Andrew Thurley, PWC In Collaboration with the Climate Change Commission for Wales

1. www.pwc.co.uk
Approach to Green Growth:
Implications for Wales
Andrew Thurley, PwC
In collaboration with the Climate Change
Commission for Wales

2. What I will cover
1. The Green Growth opportunity
2. Approach to green growth planning
3. Implications for Wales
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3. What is green growth?
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4. What do we mean by a „Green Economy‟?
A green economy is an economy that is low-carbon, climate-resilient,
biodiverse, resource-efficient and socially inclusive.
“One that results in improved human well‐being and social equity, while
significantly reducing environmental risks and ecological scarcities. It is
low carbon, resource efficient, and socially inclusive”
(UNEP, 2011).
“A resilient economy that provides a better quality of life for all within
the ecological limits of the planet.”
(Green Economy Coalition)
A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast Briefing
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5. Commitment internationally - Rio Declaration (2012)
“We consider green economy in the context of sustainable development and
poverty eradication as one of the important tools available for achieving
sustainable development...”
“It should contribute to eradicating poverty as well as sustained economic
growth, enhancing social inclusion, improving human welfare and
creating opportunities for employment and decent work for all, while
maintaining the healthy functioning of the Earth‟s ecosystems...”
“We encourage each country to consider the implementation of green
economy policies in the context of sustainable development and poverty
eradication, in a manner that endeavours to drive sustained, inclusive and
equitable economic growth and job creation, particularly for women,
youth and the poor.”
“In this regard, we encourage all stakeholders, including business and
industry to contribute, as appropriate.”
Source: Rio +20 Outcome Document – The Future We Want - Part III. Green economy in the context of sustainable development and poverty eradication
A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast Briefing
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6. Green Growth in Numbers
2010/11 low carbon and environmental
USD 5.3 trillion – goods and services global market.
Growth rate predicted for the UK market,
5.5% – 2014/15
global green stimulus; 15.6% of total fiscal
USD 436 billion – stimulus.
annual long term commitments of the 114
USD 100 billion– signatories of the Copenhagen Accord.
developed countries fast start funding
USD 30 billion – pledges for 2010-12.
Signatories to the UNCSD outcome
193 – document „The Future we Want‟
Rate at which world needs to reduce carbon
88% – intensity to limit warming to 2 degree
Celsius.
Rate per year at which world needs to
5.1% – reduce carbon intensity to limit warming to
2 degree Celsius.
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7. The green race is on...
Governments across the world are waking up to the green growth opportunity
Germany – The National Strategy for South Korea - investing
United Kingdom – assessment
Sustainable Development (2002) heavily in domestic green
of the benefits to society of UK
defined targets for 21 sectors. In 2010 industries, including USD
ecosystems discovered
nearly 17% of electricity supply was 36bn in renewable energy,
USD1.6billion/year contribution
generated from renewable sources, creating 110,000 jobs and
of pollination to food production
aiming to capture 15% of
and USD2000/hectare/year value surpassing the target value of 12.5%
the global solar and wind
of wetlands for flood management
power market
Japan –
National
strategic
projects related
to green
Practical application highly variable: innovation
Developed countries: Economic
UAE –Developing recovery focussing on green jobs, Lam Dong local authority,
a Green Economy Vietnam – successfully
Roadmap‟,
technologies and infrastructure implementing „Decision 380‟ which
including Developing countries: Sustainable use of makes payments to communities for
opportunities natural capital and diversification of water protection, soil regulation and
around economic base leading to poverty scenic landscape values
sustainable reduction
energy.
New Zealand –
launched a campaign to
Indonesia -
Brazil – gasoline is an stimulate green growth,
forging new
alternative fuel in Brazil undertaken research to
partnerships with
where every vehicle must use identify the global green
countries that are
at least 25% bio ethanol. growth situation and to
buying ecosystem
Ethanol is usually 2-3 times Kenya – Africa‟s first carbon identify New Zealand‟s
services including a
cheaper than petroleum exchange to earn dividends USD 1 billion deal
best opportunities.
based fuels. for using clean energy and with Norway to help
growing more trees protect the nation‟s
rainforests
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8. Some common themes
Industrial policy & export Innovation - e.g.
Green cities promotion - e.g. Focused Technology advancement
e.g. Transport revolution in in South Korea and
development of manufacturing sector in
Copenhagen ; Houston‟s aim to be Japan‟s „National Strategic
Germany, China and South Korea
the greenest city in the US by retro- Projects Related to Green
fit all its buildings by 2014 and Innovation‟
cutting energy use by 30%;
sustainable design in Tianjin Eco-
City, China
Wales? Infrastructure
e.g. Upgrading and
changing physical
assets and
infrastructure in China
and Japan
Natural capital
e.g. Management of
natural capital and
initiatives to enhance Partnerships
agricultural productivity e.g. New Zealand‟s
in Brazil and Ethiopia; campaign to stimulate
financial incentives for green growth across
clean energy in Kenya, the economy;
natural resource Indonesia‟s
protection in Vietnam; partnerships with
and assessing economic countries on that are
value of ecosystems in the Energy - e.g. focus on energy diversification and buying ecosystem
UK renewables in Germany , UAE, S.Korea and Brazil. services
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9. Approach to green growth planning?
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10. Approach to green growth
• 5 dimensions of green growth all
of which are measurable
• Transparency and collaboration
in the modelling process
• Training of policy-makers and
beneficiaries in the development and
implementation of green growth
strategies
• Extensive stakeholder
engagement
• Implementation - green growth
financing and institutional
arrangements
Emphasises economic performance, underpinned by good environmental
management and social development
e.g. green jobs, innovation, market efficiencies and improving human, natural and
A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast Briefing
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physical capital stocks to enhance productivity and resilience. 10

11. Green growth critical success factors
One of the key differentiators between green growth and sustainable development
is private sector development and market-based principles.
National leadership and
ownership... 1 ....enabling the necessary conditions for a
transition to a green economy.
2
...to programmes and projects as a
A long-term and prerequisite for fuelling innovations and
multilateral approach... investments into a green economy.
...with industry, the private sector, academic
Stakeholder engagement... 3 institutions, government ministries, and a
general public who are fully engaged in the
programme‟s development and implementation.
Joint efforts and integration
with existing processes... 4 ...to maximise the use of best practices from
other countries and organisations and
implement best programmes and processes
5
...that is professional and transparent,
predictable and stable, reported and verified,
Good governance... results-oriented and focused on practical
implementation.
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12. An application of this approach
Global Green Growth Institute : Country Selection Project
GGGI priorities and areas of focus BMU priorities and areas of focus
Shared Vision of Green Growth
Green Growth Potential Enablers
• GHG emissions • Institutional capacity
• Economic growth • Human capital and
infrastructure
• Biodiversity
• Policy framework
• Social development and
poverty alleviation • Finance
• Climate change resilience • Cluster effects
• Political commitment
• Donor space
Screening to identify 12 countries with green growth potential
Prioritisation of 3 countries using
diagnostic
Country mission to identify green
growth assistance
needs
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13. The green growth generator
1. Define vision for sustainable growth
2. Baseline assessment of expected
growth path in absence of green growth
interventions
3. Develop Interventions & Scenarios
– policies and practices that could
„leapfrog‟ to a green economy
4. Quantitative and qualitative Modelling
& Analysis of scenarios
5. Present interventions in a Roadmap,
with short and long term actions for
different sectors
6. Implement the interventions through
demonstration projects, business
engagement and policy change
A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast Briefing
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14. Green growth analysis
Key attributes:
• Framework to deliver robust,
evidence-based analysis
• Macro to micro economic
modelling platform focused on
measuring the impacts of green
growth
• Extended macroeconomic
modelling capturing wider
social and environmental
implications of green growth
• Micro level analysis to assess
green growth performance of
interventions
• A collaborative approach
that “Macro to
Micro”
will help secure stakeholder approach that
engagement and buy-in. embeds green
growth
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15. Quantitative analysis
GHG
emissions
Carbon Carbon/
CO2 Intensity capita Range Total
2015 90% 70% 80% +- 50% 80%
2020 90% 70% 80% +- 50% 80%
2030 90% 70% 80% +- 50% 80%
weight
Climate change Economic
resilience growth
Crop Infrastructure Prod-
resilience vulnerability Range Total Growth Jobs uctivity Range Total
2015 90% +- 50% 80% 2015 90% 90% 90% +- 50% 90%
2020 90% +- 50% 80% 2020 70% 70% 70% +- 50% 70%
2030 90% +- 50% 80% 2030 60% 60% 60% +- 50% 60%
weight weight
Biodiversity and Social development
ecosystem services and poverty alleviation
Extraction Water Ine- % Commun-
sustainability stress Range Total quality poverty ity impact Range Total
2015 90% 90% +- 50% 80% 2015 90% 90% +- 50% 80%
2020 90% 90% +- 50% 80% 2020 90% 90% +- 50% 80%
2030 90% 90% +- 50% 80% 2030 90% 90% +- 50% 80%
weight weight
Resource
assessment
Capex Opex Skills People
$100m $30m pa Tech, legal 40,000
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16. Green economy roadmap
The roadmap presents
the agreed
interventions, helping to
build consensus and
provides a framework to
plan and coordinate
the transition to a
green economy.
A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast Briefing
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17. Mirrors WBCSD „Vision 2050‟ approach
The pathway to Vision 2050
A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast Briefing
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18. Implications for Wales
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19. Embedding green economy in value chains
e.g. manufacturing
End
Stage
Resource Logistics Design &
Processing L L Retail L Use of
extraction (L) Manufacture
life
Regulation Intelligent Operational Product standards Retailer product Efficiency Sustainable
logistics performance selection features in waste
Location Innovation
Potential interventions
targets - design management
Fuel pricing mandatory/ Labelling
EMS/H&S Operational Behaviour Regulation
voluntary
programmes Site location performance targets Pricing strategy change
Regulation, e.g. Infrastructure
Voluntary Sourcing strategy Supply chain Incentives &
carbon tax
initiatives initiatives disincentives
Industry association
Industry e.g. energy
Industry initiatives Advertising
association pricing, water
association
initiatives metering
initiatives
Stakeholders
Businesses Consumers Government Local Government Civil society
“Greening the economy refers to the process of reconfiguring businesses and infrastructure to deliver better
returns on natural, human and economic capital investments, while at the same time reducing greenhouse
gas emissions, extracting and using less natural resources, creating less waste and reducing social disparities.”
A Green Economy for Wales - 5 Dec breakfast meeting document - Draft for discussion
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20. The emerging green economy in Wales & the UK
“Quietly and without fanfare, green
business has
41,500 people were become a UK success story, at home and
employed in the low carbon and
environmental sector in Wales in abroad… Our low carbon and environmental sector has shown that
2010-11 it‟s not just for the good times, but that it has continued to grow
More people are now employed in steadily even whilst broader economic activity slows.” (Green
Alliance)
green jobs in Wales than in either The UK is ranked 6th in the world for
financial services or in the motor trades.
green business sales, with a market share
More than 2,200 of3.7%. The US comes 1st with
Companies involved in Wales‟ companies in the low carbon 19.5%, followed by China (13.1%), Japan
green economy achieved a and environmental sector (6.2%), India (6.2%) and Germany (4.2%).
little under£5.3bn
In the renewable energy
in sales - a growth of
sector alone, investment in “Over 1/3 of the UK‟s economic
4.5% on the year before. Wales in 2011-12 reached growth in 2011-12 is likely to have
come from green business”.
£443m, or (CBI, 2012) Projections suggest the green economy
£147.35 per head.
would grow by 40% by 2014
compared to pre-crisis levels, while the
wider economy would barely have
recovered.
“The „low carbon environmental goods and services‟ sector represents
the heart of the green economy...This sector is the source of the clean
energy and low carbon innovation which will drive transformation “It‟s clear that the future of jobs and prosperity in Wales lies in the green economy – which
across the wider economy...This sector is not in recession, with the UK
is now a major source of jobs and enterprise. “We
should celebrate the
outperforming the global average growth.”
excellent work being done by companies
“We now need to make sure that Wales throughout Wales and build on their success to
can outperform the rest of the UK.” deliver an economic recovery.”
(Head of WWF Cymru Anne Meikle)
(Peter Davies, Commissioner for Sustainable Futures )
Source: ‘Why the green shoots of recovery could come from low carbon businesses’, Wales Online, 7 Nov 2012. Article referencing reports by Green Alliance – ‘Green
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economy: a UK success story’ (Aug 2012) and CBI – ‘The colour of growth: maximising the potential of green business’ (July 2012)
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21. The green growth opportunity in Wales
– potential opportunities
Export base in Job creation through
environmental goods & retrofit
services
Building and transport
A green brand for efficiency
Wales‟ tourism to
cultural and natural
assets Low carbon energy
Sustainable development
agricultural products &
forestry sector Improving
infrastructure
A centre of expertise for e.g. transport networks
sustainability education
Waste management
Second generation infrastructure
biofuels
Sustainable fishing Smart grids
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22. Wales has already started its journey – but there is no common
„green growth‟ thread, & not yet fully grasping the potential
Green Skills
Sustainable Science Strategy Climate Change
Strategy Jobs and Sustainable
Development Bill, for Wales Strategy
Growth Programme
Environment Bill and
Planning Bill
Energy Wales: A Low
Carbon Transition‟
Centre for
Alternative
Technology
Arbed
City Regions
Report
Green Deal The Climate
Group‟s Clean
Revolution
campaign
Creative ICT Energy & Advanced Life Sciences Financial & Food & Construction Tourism
Key sectors industries Environment materials & Professional farming
manufacturing services
identified
Enterprise Sector panels established, made up of
Zones Wales private sector business people, who Energy & Environment
advise on opportunities SME Fund
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23. Where next for Wales?
Contact details:
Andrew Thurley
PwC | Director – Sustainability and Climate Change
Direct: +44 (0)20 7212 6503 | Mobile: +44 (0)7753 928249
Email: andrew.thurley@uk.pwc.com
In collaboration with the Climate Change Commission for Wales
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