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OECD Green Growth Strategy:
Relevant issues for Investment Policy
Review of Ukraine
Brainstorming on IPR
Chapter: Investment
for Energy Efficiency
Kyiv, 6 July 2010
Blanka Kalinova
OECD Investment Division
blanka.kalinova@oecd.org
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Presentation
OECD Green Growth Strategy: main elements and
adopted approaches
Investment in support of green growth
OECD Green Growth Strategy: Relevant issues for
Investment Policy Review of Ukraine
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What is green growth?
Definition: A way to pursue economic growth and development, while
preventing environmental degradation, biodiversity loss and
unsustainable natural resource use.
Objectives: maximize the chances of exploiting cleaner sources of
growth and develop a more environmentally sustainable growth model.
OECD Green Growth Strategy:
Mandate by OECD Ministerial Council meeting in June 2009: bring
together economic, environmental, social, technological and
development aspects into a comprehensive framework (horizontal &
multidisciplinary project)
Interim Report submitted in May 2010; final report in 2011
International dimension: strategies should be articulated at the
national level, but international cooperation and coordination critical
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OECD approach: From the analysis to policy
recommendations
Develop a conceptual framework for understanding green growth;
analyse new issues raised by green growth (e.g. potential effects of
green growth on the level and nature of employment)
Develop a set of indicators to measure and asses economic,
environmental and well-being aspects of green growth (e.g.
environmental efficiency of production and consumption)
Peer reviews of national green growth policies: identify best practices
and lessons learned
Address political economy considerations of green growth: public
actions and corporate practices
Provide a platform for international co-ordination and dialogue
through the International Green Growth Dialogue initiative
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Green Growth Strategy Framework
•Reform environmentally harmful subsidies
Remove barriers to •Remove barriers to trade in environmental goods and services
•Strengthen policy coherence
green growth
•Adopt an integrated policy mix: market and non-market based
Promote trajectory instruments
•Accelerate the innovation and diffusion of green technologies
shift •Encourage measures for greener consumption and develop innovative
financial mechanisms
• Smooth reallocation of labor through key labor market and
Support the training policies Greener
• Upgrade workers' skills and competencies
transition • Address distributional effects of the associated structural change growth
• Improve financing mechanisms for global public goods
Strengthen
• Enable pro-poor green growth
international co- • Address potential competitiveness issues
operation • Promote technology transfer and R&D co-operation
• Develop a new accounting framework and a set of green growth
indicators
Measure progress • Measure impact of specific policies
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Overcome barriers to green growth
Getting price right for green growth: design market-based instruments
(imposing direct cost on the polluter) and environmentally-related taxes
(currently only 1.7% of GDP in OECD countries), such as carbon tax
Reform environmentally harmful subsidies: e.g. subsidies to fossil-fuel
energy consumption or production (USD 310bn in 20 non-OECD countries)
and agricultural subsidies (USD 265bn in OECD countries) – “win-win”
opportunity (reducing budget burden and avoiding misallocation of resources)
Removing barriers to trade in environmental goods and services;
encourage international technology transfer
Strengthening policy coherence: avoid environmentally-related taxes
which would burden low-incomes or prompt pollution-intensive firms to
reallocate their production – international cooperation required to overcome
potential competitiveness concerns
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Promote trajectory shift and support
the transition
Acting on both demand and supply sides: diffusion of
green technologies and measures for greener consumption
Adopt an integrated policy mix: market pricing signals
(environment-related taxes, charges, tradable permits) and non-
market based instruments (regulations and policies to support
green technologies and innovations)
Design and implementation: no one-size-fits-all approach in
the choice of policy instruments – national strategies can differ;
Reform approach: smooth the transition through labour market
policies and upgrading skills and competencies;
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OECD Green Growth Strategy and IPR
of Ukraine
Getting price right: energy prices must first reflect production costs
to pass right signals to producers and consumers (eliminate energy
production/consumption subsidies)
Manage transition and shift to green growth:
Introduce progressively environment-related taxes
Put in place regulations and policies to support green technologies
Take into account the effects on growth, employment and skills
Green growth policy in the energy sector: contribution by
International Energy Agency – 3 main areas:
Energy efficiency
Renewable energy
Low carbon technologies
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Energy efficiency
Investing in energy efficiency provides several advantages:
Increase energy security
Reduce energy costs
Improve environment
Main energy efficiency policies:
National strategies to impose minimum energy performance standards
for appliances and equipment
Innovative financial instruments to encourage energy efficiency
investment, e.g. public tariff guarantees in public-private partnership
International Partnership for Energy Efficiency Cooperation
(IPEEC) established in 2008 (including China, Japan, Russia, UK,
USA, the EC) to facilitate actions aimed at high energy efficiency
gains
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Investment in support of green growth:
Contribution to OECD Green Growth
Strategy
Corporate practices to address climate change (notably
greenhouse gas emissions): building on principles of
responsible business conduct as reflected in the OECD
Guidelines for MNE
Mobilise private investment in support of green growth - the
role of government policy: using the OECD Policy Framework
for Investment to identify within different policy areas covered
(e.g. tax, trade or competition policies) how governments can
contribute to encourage investment in non-polluting and
environment-friendly technologies
Green Foreign Direct Investment Indicators: identify
discriminatory barriers against “green” foreign investment
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OECD Survey on Business Practices to
Reduce Emissions
Survey carried out in March-June 2010: more than 60
companies from 15 countries responded to the questionnaire,
representing a broad range of sectors (energy, mining, industry,
food, pharmaceuticals)
Issues addressed:
– Accounting and disclosing greenhouse gas (GHG) emissions:
(i) why? (drivers of business actions – regulations, costs, societal
expectations); (ii) how? (reporting framework); (iii) difficulties (to
estimate/collect data)
– Corporate plans to reduce emissions : (i) motivations
(regulations, costs, pressures); (ii) what actions? (energy efficiency,
use of less carbon-intensive inputs/technologies)
– Interface with suppliers and consumers: (i) involving suppliers;
(ii) information to consumers (labels); (iii) governments measures
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Green Investment module: Relevant issues
for IPR of Ukraine
OECD Guidelines for MNE: Ukraine’s adherence is the ultimate
goal of the IPR; the Guidelines are recommendations to
companies on responsible business conduct; ongoing update will
provide further guidance to business in addressing growing
environmental concerns
OECD Policy Framework for Investment (PFI): already used in
UA IPR – the special chapter on energy efficiency could provide
useful insights for envisaged “greening” PFI, i.e. how to create
investment-friendly environment for “green” investment
OECD survey on business practices to reduce emissions:
some answers from companies operating in Ukraine welcome to
see their practices in comparison with other countries
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Some insights from the OECD Survey on business
practices to reduce emissions: Motivations for
undertaking a GHG inventory
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OECD Survey: Motivations to reduce GHG
emissions
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OECD Survey: Actions taken by companies to
reduce GHG emissions
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OECD Survey: Usefulness of government measures
to engage suppliers
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OECD Survey: How companies transfer clean
technologies
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OECD Survey: Usefulness of government measures
in host countries to support technology transfer by
companies
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Possible lessons for IPR from the
OECD survey
Energy savings/efficiency is the main motivation of the
surveyed firms for:
undertaking a GHG inventory
reducing GHG emissions
actions to reduce GHG emissions
Government measures/public policy play a critical role to:
engage suppliers
support technology transfer by companies
Some evidence of “greening” effects:
Companies transfer the same level of technology & procedures in
all company
Invitation to companies operating in Ukraine to respond to OECD
questionnaire
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For more information on
OECD Green Growth Investment Policy Issues
Strategy
www.oecd.org/greengrowth www.oecd.org/daf/investment
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