what is green and inclusive growth? :: jordan schwartz
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What is Green and Inclusive Growth?
Caribbean Growth ForumJune 18, 2012
CONTENTS
• Sustainable development and green growth
• Urban challenges in LAC – an example of inclusive green growth challenges
• Inclusive green growth in practice
• The green energy challenges - Caribbean
3Source: Country Environmental Analyses, World Bank
A BAD ENVIRONMENT IS COSTLY
Cost of Environmental Degradation(% of GDP equivalent)
Average
… economic growth that is environmentally sustainable.
• Not a new paradigm, but aims to operationalize sustainable development
• An approach for countries to achieve robust growth without locking themselves into unsustainable patterns
• Not inherently inclusive, hence the need for specific policies to ensure the poor benefit
GREEN GROWTH IS…
GREEN GROWTH IS…
1. Clean
2. Efficient
3. Resilient
But it also has to be Inclusive
GREEN GROWTH IS…
Clean Efficient Resilient Inclusive
…but
• What does this mean for policy makers? • For setting investment priorities?• For choosing among trade-offs?
Since Rio, Latin America and Caribbean has served as the world’s laboratory for inclusive green growth
• From Payments for Environmental Services to high production agriculture…
• From community-driven slum upgrading to the world’s most extensive use of Bus Rapid Transit…
• From the first regional catastrophic risk insurance facility to the lowest carbon energy matrix of the developing world.
But how do we mainstream?
Sectoral Policies, Regulations, Investments, Incentives and
Behavioral Changes
URBAN AND INFRASTRUCTURE SERVICES:
Key Objectives for Green and Inclusive Growth
LAC Regional Challenges
Percentage Urban Population LAC
40
90
1950 2020
URBAN FOOTPRINT
Atlanta
Barcelona
Kingstonc.700,000 people (2011)480 km2
Exhausting land, straining service delivery
URBAN FOOTPRINT
Atlanta
Barcelona
KingstonPopulation equalized with Barcelona
Exhausting land, straining service delivery
URBAN FOOTPRINTSMALL AND GROWING ARE ALSO
SPRAWLING FASTER
Brazilian Cities
Sprawl Index (2000)Pop
ula
tion
Gro
wth
2000-2
008
URBAN TRANSPORTWE ALREADY OWN A LOT OF CARS
Road congestion in Mexico City
…and growth in automobile ownership is skyrocketing
Vehicles per thousand people LAC
300
16
BOLSTERING RESILIENCEprotecting physical capital and enhancing
competitiveness
The challenges
political economyentrenched behaviors
limited and traditional financing
18
THE REAL CHALLENGES: Political acceptability and governance
failures
19
THE REAL CHALLENGES: Social acceptability
and entrenched behaviors
ENERGY
Key Objectives for Green and Inclusive Growth
Energy
Clean
A low carbon composition
of technology
and fuel mix in generation
capacity.
Efficient
Increased efficiency in production, supply and
use of energy.
Resilient
Increased system
resilience, for instance
through inter-
connection.
Resilient
Provide universal access at
affordable prices.
Inclusive
21
Energy in the Caribbean – Booming Demand
Average annual growth of 3.6 percent throughout 2028
Doubling of demand between 2009 and 2028
Individual country growth rates vary between 2.4 and 7.9 percent per year
Peak demand will grow in * Dominican Republic from 2,300 MW in 2009 to 4,400 MW in 2028 * Jamaica from 680 MW to 1,500 MW
Electricity – the Caribbean Fuel Source
22
Country Diesel
Heavy Fuel Oil
Natural Gas Coal Other
Antigua and Barbuda X XBarbados X X X BagasseDominica X HydroDominican Republic X X X X 20% HydroGrenada XHaiti X XJamaica X X Bagasse,
WindMartinique X XSt. Kitts X XNevis X GeothermSt. Lucia XSt. Vincent and the Grenadines
X X
Trinidad and Tobago X
23
Existing Generation Technologies (MW)
Gas Turbine
Steam Turbine
Low Speed Diesel
Medium Speed Diesel
Hydro
Other
0 200 400 600 800 1000 1200
692
900
1115
650
551
47
24
Base Case
Scenario
Fossil Fuel Scenario
US$2.5 Billion
Interconnection / Renewables
ScenarioUS$2.6 Billion
Integrated ScenarioUS$4.4 Billion
Energy Affordability - Cost Savings by moving from Base Case to Integrated Approach
through 2028
14
Green Energy - Investment Requirements (Million US$)
Integrated Scenario
Antigua and Barbuda 107
Barbados 140
Dominica 818
Dominican Republic 6,200
Grenada 194
Haiti 360
Jamaica 1,937
St. Kitts 2
Nevis 1,913
St. Lucia 61
St. Vincent and the Grenadines 195
TOTAL 11,926
Production Cost Savings 14,500
26
INCLUSIVE POLICIES- INCLUDE SMARTER SUBSIDIES AND
TRANSFERS
Average distribution of energy consumption subsidy benefits across 20 countries
Poorer 20% population7% of benefits
Richer 20% population43% of benefits
27
Looking Forward
Caribbean countries face huge challenges to meet growing energy demand and diversify energy mixRelying on diesel and HFO is the most costly solution No silver bullet but requires a combination of fossil fuels and renewables to meet future demandPipeline gas, LNG, geothermal, wind should play a much more prominent role in future generation mixThe speed of renewables development will influence future demand for fossil fuel requirements
28
Integrating power systems, building submarine cable connections and sub-regional power markets are win-win solutionsInvestment requirements are large but production costs saving are hugeA variety of private, public and IFI support will be necessaryRequires countries to improve legal, regulatory and institutional framework and cross-country cooperation
Looking Forward