www.pwc.co.ukApproach to Green Growth:Implications for WalesAndrew Thurley, PwCIn collaboration with the Climate ChangeCom...
What I will cover 1. The Green Growth opportunity 2. Approach to green growth planning 3. Implications for WalesPwC       ...
What is green growth?PwC                     3
What do we mean by a „Green Economy‟?     A green economy is an economy that is low-carbon, climate-resilient,           b...
Commitment internationally - Rio Declaration (2012)“We consider green economy in the context of sustainable development an...
Green Growth in Numbers                                                                                        2010/11 low...
The green race is on...Governments across the world are waking up to the green growth opportunity                         ...
Some common themes                                             Industrial policy & export                      Innovation ...
Approach to green growth planning?PwC                                  9
Approach to green growth                                                 • 5 dimensions of green growth all               ...
Green growth critical success factorsOne of the key differentiators between green growth and sustainable developmentis pri...
An application of this approachGlobal Green Growth Institute : Country Selection Project           GGGI priorities and are...
The green growth generator1. Define vision for sustainable growth2. Baseline assessment of expected   growth path in absen...
Green growth analysisKey attributes:• Framework to deliver robust,  evidence-based analysis• Macro to micro economic  mode...
Quantitative analysis                                                                 GHG                                 ...
Green economy roadmapThe roadmap presentsthe agreedinterventions, helping tobuild consensus andprovides a framework toplan...
Mirrors WBCSD „Vision 2050‟ approach                                           The pathway to Vision 2050A Green Economy f...
Implications for WalesPwC                      18
Embedding green economy in value chains                           e.g. manufacturing                                      ...
The emerging green economy in Wales & the UK                                                                              ...
The green growth opportunity in Wales                     – potential opportunities    Export base in                     ...
Wales has already started its journey – but there is no common„green growth‟ thread, & not yet fully grasping the potentia...
Where next for Wales?   Contact details:    Andrew Thurley    PwC | Director – Sustainability and Climate Change    Direct...
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Approach to Green Growth: Implications for Wales

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

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  • Whilst definitions of ‘green growth’ vary, it is commonly understood as a means to achieve economic progress that is environmentally sustainable and socially inclusive. It is predicated on the need to curb greenhouse gas emissions, use resources more efficiently, provide long-term sustainable increases in GDP and standards of living, and value the often economically invisible natural assets that have underpinned economic success .These needs go hand-in-hand with opportunities – for green jobs, for new products and innovations, for cost reduction, and for capturing some of the estimated USD 5 trillion low carbon and environmental goods and services market worldwide. We have designed an approach to economic growth that can be used to develop and implement strategies that transform economic activity by balancing the different risks and opportunities facing society today. Our approach to green growth is characterised by the green growth flower which captures the complex and integrated nature of delivering transformational change.
  • Approach to Green Growth: Implications for Wales

    1. 1. www.pwc.co.ukApproach to Green Growth:Implications for WalesAndrew Thurley, PwCIn collaboration with the Climate ChangeCommission for Wales
    2. 2. What I will cover 1. The Green Growth opportunity 2. Approach to green growth planning 3. Implications for WalesPwC 2
    3. 3. What is green growth?PwC 3
    4. 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 BriefingPwC 4
    5. 5. Commitment internationally - Rio Declaration (2012)“We consider green economy in the context of sustainable development andpoverty eradication as one of the important tools available for achievingsustainable development...”“It should contribute to eradicating poverty as well as sustained economicgrowth, enhancing social inclusion, improving human welfare andcreating opportunities for employment and decent work for all, whilemaintaining the healthy functioning of the Earth‟s ecosystems...”“We encourage each country to consider the implementation of greeneconomy policies in the context of sustainable development and povertyeradication, in a manner that endeavours to drive sustained, inclusive andequitable economic growth and job creation, particularly for women,youth and the poor.”“In this regard, we encourage all stakeholders, including business andindustry 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 eradicationA Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC 5
    6. 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.A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC 6
    7. 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: EconomicUAE –Developing recovery focussing on green jobs, Lam Dong local authority,a Green Economy Vietnam – successfullyRoadmap‟, technologies and infrastructure implementing „Decision 380‟ whichincluding Developing countries: Sustainable use of makes payments to communities foropportunities natural capital and diversification of water protection, soil regulation andaround economic base leading to poverty scenic landscape valuessustainable reductionenergy. 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 7
    8. 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 Koreathe 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 arevalue of ecosystems in the Energy - e.g. focus on energy diversification and buying ecosystem UK renewables in Germany , UAE, S.Korea and Brazil. services PwC 8
    9. 9. Approach to green growth planning?PwC 9
    10. 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 andA Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC physical capital stocks to enhance productivity and resilience. 10
    11. 11. Green growth critical success factorsOne of the key differentiators between green growth and sustainable developmentis private sector development and market-based principles.National leadership andownership... 1 ....enabling the necessary conditions for a transition to a green economy. 2 ...to programmes and projects as aA long-term and prerequisite for fuelling innovations andmultilateral approach... investments into a green economy. ...with industry, the private sector, academicStakeholder engagement... 3 institutions, government ministries, and a general public who are fully engaged in the programme‟s development and implementation.Joint efforts and integrationwith 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.A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC 11
    12. 12. An application of this approachGlobal 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 needsPwC 12
    13. 13. The green growth generator1. Define vision for sustainable growth2. Baseline assessment of expected growth path in absence of green growth interventions3. Develop Interventions & Scenarios – policies and practices that could „leapfrog‟ to a green economy4. Quantitative and qualitative Modelling & Analysis of scenarios5. Present interventions in a Roadmap, with short and long term actions for different sectors6. Implement the interventions through demonstration projects, business engagement and policy changeA Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC 13
    14. 14. Green growth analysisKey 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 growthA Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast Briefing 14
    15. 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 40,000PwC 15
    16. 16. Green economy roadmapThe roadmap presentsthe agreedinterventions, helping tobuild consensus andprovides a framework toplan and coordinatethe transition to agreen economy.A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC 16
    17. 17. Mirrors WBCSD „Vision 2050‟ approach The pathway to Vision 2050A Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC 17
    18. 18. Implications for WalesPwC 18
    19. 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 greenhousegas 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 PwC (UNEP, 2009) 19
    20. 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 PwCeconomy: a UK success story’ (Aug 2012) and CBI – ‘The colour of growth: maximising the potential of green business’ (July 2012) 20
    21. 21. The green growth opportunity in Wales – potential opportunities Export base in Job creation throughenvironmental goods & retrofit services Building and transport A green brand for efficiency Wales‟ tourism to cultural and natural assets Low carbon energy Sustainable developmentagricultural products & forestry sector Improving infrastructureA centre of expertise for e.g. transport networkssustainability education Waste management Second generation infrastructure biofuels Sustainable fishing Smart gridsA Green Economy for Wales - 5 Dec 2012 – Climate Change Commission Wales: Breakfast BriefingPwC 21
    22. 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 ReportGreen 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 FundPwC 22
    23. 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 WalesThis publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in thispublication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in thispublication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care forany consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.© 2012 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) which is amember firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
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