Business Engagement for Green Growth and Employment · Asia-Pacific Economic & Policy Dynamics • More APEC countries are going beyond policy statements and making resource commitments

Business Engagement for Green Growth and Employment

20-21 March 2012

Graham Larcombe, Director Strategic Economics Group

APEC Symposium on Human Capital Policies for Green Growth and Employment, Washington

Green Growth Agenda All sections of society in Asia-Pacific need to be mobilised to support urgent shift to green growth. Impressive aggregate growth rates threatened by environmental disaster and increasing resource constraints: water, energy, minerals, land, forests, and threats to food supply. Growing uncertainty, risks and lack of confidence with existing globalisation model i.e export orientation countries with plentiful and cheaper labour. New business models required. Rationale for global supply chains has been cost minimisation, not sustainability. Strong commitments by developed APEC economies to transfer opportunities to developing APEC economies. Goal: virtuous cycle of green growth - recognise market forces to drive sustainable technologies, alignment and coordination of green growth policy across APEC, convergence of cost effective regulatory regimes, and investment in knowledge and skills across strategic supply chains (eg building, agriculture, manufacturing).

Six Challenges 1. Strengthen the green growth paradigm by fostering economic growth and development

while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies (OECD).

2. Increase green commitments of developed APEC economies to support developing economies.

3. Promote interaction between different interests and institutions: ideas, practices, policies and market realities to underpin shift to green growth

4. Find affordable solutions to meet the need of poorer people in developing countries: low cost materials, eco-design, recycling and enhancing environmental assets: land, forests, water

5. Integrate APEC globalisation agenda (economic prosperity, energy security trade flows, technology transfer, knowledge exchange) with sustainability agenda (integration of economic dynamism, fairness, poverty alleviation, and protection of social and environment, through investment, technology transfer and collaboration and sustainability regulatory cooperation and convergence).

6. Increase investment in knowledge and skills, and to diffuse knowledge, technologies and skills across industry supply chains and communities in A-P and global economies.

Asia-Pacific Economic & Policy Dynamics • More APEC countries are going beyond policy statements and making resource

commitments to green growth eg Green expenditure % of total stimulus packages in response to onset of financial crisis (Korea 78.7%, China 33.6%, Australia 22.7%, US 12%).

• Market for Clean Energy Technology (CET) - wind energy, biodiesel, solar - is booming, now exceeding pharmaceutical industry. In 2008, China was easily the largest producer of clean-tech in monetary terms, earning more than 44 billion euros, or 1.4 per cent of its GDP, leading the world in many clean-tech sectors, including wind turbines, solar photovoltaic hardware, and high-speed rail technologies. In 2010, China boosted spending on low-carbon energy  by  30%  to  $51.1  billion,  ‘‘by  far  the  largest  figure  for  any  country”.

• Global investment in renewable energy is projected to translate into 20 million jobs by 2030 (ADB), but more important is greening existing jobs and skills.

• Global fossil-fuel consumption subsidies are impeding green growth $409 billion (2010) – and (in baseline case) forecast to reach $660 billion in 2020, or 0.7% of global GDP. This is 6 times the support given to renewables.

• Urbanisation has major environmental impacts. The question is can mega-cities be transformed into eco-cities – planning, infrastructure, housing – and opportunities to expand business engagement in infrastructure, renewables, environmentally sensitive and energy-efficient technologies

APEC Green Growth Priorities 1. Eco-cities, through APEC Low carbon model town -

Tianjin City Project, jointly proposed by Japan and China, as the first case of the Project Energy smart low carbon communities.

2. Convergence of green commercial rating systems.

3. Expanding trade in environmental goods.

4. Phase out inefficient fossil-fuel subsidies.

• Macro-economic settings to support sustainability – elimination of fuel subsidies, shift to eco-taxation principles.

• Cost effective regulatory systems that promote green solutions and diffuse green technologies and skills

• Changing household and consumer preferences spurred by good information and public education eco-labelling, eco-branding

• Promote sustainable networks/enterprises (eg green entrepreneurs, invest in green skills, grants/ loans).

• Technical training to enable developing country SMEs to access green supply chains.

• Local action plans to meet the needs of specific localities (eg farming communities), industry sectors (forestation, manufacturing), and different business structures (transnationals, SMEs, self-employed).

• Increasing incentives for developing countries to participate, including diffusing new technologies and skills to SMEs, and supporting developing (non Annex 1) countries to access projects under Clean Development Mechanism and emerging programs.

Strengthening Business Engagement

Emerging Business Models • Eco-innovation support through clusters

Styria, Austria

• Using green building standards to create a competitive cluster

• Habitech Energy and Environment Cluster Trento, Italy

• Attraction and development of green investment and infrastructure Gangwon Green growth, Rep. of Korea

Emerging Business Models (cont.)

• Joint ventures and subcontracting requirements to drive sustainability outcomes across the building industry Landcom Australia

• Strengthening industry and research and educational institutions collaboration “Cool  City  Sakai  Plan”,  Japan  

• Strategic green investment to become a global leader in manufacturing – Twin Cities Initiative green manufacturing Minneapolis/St Paul, USA.

• Industrial Policy and Technology Transfer: Eolicas de Portugal

Challenges

1. Skills barrier is a major barrier in transforming economies towards green growth.

2. Many impediments to firms investing in green skills: including cost, low priorities, but also lack of suitable trainers/curricula.

3. Major investment required in sustainability skills across APEC.

4. More emphasis on customised solutions including adaptation and mitigation responses.

Human Capital & Employer Engagement

Greening existing generic and core skills • Waste minimisation,

• Green procurement,

• Technical use of new equipment

• Awareness of eco-certification and standards

• Environmental accounting,

• Green management and leadership,

• Cultural skills.

Human Capital & Employer Engagement

Responding to high demand in growth industries for emerging skills not available in the market • Measurement of greenhouse gas emissions

• New low-carbon processes

• Carbon finance

• Environmental accounting and reporting (from triple bottom to integrated accounting)

• Green project identification, management, procurement and risk management

• Green research agendas (eg technical efficiency of photovoltaics, 2nd generation biofuels)

• Design, engineering and financing Sustainable infrastructure – high speed rail, smart grids

Human Capital & Employer Engagement

Strategies required to support and engage businesses to invest in • Green entrepreneurial and management skills

• Emphasis on TVET: Technical and trade skills (wind, solar, bio-fuels)

• Social skills: communications, team work (inter-disciplinary skills to support sustainability outcomes)

• Identifying concrete local solutions to environmental challenges through search and experiential learning

• Adaptive skills – basic, generic, flexibility

• Continuous restructuring and retraining to support green targets, regulations and goals

• Recognise and accredit informal skills

Human Capital & Employer Engagement