processes in an ecologically sound way and creates new jobs and income opportunities in new green sectors. It reduces environmental impact to a minimum.“ (BMZ Broschüre Ökologisches Wirtschaften, Green Economy, S. 8)

4. Seite 4 Growth – ecological objectives Götz von Stumpfedt 10.03.2013 GDP – the gross domestic product indicates the value of all goods and services produced in a country during one year it is important to understand, whether the economy is growing or shrinking Economic growth can be linked to environmental degradation; New indicators have been developed that give important information additional to the GDP. The Economics of Ecosystems and Biodiversity (TEEB) study is an international initiative to draw attention to the global economic benefits of biodiversity. It calculates the economic value of natural resources as the rainforest.

5. Seite 5 Payments for ecosystem services (PES) Götz von Stumpfedt 10.03.2013 is the practice of offering incentives to farmers or landowners in exchange for managing their land to provide some sort of ecological service. 1997 Nature magazine article estimated the annual value of global ecological benefits at $33 trillion, a number nearly twice the then global gross product. There are “big three” among these 24 services which are currently receiving most of the money and interest worldwide. climate change mitigation, watershed services and biodiversity conservation e.g. UN-REDD Program is the United Nations collaborative initiative on Reducing Emissions from Deforestation and forest Degradation (REDD) in developing countries.

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7. Seite 7 What does the ecological footprint mean? Götz von Stumpfedt 10.03.2013 The ecological footprint represents the amount of biologically productive land and sea area necessary to supply the resources that a human population consumes, and to assimilate associated waste in a given technological context It estimates how much of the Earth it would take to support humanity if everybody followed a given lifestyle. For 2007, humanity's total ecological footprint was estimated at 1.5 planet Earths; that is, humanity uses ecological services 1.5 times as quickly as Earth can renew them. It represents an accounting system for bio-capacity that tracks how much bio-capacity there is, and how much bio-capacity people use. Every year, this number is recalculated to incorporate the three-year lag due to the time it takes for the UN to collect and publish statistics and relevant research.

8. Seite 8 Components of the Footprint Cropland Fishing Grounds Carbon Footprint Grazing Land Forest Built Area Götz von Stumpfedt 10.03.2013

9. Seite 9 Ecological Creditors and Ecological Debtors Götz von Stumpfedt 10.03.2013

10. Seite 10 Götz von Stumpfedt 10.03.2013 Relative and absolute decoupling

11. Seite 11 Götz von Stumpfedt 10.03.2013 Decoupling of energy consumption and GDP growth in Germany Resource productivity GDP (gross domestic product) Resource extraction and imports Source: Federal Agency for Statistics Resource productivity and growth

12. Seite 12 Götz von Stumpfedt 10.03.2013 Decoupling of energy consumption and GDP Decoupling of energy consumption and GHG-emissions Germany Efficiency Substitution

13. Seite 13 Götz von Stumpfedt 10.03.2013 Germany Success factors (1) 1.Political system: Ability to quickly integrate the new issues  learning to formulate and implement policies  consensus orientation/ corporatism integraton of stakeholders

14. Seite 14 Götz von Stumpfedt 10.03.2013 2.Environmental policy is innovation policy Regulative policies Feed-in-tariffs Environmental taxes Germany success factors (2) Strong and competitive green industries green business services

15. Seite 15 Success Story China (1) 11 th Five-year Plan (2006-2010): Allocation of a significant share of investments to green sectors  esp. renewable energy and energy efficiency Wind Power Annual growth rate of additional generating capacity from wind power: more than 100% from 2005 to 2009 New installations in 2009: 13,8GW  China led world in added capacity = 2 nd in terms of installed capacity, after the US Solar Power China is largest Solar PV manufacturer Produced 45% of global solar PV in 2009 With more than 12 GW of large projects in the pipeline, it would rapidly become a major market in Asia and the world China is largest market for solar hot water with nearly 2/3 of global capacity  more than 10% of Chinese households rely on the sun to heat their water with more than 160 million sq. meters as total collector area

16. Seite 16 China Success Story (2) Job Creation Energy sector output is worth US$17 bn. and employed an estimated 1,5 million (2009), out of which:  600,000 in solar thermal industry  266,000 in biomass generation  55,000 in solar photovoltaics  22,200 in wind power  In 2009 alone, an estimated 300,000 jobs were created.

17. Seite 17 Götz von Stumpfedt 10.03.2013 Comparing industrialized countries Most competitive countries are less polluting Environmental sound is innovative Environmental sound policies are innovative

18. Seite 18 GIZ‘s approach: Establish green growth as a cross-cutting issue Götz von Stumpfedt 10.03.2013 Change framework conditions to integrate external costs Eco-taxes; reduction of subsidies Make use of cost-effective environmental investment Promote eco-efficiency, profitable environmental management PREMA, Pro-Klima, Green industrial parks, eco-Innovation Create green markets Green procurement, feed-in-tariffs for renewable energies Green finance Implement environmental and social standards

19. Seite 19 Götz von Stumpfedt 10.03.2013 Reduce market failure  Reduction of environmentally critical subsidies e.g. fuel subsidies  introduction of ecological taxes  Integrate environmental aspects into poverty reduction strategy papers (PRSP)  introduce feed-in tariffs for renewable energies Integrate costs of pollution into production costs Change framework conditions to integrate external costs

20. Seite 20 Introduction of ecological taxes in Vietnam Götz von Stumpfedt 10.03.2013 Taxing refined fuels and coal energy and certain chemicals (HCFCs) selected pesticides and soft plastic bags. Expected results reduction of CO 2 emissions by 7,5% revenues 1,5 billion Euro/ year reduction of waste. Change framework conditions to integrate external costs

21. Seite 21 Götz von Stumpfedt 10.03.2013 Cost structure of the manufacturing sector Germany Material 44,8 % Saving potential 20% Personnel 18,7% Material costs: 500 bn. Euro Saving potential: 100 bn. Euro Source: DESTATIS 2009 Make use of cost-effective environmental investment

22. Seite 22 Götz von Stumpfedt 10.03.2013 During the last decades, in Germany material and resources productivity has risen, but much slower than the productivity of labour. 350 300 250 200 150 100 50 0 1960197019801990 Productivity of labour Productivity of material Productivity of energy Development since 1960=100 (West Germany only) Make use of cost-effective environmental investment

23. Seite 23 Götz von Stumpfedt 10.03.2013 Material- and Energy Flow Diagram Make use of cost-effective environmental investment

24. Seite 24 Götz von Stumpfedt 10.03.2013 Value Stream and Cost Diagram Make use of cost-effective environmental investment

25. Seite 25 Götz von Stumpfedt 10.03.2013 PREMA Saving Potentials EnergyWater Steel Make use of cost-effective environmental investment

26. Seite 26 Where is the problem How big is the problem Why do you have the problem What can we do about it Who does what by when How to go on Cycle of change GIZ Prema approach Cost Saving potentials ? Make use of cost-effective environmental investment

27. Seite 27 economic efficiency organisational learning environmental performance Capability to implement changes Less waste, air emissions and effluents Cost savings and Increase in productivity Make use of cost-effective environmental investment GIZ Prema approach PREMA = triple win

28. Seite 28 continuous application in the company Elements of the PREMA Programme Infotraining to PREMA 2 hours – 1-day workshop Cost Management Module 3 workshops of 2-3 days each Good Housekeeping Module 3-day workshop network meeting network meeting network meeting Make use of cost-effective environmental investment

29. Seite 29 Götz von Stumpfedt 10.03.2013 Example: CHINA – application of methodology „Profitable Environmental Management“ (PREMA) Approach  PREMA Training of 3 Trainers, 42 Consultants, 128 representatives of companies  Implementation of 11 training programs in 5 cities  Implementation of 840 PREMA measures in more than 60 companies Results  64 companies, implementation of more than 800 individual measures  Investment of approx. 6,5 million € in plants that led to annual net saving of approx. 13,5 million € (average payback period: 5,2 months)  Altogether, up to 30% of energy, 20% of water and 10% of materials have been saved Make use of cost-effective environmental investment

30. Seite 30 Götz von Stumpfedt 10.03.2013 Make use of cost-effective environmental investment

31. Seite 31 Proklima Integrated ozone and climate protection with focus on natural refrigerants with low-GWP and energy-efficient applications. –16 years worldwide initiatives –~ 235 projects –~ 40 Partner countries –~ 100 Mio tons CO 2 eq. reduced Make use of cost-effective environmental investment

32. Seite 32 Global relevance of cooling More than 50% of energy consumption in hotels & resorts for cooling and air conditioning Ca. 15% of global energy consumption for cooling (7% growth/year until 2050) [IEA] Approx. 40% of energy consumption in urban areas for refrigeration and air conditioning Up to 40% of goods perish along the (missing) cool chain Refrigerator and air conditioning unit are (next to light and tv) the top investments for poor families Up to 80% of energy costs of poor households come from the household refrigerator Make use of cost-effective environmental investment

33. Seite 33 Case study Ramada Benoa Hotel, Bali (Indonesia) Installation of new air conditioning system 180 Guest rooms, spa, restaurant, etc Energy consumption: 3.2 Mio kWh/yr (old system) Savings: ca. US$ 15,000/month, 1.8 Mio kWh/yr, Return on Investment: 12 Months Save 1,500 tonnes CO2eq/yr, between 40–60% lower CO2eq emissions Götz von Stumpfedt 10.03.2013 Make use of cost-effective environmental investment

34. Seite 34 Approach Capacity building for local AC manufacturer Independent energy and emission audit Redesign of AC products Pilot installation in hotel Training of local technicians (installation, operation, maintenance) Promotion of results and experience, replication Best practice in national strategy for sector transformation Make use of cost-effective environmental investment

35. Seite 35 Sustainable management of industrial zones in Tunisia: 121 industrial zones in which 50% of all companies produce. GMG is a group of companies which together provide infrastructures such as waste water. GIZ  consults how to increase resource efficiency and how to reduce emissions.  acts as a moderator/intermediary btw. governments and industries. Götz von Stumpfedt 10.03.2013 Sustainable Management of Industrial Zones Make use of cost-effective environmental investment

36. Seite 36 Götz von Stumpfedt 10.03.2013 Addresses all levels of the innovation system: Product, process, service, and usage system innovations etc. Improvement of framework conditions: Environmental policy/ Internalization of external costs, financial instruments, public procurement rules Innovation capacity by firms: Eco innovation, firm competitions, ecological services, incubators, education/ training and research Cooperation/networking btw. research/ knowledge suppliers and companies, btw. companies, btw. companies with innovative solutions and their costumers  Consulting Project in Sustainable Innovations: Programme supporting SSMEs in Egypt Innovation and Technology Development Ecological Innovations Make use of cost-effective environmental investment

37. Seite 37 Summer academy sustainable entrepreneurs 2011 et 2012, GIZ Algeria Business plan competition54 winners selected Summer school: training, mentoring, business plan development Create awareness Support high potential start-ups Stimulate innovation Make use of cost-effective environmental investment

38. Seite 38 Development of a platform to facilitate and promote innovation, collaboration and entrepreneurship for the green economy Services: facility (fab lab, creativity corner), training (green skills, innovation management, marketing), consulting (project feasibility, energy efficiency) Partners: Ministry of Trade and Industry, Ministry of Education, University of Cairo, Youth NGO Ice Hub - Egyptian-German Program Private Sector Promotion and Employment Promotion: Make use of cost-effective environmental investment

39. Seite 39 Create green markets Green procurement and green labels Götz von Stumpfedt 10.03.2013 Green procurement and eco-labelling project in Bangkok The Green Public Procurement in Thailand is strengthened. The new Green Public Procurement strategies in Thailand are disseminated to other selected countries in Southeast Asia. 2) Create green markets

40. Seite 40 Policy Consulting: Intersections of financial, environmental and energy policy Integration of ecological aspects within regulatory frameworks of banks and other financial service providers Innovative concepts of financing for: SSMEs renewable energies investments in energy efficiency Financial system development Green Finance Götz von Stumpfedt 10.03.2013 Green Finance

41. Seite 41 India: SSME Promotion in India Götz von Stumpfedt 10.03.2013 Green finance for improvements in energy-efficiency. The development of loan products for the purchase of clean and energy- efficient technologies. Energy-efficient loan is tested in a light metal cluster involving ca. 10.000 SSMEs. GIZ: consults banks like the State Bank of India in their development of loan products for clean and energy-efficient technologies acts as intermediary btw. banks and industry Green Finance

42. Seite 42 India: Sustainability in the Banking sector Götz von Stumpfedt 10.03.2013 Support to the State Bank of India and other banks. Integration of environmental issues and other dimensions of sustainability in their management strategies. Integration of environmental and social aspects into lending decisions and to evaluate risks relative to these issues. Development of trainings to integrate adaptation to climate change into management strategies. Banks as multipliers for sustainability issues. Reducing Carbon footprint of companies in textile industries. Green Finance

43. Seite 43 Systemic and systematic integration of ecological aspects and criteria in the promotion of value chains, which means at all levels of the value chain: Interactions btw. value chains and climate change as well as Resource efficiency Identification of new, ecologically sustainable business opportunities & models Indonesia ( Local und Regional Development, LRED)  Value chains in tourism Promotion of Value Chains Green Value Chains – Basic Approaches Götz von Stumpfedt 10.03.2013 Green Finance

44. Seite 44 Bangladesh: Social and environmental standards in industry esp. textile industry Götz von Stumpfedt 10.03.2013 Pressure to respect social and environmental standards Development partnerships with international retail enterprises and local partners; Bangladesh Garment Manufacturers & Exporters Association; Advise the development of new environmental guidelines on the national level. Training of entrepreneurs, managers and workers in energy- and resource- efficiency and the treatment of chemicals and wastewater 200 enterprises were able to step up one staircase in ILOs classification  Respect of social and environmental standards is raising productivity; the project aims at documenting these “business cases” and wants to cooperate with local consultants to make sure that positive experiences are being scaled up to a national level. Implement environmental and social standards

45. Seite 45 Götz von Stumpfedt 10.03.2013 Thank you very much for your attention! goetz.stumpfeldt@giz.de