Memorandum for a Green Economy

A joint initiative of the BDI and BMU

Imprint Published by: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) Division ZG III 2 11055 Berlin Germany Email: ZGIII2@bmu.bund.de Website: www.bmu.de/english Edited by: Design: Printed by: The Federation of German Industries (BDI) Breite Str. 29 10178 Berlin Germany Email: info@bdi.eu Website: www.bdi.eu BMU: Peter Franz, Dr. Florian Kammerer, Division ZG III 2 BDI: Franz-Josef von Kempis, Climate and Sustainable Development design_idee, bro_fr_gestaltung, Erfurt Silber Druck oHG, Niestetal

Photo credits: Cover: jarts/photocase.com p. 5 (left): CDU/CSU-Bundestagsfraktion/Christian Doppelgatz p. 5 (right): BDI/Christian Kruppa Date: Juni 2012 First Print: 1,000 copies

Memorandum for a Green Economy

A joint initiative of the Federation of German Industry (BDI) and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) on the occasion of the Rio +20 United Nations Conference on Sustainable Development in Rio de Janeiro (2012)

Foreword

Climate change, resource scarcity, biodiversity loss and a growing world population will compel us to establish even stronger links between the economy and ecology in the context of sustainable development. To achieve this, we need growth and innovation both in industrialised countries and in developing and emerging economies. Germany has already made great progress in greening the economy. Today, we need far fewer raw materials and less energy, and emit fewer pollutants than ten years ago for the same yield. What is more: the green economy provides enormous market opportunities. Environmental and efficiency technologies are drivers of growth along the entire industrial value chain. They profit from being rooted in traditional branches of industry while at the same time advancing the modernisation of these industries, for example mechanical engineering and vehicle construction, the chemical and the electrical industry. Energy and raw material efficiency are becoming increasingly important as competitive factors in these sectors. The global market volume of environmental and efficiency technologies already totals around 2 trillion euros. According to recent estimates made for the new Greentech Atlas 3.0, this volume will more than double in the next ten years.

Policymakers and industry must work together to further strengthen the innovative capacity of German businesses in these key markets of the future, and to ensure that German industry is able to live up to its responsibility in value creation. The German government has laid decisive foundations for the ongoing process of greening our economy. Maintaining industrys global competitiveness with a level playing field will always be a focus in this, allowing Germany to combine growth, innovation and sustainability in its social market economy. This is the approach the Federal Environment Ministry and the Federation of German Industries are promoting in their joint memorandum on the occasion of the Rio 2012 conference.

Peter Altmaier Federal Minister for the Environment, Nature Conservation and Nuclear Safety

Dr. Markus Kerber CEO and Member of the Board of the Federation of German Industries (BDI)

I.
We support the guiding principle of sustainable development!
In June 2012, 20 years later, the United Nations is once again holding a conference in Rio de Janeiro aimed at confirming and renewing commitment to sustainable development. With this memorandum, we, the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) and the Federation of German Industry (BDI), affirm our commitment to the principle of sustainable development as the basis to guide our political and economic activity. We jointly support the Green Economy theme of the conference, which is integrated within the overall theme of sustainable development, and we affirm the need for intensified efforts towards an environmentally sound economy. Over the past 20 years, sustainability has become an increasingly important guiding principle for political and economic activities in Germany. Efforts toward sustainability entail finding a balance between economic, ecological and social interests, as well as resolving any related issues of interdependencies and conflicts of interests.

Traditional industries share of traditional industries in the total market for environmental and resource efficiency technologies (excerpt) in 2010
Total market for environmental technology and resource efficiency EUR 1,930 bn (42 %) ~EUR 806 bn
17 % Electrical engineering

15 % Mechanical engineering 8% Chemicals 2% Automotive industry

Source: GreenTech made in Germany 3.0. Environmental Technology Atlas for Germany

It is our joint conviction that the political and economic sectors play a key role in efforts to bring about a society that produces few emissions, uses resources efficiently natural assets. Sustainable economic ~2,650 and conserves ~2,600 activity and innovation must be closely intertwined in any such efforts. Germanys efforts toward sustainable development will help to safeguard its long-term international competitiveness. We are convinced that there is no1,930 1,930 alternative to a sustainable economy. 12 %
6% ~1,600 2% ~1,500 20 %

42 %
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II.
A green economy limits ecological risks and strengthens competitiveness!
We understand green economy to be a concept that focuses on a positive connection between a sustainable economy and the environment, that shapes growth in environmentally sound and sustainable ways and that enhances social prosperity and well-being. In economic decisions, taking suitable account of ecological guidelines is an effective way of countering global megatrends such as climate change and loss of biodiversity.

Growth forecast for the global market for environmental and resource efficiency technologies in 2011, 2015 and 2025 (EUR bn, average annual change 20112025 in percent)
~ 15 % ~ 15 % ~ 15 % 4,403 5.6 % 2,625 389 674

2,044 300 1,744

Germanys market share Germany

2,237

3,729

Rest of world

2011

2015

2025

Source: GreenTech made in Germany 3.0. Environmental Technology Atlas for Germany
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A green economy limits ecological risks and uses economic opportunities. The key efforts in achieving such an economy include: Intensifying efforts to prevent harmful emissions and pollutant discharges into all environmental media, Reduction, recycling and environmentally sound disposal of waste, and closing substance cycles to the greatest possible extent, Further reducing the use of non-renewable resources, Making an even more efficient use of energy, raw materials and other natural resources, Making continual progress in replacing the use of non-renewable resources with sustainably produced renewable resources, In the long term, achieving an energy system that is based more strongly on renewable energy sources, and Conserving and restoring biological diversity, ecosystems and ecosystem services.

III.
The goal is to green the entire economy, and that goal presents great economic opportunities!
The objective of greening the economy offers great economic opportunities and holds enormous economic potential. Efforts toward that objective help secure competitiveness, develop areas for new, sustainable growth and take early account of economic scarcities and costs. The financial and economic crisis showed how important it is for growth to be sustainably oriented. Together, we want to prepare a basis for making full use of the economic opportunities and potential of the green economy. Greening must extend to the entire economy. Existing, established economic sectors play an integral role in this process. On the one hand, by making use of environmental technology and emphasising resources efficiency, existing industries enhance the development of environmental technology and resources efficiency. On the other hand, environmentally oriented technologies tend to drive modernisation in existing industries, especially by improving efficiency in the use of energy, resources and materials. Efficiency enhancements in processes and products, along with the use of renewable resources, reduce dependencies and ecological risks. That is a particularly important aspect for German industry, which is strongly resourcesdependent.

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Greening thus presents especially great opportunities for the German industry. In Germany, industry accounts for 22 percent of value creation and employs some 5.7 million people. It owes much of its innovative power to its own ongoing R&D expenditures, which account for nearly 90 percent of the economys total R&D expenditures. With this innovative strength, German industry is already contributing significantly to efforts to deal with current megatrends. A green economy needs primary industries and energy-intensive industries, since such industries are the main pillars of industrial production. Therefore, it is vitally important to maintain existing value chains in Germany and at international locations. Innovations on the level of primary industries play an important role in the development of products that are energy-efficient, resources-efficient and environmentally friendly. Without such innovations, sustainable economic growth would be inconceivable. Consequently, and in view of growing sustainability requirements, there is no place for arbitrarily classifying sectors and products into green and non-green categories. Germanys successful overall industrial value chain is a key basis for the strength of Germanys lead markets for environmental technology and resources efficiency. Both in Germany and globally, such markets have become important economic factors, as the study GreenTech made in Germany, which was prepared under commission to the BMU, shows. In 2011, such markets had a global volume of 2,044 billion euro. And they are forecast to grow to 4,400 billion euro by 2025. That figure translates into an average annual growth of 6.5 percent.

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IV.
We support the principles of the social market economy they support us in our efforts to move toward a green economy!
Germanys social market economy has proven to be a key to economic success and social stability. The values on which the social market economy is founded, Germanys industrial base and the innovative power of German companies, have helped the German economy to emerge largely unscathed from the global economic and financial crisis. The social market economy is a successful model that provides an excellent framework in Germany for sustainable development and economic greening, since it links freedom, responsibility, initiative and competition and holds potential for positive development. In the social market economy, the state provides a stable framework for the functioning of the market and safeguards a balance in society via participatory and social policies. As a result, the social market economy provides a solid basis for the viable further development and growth of our social and economic order. The key aspects of such an economy include a) a regulatory framework that follows both social and ecological guidelines and b) trust in commonly recognised rules. Consumers and companies alike need clear, lastingly stable standards to which they can model their actions.

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In light of the challenges ahead, it will become more and more necessary to enhance co-ordination of various policy areas such as environmental policy, economic policy and research policy, as well as foreign policy. The basic guiding principles involved include: Intensifying support for comprehensive ecological modernisation in co-operation with industry The focuses in this area must be on resources consumption, emissions reductions, increased energy and raw-materials productivity, product design and the design of suitable value chains. Strengthening free competition and free market access Competition plays a decisive role in sparking markets creativity in finding the best, most efficient technological solutions. Reductions of trade barriers also play an important role in this context. It is vitally important to make use of opportunities for competitiveness, environmentally sound growth and employment. Supporting innovation The best support for innovation is found in the interplay of a clear, supply-sideoriented political framework and stimulated demand (coordinated innovation policy). Making regulatory measures reliable Economic players require planning certainty especially in light of their investment cycles. Promoting a culture of participation Progress toward sustainable development and a green economy can be achieved only via constructive interaction between a clear political framework, innovative companies and their highly qualified workforces and a well informed public. We want to promote such a culture of participation.

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V.
We can achieve a green economy through a concerted effort involving all forces in society!
In many areas Germany has already made considerable progress in its development toward a green economy. With the transformation of its energy system, its Closed Substance Cycle Waste Management Act and its Resource Efficiency Programme, Germany has provided important impetus toward such a development. Thanks to progressive environmental policy, interacting with an innovative, efficient economic sector, Germany has achieved excellent international competitiveness in the market for environmental and efficiency technologies. A green economy needs coordinated action of all forces in society. The challenges of sustainability can be addressed effectively only via combined, co-ordinated resources. Such resources include companies, public institutions, public-sector organisations and the public at large. The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) plans to support the political framework for a green economy. Efforts in this area will include:

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Creating a level playing field for companies, in the framework of sustainable development, Strengthening consideration of overall value chains, Promoting acceptance of technology and openness to technology, Improving technological co-operation and protection of intellectual property rights (IPR), Reducing barriers to trade, Targeted assignment of support to research, Broadening and enhancing training and available training resources in the area of sustainability, and Creating the necessary infrastructures for such efforts. German industry plans to make use of the framework for a green economy and will continue supporting the process of sustainable development with innovative products and technologies. On the basis of its active research and development activities and its competitiveness, it will continue to make production processes and products increasingly energy and resource efficient, and replace or re-use non-sustainable raw materials. In addition, German industry will assume the social responsibility it has in the value chain at national and international level, and it will report in suitable ways on such responsibility. In view of the inadequate and patchy international implementation of the sustainability agenda adopted in Rio de Janeiro in 1992, German companies are making an indispensable contribution to the relevant Capacity Development Scheme by continually introducing and expanding environmentally friendly production processes and socially compatible working conditions at their international locations.

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VI.
We are convinced that a green economy must include sustainable production and consumption patterns that take full account of megatrends, in the interest of achieving prosperity and a high standard of living throughout the world and for future generations. In the context of sustainable development therefore, all stakeholders must model their decisions and actions to a scope wider than solely their own generation and their own regions. This is the only way in which we can protect our natural bases for life, strengthen cohesion in society and promote economic competitiveness.

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15 % Mechanical engineering 8% Chemicals 2% Automotive industry

Green techs share of the global market volume in selected industries (in EUR billion) in 2010
~2,650 ~2,600

1,930

1,930 12 % 6% ~1,600 2% ~1,500 20 %

42 %

Green technology

Electrical engineering

Chemicals

Automotive engineering

Mechanical engineering

Environmental technology

Source: GreenTech made in Germany 3.0. Environmental Technology Atlas for Germany

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PUBLICATION ORDER: Publikationsversand der Bundesregierung Postfach 48 10 09 18132 Rostock Germany Tel.: +49 1805 / 77 80 90 Fax: +49 1805 / 77 80 94 Email: publikationen@bundesregierung.de Website: www.bmu.de/publications This publication is part of the public relations work of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety. It is distributed free of charge and is not intended for sale. Printed on recycled paper.