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Speech delivered by Sir Suma Chakrabarti, EBRD President, to CCIEE’s 4th Global Think Tank Summit, Beijing
Good morning, ladies and gentlemen! Delighted to be here, addressing you on this very important subject. My thanks to CCIEE and Chairman Zeng Peiyan for inviting me.
The Times They Are A’ Changing!
I’d like to begin my remarks with an observation that may strike some of you as obvious. But I think it is an observation worth stating.
The fact that we are talking about ‘Green’ and ‘Growth’ in the same breath, not as opposites or as a trade off, but as two ideas that complement each other, is pretty extraordinary.
Even a few years back, many people were reluctant to frame the debate in such terms.
It wasn’t quite Either/Or: either we advocate sustainable, environmental-friendly values, or we go for growth.
But there was a real sense in which those green values were seen as a constraint on, not as a potential engine for, growth.
Well, as Bob Dylan once said, the times they are a changing!
And how fast!
For all sorts of reasons, the debate has shifted radically.
And so have the ambitions of the developed nations.
That is particularly satisfying for an institution like the EBRD, which has consistently been at the forefront of change in this area.
So it’s exciting to see the way the concepts of ‘Green’ and ‘Growth’ are now yoked together.
Why the Shift in Attitudes?
This change in attitudes is the result of several factors.
The technology that drives green innovation is getting cheaper all the time.
Many influential countries have had a major rethink on where they stand on green investments and are now going all out to encourage them.
And the way we measure the costs and benefits of green investments, particularly in the long term, is also evolving – and evolving very much in their favour.
That new calculus is reflected in the scale and ambition of what we are all trying to do.
So the recently declared aim of the G7 nations to phase out emissions by the end of this century has, of course, attracted comment.
But it no longer strikes most people as Utopian.
Instead, such calls seem to be in keeping with a more general mood amongst governments, businesses and consumers.
From Changing Attitudes to Delivery
What will it take to deliver such goals?
In the EBRD’s view, we need to unlock new markets, introduce new technologies and support the private sector.
We also need to create a competitive environment for alternative technologies on a level playing field with existing fossil-fuel based ones.
Any shift to a sustainable economy will be centred on the transformation of markets, changes in entrepreneurial behaviour, on new products and new skills.
We know from long experience that fostering innovation and private sector entrepreneurship in the green economy in the countries where we work will not just help reduce the costs of environmental damage and climate change.
It can also bring other substantial benefits such as energy diversification and lessen dependence on fossil fuels.
All of this sits very well with the EBRD, our values and everything we have been trying to do in this field and indeed beyond.
The recent New Climate Economy report identified three ‘drivers of change’ which need to be harnessed to overcome barriers to low-carbon growth.
They are: raising resource efficiency; investment in infrastructure; and stimulating innovation.
All of these are what we at the EBRD think of as our ‘calling cards’.
Ever since our creation almost 25 years ago, the EBRD has been committed ‘to promote, in the full range of its activities, “environmentally sound and sustainable development”. This is in article 2 of our constitution.
Projects that foster environmental and social sustainability rank among our highest priorities.
If I may bombard you with figures for a moment, EBRD financing in this area amounts to nearly €17bn in over 950 projects over the last nine years.
The total value of those projects stands at €93bn. We’ve reduced CO2 emissions by 70 million tonnes per year.
Last year more than a third of our total investment was in sustainable resources.
Scaling up Delivery
Yes, those figures are impressive.
But they are not enough.
We need to scale up delivery in this area.
Encouraged by our shareholders, some of which are those very same G7 nations, but also aware that we have real expertise on Green Growth, we want to do much more.
So we are looking at a possible new target for financing in this field of around €4 billion a year. Over five years that’s a total of €20 billion.
Based on the past performance of our activity in climate finance, this would leverage another €70 billion for a total project value of up to €90 billion.
In line with our business model, we would expect between a half and two thirds of that financing to be in the private sector.
Part of that will be doing what we already do.
But we are also exploring new areas.
Investing in low-carbon buildings, transport and electricity systems, clean manufacturing and bioenergy. The full range of activities that amount to green economy transition.
And, as we scale up in this area, we want to do more with other multilateral development banks. In this regard, I am very much looking forward to co-financing green growth projects with the Asian Infrastructure Investment Bank as soon as it is up and running.
Ladies and gentlemen, the EBRD motto is: we invest in changing lives
More and more, we at the EBRD define the ‘change’ in ‘changing lives’ as the change from a world powered by the inefficient and harmful consumption of fossil fuels to one which is more sustainable and environmentally sound.
One that will also deliver long-term growth.
Green growth.
Thank you very much.
