Skuli Helgason at Innovation Forum in Reykjavik, May 2012
The Icelandic Economy• Key sectors include fishing, tourism and heavy industry. Icelandic economy vulnerable to adverse trends in foreign markets. A strong need for diversification.• Polarization between nature conservation and heavy industry has been a major political cleavage factor for decades.• The Green Economy can bridge the divide between strong demands for growth and sustainable development.
Why a green economy?• Green economy is a prerequisite for sustainable growth in the 21st-century and a logical reaction to climate change.• An environmentally friendly economic policy in line with the philosophy of sustainable development coordinates economic policy with Iceland´s promotional strategy.• The demand for green energy is increasing and Icelanders have a comparative advantage in terms of extensive knowledge in the field of renewable energy.• Icelanders have one of the largest ecological footprints in the world. Challenge calling for a swift response.
What is a green economy? Economic activity that reduces carbon emissions, supports a more efficient use of energy and resources and prevents the degradation of biological diversity and ecosystem services. A green economy is characterised by increased value creation while reducing the demand on nature.A green economy is a practical route to sustainable development.
What are green jobs? A: Pure green jobs Jobs in businesses that produce goods or services that benefitthe environment or support the conservation of natural resources. B: “Greening” jobs Jobs which include making production processes more environmentally friendly and/or less demanding with respect to use of natural resources.
A Vision for Iceland Iceland can be a role model as a green economy,emphasizing clean natural environment, sustainable use of energy, innovation and education towards sustainability.
Statement of policy• The Government will set an example and create conditions for the development of a green economy.• Economic incentives will be used to promote green economic activity.• Green jobs will be created.• Emphasis will be placed on promoting green investments from local and foreign sources.
Statement of Policy• The Polluter-Pays-Principle will form the basis for implementing fees and tariffs to finance economic incentives.• The Precautionary Principle will be an integral part of the governments´ fiscal and employment policy.• Education on sustainable development and environmental issues will be increased.• The green economy will be an integral part of the national promotional strategy.
The State as a Model• Strengthening the green economy shall be a priority in the government´s economic and employment policy.• Althingi, all cabinet ministries and public institutions shall implement environmental management plans to reduce waste and negative environmental impact.• Increased emphasis on green public procurement. Eco- friendly calls for tenders will be increased to 50% in 2015 and 80% in 2020.• Iceland shall ratify Appendix 6 to the MARPOL Convention for the Prevention of Pollution from Ships and declare the Icelandic exclusive economic zone an Emission Control Area.
Administration and Analysis• The green economy will be located in the Prime Minister´s Office which will coordinate the work of all cabinet ministries. The PMO’s office will initiate a consultative process with local governments.• Genuine Progress Indicator (GPI) shall be calculated and published along with GDP measurements.• Provisions on Cost-Benefit analyses (CBA) shall be added to legislation on environmental impact assessment of plans and projects.• A comprehensive revision of the legislation on waste to remove barriers to the recycling industry in Iceland.
Green Jobs and Investments• A five-year campaign will be launched to encourage foreign direct investment (FDI) in green businesses.• A Green Venture Capital Fund shall be established in a public-private partnership including domestic and foreign investors.• A Green Innovation Fund shall be established to fund green R&D and innovation projects.• The Government shall develop an action plan to increase organic production to a level of 15% of national agricultural production by 2020.
Economic Incentives• Renewable energy for transport will not be taxed before its share has reached 20% of total use in transport.• Private businesses will be reimbursed up to 20% of the cost of implementing certified environmental management systems (for instance ISO 14001 or EMAS).• The Ministry of Finance shall develop pollution fees, which will be used to partially reimburse private businesses that invest in pollution prevention solutions in respective industries.• Public institutions will be reimbursed up to 20% of product costs that fulfil the terms and conditions of Environmental Labels Type 1
Green Revolution of the Mind• Innovation Center Iceland shall be entrusted with the development of a methodology that encourages the “greening” of the practices of local businesses.• An educational campaign shall be launched concerning the real cost of alternative means of transport and the relationship between different means of transport and health.• All legislation pertaining to public institutions shall be revised in order to integrate the concept of sustainable development into the statutory purposes of the respective institutions.
Political Consensus• Parliamentary resolution –support from all parties.• Parliamentary committee reaches a unanimous conclusion in final report.• Standing committee proposes that resolution will be approved 9-0• Parliament approves resolution 43-0
Latest developments• The Icelandic Government has approved an Investment Plan for 2013-2015 that includes a proposal for providing 25 million euros towards implementing the first phase of an Action Plan on the Strengthening of the Green Economy.• Priority will be given to proposals that support R&D and innovation; increase investments; introduce economic incentives and create green jobs.• The Prime Minister’s Office will designate a task force to finalize an Action Plan based on the Parliament resolution.