Rebeca Grynspan: Remarks at the Second East Asia Low Carbon Growth Partnership DialogueMay 17, 2013
Ms. Rebeca Grynspan
U.N. Under-Secretary General and UNDP Associate Administrator
At the Second East Asia Low Carbon Growth Partnership Dialogue
Session 2 Panel: Policy challenges and improvement of environments for promoting technology transfer
Tokyo, Japan, 17 May 2013
Mr. Fumio Kishida, Minister of Foreign Affairs of Japan,
Mr. Mok Mareth, Senior Minister of Environment of Cambodia,
Mr. Nguyen Minh Quang, Minister of Natural Resources and Environment of Viet Nam,
Mr. Pithaya Pookman, Vice Minister of Natural Resources and Environment of Thailand,
Ladies and Gentlemen,
I congratulate Japan for convening this Second East Asian Low Carbon Partnership Dialogue, and thank Japan and Cambodia for inviting me to join this distinguished panel discussion today. I am glad to see that we are building on the success of last year’s dialogue.
Japan’s leadership and commitment to addressing the challenges of climate change – both at home and internationally – is exemplary.
As we emphasized last year, there is an urgent need to transform production and consumption patterns towards a low-carbon development pathway. To get there we need to take action at the global, national and local/community levels and each of these levels require different things. It is also true as it has been said that at the national level there is no “one size fits all”; LDCs and SIDs come to mind as 2 distinct groups to be considered. But facing their challenge also requires to change our discourse from highlighting the tradeoffs between poverty eradication, environment and economic growth and focus in what we call “the triple wins” that is a positive agenda, where we choose the interventions that offer developing countries the opportunity to reduce poverty, stimulate the economy, and protect the environment at the same time. We are convinced that this is not only A WAY to go but the ONLY way to go if we want to achieve Sustainable Human Development. In this year’s HDR there is again a reminder that the progress experienced by the world in human development will not be sustained in the future unless equity and the environment are addressed successfully.
We recognize the huge challenges associated with this agenda. Two of them a central part of the discussions today: technology transfer and financial resources. We have been asked to address the financial resources constraint and how to use the public money as a catalyst to mobilize resources from the private sector in order to realize a green market.
As an example of the challenge we face, in the area of clean energy alone, for instance, investment needs have been estimated at between US $500 billion to US$ 1.2 trillion a year globally. To get there, private investment will certainly be the primary tool, but public finance HAVE to play a critical role in creating the conditions to attract that much needed private investment. In UNDP we have calculated that we need to mobilize around 1$ of public investment to get around 5$ investment from the private sector, let alone the regulation frameworks, capacity and institutional building that needs to be done.
In my short remarks today I will offer three principles, which we at UNDP believe should guide the use of public finance in this regard – equity, efficiency, and effectiveness.
Allow me to elaborate.
First, equity. How to achieve equitable access of the Developing countries to international finance, so that all developing countries participate in, and benefit from, low-carbon growth. Because we know how concentrated in a handful of countries is international finance, public and private. And also how inequalities can play at the national level so green growth not necessary translates into inclusive growth.
What is important therefore is that public finance from international sources be flexible enough to support the design and deployment of low carbon initiatives in any developing country context. This is a key consideration for the Green Climate Fund, whose business plan, as we know, is currently being elaborated. The same applies to technology transfer that is about access to affordable, cost competitive technology for ALL developing countries and the developing of the necessary capacities to access, maintain and use technologies effectively. This is even more reachable now that technology that was previously too expensive is becoming available for broad applications in all developing countries. One dramatic example is the case of solar PV energy were module costs per watt have fallen from 40$ in 1979 to $0.9 in 2012, a 98% cost reduction!
UNDP has established a number of programmes to help countries access and deploy climate finance. UNDP’s Low-Emission Capacity Building programme - which is active in 25 countries, including 6 in Asia - is an example of an initiative that lays the foundations for developing countries to benefit from green growth.
In Vietnam, for example, this programme is working to strengthen the capacity of the government to develop Nationally Appropriate Mitigation Actions (NAMAs), which outline opportunities for private investment in low-carbon initiatives.
Second principle, efficiency, public finance must be used catalytically to drive private investment and also to make private investment more equitably distributed between countries!
This is even more important now that public finance is increasingly scarce.
The private sector is already responding. Global private sector investment in clean energy was the second highest ever last year - close to an impressive $270bn. But the problem is that developing countries outside BASIC countries (Brazil, South Africa, India and China) accounted for less than 10 per cent of this total.
For these countries not to be left behind, focus needs to be given to shift the risk/reward profile of investments. These means 1) to put in place the necessary policies to incentivize investment and 2) systematically removing the underlying barriers and risks to investment that in turn unlocks private sector funding (for example with innovative financial schemes and price policies like the “feed in tariffs” models).
UNDP is one of the largest providers of technical assistance in this area. In Malaysia, for instance, with the financial support of the Global Environment Facility (where Japan is again the main contributor), UNDP assisted the government in the design of the 2010 renewable energy law, building local technical capacity, and creating financial incentives for investment, this project has contributed to an estimated 4 billion US$ in investment in solar photovoltaic energy and thousands of jobs.
A new UNDP report, Derisking Renewable Energy Investment, provides guidance for policymakers as they identify the best use of public funds to scale-up private investment in renewable energy. I encourage all of you to have a look at this innovative report.
The third and final guiding principle for spending public finance wisely is effectiveness.
Public finance can have most impact when low-carbon activities are not treated in isolation from other national priorities. Instead, it is most effective when it creates synergies - between mitigation and adaptation, and between climate action and other national development priorities.
UNDP is assisting national and sub-national governments in over 100 countries, of which 19 are in Asia to do this. The aim is to help decision makers identify low-carbon objectives which are complemented with climate-resilient approaches and aligned with national development priorities
At UNDP, we are also an enthusiastic partner of the Secretary General’s Sustainable Energy for All initiative and of Japan’s leadership through this Forum and through the TICAD V Conference that is going to take place in Yokohama in two weeks’ time and will also discuss Strategies for Low Carbon Growth and Climate Resilient Development. These initiatives are critical to pursue low-carbon growth.
Allow me to conclude by emphasizing that as the international community embarks on the design of a post-2015 development agenda and the Sustainable Development Goals, it is important to ensure that the promotion of low-carbon growth is an integral element of that agenda, together with tackling the way we measure progress. Going beyond the GDP is becoming even more important.
UNDP stands ready to work with all our partners in the region and beyond to make the promise of low-carbon growth a reality.