Towards a green economy

reduce

extraction on the

and

processing

supporting economic growth. Discussion

two recommended policy enabling

costs, environment

thereby highlight priorities, namely closed-

cycle manufacturing with supportive infrastructure and regulatory reform to enable factor efficiency improvements in energy use through greater use of cleaner technologies like CHP. Governments should seek ways to encourage closed-cycle manufacturing, for example, by encouraging large multinational systems integrators which manufacture aircraft, automobiles, home appliances, electronic goods, etc. to be responsible for integrated materials management throughout the entire supply and demand chain– from the point of extraction to final disposal. The main objective must be to make manufactured goods last longer, by means of greater emphasis on re-design, repair, reconditioning, re-manufacturing and recycling. Extended producer responsibility (ERP) laws, refundable deposit schemes, and improving the functioning of markets for secondary raw materials are the most likely tools for getting started.

Each country will need to consider its appropriate policy mix of regulatory instruments and approaches to make the transition happen, mindful that basic physical processes and damaging impacts associated with pollution and unsustainable resource use are universal.17

As major

point sources of pollution, the manufacturing industries have traditionally been easy targets of command-and- control regulations. In some cases these need reform, in others new ones are required to scale up transformation. Command-and-control regulations need however to be better combined with market-based approaches, allowing appropriately structured markets to reflect the real price of energy and other resources and allowing

17. During the annual UNEP Business & Industry Global Dialogue on 11-12 April 2011, manufacturing industry representatives agreed on the need for a predictable regulatory framework, enabling long-term strategic thinking and longer-term investment, as precondition for business and industry to contribute to a “step” or transformative change that goes beyond existing voluntary industry initiatives. At the same time, it was stressed that regulation needs to be applied to local context, considering local approaches and social circumstances.

manufacturing industries to innovate and compete on a fair basis. Recent history shows that the introduction of taxes can be a strong driver for technology innovation (petrol taxes and vehicle engine technology). Use of economic instruments can also reduce monitoring costs for regulators, but requires a willingness to undertake thorough economic analysis on their likely costs, benefits and effectiveness in order to design them correctly.

The concentration of certain heavy industries in some countries, as well as the dominance of their markets by a core group of corporations may point to opportunities for advancing climate mitigation strategies with an industry-sector approach, even if only on a national basis. This may be a way of addressing competition concerns and avoiding capital lock-in by industrialising countries in outdated technologies. At the same time, crediting and trading schemes is likely to offer greater economic efficiencies if introduced across industries. This can also be explored throughout global supply chains by using CDM-type projects to share cleaner technology applications among developed and developing markets.

Governments will also need to consider ways of supporting the greening of manufacturing through institutional support and soft technology approaches, for example, education and training in areas such as cleaner production and considering smaller, supplier enterprises in particular. Institutional support can vary from the financial, ensuring the provision of green subsidies and loans, to the provision of infrastructure, ensuring appropriate systems for deposit refunding, waste recovery, recycling and distribution. Scaled-up investment in establishing eco-industrial parks can be a key building block in this, an area open for public-private partnership. Voluntary initiatives by manufacturing industries over the last ten years have shown growing willingness to measure and communicate relevant performance and discuss with investors and other stakeholders what indicators to use in the process. Greening national economies and markets require reliable methodologies underlying these and similar efforts to communicate performance via green product labels and certification schemes.

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