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TCI2015 Climate Smart Clusters


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By Christian Schoen, presented at the 18th TCI Global Conference, Daegu, 2015.

Published in: Economy & Finance
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TCI2015 Climate Smart Clusters

  1. 1. Climate Smart Clusters Christian Schoen, Mesopartner PartG, Germany Parallel Session 2.2: New Role of Clusters in the Broader Economic Context
  2. 2. What are interfaces between cluster development and climate change? 1. Cluster Development primarily targets enterprises that are – causing CC and environmental degradation – affected by CC and environmental degradation – benefitting through tapping into business opportunities 2. Many clusters or the value chains are ‘greened’ or focus on green products, but are located in territories that need to offer a right policy and regulatory framework for eco-friendliness and climate resilience 3. National top-down regulations and campaigns to stimulate climate resilience and eco-friendly behavior of enterprises and local authorities are enforced and implemented at sub-national, cluster level 4. Local actor networks and clusters have started to promote decentralised approaches to increase their climate resilience from the bottom-up, e.g. striving for local energy supply autonomy
  3. 3. Enterprise What are interfaces between cluster development and climate change? Emissions Opportunities Value Chain TopDownRegulations Bottom-upInitiatives Regional Business Environment Economic Cluster Prefer ences CC Impact
  4. 4. What are the determinants of a cluster’s climate change vulnerability? Source: Adapted from GIZ, 2014. The Vulnerability Sourcebook Exposure Sensitivity Potential Impact Adaptive Capacity Vulnerability • Climate variability/change • Location / Infrast, • Supply Chains • Sector-specific characteristics and challenges • Business Environment • Cluster Management
  5. 5. Why developing a Climate Smart Cluster concept?  Assessing the extent to which a cluster is prepared to adapt/mitigate the impacts of climate change (in the location where it is operating) and tap into business opportunities  Identifying economic development tools, which can be “greened” and incorporated into cluster development. In general, trying to “short cut” scientific methods and instruments in a participatory manner  Pinpointing necessary actions to enhance preparedness to address climate change issues that could potentially undermine the competitiveness of a given cluster  Supporting the process of climate-proofing business operations and develop sustainable entrepreneurship
  6. 6. What is a Climate Smart Cluster (CSC)?  Climate Smart Clusters (CSC) aim at maintaining or increasing long- term competitiveness in times of climate change and environmental degradation  This goes beyond strengthening cluster enterprises in their purely economic dimension of competitiveness, but targets the wider definition of sustainability, including ecological and social dimensions  CSC enable a stronger resilience of cluster enterprises and the value chains they are embedded in, identifying resource efficient behavior and cost saving potentials and looking for related business opportunities  CSC development addresses supply and demand side of cluster enterprises and their framework conditions
  7. 7. What makes a cluster climate smart? Climate Smart Clusters Climate Change Awareness Mitigating Cluster Impact National Regulations Local Regulations Eco-efficient infrastructure Vulnerability Awareness Public-Private Collaboration ‘Green’ Monitoríng
  8. 8. Why are enterprises under-engaged in responding to climate change?  Low levels of awareness (lack of commercial rationale)  Challenges in interpretation of available information  Decision making under uncertainty  Senior management buy-in only after climate-related events  Focus on short-term costs and cash flows  Lack of resources (finances, skills)  Need for unprecedented levels of collaboration Source: PwC 2010. Business leadership on climate change adaptation, PricewaterhouseCoopers LLP (UK)
  9. 9. Steps in the Approach Environ./Climate Impact of Cluster on the Location Environ./Climate Impact of the Location on Cluster Assessment of Cluster & Cluster Location  Environmental/climate impact assessment of cluster and cluster enterprises on location  Assessment of Environ./ Climate conduciveness of location (Regulations, Green BDS/Finance Offers, CC/Environ. Awareness)  CC Vulnerability Assessment of location and cluster Formulation of Climate Smart Cluster Objectives  Adaptive Capacity options / targets of cluster  Emission reduction targets of Cluster  Resource efficiency targets of Cluster  Conducive Regulations  Expansion of Green BDS / Finance  CC / Environmental Awareness Creation  Adaptive Capacity targets Climate Smart Cluster Strategy and Measures How could clusters become climate smart?  Regulatory Reform  Promotion of Green BDS / Finance  CC Campaign  Enhancing adaptive capacity  Enhancing adaptive capacity of Cluster  Support cluster firms to reduce emissions & become more efficient
  10. 10. Cluster Framework for CC Adaptation/Mitigation • Awareness of CC & Environmental Degradation among enterprises/population/o fficials • Acknowledgement of CC as risk for competitiveness of local clusters • Tool example: World Café Cluster CC Awareness • Environmental/climate impact of cluster on location • CC vulnerability of location and clusre • Assessment of Environ./ Climate conduciveness of local business environment • Tool examples: Hot Spot Analysis, Vulnerability Assessment of Location/Cluster Cluster CC Assessment • Identification of potential adaptation / mitigation options / targets • Development of a CSC strategy • Implementation of CSC management measures • Monitoring and measuring of CSC management/progress • Tool examples: Scenario Writing, Mainstreaming of Climate Smart Cluster targets into local plans, Balanced Scorecard, Carbon Footprint Assessment Cluster CC Management Source: Adapted from Agrawala, S. et al. (2011). OECD Environment Working Papers, No. 39
  11. 11. • Vulnerability Assessment (rapid) • Hot Spot Analysis • Enterprise Surveys • Enterprise audits • Compass of Local Competitiveness (Adjusted Balanced Scorecard) • Carbon Footprint Assessm. • ‘Green’ Cluster Café • Advocacy / campaigns Assessments Climate Smart Strategies & Plans CC Awareness Green Monitoring Review Plans & Regulations • Review CC elements in local / cluster development plans • Scenario Writing • Design of Climate Smart Cluster Measures (Technology, Finance, Capacity Building) CSC Development Cycle and Toolbox Sensitization Review & Hypotheses Analysis & Understanding Intervention Design / Strategizing Monitoring & Evaluation
  12. 12. Future Research Questions 1. How sensitive and aware are clusters about their interrelation with climate change - in different parts of the world? 2. Do clusters usually assess their vulnerability, their contribution and their opportunities with respect to climate change and, if yes, how? 3. How do clusters and cluster enterprises respond to threats and opportunities of climate change in order to remain competitive? 4. How can small companies work together to create climate resilience? 5. What are sector-specific differences of adaptation/mitigation efforts? 6. How does a conducive business environment ideally look like that enables clusters to become climate smart? How does climate smart cluster policy could look like? 7. How to catalyze public-private action on adaptation and mitigation? 8. What should be the role of cluster managers, meso-institutions, large enterprises and insurances?
  13. 13. THANK YOU! Christian Schoen – Mesopartner PartG, Germany