Green Growth and Role of EcoEfficiency

1
Second Green Growth Policy Dialogue. Beijing,
2006 . 5. 23-25
Green Growth and Role of Eco-Efficiency
2006 . 5. 23-25
Jeong-In, Kim, (Chung-Ang University )
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Contents
Economic Growth and Consumption Pressure
01
Environmental Pressure and Costs
02
Green Growth and Role of Eco- Efficiency
03
Road to Ahead
04
3
01
Economic Growth and Consumption Pressure

• National consumption pressure per person
  country (Human Development 1998)
• Japan, Korea, and Taiwan show double pressure
  per capita of the world average,
• China most pressure at the country level.

ltFigure 1gt Consumption Pressure and
Environmental Burden (1995)
4
01
Economic Growth and Consumption Pressure

• - Environmental burden is not always low for high
  income economy.

ltFigure 6gt Per Capita GDP and Environmental
Sustainability Index
Source World Economic Forum
ltTable 6gt Some Countries Per Capita Consumption
Pressure Index (CPI) (95)
Source WWF(1998), Living Planet Report, p.1
5
01
Economic Growth and Consumption Pressure

• Northeast Asian countries are taking one fifth
  of world economic market

• After 20 years, NE will be 20 of Economic
  Share in the World

ltTable 1gt Future Perspective of Economic
Proportion in Northeast Asian (Unit )
Source Mizuho Research Institute, Economic
Outlook, 2004
6
01
Economic Growth and Consumption Pressure

• - Several areas in Asia Pacific are under high
  water stress, including north China.
• Average level of suspended solids in major
  rivers rapidly escalated to 20 times
• than water quality standard recommended (0ECD)

ltFigure 2gt Water Withdrawals Against Water
Resources (1990-2020)
7
01
Economic Growth and Consumption Pressure

• IGES White Paper
• Sustainable Asia 2005 and Beyond In Pursuit
  of Innovative Policies (2005)
• In 2025, Asias water consumption will be about
  1900 Km³

ltFigure 3gt Increase of Water Consumption by
Region
Source Igor A. Shiklomanov Summary of the
Monograph World Water Resources at the
Beginning of the 21st Century,
2003.
8
01
Economic Growth and Consumption Pressure

• - NE energy demand increase two
• times more than 1999 till 2020
• China will consume 70 demand

• 1. China
• China's economic boom is expected to
• maintain an upward trend until 2020.
• 2. Korea
• - Bank of Korea(2005)
• share of Korean economy in the world
• 1.7,
• - increase to 2 (2040)
• 3. Japan
• Share of economy 12 (2003)
• Share of economy 6 (2040)

ltTable 2gt NE Countries Final Energy Demand
Until 2020
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01
Economic Growth and Consumption Pressure
ltTable 3gt Estimation of Petroleum Imports among
Northeast Asian (2001-2025)
(Unit Million barrel/day )
Note ( ) mean import from China. Source IEA,
World Energy Outlook, 2004

• If Chinese economic growth maintain 6 in
  average per year until 2030,
• Consumption of primary energy increase from 0.85
  billion ton to 2.4 billion tons(2030)
• Importing cost for petroleum may be about 25.3
  billion US dollars.

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01
Economic Growth and China

• - Magda Lovei(2005) from the World Bank argued
  that social welfare is determined
• by the level of different forms of capitals
• - Net saving is calculated from
• Gross national saving - depreciation
  education expenditure pollution damage
• mineral depletion net forest depletion
  (Environmental accounting)

ltFigure 4gt Comparison of gross national
savings and adjust net savings
ltFigure 5gt Trends of Gross national savings and
Adjust net savings in China
Source World Bank (2006) Where is the wealth of
Nations? World Bank Washington DC
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02
Environmental Pressure and Costs
China - To produce 1 worth of product,
industry spend 3 times more energy than the
world average, seven times more than Japanese
industry.
ltTable 7gt Trends of Electric Equipment
Production in China (Unit 100,000)
Source Summary of Chinese Statistics, 2002
12
02
Environmental Pressure and Costs

• - Chinas automobile demand(2003) ranked 3rd in
  the world.
• Car sales with over 2000cc power capacity 72
  .
• - Korea Sales of RV/large automobiles are the
  most selling items.

ltTable 8gt Sales of Domestic Automobile by Size
in Korea
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02
Environmental Pressure and Costs

• Portion of large refrigerator is 2.5 times
  higher than Japan in Korea.
• Life cycle of these products are quite limited
  refrigerator is 7 years,
• washer 6 years, Color TV 7 years, and
  automobiles around 6-7 years.

ltTable 9gt Proportion of Market Share for the
Imported Goods (Unit )
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02
Environmental Pressure and Costs

• World consumption of raw materials (China) had
  taken 7 (1990), but it increase 20 (2003)
• - will be increased two times more in 2010 in
  China.
• Chinese Institute of Science
• - 2005, the growth rate of GDP has expanded 10
  times comparing to 1949,
• - Growth rate of consumption for raw material
  increased 50 times more than
• before.

ltTable 10gt Chinese Eco-efficiency Indicators
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02
Environmental Pressure and Costs
ltTable 11gt Comparison of GHGs Intensity by
Industry Sector and Its Ranking
Note P-production, C-Consumption, I-Intensity,
A-Asia, East U-Eastern Europe Source OECD, 2005
16
02
Environmental Pressure and Costs
ltTable 12gt Comparison of Some Research Results
on the Economic Losses Caused by Environmental
Problems in China
Source Xu Songling, 1998 Fu-Chen Luo et al.,
1999
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03
Green Growth and Role of Eco-Efficiency

• Green Growth strategies supportive fiscal
  policies
• - Taxes of natural resources exploitation
• - Elimination of environmentally damaging
  subsidies
• - Pollution charges and taxes
• - Environmental or green tax reforms.
• Environmental policies
• - Regulations of emissions
• - Integration of environment into sectoral and
  regional policies, plans, program
• - Appropriate public environmental expenditure
  management
• Strong institutional and implementation
  frameworks
• - Incentives, enforcement, and cross-sectoral
  coordination
• - Monitoring and evaluation of effectiveness
  and results

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03
Green Growth and Role of Eco-Efficiency
ltCase Igt
IEI was an index indicating the net changing of
environmental pressure (EP) and economic driving
force (DF) during the certain period time.
     ? IEI  1 (EP/DF)ey/(EP/DF)by x 100
 1 (EPey/EPby)/(DFey/DFby) x
100 where, ey end of year, by beginning of
year                  If, IEI gt 0 ?growth rate
of DF gtgrowth rate EP ?? Improved () If,
IEI lt 0 ?growth rate of DF lt growth rate EP
? Worsed (-)
?, Northeast Asian countries begin to act
for the eco-efficiency work (circular economy).
- Chinese National Development and Reform
Commission (NDRC) announced China would
speed up its move in building a resource
efficient and energy efficiency society -
will be written in the 11th Five-Year Plan.  
? Japan declared the recycle - based economy,
1) eco-efficiency forum M 2) material
flow analysis 3) factor x idea 4)
index of eco-efficiency improvement
macro level and micro level. - European
Environment Agency (EEA) - Nordic region
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03
Green Growth and Role of Eco-Efficiency
ltTable 13gt Trend of Index of Eco-efficiency
Improvement (IEI) (1990-2000) 
Unit
Source BOK, New Account of Environment and
Economy in Japan, 2005.2
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03
Green Growth and Role of Eco-Efficiency
ltCase IIgt

• Concept of eco-efficiency was introduced by the
  Business Council on
• Sustainable Development
• Eco-efficiency and its underlying philosophy of
  dematerialisation open up
• new ways to look at the full system cost and
  the value associated with
• products or services
• Objective of eco-efficiency
• - To maximize value, minimizing resource use
  and adverse environmental
• impacts.  
• - Does not address all sustainable
  development.

 Eco-efficiency  product or service value /
environmental influence
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03
Green Growth and Role of Eco-Efficiency
ltFigure 8gt International Comparison of
Eco-efficiency
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03
Green Growth and Role of Eco-Efficiency
ltCase IIIgt

• Basque countries (Spain, Portugal) GDP growth
  grew 37 and unemployment
• dropped by 16.
• However, municipal solid waste produced per
  capita was increased to 47, emission
• of GHS was increased by 25

ltFigure 9gt Eco-efficiency in Basque Country
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03
Green Growth and Role of Eco-Efficiency

• 1990 2000, GDP in EU grew by 23, higher than
  the rate of energy
• consumption (10),
• MSW (municipal solid waste produced) per capita
  (12)

ltFigure 10gt Eco-efficiency in EU
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03
Green Growth and Role of Eco-Efficiency
ltFigure 11gt GDP and DMI Relation Material Use,
Water Use

• Even China shows good decoupling trends from
  1988 to 2004.
• Only residential sector has increasing trend of
  growth of pollution.

ltFigure 11gt Chinese Eco-efficiency
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03
Green Growth and Role of Eco-Efficiency
ltCase IVgt

• The Austrian government has put forward a plan
  to dematerialize its
• economy by a factor of 10 in the coming
  decades. (Factor X)
• Dutch government worked on a factor of 4 by
  doubling gross national
• product (GNP).
• European Union came out in favor of an
  improvement in resource
• productivity by a factor of 4 in the next two
  or three decades by a
• factor of 10 around year 2050

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03
Green Growth and Role of Eco-Efficiency
Some examples of indicators are 1) Product /
Service Value Volume / mass, monetary 2)
Environmental influence in product / service
creation energy consumption, materials
consumption, natural resources
consumption, non-product output 3)
Environmental influence in product / service
use waste, energy consumption,
emissions during use / disposal
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03
Green Growth and Role of Eco-Efficiency
ltCase V MFAgt
ltFigure 12gt Use of Material Flow Account Analysis
in Various Countries

• Integrate life-cycle- wide (economy- wide)
  material flow account,
• Resource exploitation, its transformation into
  various substances and products, and solid waste.
  
• - A methodology by OECD has been developed and
  tested for industrialized countries

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03
Green Growth and Role of Eco-Efficiency
ltFigure 13gt Examples of Economy-wide Material
Flows Account in Japan
National Institute for Environmental Studies
(Moriguchi, 2003)

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03
Green Growth and Role of Eco-Efficiency
GDP and DRI Relation
Material Use, Water Use in UK
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MFA (Material Flow Analysis)
                                                
          ?? 5) ??? ?? ? ???? (??? ? ?)
                                                
                                   ?? 3) Mass
Balance ?? ?? ? ??????? ?????? (??? Mass
Balance Report(p.42), Royal Society for Nature
Conservation)
                                                
                                   ?? 1) Mass
Balance ?? ?? ? ??????? ?????? (??? Mass
Balance Report(p.42), Royal Society for Nature
Conservation)
                                                
                                   ?? 2) Mass
Balance ?? ?? ? ??????? ?????? (??? Mass
Balance Report(p.42), Royal Society for Nature
Conservation)
                                              
                                                  
                   ?? 4) Mass Balance ?? ?? ?
??????? ?????? (??? Mass Balance Report(p.42),
Royal Society for Nature Conservation)
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03
Green Growth and Role of Eco-Efficiency
ltTable 14gt Resource Productivity in Korea by
Using MFA (1991-2003)
Note DMI Direct Material Input Source MOE,
Pilot Study on the Integration of Environment
and Economy Account Study on the Green GDP.
2005.8
32
03
Green Growth and Role of Eco-Efficiency
ltTable 15gt 2005 Environmental Sustainable Index
Source www.yale.edu/esi, 2005
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03
Green Growth and Role of Eco-Efficiency
Other eco-efficiency indicator initiatives -
Examples Inc. used Eco-efficiency ratios, -
Cell-Phone use the x Factor, Hitachi Corp,
Fujitsu, and Mitsubishi(Factor X) - BASF
ecological fingerprint , make eco-efficiency
manger.
ltTable 16gt Examples of Eco-Efficiency Indicators
Product Value (Numerator)
34
03
Green Growth and Role of Eco-Efficiency
lt Table 17gt Examples of Eco-Efficiency Indicators
Product Value (Denominator)
35
03
Green Growth and Role of Eco-Efficiency
ltTable 18gt Comparison of Eco-Efficiency Methods
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04
Road to Ahead

• Paradigm of Grow Now, Clean up later is not
  valid.
• Eco-efficiency methodology to achieve the green
  growth
• - Linked to the Millennium Development Goal
  
• - Do Regional Implementation Plan for
  2006-2010
• Main function of NEASPEC should be focus on
  these issues.

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04
Road to Ahead
First Actions of Implementation from NEASPEC

• Identify and elaborate policy options and
  challenges
• for the eco-efficiency Basque Approaches
• Pursuit of joint research for the eco-efficiency
• indicators
• Create eco-efficiency indicators and related
• indicators
• Make guideline sustainable consumption
  Production.
• Enhancement of recycle-based oriented policy
  tools
• Disseminating information

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04
Road to Ahead
ltTable 19gt Introduction of Green Tax and
Reduction in Pension Tax in Germany (rates)
Source UN ESCAP, Achieving Environmentally
Sustainable Economic Growth, 2005. 3
ltTable 20gt Denmarks Green Tax Shift
Note forecasts for 1999-2002 in billions
DKR. Source Jensen A.H. 2001.
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04
Road to Ahead
Second Actions of Implementation from NEASPEC
-  Assessment of social economic capability
-   Study on opportunity of cooperation for
financing support -  Promote high energy
efficiency Public, civil, business -  Build
capacity for the integration of Green Growth -
Formulate action plan Financial Support (Bank)
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Thank You