UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

GreenIndustry: Resourceandenergyproductivityforlowcarbonindustrydevelopment Statementby KandehK.Yumkella DirectorGeneral

attheThirdNevskyInternationalEcologicalCongress
ECOLOGIZATIONOFNATUREMANAGEMENT ABASISFORMODERNIZATIONOFECONOMYINBALANCEWITHNATURE

TavricheskiyPalace,St.Petersburg,RussianFederation 14May2010

 MrSpeaker, Excellencies, DistinguishedDelegates, LadiesandGentlemen, Introduction It is a great pleasure and privilege to have been invited to address you today at this important congress in the beautiful and historical city of St. Petersburg. I would like to thank the CIS Interparliamentary Assembly and the Federation Council of the Federal Assembly of the Russian Federation for this invitation and to congratulate them for the initiative they took two years ago to launchtheNevskyCongress. I warmly commend you for having assumed the mission to promote the creation of an international system of ecological security by strengthening transborder cooperation and harmonization of environmental legislation of the CIS member states and other countries of the world community. In several speeches I have given in recent months, I have drawn attention to the importance of global megatrends developments in the world economy that do not respect frontiers and affect all of us, for good or ill. These megatrends include the food, fuel and financial crises, of which the last has justrecentlyassumedanentirelynewdimensionwithasyetunpredictableconsequences.Theyalso include the distinct but related issues of unprecedented demographic growth, especially in developing countries, unequal globalization and the growth of the illicit economy throughout the world. These developments are dwarfed by a variety of environmental challenges faced by the planet, and in particular the potential threats of climate change, which are the focus of this congress. I fully concur with the central thesis of the congress that there is an urgent need to define a strategy for ensuring that economic growth is sustained, in order to continue to provide the still desperately impetus for wealth creation and poverty reduction, but that it is also ecologically sustainable. As I have also mentioned in several of my recent speeches, this will necessitate joint action by many actors, in both the public and private sectors, and partnerships across national and regional boundaries. I therefore welcome the debate that this congress is seeking to generate on issues related to expanding the use of renewable and alternative energy sources, promoting increased energy efficiency, developing lowcarbon and lowresource products and processes, and exploring effective approaches for a balanced growth process in which both economic and environmental goals are met. In short, that there is a modernization of national economies in balance with nature, and that this process is achieved in a coherent and coordinated way across countries and regions, because natureknowsnoboundaries. It is with great pleasure that I can inform you that my Organization, UNIDO, the United Nations Industrial Organization, is making a conscious effort to contribute to this process. While we clearly regard the development of the productive sectors, and industry in particular, as the most effective means of poverty reduction, we also understand that this has to take place in the context of environmental sustainability. Promoting clean production, as well as access to clean energy and the efficient use of energy, is one of our three organizational priorities, together with support for the development of productive activities to reduce poverty, and assistance in building the capacities of developingcountriestoparticipateeffectivelyininternationaltrade.

By2030,worldenergydemandisprojectedtoincreaseby44%.Thiswillrequireabout$17trillionin newinvestments. Thereisampleevidencethatagreenenergyandindustrialrevolutionhasalreadystarted. (1) HSBC and Deutsche Bank estimate that green energy investments will top $500 billion a year larger than the global aerospace and defence industries combined! and that the clean energy market will be worth $2 trillion in ten years. According to Michael Northrop of the Rockefeller BrothersFund,thisisbiggesteconomicopportunityeverquantified. (2) From 20022007, we saw a sevenfold increase in investments into green energy solutions. Investmentshavecontinued,eveniftheydippedin2009duetothefinancialcrisis. (3) China is the largest market for wind and solar energy. China intends to generate 15% of its energyfromrenewables.Inthepastfourtofiveyearstheyhaveemergedasthesinglelargestmaker ofwindturbinesandsolarpanels. (4)TheEUmarketandits2020targetshavealsocreatedanewimpetus.Henceweseeprojectslike Desertec and Euromed Solar to generate electricity through concentrated solar technology from the SaharaforEuropeaneconomies. (5) President Obama says the US should lead the green energy revolution, and through stimulus measures, he has allocated about $80 billion in green investments including about $40 billion for R&D. Between 1998 and 2003 Russias R&D doubled and its R&D/GDP ratio rose from 1.0% to 1.3%, by 2005itstoodat1.1% In comparison, figures from a 2008 study suggest thatIsrael devoted 4.7% of its GDP to R&D, and wasleadingallcountries,followedbySwedenwith3.9%,Finlandwith3.5%,Japanwith3.2%andthe RepublicofKoreawith3%. IsRussiaandtheCISregionpartofthisrevolution?Areyoureadytoleadandshapethisrevolution? Russia has always had a great tradition of scholarship, and great scientific minds. It can and should invest more into research and development (R&D ) in order to strengthen the innovation pipeline, allowforrapidtakeupofexistingtechnologies,andtosupportnewbreakthroughtechnologies. DistinguishedDelegates, LadiesandGentlemen,

GlobalContext Aswemeetheretoday,theCommissionforSustainableDevelopmentiswrappingupits18thsession, during which it considered global progress towards the realization of the goals for Sustainable Consumption and Production that were originally agreed upon at the United Nations Conference on Environment and Development in Rio de Janeiro in 1992, and were subsequently reaffirmed during the 2002 World Summit on Sustainable Development (WSSD). Sustainable Consumption and Production is about how humanity produces an adequate supply of goods and services for everyone while putting less pressure on the environment and ecosystems. In short it is about delinking economicdevelopmentandsocialwellbeingfromenvironmentaldegradation. Slide1:Worldecologicalfootprintrelativetobiocapacity Let me focus the discussion by looking at some basic statistics. The worlds total ecological footprint in 1960 was 50% of the global supply of bioproductive land. In the following 27 years, the footprint doubled, so that by 1987 the pressure exerted by global consumption equalled the regenerative capacity of planet earth. But the process did not stop there. By 2009, the overshoot was 39%. To putitdifferently,humanitytodayusestheequivalentof1.4planetstoprovidetheresourcesweuse and absorb our waste. If current population and consumption trends continue, it is estimated that bythemiddleofthenextdecadewewillneedtheequivalentoftwoEarthstosupportus.Ofcourse, itwillcomeasnosurprisetoyouthatweonlyhaveoneEarth. Slide2:EcologicalfootprintoftheRussianFederationrelativetobiocapacity International comparisons of the ecological footprint are very revealing. The ecological footprint of the Russian Federation currently stands at around 4.5 ha per capita, well below the available biocapacity of approximately 6.5 ha per capita given by the countrys vast land mass and relatively lowpopulationdensity.Bycontrast,theaveragefootprintinindustrializedcountriesliesabove6ha per capita, in middleincome countries just under 2 ha per capita and in the lowincome countries below1hapercapita. The global fair share would be approximately 2 ha per capita. If all global citizens were to have the same lifestyle as the average citizen of the industrialized world, we would need the equivalent of about five Earths to support us. These global disparities are immense, as illustrated with the alternativeworldmapwhichdrawsthesizeofterritoriesbytheirtotalecologicalfootprintinsteadof the size of their surface area. Viewed by ecological footprint, industrialised and emerging economiesarefarlargerthentheirrelativesurfacearea. Slide3:Ecologicalfootprintofnations(2006) A comparison of this ecological footprint distribution map with the population distribution map reveals the true scale of the global resource consumption challenges. Global resource consumption already exceeds ecological carrying capacity. The LDCs and low income countries have disproportionately lower resource consumption and will require access to more resources to meet theirbasicneedsandimprovetheirstandardofliving.Thechallengethenistofacilitateaswiftshift in unsustainable consumption and production patterns in order to get back within the carrying capacitiesofecosystemswhileensuringupwardconvergenceinlivingstandardsacrosstheplanet. Slide4:Globalpopulation(2006) DistinguishedDelegates, LadiesandGentlemen,

GreenIndustry Asthespecializedagencyforindustrialdevelopment,UNIDOisparticularlyconcernedhowindustrial development contributes, or as the case might be, impedes progress towards Sustainable Consumption and Production. To emphasize the positive contribution industry can make, I made GreenIndustryanorganizationwidestrategicpriorityforUNIDO. GreenIndustryisatwoprongedagenda: Firstly, it is about assisting existing and emerging industries to reduce their energy, water and materials consumption and reduce their emissions to water, air and land. This is the agenda for the greening of industries, which will have to ensure that all industries produce more while using less resources and generating fewer emissions, year after year, as a continuousimprovementprocessovertime. Secondly, green industry includes the establishment of a vibrant and innovative environmentalgoodsandservicessector.Theseincludetheprovidersofwastemanagement and recycling techniques and services, producers of environmental technologies, providers of energy efficiency and renewable energy techniques and suppliers of environmental monitoringservices. In September 2009, UNIDO convened a Green Industry Conference for Asia, hosted in Manila by the Government of the Philippines and attended by some 1,200 participants. Governments of 21 Asian developing countries agreed on the Manila Declaration on Green Industry. The signatories acknowledged that markedly different industrial development pathways are urgently needed, and called upon UNIDO and the other intergovernmental organizations to support developing countries in the challenging but necessary endeavour to achieve lowresource, low carbon patterns of industrialdevelopment. UNIDO is actively pursuing the Green Industry agenda. Together with the United Nations Environment Programme, UNEP, we establish and support a global network of National Cleaner Production Centres, or NCPCs. These Centres deliver information, assessment and advisory services to businesses, governments and other stakeholders for the adaptation and adoption of cleaner production methods, practices and technologies. The first eight NCPCs were established during 19941995 and since then the programme has expanded to currently some 50 developing and transitioncountries. Following and extensive evaluation of the NCPC programme in 2007/2008, UNIDO and UNEP formulated a strategy for scaling up and mainstreaming the activities and impacts of the NCPCs and similar initiatives. As a result, the programmes focus has expanded to Resource Efficient and Cleaner Production to underpin the message that the same preventive environmental and productivitymethodscontributetothreesustainabilitydimensions: (i) theproductiveuseofnaturalresources,includingenergy,materialsandwater; (ii) theminimizationofgenerationofwastesandpollutants;and (iii) safeandresponsibleproduction. I was pleased to witness firsthand the vibrancy and dedication of the NCPCs when I attended their 2009globalnetworkingmeetinginLuzern,Switzerland. One of the Centres under the Programme is based in this historic city of St Petersburg. The North Western International Cleaner Production Centre has been an active partner for UNIDO with a particular focus of its activities on water management. Moreover the Centre played a pioneering

role in the promotion and application of chemical leasing to several local companies including Vodokanal. Chemical leasing introduces a service based business model for chemicals management. It aligns the interests of the chemical supplier and the chemicals user to use the least possible amount of the most benign chemicals for any application, as the chemicals supplier is being paid on thebasisoffinishedproductsinsteadofchemicalssupplied. Inaddition,UNIDOhasalsobeenworkingoncreatingenablingpolicyframeworksforgreenindustry, which will be released shortly. Environmental legislation is now generally in place, but the efforts devoted to implementation and enforcement, and hence the average levels of industry compliance, vary greatly. The unfortunate result is that companies operating in lax enforcement regimes experience that noncompliance remains cheaper then compliance, a situation that has been systematicallyruledoutinWesternEurope,NorthAmericaandJapansincethemid1980s. Although UNIDO recognizes that firms may find it difficult and costly to comply with applicable environmental legislation, compliance should be treated as a nonnegotiable condition for doing business as a matter of principle, regardless of the business location. Buyers, investors and regulators and the international community should therefore focus on making it easier to achieve compliancebyprovidingtechnicalandmanagerialassistance,risksharing,andinvestmentsupport. DistinguishedDelegates, LadiesandGentlemen, Energyandclimate The development of a sustainable, longterm solution to meeting the worlds energy needs is a defining issue of our time. Energy is directly linked with the key global challenges that the world facespovertyreduction,climatechange,andglobal,environmentalandfoodsecurity. Current energy systems are failing to meet the needs of the worlds poor. Worldwide, 2.6 billion peoplerelyontraditionalbiomassforcookingand1.6billionpeopleaboutaquarterofthehuman race do not have access to electricity. The projected cumulative investment required between 2005 and 2030 to meet energy needs is almost US$ 20.1 trillion, but even if this investment is securedoverthenextthirtyyears,1.4billionpeoplewillstilllackaccesstoelectricityin2030and2.7 billionwillstillrelyontraditionalbiomassforcookingandheating. Global energyrelated carbon dioxide (CO2) emissions will increase by some 50 per cent between 2004 and 2030 unless major policy reforms and technologies are introduced to transform the way energy is produced and consumed. Coal has overtaken oil as the leading contributor to global CO2 emissions. Developing countries will account for three quarters of the increase in carbon dioxide emissions between 2004 and 2030 unless major transformative policies and technologies are introducedinthenextfewyears. Per capita emissions in developing countries will remain small compared with those in developed countries.Yet,theshareofdevelopingcountryemissionsisexpectedtorisefrom39percentin2004 to over half of the total world emissions in 2030 unless mitigated by policies that promote more efficientproductionanduseofenergy,switchingtocleanerfuels,moreefficienttransportation,and cleaner electricity supply. Many fastgrowing developing countries will make their major energy related investments in the next decade. There is a short window of opportunity to ensure that the energyinfrastructureandindustrialfacilitiesareasenergyefficientaspossible.

At the global level, the energy system supply, transformation, delivery and use is the dominant contributor to climate change, representing around 60 per cent of total current greenhouse gas (GHG) emissions. Current patterns of energy production and consumption are unsustainable and threaten the environment on both local and global scales. Emissions from the combustion of fossil fuels are major contributors to the unpredictable effects of climate change, and to urban air pollutionandacidificationoflandandwater. Reducing the carbon intensity of energy that is, the amount of carbon emitted per unit of energy consumedisakeyobjectiveinreachinglongtermclimategoals.Aslongastheprimaryenergymix is biased towards fossil fuels, this would be difficult to achieve with currently available fossil fuel basedenergytechnologies.Giventhattheworldeconomyisexpectedtodoubleinsizeoverthenext twenty years, the worlds consumption of energy will also increase significantly if energy supply, conversion and use continue to be inefficient. Energy system design, providing stronger incentives for reduced GHG emissions in supply and increased enduse efficiency, will therefore be critical for reducingtheriskofirreversible,catastrophicclimatechange. It is within this context that the UN SecretaryGeneral convened an Advisory Group on Energy and ClimateChange(AGECC)in2009toaddressthedualchallengesofmeetingtheworldsenergyneeds fordevelopmentwhilecontributingtoareductioninGHGs.TheGroup,whichIhavetheprivilegeto chair,carriedoutthistaskinarapidlychangingenvironmentinwhichenergywasoftenakeyfactor: thesensitivityoftheglobaleconomytoenergypricespikes;increasedcompetitionforscarcenatural resources;andtheneedtoaccelerateprogresstowardsachievementoftheMDGs. The Group submitted its report to the SecretaryGeneral in April 2010. The report sets out for the firsttimetwoambitious,butachievable,globalenergygoals. Goal1:Ensureuniversalaccesstomodernenergyservicesby2030 Goal 2: Reduce global energy intensity the quantity of energy per unit of economic activity or output(GDP)by40percentby2030 One of the challenges facing the global development community is that there is no clear consensus on what access means and on access indicators. The AGECC report defines access as access to clean, lowGHG emitting and affordable energy services for cooking and heating, lighting and communicationandproductiveuses. We have adopted this broader definition because access to sufficient energy for basic services and productive uses represents the level of energy access needed to help sustainable improve livelihoodsinthepoorestcountriesanddrivelocaleconomicdevelopment. Please note, however, that energy access is not an allornothing issue, and should be considered in stages. The AGECC report considers three incremental levels associated with meeting basic needs, supporting productive uses, and meeting the needs of modern society. Clearly the GHG impacts are differentateachlevel. This is why it is very important that expanding access is done in the cleanest and most sustainable waypossible.Countriesshouldbehelpedtoestablishalowcarbonroutetodevelopmentbydriving down the costs of lowemissions technologies in order to facilitate their accelerated deployment,

both on the supply side (including loweremissions fossil fuelbased technologies) and the demand side,whereenergyefficientendusedevicesreducetheamountofpowerconsumed. Furthermore, there is a strong correlation between energy consumption and economic growth. The term energy intensity provides a way of understanding the evolution of this relationship. Since 1990, global energy intensity has decreased at the rate of about 1.3 per cent per year. The AGECC reportcallsforadoublingofthisrate.Achievingthisgoalwillrequiretheinternationalcommunityto harmonize technical standards for key energyconsuming products and equipment. It will also requireatransferofknowhowandgoodpractices,andthedevelopmentofcapacitiestoimplement them. Investment in energy efficiency also needs to be encouraged. The AGECC report calls for energyefficiencytobeprioritizedintheshortandmediumtermasamitigationmeasure. DistinguishedDelegates, LadiesandGentlemen, Closingremarks The expanding evidence base on the interrelatedness and scales of resource consumption, water scarcity, peak oil, climate change, and other chemical and environmental risks underlines the urgent need for an effective response. The risks and costs of nonaction are higher than the costs of prudentearlyaction,aswasprofoundlydemonstratedbytheSternReviewonClimateChange. Amidst the gloomy news on the environment and climate that surrounds us, UNIDO remains optimistic that opportunities are available to act now. The National Cleaner Production Centres and other initiatives have proven beyond doubt that taking care of resources, energy and the environment is generally good for business, the environment and development at large. The time has come for us to move from pilot and demonstration projects to the widespread adoption and adaptation of best practices, and to the scalingup and mainstreaming of green industry initiatives. This will require (i) the prioritization and targetsetting for green industry in national development policies; (ii) the implementation and enforcement of appropriate industrial and environmental policies; (iii) the dissemination of relevant knowledge, technology and information in locally appropriate forms; and (iv) the effective utilization of already available human and institutional resourcesandexperiences. Iamencouragedtoseethattheseissuesarebeingpickedupwithsomuchcommitmentandresolve at this Congress, and I wish you all the best for your deliberations. I am confident that they will make a significant contribution to addressing the challenges of modernizing your national economies,andindeedtheglobaleconomy,inbalancewithnature. Thankyou.