Workshop

1. Workshop TOWARDS A GREEN ECONOMY 5 July 2011 Programme “Sustainable Economic Development and Employment Promotion (EEP)

2. Workshop “Towards a green economy” Contents 1 What is “green economy” 2 Main opportunities for “greening” in energy 3 Green economy in industry Main opportunities in tourism 4 Main directions for greening cities 5 Green economy in agriculture 6

3. Workshop “Towards a green economy” Contents 1 What is “green economy”? 2 Main opportunities for “greening” in energy 3 Green economy in industry Main opportunities in tourism 4 Main directions for greening cities 5 Green economy in agricultue 6

4. What is Green Economy UNEP defines a green economy as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. A green economy is > low carbon > resource efficient > socially inclusive 3

5. What is Green Economy In a green economy, growth in income and employment should be driven by public and private investments that • reduce carbon emissions and pollution, • enhance energy and resource efficiency, • prevent the loss of biodiversity and ecosystem services. 3

6. Global momentum for transition to a green economy Climate Change financial crisis Accelerating carbon emissions indicate a mounting threat of climate change, with potentially disastrous human consequences. These crises are impacting the possibility of sustaining prosperity worldwide and they are also compounding persistent social problems, such as job losses, socioeconomic insecurity, disease, and social instability. food crisis fuel crisis

7. The causes of these crises vary, but at a fundamental level they all share a common feature: the gross misallocation of capital. During the last two decades, much capital was poured into property, fossil fuels and structured financial assets with embedded derivatives. However, relatively little in comparison was invested in renewable energy, energy efficiency, public transportation, sustainable agriculture, ecosystem and biodiversity protection, and land and water conservation.

8. By depleting the world’s stock of natural wealth – often irreversibly – this pattern of development and growth has had detrimental impacts on the wellbeing of current generations and presents tremendous risks and challenges for the future. Today only 20% of commercial fish stocks, primarily low priced species, are underexploited; 52% are fully exploited with no further room for expansion; about 20% are overexploited; and 8% are depleted . Water is becoming scarce and water stress is projected to increase with water supply satisfying only 60% of world demand in 20 years. • Agriculture saw increasing yields primarily due to the use of chemical fertilizers, yet has resulted in declining soil quality, land degradation and deforestation – which resulted in 13 million hectares of forest lost annually over 1990-2005. 4

9. „Brown Economy“ Currently, enabling conditions are heavily weighted towards, and encourage, the prevailing brown economy, which depends excessively on fossil fuels, resource depletion, and environmental degradation A brown economy is one which is > high carbon > resource inefficient and > socially exclusive. With other words a brown economyis the one we have practiced the last 150 years all over the world. Rising and related problems of congestion, pollution, and poorly provisioned services affect the productivity and health of all. 4

10. Possibilities of a transition to a Green Economy. • Investing in natural capital • Agriculture, fisheries, water, forestry • II: Investing in energy and resource efficiency • Renewable energy, manufacturing, waste, buildings, transport, tourism, cities

11. Workshop “Towards a green economy” Contents 1 What is “green economy” 2 Main opportunities for “greening” in energy 3 Green economy in industry Main opportunities in tourism 4 Main directions for greening cities 5 Green economy in agricultue 6

12. Greening the energy sector focuses on renewable energy supply. • Ranges of fossil energies The end ist in sight. Fossil energies are finite. The transition to renewable energies is a must. • Uranium: 30 years • Oil: 40 years • Gas: 60 years • Coal: 200 years _____________________________ • Sun : 5.000.000.000 years

13. Part of global energy demand renewable energies can cover (in%) • Sun: 380 % • Geothermal: 100 % • Wind Energy: 50 % • Biomass: 40 % • Flow Hydropower: 15 % • Ocean Energy: 5 % * on basis of currently available technologies

14. The State of development of alternative energy sources • Greening the energy sector focuses on renewable energy supply. • In Ukraine, the total annual energy potential of technically feasible alternative energy sources is about 63 million tons c.e. The using of non-traditional energy sources would allow Ukraine to replace fossil fuel by 40%, including Crimea - by 302%, in Donetsk region - by 18%, in Chernivtsi region - by 108%. • At present the level of using potential of renewable energy is very poor. The share of non-traditional energy sources in the energy balance of the country is 7,2% (6,4% - off-balance sources of energy, 0,8% - renewable energy sources). According to the Ukrainian energy strategy the share of alternative energy in total energy balance of the country and to be extended to 20% by 2030.

15. Expansion of renewable energies In 2021 power consumption in Bavaria should be covered to 50% from renewable energy sources (currently 25%) Water power: 17 % share of electricity generation until 2021 (currently 13 %) Wind power: 10 % share in electricity generation until 2021 (currently 6 % = from 410 to 1.000 -1.500 wind turbines) Energy from biomass: 9 % share in total energy consumption in 2021 (currently 7 %) Solar energy (photovoltaic): 16 % share in power consumption until 2021 (3 % in 2009) Solar thermal energy and ambient heat : 4 % share of total energy consumption until 2021 (currently 0.5 %) Geothermal energy: 1 % share of total energy consumption until 2021 (currently 0.2 %) 16

16. The State of development of alternative energy sources • In 2009 500 million UAH was allowed in the State budget for development of alternative energy (the objects of the Ministry of Housing) and 1,5 billion - for the objects of Ministry of Regional Development and Construction. • State Agency for Energy Efficiency and Conservation is engaged in the development road map for renewable sources development. This road map will allow to plan in which region, in which volume and when can be used existing potential of all types of renewable energy sources.

17. Ukraine has the potential to develop 5 main directions of using renewable energy sources: • wind energy - 20,6million tons of coal equivalent • biomass – 20,08million tons of coal equivalent • geothermal energy – 12million tons of coal equivalent • solar energy – 6million tons of coal equivalent, • small-scale hydropower – 3,06million tons of coal equivalent,

18. Solar energy • Technically achievable annual potential of solar energy in Ukraine is 6 million tons of coal equivalent (c.e.), its use can save about 5 billion m3 of natural gas (In 2008 it was produced 20.6 billion m3 of natural gas). • The potential of Crimea is 0,38 million tons c.e., Donetsk region - 0,27 million tons c.e., Chernivtsi region - 0,09 million tons c.e.

19. Solar energy • Nowadays there is a limited use of direct solar energy in Ukraine. Existing programs for energy development envisages increasing use of solar energy mainly for local hot water supply in summer season. Climatic conditions of Ukraine allow also to use solar energy for the heating of buildings, creation of year-round centralized district heating systems with seasonal heat storage. • The main barrier for using solar energy is an economic one. The Ukrainian economy can’t mobilize any considerable investments in some projects on using solar energy. • There is a growth on the national level of understanding of the fact that under conditions of own resources shortage it is necessary to develop the alternative energy sources.

20. Solar energy • Several companies are already working in this sphere. In Simferopol, solar power plant is successfully operating and providing hot-water to hotel "Sports" in unheated season (7 months). • The Austrian company "Active Solar GmbH" implements a pilot project for construction the first Crimean solar electric plant in the Simferopol rayon. • There is a construction of the first pilot heliostation in the village Shelkino in the eastern part of Crimea. • In the Kherson region there are plans to realize projects of street lighting of settlements with the electricity stored by solar energy.

21. Small hydropower • By potential of hydro resources Ukraine is not on the leading place among the CIS countries, but the extent of developed hydropower economical potential is rather high. • Annual production of electricity by using technically achievable potential of small rivers in Ukraine is estimated at 8.3 billion kW. h / year, which will provide savings of fossil fuels up to 3 million tons c.e or 2.6 billion m3 of natural gas. (12,6% of gas production in 2008). • The potential of Chernivtsi region is 0,22 million tons c.e., potential of the Crimea is 0,05 million tons c.e., the Donetsk region - 0,05 million tons c.e.

22. Small hydropower • In Ukraine 74 projects has green tariff for different directions, including 61 - small hydropower projects. • "Novosvit", “Akvanova" and "Sibeks” are the most successful Ukrainian companies in this area, company "Novosvit" has about 14 hydro power plants. These companies are quite successfully using "green" tariff. • The Swiss company «Alter Energy Group AG» (AEG) is interested in the development of small hydropower in Ukraine. These projects are supported by the EBRD and the International Finance Corporation. • German company "RWE" is also going to be presented on the alternative energy market in Ukraine.

23. Biomass • At present, the contribution of biomass to Ukraine’s energy supply is about 0.5%. Only about 0.7 million toes (tons of oil equivalent) are currently used primarily firewood for domestic purposes as well as for fuel in forestry and wood processing enterprises. • Studies have suggested that biomass sources could provide at least six times more to Ukraine’s energy mix and potentially ten times or greater. • According to official statistics, the total biomass potential in Ukraine is about 50 million tons c.e. and technically achievable - 36 million tons c.e, economically viable - 27 million tons c.e. • The potential of Donetsk region is 0,90 million tons c.e., the potential of the Crimea is 0,64 million tons c.e, Chernivtsi region - 0,47 million tons c.e.

24. With some of the best farmland in the world, Ukraine has the natural resources to produce a variety of energy crops that could be used for direct combustion as well as conversion into ethanol and biodiesel fuels. When allocated for rape 10% of agricultural land the country can grow 8,5 million t of rape seeds processing which provides about 3 million tons of biofuel annually. This can provide up to 60% of the country's current annual demand for diesel fuel. In addition to expanding the agricultural market and economically stimulating rural Ukraine, biomass production would reduce reliance on energy imports and farmers’ vulnerability to speculative seasonal energy prices while yielding fuels that burn cleanlier.

25. Biomass • The energy that could be provided by biogas derived from the manure of cattle, pigs, and poultry simultaneously has been estimated to be in the range - 1.1 - 1.6 million toe. • Energy analysts have suggested that it is possible to construct about 3000 biogas plants in Ukraine - each with an average digester volume of 1000 m3, including 295 biogas plants at hog raising plants, 130 biogas plants at poultry plants, and 2478 biogas plants at cattle raising farms and other food industry enterprises. • It is very important that biomass is retrievable source: every year the same amount of biomass is created in agriculture. However, at harvest time it can be compressed into pellets which can be used during year. For example, there are many thermal power plants using coal, and they can be easy switch over pellets from biomass.

26. Biomass • However, no many biomass plants are yet operating in Ukraine to produce power for the electrical grid or large district energy systems - a fact due in part to the high cost of boilers purchased from foreign manufacturers and the still limited availability of significantly less expensive, domestically produced equipment. One firm “Zhitomirrempischemash” is producing hot water wood-fired boilers that cost one-sixth the price of similar boilers of foreign producers. • During the past five years, a small number of modern biomass plants have begun operating such as steam wood-fired boiler at the Odek Ukraine plywood factory in the town of Orzhiv. • The company «Zorg Biogas AG» operates in this sphere in the Ukraine. This company is using patented German technology for processing raw materials into biogas.

27. Wind energy • In Ukraine the annual technically achievable energy potential of wind energy is 15 million tons c.e., its use can save about 13 billion m3 of natural gas. (63,7% of gas production in 2008). • Crimea has the biggest potential (3,5 million tons c.e.), Donetsk region - 1,60 million tons c.e., Chernivtsi region - 0,30 million tons c.e. • A strong wind power industry support was given by a Ukrainian government Law issued in 1996 in the form of Complex Wind Farms Construction Program.

28. Wind energy • According to the State program of building wind power plants,Crimea is defined as a territory of priority development of wind power in Ukraine, because the coasts of the Black and Azov Seas, the South Coast of Crimea have high wind power potential. • The Crimean coasts make Ukraine second after Norway among countries possessing shallow water areas that are suitable for large wind farms. In Crimea there are favorable conditions for wind use and efficient operation of high-power wind-electric plant and autonomous wind-mill electric generating units within a year. Today 70% of all Ukrainian wind energy facilities are producing in Crimean peninsula. Kerch and Tarkhankut coast are defined as the most promising rayons for creation of renewable energy facilities. Today in the Crimea, four state-owned enterprises produce wind energy. Among operating wind power stations are Donuzlav WPS, Saki WPS, Novoazovsk WPS and Truskavets WPS.

29. Wind energy • According to experts, Donetsk region has considerable potential for the development alternative energy sources, primarily wind and sun. In 2003 the Donetsk Regional State Administration together with company "Windenergo" developed "The program of replacement capacity of thermal electric power plant by wind power stations." The program envisages increasing the share of electricity produced by wind generators up to 20-30% of the total electricity generated in the region. • Donbass Fuel-Energy Company is developing the construction project of wind-electric plant on the Azov Sea coast. A contract with German company "Wind Guard" for wind monitoring is already signed

30. Geothermal energy • Ukraine possesses considerable resources of geothermal energy, which is an attractive resource for using geothermal energy for space and water heating and cooling for residential, public and industrial purpose. • The Carpathian region is the most promising for the extraction of high-potential geothermal energy resources, followed by Crimea. A promising area for geothermal energy development is also the Dnieper-Donetsk Basin, which includes Chernigov, Poltava, Kharkiv, Luhansk regions.

31. Geothermal energy • At present thermal water is used for municipal heat supply and in agriculture in the western and central part of Crimea (Iljinka; Sizovka; Kotelnikovo; Novo-Alexeyevka; Yantarnoye). • Separate wells are used in the Transcarpathian region for supplying thermal water in swimming pools or as an additional source of heat for the local boiler houses.

32. Nongovernmental organizations have the great importance for the development of this direction at the regional level. They can initiate different project together with municipalities. • For example, public organization "Letavitsa” (Donetsk region) with the support of the Eurasia Foundation implemented a project "Bioenergy: get energy from waste", which was designed specifically for rural areas of Donetsk region (2007-2008). The project has accumulated a database of equipment suppliers, made the analysis of the most effective technologies, developed several models for energy production from alternative sources. The project was implemented in Maryinskiy, Starobeshevo and Krasnoarmeysky rayons. The project was implemented for clubs, libraries, kinder garden and feldsher's station. As a result, heating costs have been significantly reduced through the using of waste, and residents have a significant economic impact.

33. GIZ activities • Two youth festival “Ecoenergy” was conducted in 2009 and 2010 in Sevastopol. These festival included: an Exhibition, competition on projects and presentations: ”The World in which I wish to live” and ”In harmony with the nature” (2009). There also were a practical science seminar “Use of renewable energy sources and global change of a climate”; eco-ethical master-classes and training sessions. • The Renewable Energy Study was conducted in Crimea. The study was focusing on the solar energy potential. The key barriers to the development of the industry are the low cost of gas and electricity in Ukraine. • Cluster «Energy-Efficiency» was registered in December, 2010 and project continues to support development of cluster «Energy-Efficiency» (Sevastopol). • The CCI Crimea and CCI Sevastopol, the cluster initiative «Energy Saving» and the German Group “Bosch Thermotechnik” have launched a joint initiative related to the development of heliosystems in the ARC and Sevastopol. The main goal of the project is to develop a regional market for heliothermal systems jointly with local specialists in order to promote the solar energy technology among potential users.

34. GIZ activities • Development of Regional Innovation Strategy of Crimea (this strategy includes activity on promotion introduction of energy and resource efficient technologies). • Round table "Innovative methods of processing of agricultural products" was organized in Sevastopol. Arne Grengreft presented "Innovative methods of processing of agricultural products for biofuel production". • В місті Чернівці відкрито мобільну виставку «Енергетичні технології «Пасивний дім». Метою виставки є інформування широкого кола населення про методи енергозбереження, роз’яснення інноваційної технології будівництва, пропагування енергоощадного використання ресурсів та зменшення викидів вуглецю в атмосферу.

35. Obstacles • In Ukraine, as in many developing countries, government support to the energy sector is used to decrease the price of energy consumption to below market levels in the belief that this will reduce poverty and spur economic growth. The Energy Policy in Ukraine focuses on subsidizing domestic prices for electricity and heat. This further impedes the development of renewable energy market and reduces efficiency of environmentally friendly technologies. In Ukraine, relatively low energy prices have hindered the development of alternative energy sources, as the price of finished product and its production costs are much higher compared with the price of traditional energy. • For example, price and production total world subsidies for fossil fuels collectively exceeded US$ 650 billion in 2008.

36. Workshop “Towards a green economy” Contents 1 What is “green economy” 2 Main opportunities for “greening” in energy 3 Green economy in manufacturing Main opportunities in tourism 4 Main directions for greening cities 5 Green economy in agriculture 6

37. Manufacturing • Производство обеспечивает 23% мировой занятости и является ключевым этапом жизненного цикла использования материалов. Что касается использования ресурсов, то этот сектор отвечает за 35% мирового потребления электроэнергии72, свыше 20% мировых выбросов углерода и добычу более чем четверти первичных ресурсов. • В настоящее время производство отвечает примерно за 10% мировой потребности в воде; ожидается увеличение этой доли к 2030 году более чем до 20%; таким образом, использование воды на производстве будет конкурировать с ее использованием в сельском хозяйстве и городах.

38. Manufacturing has a large material impact on economy and the environment • Manufacturing is responsible for around 35 % of the global electricity use, over20 % of CO2 emissions and over a quarter of primary resource extraction. Along with extractiveindustries and construction, manufacturing currently accounts for 23 % of global employment.It also accounts for up to 17 % of air pollution-related health damages. • Manufacturing is responsible for around 10 % of the global water use; the same applies to wateruse by industry, which is expected to grow to over 20 per cent of global total demand by 2030.

39. Manufacturing has a large material impact on economy and the environment • Manufacturing is responsible for around 61 % of the Ukraine electricity use (35 % - average in the world) and over a quarter of primary resource extraction. • Along with construction, manufacturing currently accounts for 24 % of Ukraine employment. It also accounts for up to 58 % of air pollution. • Gross air pollution damages are equivalent to 4 % of global GDP. • Manufacturing is energy and input-intensive - in 2008 energy intensity of Ukraine's GDP was more than 2 times higher than the average energy intensity of GDP of developed countries. • УрейтингуВсесвітньоїконкурентоспроможностісвітовихекономіксередголовнихпричинвідставанняУкраїни (54 місцез 55 країн) експертиМіжнародногоінститутурозвиткуменеджментувідзначаютьдужевисокуенергоємність

40. Manufacturing industries have to pursue life-cycle approaches and introduce the concept of eco-efficiency which includes: • reducing the material and energy intensity of products, • enhancing material recyclability, • extending product durability • increasing the service intensity of products.

41. Reducing the material and energy intensity of products • Re-design products and/or business models so that the same functionality can be delivered with fundamentally less use of materials and energy. This also requires extending the effective life-time of complex products and improving quality, by incorporating repair and remanufacturing into a closed-cycle system. If the life of all manufactured products were to be extended by 10%, for example, the volume of resources extracted could be cut by a similar amount. Repair, reconditioning, remanufacturing and recycling are fairly labour-intensive activities, requiring relatively little capital investment.

42. 1.1. Creating close-cycle manufacturing (or eko-inductrial parks). This manufacturing system maximises the useful life of products and minimises the waste and loss of valuable and scarce metals. • For example, “Ista-center” (Dnepropetrovsk) introduces production technology for lead-acid batteries with closed-cycle. • Ministry of nature is exploring the possibility of building in Ukraine 8 processing plants of motor tires. 1.2 Remanufacturing is becoming increasingly significant, particularly in areas such as motor-vehicle components, aircraft parts, compressors, electrical and data communications equipment, office furniture, vending machines, photocopiers, and laser toner cartridges. • Caterpillar is probably the world’s largest remanufacturer, with a global turnover of US$1 billion and plants in three countries. About 70%of a typical machine (by weight) can be re-used as such, while another 16 % is recycled.

43. 1.3. The field of electronics recycling is promising area for research and development. Currently, there is some recycling of television sets to recover lead and glass, but e-recyclers mostly try to recover silver and gold, without recovering other scarce metals. • A recycling campaign to collect used mobile phones in Japan was launched in November 2009 and involved 1,886 stores and supermarkets. Those who returned used mobile phones in exchange for purchasing a new device were invited to enter a lottery to win coupons worth $12 to $600 depending on the price of the mobile phone they bought. The initiative collected 569,464 mobile phones containing precious metals amounting to 22 kg of gold, 140 mg of silver, 10 g of copper and 4 mg of palladium in just 4 months.

44. 2. Substitute “green” inputs for “brown” inputs wherever possible. For example, introduce biomass as a source of chemical feedstock. Emphasize process integration and upgrade of process auxiliaries such as lighting, boilers, electric motors, compressors and pumps. 3. Recycle internal process wastes, including waste-water, high temperature heat, back pressure, etc. Use materials and energy with less environmental impact, e.g. renewable or waste as inputs for production processes. Remanufacturing operations worldwide save about 10.7 million barrels of oil each year, or an amount of electricity equal to that generated by five nuclear power plants. • Co-generation: combined heat and power. One of the most important (and under-exploited) near-term opportunities for improving energy efficiency in industrial processes lies in recycling high-temperature waste heat from processes such as coke ovens, blast furnaces, electric furnaces and cement kilns, especially for electric power generation using combined heat and power.

45. 4. Introduce new, cleaner technologies and improve the efficiency of existing processes to leapfrog and establish new modes of production that have a fundamentally higher material- and energy efficiency. To start with, major savings potential in manufacturing lies in improving the resource efficiency of existing processes. • Enterprise “Zaporizhstal” is a leader in implementing environmental programs. Enterprise carries out the reconstruction and modernization of equipment; over the past 10 years it was reduced dust emissions into the atmosphere by 41%; sewage - up to 30%, the company increased the level of reuse of process water by 86%. Minimizing waste and maximum use of them in own production –is a main task of the company.

46. „Greening the value chain“ • Eco- / resource efficiency: • Increase material / energy efficiency • Minimize waste and losses • Reuse / recycle by-products or secondary raw material • reduce costs

47. «Меньше» может стать «больше» • Меньше энергии экономит деньги • Меньше сырья экономит деньги • Меньше потребляемой воды экономит деньги • Меньше отходов экономит деньги • Меньшее использование земли экономит деньги и защищает окружающую среду. Это экоэффективность. Это так просто!

48. Reduction potential in Chinese SMEs through PREMA®-Application Energy Water Steel * billion - 30% - 20% - 8%

49. Sustainablemanagementofindustrialzones, India • Introduction of the eco-industrial parks approach (EIP) • Transformation of existing parks into EIP‘s / planning of new EIP‘s • Environmental management plans: waste minimization, clean air / air pollution prevention, risk management / hazardous waste, etc.

50. Public institutions can support the validation and harmonization of eco-labeling schemes, and establish consumer awareness and education programs to ensure consumers are able to make informed decisions and recognize newly introduced labeling and product information schemes. • An example is the provision of management and technology assistance to assist SMEs in exploiting opportunities for increased resource use efficiency and recycling. Another example would be PPP for the disassembling and collection of e-waste in socially and environmentally beneficial ways in developing countries that have a comparative advantage in this industry. • Public institutions can support research and development (R&D), revised educational curricula and training programs to promote cleaner processes and systems, eco-design, products and services.