(Sustainable and Inclusive) Growth: Learning from Innovation in Emerging Economies
Total Page:16
File Type:pdf, Size:1020Kb
Unlocking business dynamism to promote green (sustainable and inclusive) growth: learning from innovation in emerging economies Stefanie Bauer, Karen Ellis, Daniel Harris, Pragya Kothari, Alberto Lemma, Dominik Weidert, and Zhang Xiaoying Working Paper 361 This material has been supported by UK Results of research presented Aid from the UK Government, however the views expressed do not necessarily reflect in preliminary form for discussion the UK Government’s official policies. and critical comment Shaping policy for development Working Paper 361 Unlocking business dynamism to promote green (sustainable and inclusive) growth: learning from innovation in emerging economies Stefanie Bauer (GIZ), Karen Ellis (ODI), Daniel Harris (ODI), Pragya Kothari (GIZ), Alberto Lemma (ODI), Dominik Weidert (independent expert), and Zhang Xiaoying (IPRCC). January 2013 ODI 203 Blackfriars Road, London SE1 8NJ www.odi.org.uk * Disclaimer: The views presented in this paper are those of the author(s) and do not necessarily represent the views of ODI, GIZ, IPRCC or UKAID ISBN 978-1-909464-03-2 Working Paper (Print) ISSN 1759 2909 ODI Working Papers (Online) ISSN 1759 2917 © Overseas Development Institute 2012 Readers are encouraged to quote or reproduce material from ODI Working Papers for their own publications, as long as they are not being sold commercially. For online use, we ask readers to link to the original resource on the ODI website. As copyright holder, ODI requests due acknowledgement and a copy of the publication. ii Contents Contents iii Acknowledgements iv Tables and boxes v Figures v Acronyms vi Executive summary x 1 Introduction 1 2 The central tenets of a green growth paradigm 3 2.1 What is green growth? 3 2.2 Why green growth? 3 3 Green growth in India 5 3.1 Growth, poverty reduction and environmental protection in India 5 3.2 The current policy environment 17 3.3 Proposed case studies for further analysis 32 4 Green growth in China 37 4.1 Growth, poverty reduction and environmental protection in China 37 4.2 The current policy environment 45 4.3 Proposed case studies for further analysis 61 5 Conclusion 64 References 66 iii Acknowledgements The authors would like to thank John Young (ODI), and Dr Wang Xiaolin (IPRCC), for their thoughtful contributions to the framing of this research and comments on drafts of the paper. Although interviewees remain anonymous, we would also like to thank those who gave their time to be consulted during bilateral meetings and stakeholder workshops. We also want to thank Katherine Miles for her feedback and contribution to the final draft of the paper. iv Tables and boxes Table 1: Proposed case studies xii Table 2: Key focus of India’s five-year plans between 1951 and 2012 18 Table 3: Growth of installed wind capacity in India 26 Table 4: The Indian green building rating systems 30 Table 5: Main Strategic Emerging Industries (SEI) technologies 47 Table 6: Policies to support Strategic Emerging Industries (SEIs) in China 48 Table 7: Emissions trading in China, 11th and 12th five-year plans 53 Table 8: Ecological compensation mechanisms, 2008 54 Table 9: Selected green subsidies 57 Table 10: Phases of green public procurement and relevant legislation 59 Box 1: China’s Top-1000 Energy-Consuming Enterprises Program 61 Table 11: Initial shortlist of recommended case studies for further analysis 62 Table 12: Proposed case studies 64 Figures Figure 1: Population living on less than US$1.25 per day 7 Figure 2: The sectoral shift of India’s economy since 1950 8 Figure 3: The environmental apparatus in India (authors’ own graph) 13 Figure 4: National energy saving targets under the PAT scheme (2012-2015) 25 Figure 5: Selected countries’ GDP growth rate, 1978-2011 37 Figure 6: Selected countries’ GDP per capita growth rate, 1979-2011 38 Figure 7: Mapping a typology of Chinese policies for green and inclusive growth 61 v Acronyms BEE Bureau of Energy Efficiency BMO Business Membership Organisation BMZ Federal Ministry for Economic Cooperation and Development BR Business Responsibility BRICS Brazil, Russia, India, China and South Africa BSE Bombay Stock Exchange CBRC China Banking Regulatory Commission CCFG Conversion of Cropland to Forests and Grassland Program CCVI Climate Change Vulnerability Index CDKN Climate Development Knowledge Network CDM Clean Development Mechanism CEIA Cumulative Environmental Impact Assessments CG Central Government CGCF China Green Carbon Foundation CGI China Greentech Initiative CII Confederation of Indian Industries CII-ITC- Centre of Excellence for Sustainable Development of the Confederation of Indian CESD Industry CIRC China Insurance Regulatory Commission CPSE Central Public Sector Enterprise CSR Corporate Social Responsibility DIPP Department of Industrial Protection and Promotion DPS Discharge Permit System DSM Demand Side Management DST Department of Science and Technology EFR Environmental Fiscal Reform EIA Environmental Impact Assessment EPA Environmental Protection Act EPB Environmental Protection Bureau ESCO Energy Service Companies ESG Environmental, Social and Governance ET Economic Times ETS Emissions Trading Schemes EV Electric vehicle FC Finance Commission FCV Fuel Cell Vehicles vi FDI Foreign Direct investment FE Financial Express FECF Forest Ecosystem Compensation Fund FICCI Federation of Indian Chambers of Commerce and Industry FMC Foundation for MSME Clusters FT Financial Times FYP Five-Year Plan G-20 Group of Twenty GIZ Gesellschaft für Internationale Zusammenarbeit GBI Generation Based Incentives GDP Gross Domestic Product GOI Government of India GRI Global Reporting Initiative GRIHA Green Rating for Integrated Habitat Assessment GW Gigawatts ICT Information and Communication Technology IDS Institute of Development Studies IEA International Energy Agency IEP Integrated Energy Policy IGBC Indian Green Building Council IGEN Indo-German Energy Programme IGEN-RE Indo German Energy Programme - Renewable Energy Component IICA Indian Institute of Corporate Affairs IISD International Institute for Sustainable Development ILO International Labour Organization IPCC Intergovernmental Panel on Climate Change IPRCC International Poverty Reduction Center in China ISO International Organization for Standardization IT Information technology LEED Leadership in Energy and Environment Development LGOP State Council Leading Group Office on Poverty Reduction and Development NDRC National Development and Reform Commission MCA Ministry of Corporate Affairs MDG Millennium Development Goal MEP Ministry of Environmental Protection MNRE Ministry of New and Renewable Energy MoCI Ministry of Commerce and Industry MoEF Ministry of Environment and Forest MOST Ministry of Science and Technology vii MRV Measurement, reporting and verification MSME Micro, Medium and Small Scale Enterprises MW Megawatts MWh Megawatt hour NAPCC National Action Plan on Climate Change NBS National Bureau of Statistics NDRC National Development and Reform Commission NEP National Environment Policy NEPA National Environmental Protection Agency NGO Non-governmental Organisation NInC The National Innovation Council NMP National Manufacturing Policy NVGs National Voluntary Guidelines ODI Overseas Development Institute OECD Organisation for Economic Cooperation and Development PAT Perform Achieve and Trade Scheme PBOC People’s Bank of China PCI Planning Commission of India PHEV Plug-in Hybrid Electric Vehicles PLG Provincial and Local Government POP Persistent organic pollutant PRC People’s Republic of China R&D Research and Development RBI Reserve Bank of India REACH Registration, Evaluation, Authorisation and Restriction of Chemical Substances REC Renewable Energy Certificates RMB Renminbi RPO Renewable Purchase Obligation SAPCC State Action Plan on Climate Change SEBI Securities Exchange Board of India SEI Strategic emerging industry SEPA State Environmental Protection Administration SERC State Electricity Regulatory Commission SISCA Selco Incubation Centre for South Asia SME Small and medium enterprises SOE State-owned enterprise tce tonnes coal equivalent TERI The Energy and Resource Institute viii ToI Times of India TVE Township and village enterprise UK United Kingdom UNCTAD United Nations Conference on Trade and Development UNEP United Nations Environment Program UNFCCC United Nations Framework Convention on Climate Change UNIDO United Nation Industrial Development Organisation US United States VAT Value-added tax VC/PE Venture Capital and Private Equity WBCSD World Business Council for Sustainable Development WDI World Development Indicators WPI Wholesale Price Inflation WRI World Resources Institute WSJ Wall Street Journal WWF World Wildlife Fund ix Executive summary Achieving sustainable and inclusive growth – or ‘green growth’ as it is defined in this working paper – is an urgent and challenging task. Creating new sources of income and employment that reduce poverty and are environmentally sustainable is the new global imperative. There is a great need for guidance and practical examples of successful policy interventions to help achieve this goal. While no single country has yet achieved green growth, many emerging economies – including China, India and Brazil – are implementing or experimenting with innovative policy approaches and have succeeded in stimulating considerable amounts of associated investment and innovation by business as a result. So there is enormous scope to identify emerging lessons in real time, as policies are rolled out, to generate the policy and practical recommendations