Global Green Growth Forum, October 8-9 2012, Copenhagen
The 2nd Global Green Growth Forum took place on 8-9 October, bringing together 250 business, public and civil society leaders committed to advancing inclusive green growth. The fragile global economic recovery remains an important and challenging backdrop, but the assembled leaders recognise that as growth picks up again across the globe, there cannot be a return to business as usual. Acknowledging the deliberations and outcomes of 2012 G20 Summit in Los Cabos and in particular Rio +20, the discussion focused on concrete actions to contribute to the implementation of “The Future we want”. Sustainable, inclusive growth patterns must be rapidly established to ensure that prosperity can be sustained also in the long run.
The Global Green Growth Forum is a unique platform to catalyse partnerships that can rapidly bring to scale green growth opportunities. Realizing the potentials of green growth requires the effective mobilization at scale of financial, technological and human capital. This will only be possible if governments and the private sector collaborate at the local, national and the international levels to overcome barriers, and create the right incentives for actors to innovate and invest.
The Global Green Growth Forum was opened by the Prime Minister of Denmark, Helle Thorning-Schmidt, and by the partner countries represented by the Prime Minister of the Republic of Korea, Hwang-sik Kim, and the Minister of Environment and Natural Resources from Mexico, Juan Rafael Elvira Quesada. Then followed speeches by the new partners: Vice Minister National Energy Administration from China, Liu Qi; Chairman of the Administrative Control and Transparency Authority of Qatar and the Incoming President of COP18, HE Abdullah bin Hamad Al-Attiyah; and the Minister for Medical Services from Kenya, Peter Anyang’Nyong’o. The broad geographical composition of the partner countries underscores the global relevance of the issues discussed at the 3GF and the interest in pursuing sustainable solutions through international collaboration and building of new alliances.
The overarching theme of the 3GF 2012 was resource efficiency and growth. Recognizing that a return to higher growth rates and employment continue to be at the forefront of politics across the globe, the 3GF 2012 explored the economics and the broader political economy of green growth. The Forum found that greening the global economy offers opportunities for businesses, communities and nations. This is underpinned for example by the growing markets in clean technology and renewables. Furthermore, going green through enhancing resource efficiency and productivity is increasingly seen as important parts of improving competitiveness both at company and national level. The need to work with green growth issues at the city and regional level was highlighted, such as the suggestion from IADB to collaborate with the Global Green Growth Forum to boost green growth also in the Caribbean and the Latin-American region.
There was a need to increase the sense of urgency to act. Arguments for postponing the transition efforts until after the current economic crises were dismissed by compelling evidence, presented by various institutions during 3GF, that the cost of inaction would be even greater.
Leadership from all stakeholders is needed to speed up the transition to green growth, taking into account national priorities. In particular political leadership was needed to create an enabling framework for businesses to act. The political economy of green economy will need to be understood when moving forward to ensure broad support. The importance of social mobilization in support of green growth was underlined.
Closing the gap in financing for the transition to a green growth pathway was highlighted as one of the most urgent needs. Key is to catalyse private investment through financial innovation, and leverage scarce public finance and ensure investment grade public policies. The need to reduce fossil fuel subsidies and divert investments currently flowing into carbon intensive development into green growth was highlighted. Several partnerships launched and progressed at the 3GF were specifically about financial innovation, with particular focus on energy efficiency financing and the design of more effective financial instruments for ensuring country and political risk.
Climate change and natural resource depletion disproportionately impact poorer countries with developing countries facing the gravest consequences whilst lacking resources to address these impacts of upscale opportunities. The 3GF emphasised the inclusiveness aspects of the green growth agenda when designing new initiatives.
Technological innovation and in particular disruptive innovations are essential elements in the transition to green growth, as well as diffusion and adaption of green technologies, particular in developing countries. Key is new ways of bringing known and new technologies together, changing services provided, and use ICTs more effectively to advance integration e.g. smart cities, smart girds etc. The importance of good framework conditions was highlighted. It was pointed out that carbon pricing remain essential in promoting low carbon technologies and technologies to enhance resource efficiency.
The 3GF also offered an opportunity to review recent years’ experience with mega-partnerships involving private and public actors also at a global scale. These Mega Partnerships, that include Sustainable Energy for All (SE4All), the Green Growth Action Alliance (G2A2), the Global Dry Land Alliance (GDLA) and the Water Resources Group (WRG), exemplify how to create large scale partnerships, international impacts and outcomes. At the same time, the discussion emphasized the importance of local solutions and local implementation, the need to have a dedicated core of public and private organisations involved, to stay focused on where the partnerships can make a difference, keep flexible and ensure broad distribution and uptake of lessons learned.
Recognizing that there is not one model for achieving green growth, the Forum featured discussions of relevant experiences from six countries: Brazil, China, Germany, Indonesia, Morocco, and Turkey. In order to exploit the unique character of the 3GF, the focus was on public private partnerships in bringing forward sustainable solutions at country level. The sessions facilitated cross country learning and pointed to commonalities for advancing green growth at country level, including political leadership, private sector entrepreneurship, and innovative financing schemes.
3GF provided an exceptional opportunity to engage directly in dialogue between high-level business and political leaders through a number of smaller plenary settings. High-level speakers `stepped off the stage` and spent 60 minutes probing, and being probed, on their role, experience and hopes for advancing green growth through public-private collaboration across sectors. These smaller plenaries were staged in two series over the two days, focusing on the following themes, Day One: “Making Resource Efficient Growth Inclusive” and Day Two: “Breakthroughs for Resource Efficient Growth”.
3GF 2012 featured Public Private Strategy Sessions designed to explore and bring forward concrete suggestions and recommendations on aspects of green growth where public and private action is needed. 11 Public Private Partnerships were discussed and brought forward. They are all presented in the annex. Highlighted outcomes from the sessions include:
3GF launched a public private partnership to accelerate policy innovation in support of power sector transformation. This Partnership is based on the 21st Century Power Partnership (21 CPP). Recognizing the critical role that the power sector plays in achieving green growth, the Partnership will engage the private sector in advancing policies for reliable, affordable, equitable, and clean electricity systems. National Renewable Energy Laboratory (NREL) is leading this initiative.
3GF pioneered a European PPP on promoting sustainable bio-based growth through securing finance for shared research and innovation facilities to the amount 3.8 billion EUR. The importance of reaching to civil society was recognised. The partners include the European Commission, Novozymes and other bio-based industries.
3GF launched a new PPP on energy efficiency finance. This aims to create a new market for energy efficiency services in industries through the banking system. This will facilitate senior management’s decision making on concrete energy efficiency investment. Key partners are Institute for Industrial Productivity, Global Green Growth Institute and HSBC.
3GF progressed a PPP on procurement and private finance initiatives that will put in place projects to position public procurement as a driver for green growth. The PPP is led by International Institute for Sustainable Development and includes partners from public sector (i.a. State Government of Sao Paulo, Brazil), private sector (i.a. Philips, Danfoss, Abu Dhabi Sustainability Group ).
3GF launched a new PPP on Energy Efficiency Indicators in the area of motor systems, which represent a huge and largely untapped, cost-effective source for industrial energy savings. Development of indicators will help decision-makers and industry in rapid deployment of EE measures. UNIDO and Global Green Growth Institute is leading this initiative and reaching out to private sector.
Possibilities for new public private partnerships were explored in a number of informal breakfast sessions. There was great interest in exploring further possibilities for establishing partnerships in the areas of food future to reduce food loss and waste; green innovation, biofuels for aviation and green business models. These potential partnerships will now be further developed with a view to bringing them forward in the context of the 3GF. Moreover, the sessions also illustrated and discussed best practises and show-cased a concrete green solution: Hydrogen cars.
The Way Ahead
A full report from the 3GF2012 will be available shortly focussing on concrete steps forward in particular with regard to the PPP-tracks.
The conclusions and insights from the 3GF 2012 will be brought into high level international discussions and forums on sustainable development and green growth. This includes the UNFCCC COP 18 to take place in Doha, Qatar; and the further development of the Mega-Partnerships. Particular emphasis will be on bringing sustainability aspects and green growth knowledge and practices into the process initiated to develop sustainability development goals.
The participants agreed to continue the work to concretize and bring into action the many recommendations arising from the 3GF 2012 green growth agenda and to meet again in October 2013 to review progress and devise new actions.
The outcome from the 11 PPP’s at 3GF2012
•Bio-based growth: A European PPP for accelerating transition to a bio-based economy is being pioneered between a large range of bio-based industries and the European Commission with the aim of accelerating innovation and research, boosting market uptake and public awareness of bio-based products. The intension is to secure financing for shared research and innovation to the amount of 3.8 billion EUR. Participants discussed overall objectives and long term vision as well as key milestones and prerequisites for effective realization of the PPP.
•C40 and Green Growth: The C40 Green Growth Network chaired by the City of Copenhagen had its first gathering at 3GF. The aim is to promote best practices to cities around the world on how cities, the private sector and knowledge institutions can work together to attract investments and create jobs while addressing environmental challenges. Going forward from this meeting, the partners agreed on cities’ key role in advancing green growth and the importance of political leadership and emphasising the need for support at the national level.
•Cities and urban water leakage: Urban water management has been identified as an area in which public-private partnerships have significant potential to accelerate resource efficiency. The key partners for establishing a partnership to demonstrate best practice on cities and urban water leakage were discussed. Following from this a Memorandum of Understanding is expected to be signed between Copenhagen and Hanoi within a few months with the purpose of significantly reducing water leakage in Hanoi
•Energy Efficiency Financing: Building on an European Bank for Reconstruction and Development (EBRD) model, the PPP initiative led by The Institute for Industrial Productivity and the Global Green Growth Institute, will create a new market for energy efficiency services in industries through the banking system – a model that, in principle, can be developed and applied in any country or region. The PPP will address a number of key barriers to energy efficiency awareness in industries that utilize bank finance: at management, financing, and technical levels, with the aim of integrating EE finance into standard banking operations.
•Energy Efficiency Indicators: A PPP initiative was launched by the Global Green Growth Institute (GGGI) and the United Nations Industrial Development Organisation (UNIDO) on energy efficiency indicators in the area of motor systems to promote the rapid deployment of EE measures and guide effective policy measures. Motor systems represent a huge and largely untapped, cost-effective source for industrial energy savings that could be realised with existing technologies. Potential savings amount to 10-15% corresponding to 120 billion USD in annual savings by 2030. The overall objective of the PPP is to develop indicators and promote the uptake of indicator-based systems for monitoring and benchmarking performance and progress over time at industry as well as country/regional level. Participants discussed how best to engage the private sector and how to secure speedy adoption at scale of motor-system EE indicators.
•Financing Green Growth Significant investments are required to support a green growth transition that meets emerging energy and infrastructure needs sustainably. For this to happen new strategies are required to overcome the numerous risks which impede green capital investments. Participants discussed real and perceived risks associated with green capital investments, the effectiveness of existing and potential instruments to mitigate risks and sought to propose a concrete process or product to stimulate green infrastructure investments. The session also explored areas of possible collaboration between the Climate Policy Initiative and the Green Growth Action Alliance (G2A2), a coalition of over 50 businesses, public- and private finance providers launched at the 2012 G20.
•Natural capital accounting: Participants discussed possible ways in which the public and private sectors can collaborate to include natural capital value in the accounting and decision-making of financial institutions and companies. It was agreed to continue the formulation of a framework and methodology to account for and report on natural capital to ensure that what preserves the value of nature does not impede economic growth of business. The International Finance Corporation (IFC) of the World Bank Group, WBCSD, BNDES, Alstom and DSM, agreed to further the continued process.
•Power system transformation: The 21st Century Power Partnership (21 CPP) – an intergovernmental initiative on the power sector – was launched in April 2012 and taken a step further at the 3GF. The aim of the partnership is to facilitate the transformation of the power sector – a key objective in achieving green growth. Parallel deployment of renewable energy and energy efficiency will constitute 65% of avoided emissions by 2035, an ambitious goal requiring targeted investments in smarter grids and dedicated collaboration between electricity providers, grid operators, regulators and equipment manufacturers. The aim of the PPP is to address the key barriers, help identify and promote smart policy and regulation, encourage investment and facilitate much needed multilateral public-private information sharing and exchange of best-practice green growth solutions. Participants particularly focussed on how to effectively engage the private sector in the transformation.
•Procurement and Private Finance Initiative The Partnership for Procurement and Green Growth was initiated at 3GF 2011 with the aim of encouraging governments to use their purchasing power to stimulate green investment, production and innovation across domestic and global value chains. It’s flagship report ‘Procurement, innovation and green growth: The story continues’ was launched to identify lessons learnt and determine the effectiveness of green public procurement as a growth driver. The aim of the partnership is to influence laws, policies and programmes to make them act as catalysts for green innovation and growth. Participants discussed explored how the Partnership needs to work to scale up public procurement as a green growth driver.
•Trade to Scale up Renewable Energy: A sustainable energy to trade initiative was launched at 3GF in 2011 by ICTSD, the Green Growth Institute and partners in cooperation with the Government of Denmark. Since then progress has been made at intergovernmental level. At this session participants examined possible co-operations at operational level between companies, civil society, and governments. The purpose of this is to advance rules-based international frameworks on trade to enable efficient chains of supply in sustainable energy goods and services. This again is aimed at boosting the use of renewable energy sources and making access to energy for all, viable.
•Water – action in developing countries: Participants explored how national water partnerships in the least developed economies can be supported by best-practice economic analyses, water management activities and public-private partnerships in industrialised and emerging economies. Drawing on the collective experience of participants, examples of successful pilot projects and business models operating in developing countries, key elements and successful factors were identified to help define and develop a PPP strategy that will support governments of developing countries in managing water while respecting the need for sustainable growth. The Water Resources Group will champion further development of such a strategy as it moves into its next phase of activities.