UNIDO Director-General Kandeh K. Yumkella on how the organisation's ‘Green Industry' initiative will help India and the challenges that lie ahead.
The Indian government, state governments, corporates as well as small and medium industry have shown interest and commitment to adopting UNIDO's ‘Green Industry' initiative. But that by itself is not enough as there are financial barriers. However, the UNIDO Director-General Kandeh K. Yumkella expressed confidence that with the right level of commitment, both financial and political, carrot-and-stick incentives and strict monitoring and regulation, India can attain the current standards of countries such as Singapore and South Korea within a decade.
Excerpts from the interview:
UNIDO has been laying a lot of emphasis on greening of industries. Can you spell out the concept of ‘Green Industry' and its relevance for developing countries?
Well, ‘Green Industry' means economies striving for a more sustainable pathway of growth by undertaking green investments and implementing public policy initiatives that encourage environmentally responsible private investments. Greening of industry is a method to attain sustainable economic growth and promote sustainable economies. It includes policymaking, improved industrial production processes and resource-efficient productivity.
‘Green Industry' promotes sustainable patterns of production and consumption, that is, patterns that are resource and energy efficient, low-carbon and low waste, non-polluting and safe, and which produce products that are responsibly managed throughout their lifecycle. Under the greening agenda, all industries continuously improve their resource productivity and environmental performance and the initiative also aims to create green industries that deliver environmental goods and services, including waste management and recycling services, renewable energy technologies, and environmental analytical and advisory services.
How is the Green Industry concept being realised in India?
You see, in India, among some of UNIDO's ongoing projects aimed at environmental sustainability is the promotion of energy efficiency and renewable energy in selected micro small & medium enterprise (MSME) clusters. The project seeks to develop and encourage a market environment for enhanced adoption of energy-efficient technologies and measures, as well as increased use of renewable sources of energy in process applications in 12 selected energy-intensive MSME clusters in the country to reduce overall carbon emissions and improve the local environment.
Second is the project for environmentally sound management and final disposal of polychlorinated biphenyls (PCBs). The objective is to reduce or eliminate the use and release of persistent organic pollutants (POPs) into the environment through appropriate disposal to protect human health and the environment from their adverse effects.
The third project is a voluntary initiative to promote greenhouse gas (GHG) accounting and low carbon production. It is to facilitate Indian industry in achieving ecologically sustainable growth and apex chamber CII has launched the ‘Mission on Sustainable Growth' which aims to promote and champion sustainable growth in Indian industry. The project's specific objective is to improve resource efficiency and environmental performance of business with a focus on verifiable accounting of GHG emission reductions in selected industrial sectors in India.
The fourth project is a national Implementation plan for POP management and disposal. Under the Stockholm Convention on POPs, it focuses on socio-economic aspects, sustainable development and environmentally appropriate policies and actions.
How do you simultaneously promote greening of industries and economic growth without imposing a burden on the limited financial resources of developing countries?
Oh yes, that's true. SMEs in developing countries face a multitude of financial constraints in transforming towards sustainability. Among others, these include inadequate availability of working capital, banks insisting on collateral and third party guarantees, and a risk adverse banking system for small projects. Generally, government institutions utilise environmental financing as an instrument to promote resource efficiency measures through financial institutions or independent funds such as the ‘Green Climate Fund'.
Also, the financial markets are starting to respond to sustainable development in more direct and creative ways such as targeted “green” funds, insurance markets, and the development of environmental policies and guidelines for considering environmental issues.
UNIDO, along with other UN agencies, capitalises on these resources for supporting sustainable industrial development in the country.
How responsive has India been in adopting UNIDO's green initiative?
The Indian government and companies combined are very sensitive to ensuring that the industrial manufacturing sector becomes more energy efficient and resource efficient. And India is no different in terms of interest and commitment from other countries like China and other major developing countries. Why, for what is driving the green energy initiative that I have seen in a number of key Asian emerging economies is national self interest. If you are more energy efficient, there is good demand management, you have to invest less in energy and power generation.
So, out of that energy security interest, many Asian economies, particularly India, is very interested in the greening initiative on the energy side. They also see a technological advantage. For, if they can, with the right set of partnership with the government, introduce such green technology efforts, they will be leaders in the future. I see this as enlightened self interest driving a number of greening initiatives in India and elsewhere. The third one, for sure, are climate and environment issues within their own communities and they do want to reduce pollution or emission. Strong interest on the part of India is clear from the fact that it has its own energy efficiency bureau.
Is the interest only at the discussion level or also at the implementation level? And what are the barriers and challenges?
Apart from the discussion level, there is genuine interest at the implementation level also. UNIDO provides technology for it. We have entered into partnerships with institutions in Bangalore and we have provided technology which is being used in Japan or France. With tie-ups and technology transfer, we do our best in helping companies with audits and training of their staff.
However, there are barriers. To be able to change the technology, you need financing and, in many cases, financing is a barrier. Second, for rapid uptake of clean technology that we want by companies, you need public policy to drive it as a mandate which requires them to do it or incentivises them to do it. In some regions, those policies are not there.