Green Economy Green Economy

New Impetus for Sustainability

20 Jahre nach dem Erdgipfel Rio 1992: neuer Schwung fr Nachhaltigkeit

Imprint Published by: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) Division ZG III 2 11055 Berlin Germany Email: ZGIII2@bmu.bund.de Website: www.bmu.de/english Edited by: Design: Printed by: Peter Franz, Dr. Florian Kammerer, Divisions ZG III 2, KI I 1, KI II 4, WA II 1, WA III 1 design_idee, bro_fr_gestaltung, Erfurt Silber Druck oHG, Niestetal

Photo credits: Cover: Ralph Kerpa/Alimdi.net Date: Juni 2012 First Print: 1,000 copies

Green Economy
New Impetus for Sustainability

04 06 08 09 10

20 years after the 1992 Rio Summit: new impetus for sustainability Concentrating societys resources via the green economy concept Using the opportunities for environmentally compatible growth The framework for a green economy Areas for action: Setting a course towards a green economy

20 years after the 1992 Rio Summit: new impetus for sustainability
20 years after Rio 1992, the Earth Summit in Brazil, the United Nations is again holding a conference in Rio de Janeiro on sustainable development (Rio +20), in order to secure renewed political commitment to that guiding principle. While much has been achieved in this area since 1992, global environmental problems have been intensifying, creating enormous challenges. And while the term sustainability has become widely accepted, many of the objectives linked with that concept have not been achieved, and new challenges have arisen. Green economy in the context of sustainable development and poverty eradication, one of the global summits focus themes, involves finding ways of achieving the objectives of sustainable development. Population growth, scarcities of water and natural resources and climate change all entail economic, social and ecological impacts and risks for economic and social development, now and in the years to come. For this reason, an international discussion regarding suitable new guiding principles for addressing these issues has begun. The debate about a green economy is a response to the ecological and social impacts of prevailing economic structures and methods, which do not take adequate account of environmental damage and risks and their social consequences. At the same time, the discussion is highlighting the economic opportunities inherent in a green economy. The green economy concept recognizes the natural foundations of life as the basis and limits for all economic activity for both industrialised countries and developing/emerging countries.

Worldwide risks
1.000 1,000

Fiscal crises Geopolitical conflict Asset price collapse Liquidity/ credit chrunch Climate change

Extreme energy price volatility

Economic disparity Global governance failures Water security Demographic challenges Corruption Flooding Organized
crime

500

Weapon of mass destruction Slowing Chinese Economy Retrenchment from globalization

Global imbalances volatility Chronic diseases

Perceived impact in Billion US$

Critical information infrastrucure breakdown

250

Regulatory failures Food security Extreme commodity price volatility

Fragile Infectious states diseases Earthquakes and volcanic eruptions

Storms and cyclones Biodiversity loss Illicid trade

Infrastructure fragility

Air pollution

Terrorism Migration

Threat from new technology Extreme consumer price volatility

100

Online data and information security

Economic Risks Enviromental Risks Societal Risks Geopolitical Risks Technological Risk

Ocean governance

Higher perceived likelihood

50

Space security unlikely likely Perceived likelihood to occur in the next ten years

Higher perceived impact very likely

Source: World Economic Forums Global Risks Survey 2011

Concentrating societys resources via the green economy concept

We see the green economy as a concept for linking environmental and economic aims in positive ways, in order to increase social prosperity and well-being. Via such links, economic growth becomes environmentally compatible. At the same time, as we move towards a green economy, we have to consider the social aspects and consequences of such change, along with the ways such change relates to other policy areas, such as education, research and development co-operation.

Key efforts in achieving a green economy

Conserving and restoring biological diversity and ecosystems Preventing harmful emissions and pollutant discharges

Achieving an energy system that is based on renewable energy sources

Reduction, recycling and environmentally sound disposal of waste, and closing substance cycles

Key efforts in achieving a green economy include

Replacing non-renewable resources by sustainably produced renewable resources

Reducing the use of non-renewable resources

more efficient use of energy, raw materials and other natural resources

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety

17 %

15 % Mechanical engineering 8% Chemicals 2% Automotive industry

Green techs share of the global market volume in selected industries (in EUR billion) in 2010
~2,650 ~2,600

1,930

1,930 12 % 6% ~1,600 2% ~1,500 20 %

42 %

Green technology

Electrical engineering

Chemicals

Automotive engineering

Mechanical engineering

Environmental technology

Source: GreenTech made in Germany 3.0. Environmental Technology Atlas for Germany

The transition to a green economy will affect all areas of the economy. This means it will necessitate developing the potential of future markets and orienting existing economic sectors to ecological megatrends, in order to strengthen them economically and enhance their competitiveness. That process, in turn, will call for entrepreneurs who have the courage to both seize the relevant economic opportunities and assume social responsibility, by developing sustainable entrepreneurial strategies and business models that can combine business success with positive contributions to the sustainable development of the entire society.

Using the opportunities for environmentally compatible growth

The experience of the financial and economic crisis has shown that growth needs to be oriented to sustainability. Environmental technologies and innovation are important economic drivers in such orientation. The emerging green markets include environmentally friendly energy generation, energy efficiency, resource/material efficiency, sustainable mobility, sustainable water management and sustainable waste and closed cycle management. Both globally and in Germany, such markets have already become important economic factors. In 2011, the global market for environmental technology and resource efficiency had a volume of 2,044 billion euros. Worldwide, the six lead markets for environmental technology are forecast to grow to a total volume of 4,400 billion euros by 2025. That figure translates into average annual growth of 6.5 percent.

Growth forecast for the global green tech and resource efficiency market in 2011, 2015 and 2025 (EUR bn, average annual change 20112025 in percent)
~ 15 % ~ 15 % ~ 15 % 4,403 5.6 % 2,625 389 674

2,044 300 1,744

Germanys market share Germany

2,237

3,729

Rest of World

2011

2015

2025

Source: GreenTech made in Germany 3.0. Environmental Technology Atlas for Germany
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The framework for a green economy

The green economy concept highlights the direction in which societies and economies in a globalised world must transform themselves if they are to achieve sustainable, viable development. The regulatory framework for the economy and for society has to be refined with a view to preventing environmental damage. In Germany, the social market economy has been a success, providing innovation, value creation and social participation. The social market economys ability to learn and to adapt, the employer/employee partnerships and

Traditional industries share of the overall environmental technology and resource efficiency market (excerpt) in 2010
Total market for environmental technology and resource efficiency EUR 1,930 bn (42 %) ~EUR 806 bn
17 % Electrical engineering

15 % Mechanical engineering 8% Chemicals 2% Automotive industry

Source: GreenTech made in Germany 3.0. Environmental Technology Atlas for Germany
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its successes in the area of social security are all conducive to development towards a green economy and, thus, to the sustainable development of the economy and of society. However, in addition to a social framework an economic model must also include sound ecological guardrails for the economy and society. And in this regard the social market economy also provides an outstanding basis for the transition to a green economy. On a basis of ambitious environmental policies, interacting with an innovative, efficient economy and a good position in the market for environmental and efficiency technologies, Germany has already made progress in many areas towards a green economy. For example, production of products for environmental protection has continued to grow disproportionately in Germany over the past few years. Germany now accounts for a large share of global trade in products for environmental protection. This success has made itself apparent in the labour market: According to recent figures, the environmental protection sector now has nearly 2 million employees. Internationally in particular, the transition to a green economy can contribute significantly to poverty eradication, by generating income and jobs and by preventing creation of poverty for example, by preventing environmentally related health damage, soil erosion and overfishing. At the same time, efforts to solve social problems will require additional measures, beyond the scope of the green economy, in areas such as social and education policy. The transition to a green economy will succeed only if all social forces get behind it.

Areas for action: Setting a course towards a green economy

Germany has already moved to modernise its economy and society in keeping with ecological criteria: Between 1990 and 2010, its energy productivity grew by 38.6 percent, while its resource productivity grew by a total of 46.8 percent. It has also made good progress in controlling air pollution: During the same period, emissions were reduced by 56.4 percent, with respect to their corresponding levels in 1990. In addition, Germany now recycles some 90 percent of all construction waste and 63 percent of municipal and production waste.
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With the transformation of its energy system, its Closed Cycle Management Act and its Resource Efficiency Programme, the Federal Government has taken key measures towards a green economy. With the national projects described below, Germany is seeking to send out the message that it is possible to combine growth, resource conservation, technological innovation and sustainability:

Ushering in the era of renewable energy sources and energy efficiency

Achieving an energy supply system that is at once reliable, affordable and environmentally compatible is one of the great challenges of the 21st century. To bring about such an energy system, the Federal Government has adopted an energy concept that calls especially for vigorous expansion of renewable energy sources and sharp increases in energy efficiency. The concept is aimed at making the German economy a) one of the most energy-efficient and environmentally friendly economies worldwide and b) an economy with competitive energy prices and a high standard of living. Security and economic viability of energy supply, and effective policies for protecting the climate and the environment, will play a central role in ensuring that Germany remains competitive in the long term as a centre for industry. We want to strengthen competition and market-economic orientation in energy markets. In doing so, we will be safeguarding lasting economic prosperity, good jobs, innovation and ongoing modernisation in our country. We stand at the beginning of a gradual transformation of our energy supply system. Significantly, the fundamental transformation of our energy system will create opportunities for future generations. Our country is a pioneer on the road to the energy system of the future. We can become the worlds first major industrialised country to achieve a highly efficient, renewable energy system. This will require the entire energy sector to make investments worth billions of euros. Such investments, however, will generate technological and economic opportunities for Germany and safeguard Germanys competitiveness as an economic centre and as an exporting country. The political sector is charged with further improving the framework for innovation and investments, and with eliminating pertinent barriers, to ensure that the necessary long-term investments are made in time. The fundamental transformation of the energy system will succeed only with the broadest possible public support for the transformation and for the requirements it will impose on us all.

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Moving towards true closed cycle management

With its new Closed Cycle Management Act, Germany has taken another major step towards true closed cycle management. In such a system, waste is a resource, and economic and ecological interests go hand-in-hand. Efficient use of ever-scarcer resources and energy sources plays a key role in the global competition between national economies. Modern closed cycle management, with extremely stringent requirements pertaining to recycling, intelligent methods for recovery of valuable raw materials and energy sources and environmentally compatible waste-disposal technologies, has already become a reality in Germany. The new act combines the objectives of reliability, resource efficiency, legal certainty and close interaction with citizens. True closed cycle management, with high recycling rates, can be achieved when citizens, municipalities and private-sector waste-management companies all accept joint responsibility for achieving it. The key aspects of such responsibility include application of the polluter-pays principle, internalisation of ecological and social costs, stringent legal requirements and proper enforcement of such requirements. In accepting such responsibility, we prevent waste on an ongoing basis, meet stringent recycling requirements and use resources more efficiently and carefully.

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Reducing environmental burdens and increasing competitiveness via resource efficiency

Resource efficiency reduces environmental burdens, strengthens global competitiveness and creates new high-quality jobs. Germany wishes to take a leading role in the necessary global transition towards resource-efficient economies. We want to show how, in a highly developed industrialised country, resource efficiency can be enhanced, without any cost to prosperity, and overall consumption of raw materials can be reduced. That is why Germany has adopted its Resource Efficiency Programme (ProgRess). The aim of the programme is to make extraction and use of natural resources more sustainable and to reduce the pertinent environmental burdens to the greatest possible degree. Resource-efficiency policies will help us accept our global responsibility for the ecological and social consequences of resource use. ProgRess describes new approaches, measures and examples for enhancing resource efficiency. In the process, it takes account of the entire value chain: It is aimed at safeguarding a sustainable supply of raw materials, enhancing resource efficiency in production, making consumption more resource-efficient, expanding resource-efficient closed cycle management and making use of cross-sectoral instruments. To achieve those aims, it relies on market incentives, information provision, advising, education, research and innovation, and it seeks to strengthen relevant voluntary measures and initiatives on the part of industry and society. Examples of such measures include expansion of efficiency advising for small and medium-sized companies; support for environmental management systems; intensified orientation of public procurement to use of resource-efficient products and services; support for voluntary product labelling and certification systems; expansion of closed cycle systems; and intensification of technology/knowledge transfers to developing and emerging countries.

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Germany accepts international responsibility

Many current environmental problems, such as climate change, losses of biological diversity and ecosystem services, desertification and pollutant inputs via global distribution of persistent toxins, are interregional or global. They can be solved only via a combination of national efforts and international co-operation. Although many countries see and accept the need for change, global emissions continue to rise, especially but not only in developing and emerging countries. Increasingly, the green economy concept is being seen as a central part of global sustainability policies. For developing and emerging countries in particular, this insight presents the opportunity to leapfrog over the phase of emissions-/resource-intensive industrialisation and to achieve prosperity for broad segments of their populations via significantly more environmentally compatible approaches. Such an approach is indispensable if the ambitious international objectives for climate/environmental protection are to be achieved. Furthering the green economy concept worldwide will call for a wide range of measures, at the bilateral and multilateral levels, in all relevant sectors. With its social market economy,

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which includes a regulatory framework oriented to environmental policy, and with its experience in developing and introducing environmental standards and environmental policy objectives, Germany can play an important role in relevant bilateral and multilateral activities. Germany already has a range of close environmental partnerships, with co-operative relationships and with networks that can be expanded and strengthened. It maintains such partnerships in the expectation that good bilateral relationships, with strategically relevant partner countries, can support success at the multilateral level. Germany is in the favourable situation of having ambitious, tested environmental concepts/standards and cutting-edge environmental technologies. Consequently, efforts need to be made to involve the German environmental technology sector in relevant activities. The Rio+20 conference is a central milestone at the multilateral level. Germany is supporting efforts to adopt, at the conference, a UN Green Economy Roadmap that provides for country-specific advising services, via the UN system, in support of the transformation towards a green economy. Reform of the United Nations environmental governance institutions is expected to provide an effective UN structure alongside existing bilateral instruments for supporting transformation towards a global green economy.

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