TOWARDS Greener development IN CENTRAL ASIA

1. TOWARDS Greener development IN CENTRAL ASIA Angela Bularga, Head of Programme EAP Task Force Secretariat Environment Directorate, OECD

2. What green growth is NOT... An excuse for protecting “green” businesses A branding exercise A green beauty contest No growth

3. What green growth IS about... • Securing future wellbeing • Delivering growth that is within environmental limits • Implementing smart policies to stimulate innovation and avoid lock-in to costly systems • Getting the prices and governance frameworks right

4. Analytical framework for Green Growth Strategies: Design and implementation

5. Policy challenges vary…

6. Applying the OECD framework in countries of Eastern Europe, Caucasus and Central Asia • Introduction to green growth • The development context • Value and economic significance of the natural capital • Environmental and resource productivity • The environmental quality of life • Market signals and price-based instruments for greening growth • Institutional frameworks – actors, goals, partnerships • Finance aspects • Country profiles

7. What policies do countries need? Improve the management and use of natural capital

8. High degree of water stress The Water Exploitation Index (WEI) compares water demand and available water resources. Stress is considered severe when WEI is above 40% (Uzbekistan, Azerbaijan, Armenia, Turkmenistan). Source: OECD/EAP Task Force Secretariat calculations based on national statistics.

9. What policies do countries need? Improve the management and use of natural capital Strengthen price and tax incentives

10. Fossil fuel consumption subsidies for the top 25 non-OECD countries (2010) 90 Electricity 80 Coal 70 Natural gas 60 Oil 50 40 Billion dollars 30 20 10 0 Iran Iraq UAE India Libya Egypt China Qatar Russia Kuwait Algeria Mexico Ukraine Ecuador Pakistan Thailand Malaysia Indonesia Argentina Venezuela Uzbekistan Kazakhstan Bangladesh Saudi Arabia Turkmenistan Source: IEA, 2010.

11. Progress on subsidy reform Progress on power sector subsidy reform, 2000 vs. 2009 Source: World Bank calculations (2013) replicating the methodology in Ebinger, 2006

12. Energy intensities in Europe and Central Asia Relative to EU-15 levels, 1990-2009 Sources: World Bank calculations based on data from IEA 2011 and World Bank, World Development Indicators. Note: Energy intensity is the amount of energy used to produce US$1 of GDP. The shaded area represents the minimum-maximum range of the EU-15. EU-10 + 1 includes the EU-10 countries plus Croatia; kgoe = kilograms of oil equivalent.

13. CO2-related intensities compared to other regions Source: World Bank (2013) based on IEA, 2011. Note: GDP using PPP in 2000 USD.

14. What policies do countries need? Improve the management and use of natural capital Strengthen price and tax incentives Address regulatory gaps and failures

15. Where environmental governance ranksScale: 1 = Lowest, 6 = Highest Source: The World Bank’s International Development Agency Resource Allocation Index (IRAI)  http://www.worldbank.org/ida/IRAI-2011.html

16. Benefits of improved air policies50% reduction scenario from projected 2020 levels Monetised benefits – per cent of GDP (2020) Source: ten Brink et al. (2011), Analysis for European Neighbourhood Policy Countries and the Russian Federation on Social and Economic Benefits of Enhanced Environmental Protection.

17. What policies do countries need? Improve the management and use of natural capital Strengthen price and tax incentives Address regulatory gaps and failures Modernise infrastructure and regional development

18. Access to improved water supply and sanitation Source: OECD (2011).

19. What policies do countries need? Improve the management and use of natural capital Strengthen price and tax incentives Address regulatory gaps and failures that hinder the green economy development Modernise infrastructure and regional development in line with green growth objectives and opportunities Stimulate “green” innovation and skills development

20. Pace of innovation uptake: Wind energy Wind Energy Capacity in the EU-15, 2009 vs. Forecasts 1990–2002 Source: Based on World Bank (2013), Glowing Green: The Economic Benefits of Climate Action.

21. What policies do countries need? Improve the management and use of natural capital Strengthen price and tax incentives Address regulatory gaps and failures Modernise infrastructure and regional development in line with green growth objectives and opportunities Stimulate “green” innovation and skills development Ensure adequate access to finance

22. Public environmental expenditure (% of GDP, 2009) Source: OECD calculations based on data submitted by countries.

23. The Challenge of Access to FinanceLending interest rates Source: International Monetary Fund, International Financial Statistics and data files.

24. What policies do countries need? Improve the management and use of natural capital Strengthen price and tax incentives Address regulatory gaps and failures that hinder the green economy development Modernise infrastructure and regional development in line with green growth objectives and opportunities Stimulate “green” innovation and skills development Ensure adequate access to finance Use better analytical tools to catalyse and measure progress

25. Mismeasurement and mismanagement % of GNI Kazakhstan Education Gross savings +4.4% 34.6% Fixed capital consumption -14.1% Energy and mineral resources depletion Pollution -28.0% -1.5% -4.6% Adjusted net savings Source: World Bank The Little Green Data Book 2013

26. Better measurement and better management Norway Savings rate Wealth Education +6.6% Gross savings Fixed capital consumption and energy depletion 37.0% -24.3% Pollution -0.1% 19.2% Adjusted net savings OECD average, 6.6% USD 2005, per capita % of GNI Source: World Bank The Little Green Data Book 2013 and Where is the Wealth of Nations? (2006)

27. Socio-Economic Context Against all odds to sustain long-term growth? Natural Assets Is growth becoming greener? Environmental and Resource Productivity Do people benefit from greener growth? Is the policy mix the right one? What is in for business and jobs? Environmental Life Quality and Safety ComprehensiveWealthAccounts GG/GE Policies and Opportunities Is wealth being preserved?

28. What policies do countries need? Improve the management and use of natural capital Strengthen price and tax incentives Address regulatory gaps and failures that hinder the green economy development Modernise infrastructure and regional development in line with green growth objectives and opportunities Stimulate “green” innovation and skills development Ensure adequate access to finance Use better analytical tools to catalyse and measure progress Continue reforming framework policies

29. Quality of the overall framework:“Ease of Doing Business” Ranking Source: World Bank (2013), Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises. Washington, DC: World Bank Group. DOI: 10.1596/978-0-8213-9615-5.

30. Mission: • enhance and expand efforts to identify and address major knowledge gaps in green growth theory and practice • help countries design and implement green growth policy Mission:enhance and expand efforts to identify and address major knowledge gaps in green growth theory and practicehelp countries design and implement green growth policy

31. Visit our web site: www.oecd.org/environment/outreach/