Statement of Mr. LI Yong Director General United Nations Industrial Development Organization

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1 Check against delivery Statement of Mr. LI Yong Director General United Nations Industrial Development Organization at Verona Efficiency Summit 8 October 2014 Verona Page 1 of 5

2 Excellences, Ladies and Gentlemen It is a great pleasure for me to join you all in this important summit that will focus on key issues concerning energy efficiency and climate change. It is especially gratifying to be in the midst of prominent leaders and experts who are shaping the global agenda on energy. Let me begin by thanking the organizers Veronafiere for inviting me to this summit and giving me an opportunity to share my thoughts on this very important issue. As you know, our projections for the future are tempered by some serious global challenges: poverty and growing inequalities, climate change, instabilities in our global economic system, enduring and expanding conflicts, and the scourge of disease such as Ebola, to name but a very few of a much longer list. At the same time, it is clear that the world has never been more interdependent than it is now. Never has it been shaped more by technological, economic and social progress based on an ever-closer interaction between countries and people across the globe. And yet, this very increase in global interaction that has brought us this progress and prosperity has also made the world more vulnerable than ever before to various challenges. I have just returned from New York after attending Climate Summit last week where it was reaffirmed that climate change and sustainable development are the central challenges of our time. They are inseparably linked to sustainable energy and need to be addressed together. Last year the Member States of UNIDO discussed our world s industrial future, and they adopted a major global declaration, which they entitled the Lima Declaration: Towards inclusive and sustainable industrial development. This declaration makes it clear: in order to eradicate poverty and to allow a better life and prosperity for the billions that are still excluded from a dignified human existence, the world needs to grow its industries in an inclusive and sustainable manner. We focus on manufacturing industries and enterprises to make them more competitive, productive and sustainable. Our experience in promoting green industry and green growth showed that sustainable energy powers human progress from job creation to industrial competitiveness, from strengthening security to empowering women. To enact an Inclusive and Sustainable Industrial Development we need to better capture and leverage the positive nexus between the multi-interdependent factors that define today s economic and environmental development paths. If we consider sustainable energy, there is a clear need for a new energy paradigm that reconciles the need for economic, industry and prosperity growth with the sustainability of environment and climate for future generations. Energy is a great integrator: it cuts across all sectors and lies at the heart of all countries, industries and communities core interests. In fact, energy is considered the missing MDG, and now more than ever, the world needs to ensure that in the post-2015 development agenda, the benefits of modern energy are available to all and that energy is provided as cleanly and efficiently as possible to everyone in the world. Energy Efficiency is certainly one of the key pillars of this new paradigm. Energy Efficiency has actually already made a great contribution during the last four decades to limit the growth of global energy demand. The policies and programmes that have been implemented in many countries since the early 1970s in response to the oil-price crisis have led to a remarkable improvement of energy efficiency and energy productivity. Without those policies and programmes it is likely that our energy consumption and greenhouse gas emissions would be 30-40% higher today than they actually are. Page 2 of 5

3 The most recent analyses and research have shown that energy efficiency is the single most important technology option to achieve the greenhouse gas emission reduction targets set by the international community to contain average global temperature rise by 2100 within the 2º C limit. More than 40% of the GHG emission reductions needed by 2050 can be and are to be achieved through efficiency improvements in the supply and end-use of energy, with enduse accounting for the largest share. The estimated economic potential for energy efficiency improvements with current best-available policies, practices and technology is substantial today, in excess of 25% of current consumption levels, in any economic sector. In the light of the insufficient progress achieved so far in reducing global greenhouse gas emission reductions, greater efforts should be devoted to supporting and accelerating the wider implementation of the Energy Efficiency policies, best-practices, technologies, interventions and savings that are available today and which could deliver immediate, or almost immediate, impact. In the industrial sector, globally, there are substantial immediate energy savings to be made that are not technology-related but, instead, are dependent on organizations and people s management practices, technical knowledge, competencies and behaviour. The work of UNIDO and many OECD countries on the implementation of energy management systems has very often shown efficiency improvements of 10-20% within the first two years without any or significant capital investments. UNIDO strongly advocates the need for systematic energy management to ensure continuous improvement of energy efficiency in industry. As such, UNIDO is extremely active in promoting and supporting the dissemination of energy management systems and related energy efficiency best practices and policies, through ongoing or preparatory project activities in more than 20 countries. But as we focus on achieving results today, we also need to work towards the promotion, support and development of policies that while requiring more time to deliver results, can bring about the more profound penetration of energy efficiency in infrastructure, manufacturing supply chains and technology innovation that is necessary to sustain and increase energy efficiency gains tomorrow. Technology-forcing and minimum energy performance standards in the United States of America, Europe and other countries have been largely successful in re-shaping the product offerings in markets, such as electrical appliances and motors. Further work is possible and needed, both in the developed and especially developing regions of the world. In this area UNIDO pays special attention to standards for industrial equipment and energy-efficient manufacturing design. For example, we will soon launch a programme in China looking at energy performance standards and related conformity assessment infrastructure for industrial coal-fired boilers. In Africa, a multi-country programme to build capacity and provide investment support for the efficient design of cook stoves for food and beverage cottage industries is well under way, and gaining increasing attention and support from stakeholders as well as donors. Over the past decade, progress and innovation in clean energy technologies and industries have been quite impressive, but heavily dependent on public policy and funding. While some emerging countries have clearly shown leadership and long-term vision in promoting clean and green technology innovation and entrepreneurship development, the large majority of countries remain deficient in terms of industrial development strategy, institutional capacity and financing resources. UNIDO believes that it is critically important that developing countries play an active and direct role in building the technology responses to the challenge of Climate Change. In partnership with the Global Environment Facility, UNIDO launched the Global Cleantech Innovation Programme for SMEs in Page 3 of 5

4 The programme is active in seven countries, and soon to be extended to an additional ten. It aims to strengthen the national innovation systems for clean energy and green technologies, while nurturing and supporting SMEs and early-stage entrepreneurs in bridging their innovative technology and business ideas with investors and markets within and outside their countries. Special emphasis is given to supporting energy and resource efficient technologies, IT applications for efficient and smart manufacturing, renewable energy technologies, and efficient and advanced materials. As we move forward in promoting Energy Efficiency, I believe that we need to start talking more about the non-energy and non-environmental benefits of Energy Efficiency and increase our efforts in building effective narratives and empirical evidence of these additional benefits. The experience of UNIDO within its industrial energy efficiency and cleaner production programmes shows that the additional socio-economic benefits can compare with, and in some cases outweigh, the energy cost savings and environmental benefits. Reduced maintenance costs, increased production process availability, competency upgrading, product quality improvement and waste minimization, employee retention, job creation and the spread of energy efficiency principles to neighbouring communities are just some of the additional socio-economic benefits that have been witnessed in UNIDO s projects. More emphasis and evidence of such additional benefits would not only reinforce the business case for Energy Efficiency with industry management and other energy users, but also with the governments of emerging and developing countries. This may result in greater levels of allocation of resources for the development and implementation of energy efficiency policies that are more socially beneficial and inclusive than what we currently see. As we all move forward with the Global Climate Change agenda, there is a need for greater collaboration between public and private actors, including financial institutions, and the stronger engagement of the private sector and civil society. If we look again to industry, I think that we can see an interesting result: countries and regions that have been more successful in improving the energy efficiency of their industry are those that have been able to implement a larger number of cooperative measures between government and industrial associations; in other words, they are those countries where government and industry have come together to identify, discuss, negotiate and agree upon win-win solutions. Likewise, in some of the most successful sustainable city projects, civil society s participation and drive has been a key success factor. UNIDO is actively engaged at the country, regional and global levels in building and supporting platforms that can promote and facilitate broader stakeholder participation and collaboration in the identification and implementation of solutions and actions. Three UNIDO initiatives that I wish to mention here are the Green Industry Platform, the Global Network of Regional Sustainable Energy Centres and a newly launched partnership with the Asian Development Bank. The Green Industry Platform is a global high level, multi-stakeholder partnership which provides a forum for catalyzing, mobilizing and mainstreaming action on Green Industry around the world. It offers a framework to bring together governmental, business and civil society leaders to secure concrete commitments and mobilize action for supporting the more efficient use of energy and raw materials in manufacturing processes and services, as well as reducing negative impacts on the environment. The Global Network of Regional Sustainable Energy Centres, coordinated by UNIDO and implemented in partnership with Regional economic and political communities, at present consists of six centres in Africa, the Pacific and the Caribbean. These Centres combine highly Page 4 of 5

5 needed capacity building services with multi-stakeholder working groups and platforms for the development of regionally relevant policies and regulations. The UNIDO-ADB partnership, being piloted in Bangladesh, is part of UNIDO s renewed focus on closer collaboration with international finance institutions to build more effective multi-stakeholder programmes and bridge the gap between the demand for industrial investments and the availability of the required financing. To conclude, energy efficiency clearly remains central and critical to address Climate Change. As we move forward, the great challenges for developing countries and emerging economies are: For policy-makers to strike the right policy balance that can reconcile the urgent need for the results of today with the exigencies of their sustainability and progression tomorrow, while at the same time effectively triggering and releasing private sector and civil society resources and energies. For the private sector to engage more actively with Government and other stakeholders, and understand that energy efficiency represents a major business opportunity. For international technical assistance organizations like UNIDO to continue to assist in the development of partnerships and actions that can enable an increasing number of developing countries and emerging economies to develop and implement interventions that effectively and prominently integrate energy efficiency into their sustainable development strategies and programmes. Industrialization is a holistic structural transformation from a lower level of development to a higher level. To achieve this structural transformation, clean energy technologies including energy efficiency and renewable energy will play an important role. This is the spirit with which we should understand the post-2015 era of development. We need to make sure that we use our clean energy technologies, our global trade, and our overall industrial advancement for a greater good and above all for eradicating poverty. In the end, it is the goal, rather than the means that make our deeds stand out in history. We will need new global partnerships for inclusive and sustainable industrial development that provide the necessary trust in the global ambitions and goals, and to allow us to use our resources in a sustainable manner. I thank you for your kind attention. Page 5 of 5

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