CLIMATE EFFICIENT INDUSTRIES. Cairo, 14 September 2014 Alexios Pantelias

Transcription

1 CLIMATE EFFICIENT INDUSTRIES Cairo, 14 September 2014 Alexios Pantelias

2 1. Population Growth & Increasing Resource Demand 53% of the world s population will be in consuming class by 2025, compared to 36% in This will result in an intensifying demand of resources for the production of goods to meet the consumption demand of this class. Energy and water security will be priority. 90% of new energy demand by 2030 likely from developing countries Worldwide, industry accounts for 19% of all water withdrawals, but with big regional variations: 2% in South Asia and 77% in Western Europe. (FAO AQUASTAT) Top 10 Business Environment Constraints to Firms (World) Access to finance Practices of the informal sector Tax rates Electricity Political instability Inadequately educated workforce Corruption "Crime, theft and disorder" Tax administration Customs and trade regulations 3.6% 3.5% 4.8% 7.8% 7.0% 9.9% 9.8% 12.2% 11.2% 16.7% Top 5 Business Environment Constraints to Firms (Bangladesh ) Political instability 36.7% Electricity 27.8% Access to finance 13.8% Corruption 7.9% Inadequately educated workforce Example Case 4.0% 0.0% 4.0% 8.0% 12.0% 16.0% 20.0% 2

3 2. Increasing global energy and resource prices Commodity prices are increasing. Resource prices are becoming more volatile. Resources are increasingly interlinked. 3

4 3. Climate Change: Business-as-Usual will soon mean no business Industry impact on Climate Change Industry is responsible for 21% of direct, 11 % of indirect GHG emissions. Industry will be responsible for 26% of the increase in GHG emissions between Significant impact of production on climate Climate change impact on industry Extreme weather events create adverse conditions for industrial productions. Droughts and floods limit resource availability, thus push commodity and energy prices higher. Temporary closures due to hurricanes and floods delay production. All this lead to higher operation costs, risking economic viability of industries. Harder to meet growing industrial resource demand 4

5 Goal of increasing competitiveness in industries while mitigating climate change change Emerging economies struggle with the dual challenge of ensuring growth in industries while keeping resource costs (energy, water, waste) competitive 32% direct & indirect GHG emissions Climate change affects business operations Scarcer and more costly resource inputs 19% water withdrawals Industries Industrial Clusters/ Zones Value Chains 5

6 Resource and energy efficiency instrumental to ensure industrial competitiveness Input Indicators Labor (availability, cost, and productivity) Resources and energy (availability and cost) Access to finance Output Indicators % of GDP Trade (% of total exports) Jobs created Innovation External Factors Affecting Competitiveness 1. Population Growth & Increasing Resource Demand 2. Increasing global energy and resource prices 3. Climate change Adapted from Deloitte 2013 Global Manufacturing Competitiveness Index 6

7 Main challenges for governments and industries Difficulty to identify and prioritize practical resource efficiency opportunities for their key industries Challenge to develop the infrastructure necessary to meet the growing needs of the private sector Removal of energy subsidies which threaten energy security and competitiveness Inadequate knowledge of resource efficiency markets among sectors Lack of communications among industries/agencies to catalyze reforms Potential for industrial efficiency policies and clean technologies: 26% reduction in industrial energy intensity 8% reduction in global energy intensity 32% reduction in industrial GHG emissions 12.4% reduction in global GHG emissions Source: IEA,

8 Approach: Improved management of resources Increase the industrial competitiveness by promoting efficient use of resources for low-carbon growth, thus creating Climate Efficient Industries Three core interventions where governments can positively support firms to manage their resources: 1. Policy and Regulations 2. Financing mechanisms 3. Standards and Labeling Sector policy and guidelines (voluntary/ mandatory) Sector reforms and industry initiatives Streamlined processes Fiscal incentives Grants Loans & Credit lines Guarantee programs Appliance standards Energy performance standards 8

9 Delivery Model Diagnostics Define mitigation/ efficiency targets and identify case-specific solution options Technical Diagnostics GHG accounting Energy use analysis water use analysis Commercial Viability Financial Analyses funding options access to finance Target Solutions Governments and private sector to prioritize costcompetitive solutions Strategic Dialogue structured technical networks and workshops aiming to minimize information asymmetries Implementation Catalyze impacts of selected solutions Policy & Regulations policy assistance capacity building Financial Mechanisms fiscal and financial incentives Standards & Labeling Policy assistance awareness programs Monitoring & Evaluation data collection indicator testing 9

10 Climate Efficient Industry of T&C GLOBAL PORTFOLIO Guatemala Green Value Chains Regulations and standards and labeling in competitive industries Jordan Innovation and Competitiveness Financial mechanisms for industrial efficiency and green manufacturing Pakistan Industrial Energy Efficiency Standards and labeling systems on fans and boilers in industries Bangladesh Partnership for Cleaner Textiles Dialogue and awareness raising on water efficiency opportunities in textiles Bangladesh Low-carbon Zones Promoting low-carbon growth through regulatory interventions in the Chittagong Export processing Zones Egypt: WBG Activities Include: The Energy and Social Safety Nets Sector Reforms Technical Assistance Project Household Natural Gas Connection Project India Eco-Cities Improving green industries in 5 cities in India Vietnam Eco-industrial parks Promoting cleaner production through green EIP guidelines Helwan South Power Project Giza North Power Project Wind Power Development Project - restructuring 10

11 Sales How standards, labeling system and incentive policies transform the market Benefits of standards and labels for product energy efficiency No standards or labels Standards only Standards and labels Minimum standards push the market to higher efficiency Energy labels, certification and incentive policies that pull the market to higher efficiency Efficiency Source: S&L Guidebook, CLASP

12 Case Example: Impact of Refrigerator Standards in US Source: Appliance Standards Awareness Project (ASAP)

13 Low-Carbon Industrial Zones Aims to create global competitive advantage and attracts big climate-conscious companies/investors ( Green Positioning ) to targeted economic zones. Industrial Symbiosis & Circular Economies concepts are utilized within this scope of work. Low-Carbon Zones: A Practitioner s Handbook is a toolkit for policy-makers to promote low-carbon development in economic zones. It provides guidelines to enhance policy frameworks towards efficient implementation and practices. 13

14 Bangladesh: Chittagong EPZ - Low-Carbon Zone Project Targeted Challenges/Issues Industrial energy price rates were raised 5 times in 5 years Lack of industry level policy Diagnosis GHG emissions inventory Energy audits for 20 firms Cost-effective GHG mitigation opportunities identified Results 3 firms adopted 5 recommendations from lowcarbon zone guidelines. In 18 months 9,178 t / year CO 2 emissions reduction Solution(s) Guidelines and action plans prepared for EPZ Regulatory frameworks set in place for some interventions Green Cell established for institutional support and promote opportunities Firm level interventions 18,222 MWh energy savings USD $ 844,155 cost savings 14

15 Implications for Egypt Energy access is an increasing demand challenge. It requires energy efficiency in key sectors. Major challenges: Lack of public awareness about energy efficiency benefits Removal of subsidies as a concern for the competitiveness of industries Due to these factors energy efficiency had only piecemeal success stories without widespread uptake by industries. Opportunities: Develop central strategy on energy efficiency based on removal of subsidies phase in voluntary and mandatory standards that are private sector sensitive. Build local industries to support energy efficiency manufacturing and services through innovation centers and clusters Industrial zones 15

16 And how to sequence 16

17 THANK YOU 17