Green Growth – innovating with new and energy-efficient solutions

When the G20 meets later this month in Mexico, its leaders will face multiple challenges, from delivering global growth and tackling the Eurozone crisis to facing the lack of progress in addressing the environmental challenges of the planet as stated in the Rio+20 UN report. So, the number one focus will be stimulating growth – greener growth.

We believe the G20 can start by sending a clear message on the benefits of low-carbon innovation, from energy efficiency solutions to clean energy products and services, as an engine for delivering green growth at a global, national, sector and consumer level.

Our common experiences suggest that the business case for investing in energy efficiency and low-carbon innovation is very clear. In both mature and emerging economies, energy efficiency solutions in buildings and industrial facilities can deliver energy savings in the range of 15-25% of a country’s total consumption. The scale of the opportunity is substantial: the energy saving potential in the building sector alone is estimated to be equal to the annual electricity consumption of the United States and Japan combined. The greenhouse gas emission reductions directly associated with these energy savings are also significant and the cost of delivery are low and the ROI attractive.

However, to unlock effectively the potential of low-carbon innovation and energy efficiency, we need supportive policy frameworks. We urge the G20 to work with the private sector to deliver clear and transparent policy as well as establish energy performance reviews and energy efficiency standards, and ensure clear reporting in energy consumption levels.

While policy is important, the business community recognizes that other barriers exist and that it has a central role to play, alongside governments, in overcoming them. We recognize, for instance, that innovation is needed to unlock private investment for low-carbon innovation and energy efficiency and that, now more than ever, businesses face significant restrictions on the cost of capital. To overcome this, we need to design and pilot new business models that utilize innovative financing and performance-based contracting structures, to reduce upfront capital requirements for energy efficiency and facilitate access to capital for small and medium-sized enterprises.

We also know that high-risk, high-cost research and development and pilot programmes for clean energy and energy efficiency may often go beyond the reach of individual countries. In instances like this, where industrial scale demonstration projects and sector scale energy efficiency programmes are needed, public-private partnerships should be established to foster greater international collaboration and progress pre-commercial technologies. Frameworks for developing these partnerships exist; governments can and should do more to accelerate the deployment of practical pilots.

To create the delivery models outlined above, business and government need to work together. For this reason, we welcome the launch of the Green Growth Action Alliance in Los Cabos. The alliance is a partnership with over 30 companies, banks and development finance institutions. Over the next three years, it will work in close collaboration with government to instigate practical progress on the key drivers of green growth and report to subsequent G20s.

As members of the alliance, we support collaborative efforts to design and pilot new financing models for low-carbon innovation and energy efficiency. We welcome the renewed spirit of partnership with the public sector and the opportunity to report to the G20 on our collective progress.

Author: Pierre Nanterme is Chief Executive Officer, Accenture, France, and Jean-Pascal Tricoire is Chairman and Chief Executive Officer, Schneider Electric, France. They are both members of the Green Growth Action Alliance.

Image: Visitors watch a cut-off model of a E-82 wind turbine in Germany. REUTERS/Christian Charisius