EBRD blog » Natural resources

Film-making competition: meet the finalists

Lawrence Sherwin Deputy Director of Communications — Thu, 01 Dec 2011 11:13:10 +0000

Earlier this year we worked with TVE to sponsor part of their Biomovies competition, an initiative that invited film-makers to create short films on environmental themes.

It has been a huge success with many more entries than last year’s event and a number of excellent, creative films making it to the final shortlist. The batch of best movies is now available to watch on Youtube, where viewers are invited to help select the ultimate winner.

The category supported by the EBRD was The Impact of Water.

The availability of safe and reliable water and wastewater treatment are vital for the health and quality of life of people everywhere. Since the Bank was established 20 years ago we have invested in numerous water projects and this is expected to become even more of a priority area as we start to work in the countries of the Southern and Eastern Mediterranean. Many of these countries are among the most water-stressed in the world, a situation that will become even more uncertain as a result of climate change.
Biomovies has inspired amateur film makers from across the globe to use their imagination and creativity to highlight these issues. This year it attracted entries from 39 different countries.

As well as Water, the competition focuses on Energy, Forests, Oceans and Living With Nature. The final 10 films will be shown at the UN Climate Change Conference in Durban, South Africa and the overall winner will be the film that receive the most views, and will be announced at the start of February 2012. Visit the Biomovies Youtube page to see the finalists and help pick the winner.

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UNDERSTANDING LOW CARBON TRANSITION

Lucy Granville Web Editor — Mon, 04 Apr 2011 16:56:09 +0000

To mark the launch of Low Carbon Transition, the joint special report on climate change published this Wednesday, we asked the authors of the report to produce a handy glossary explaining the key terms

The glossary aims to stimulate debate which we hope will be continued at the panel discussion chaired by EBRD Chief Economist Erik Berglöf and Chairman of the Grantham Research Institute Nicholas Stern, who have co-authored the report.

The launch event is being held at the EBRD headquarters in London and consists of a presentation of the main findings of the report followed by a panel discussion and a Q&A session. A reception will follow.

YOUR OPPORTUNITY TO POSE A QUESTION

If you would like to ask the panel a question relating to climate change and transition in the EBRD region of operations at the launch event this Wednesday 6 April, simply email webteam@ebrd.com by Wednesday 6 April 11am.

Low Carbon Transition Glossary

CO2 (Carbon dioxide) the principal greenhouse gas generated as a by-product of economic (human) activity

Carbon intensity of output a unit measuring the amount of carbon dioxide that is emitted into the atmosphere in the process of generating one unit of output (usually measured as Gross Domestic Product). This is the key carbon performance measure of an economy

Energy intensity of output a unit measuring the amount of energy that is used in the process of generating one unit of output (usually measured as Gross Domestic Product)

Marginal abatement cost the additional cost of a process or technology that emits one tonne of carbon dioxide less than a reference technology with the same output. A coal-fired power plant could be the reference technology where a modern gas fired plant was being introduced, for example. Or in transport, petrol powered vehicles could be the reference technology against electric vehicles

Carbon pricing the non-zero monetary value attached to the right to emit one unit of carbon dioxide into the atmosphere

Climate change mitigation measures that reduce greenhouse gas emissions in order to limit the magnitude of man-made climate change

CCS (carbon capture and storage) the collection, transport and storage of the carbon dioxide generated in industrial processes. The goal of CCS is to avoid the release of carbon dioxide into the atmosphere

CLIMI (Climate Laws, Institutions and Measures Index) an index introduced by the EBRD which measures the quality and extent of climate related laws, institutions and measures across 95 countries. The index covers both energy and non-energy related policy areas

Emission targets an undertaking to reduce greenhouse gas emissions to below a certain limit with the goal of reducing man-made climate change

Fuel mix the combination of fuels that provide energy for an economy. It includes fossil fuels (such as coal, oil and natural gas), nuclear energy and renewable energy sources (such as biomass, hydro, geothermal, wind, solar energy)

ISE (Index of Sustainable Energy) an index introduced by the EBRD that measures institutions, policies and outcomes related exclusively to sustainable energy use focused on energy efficiency, renewable energy and climate change, in the transition economies of East-Central Europe and Central Asia

Low Carbon Transition the process leading to the full or partial reduction of greenhouse gas emissions generated by economic activity

Kazakhstan's industrial policy: between pipedream and pipelines?

Ralph De Haas Deputy Director of Research — Tue, 16 Jun 2009 13:02:11 +0000

Can something good come out of the crisis? Perhaps. Kazakhstan – battered by a sudden stop in bank funding and a lower oil price – recently announced updated industrialisation plans that seem more realistic than earlier versions. The stated goal is still to advance economic diversification and reduce the country’s dependence on oil. But with less oil money floating around, the government seems to have put its feet back on the ground.

Before the crisis, government officials liked to muse about developing break-through projects in high-tech sectors such as biochemistry and space technology. About 30 to 50 ‘corporate leaders’ were the be hand-picked by the government, receive preferential treatment, and develop into competitive players in the regional and even global economy. So far this program has been disappointing, perhaps because the coveted industries are too far removed from Kazakhstan’s current technological frontier.

The ‘corporate leaders’ concept was no longer mentioned in a recent speech by President Nazarbayev. Instead, he focused on developing sectors that are closer to Kazakhstan’s current or potential comparative advantage given the country’s existing capabilities and resource endowments:

(1) Agriculture and agri-processing. Kazakhstan’s vast land mass gives it a comparative advantage in agriculture, but substantial investments are needed to improve the productivity of primary agriculture and agri-processing. Better infrastructure (such as sufficient railway capacity to export grain) is needed as well.

(2) Construction industry and building materials. Although the construction sector and the manufacturing of building materials is currently hit hard by the bust in the real estate market, there is still a need to increase the quantity and quality of commercial and residential real estate.

(3) Oil refining and the infrastructure of oil and gas industry. The three oil refining and processing facilities in the country are in desperate need of upgrading. Kazakhstan also needs to increase and diversify its oil export capacity to allow for increasing oil production during the next years.

(4) Metallurgy and manufacturing of finished metal products. Sensible given the large-scale mining industry (copper, iron ore).

(5) Development of the chemical, pharmaceutical and defence industries. The development of a (petro-)chemical cluster makes sense given the abundant hydrocarbon and mineral wealth. The development of a viable pharmaceutical industry is less likely. Eventual WTO accession will be problematic for this sector.

(6) Energy sector, including the development of clean power. Reducing the economy’s energy intensity by 10 per cent by 2015. Important given the capacity constraints in the power sector and low energy-efficiency of the industrial and manufacturing sectors.

In addition, the government announced reforms in infrastructure and the financial system, two sectors that are key for the emergence of new industries and a better utilisation of domestic and foreign saving than in the past. The further development of transport infrastructure (including the Western Europe – Western China highway corridor) is crucial to unlock export potential (and related economies of scale in production) in light of Kazakhstan’s limited domestic market. The need to create a ‘new national financial architecture’ is obvious as well, now that Kazakh banks no longer have access to virtually unlimited amounts of foreign funding. Banks will need to develop a deeper and stable deposit base and reduce their dependence on foreign wholesale funding. This will also allow them to bring down their FX lending.

So how actively should the Kazakh government promote the growth of these industries? There can be good reasons to use industrial policy to further economic diversification. Kazakhstan will substantially expand its oil production between now and 2015 and this means that the underlying tendency for the economy is to become more, not less, dependent on the hydrocarbon sector. A sensible form of industrial policy may assuage this underlying trend and partially prevent its harmful impact on other economic sectors.

The economics profession also increasingly recognises that industrial policy may help to overcome market failures in emerging markets, such as when various projects require simultaneous large-scale investments in order to become profitable (see also Chapter 5 of EBRD’s Transition Report 2008 for an overview of industrial policy in a range of transition countries). However, recipes on how to practically implement industrial policy remain scarce. For instance, while a recent book by Dani Rodrik – professor of international political economy at Harvard University – argues why carefully crafted and country-specific industrial policies may be necessary to kick-start economic growth, it is less convincing in the practical recipes that it prescribes. Rodrik argues that governments in emerging markets should not simply hand-pick companies that will get government support. Instead, there should be a continuous process of national economic ‘self-discovery’ in which the government in consultation with the private sector discovers the productive potential of the country.

While Rodrik acknowledges that ‘embedding industrial policy within a network of linkages with private groups’ may facilitate corruption and rent-seeking, it remains difficult to see how this interactive process of economic self-discovery will not be captured by vested interests and political elites that dominate many transition and emerging countries. However, even when taking these caveats into account, there are still a number of general ‘do’s and don’ts’ of successful industrial policy that can be distilled from the current state of the economic literature:

Governments have a bad track record in ‘picking winners’. Attempts to hand-pick successful companies have only been successful when countries ensured that companies were at some point exposed to competition. One way of doing this is through supporting exporters, since these will have to compete internationally.

Even better is to do a ‘market test’ before the government supports a project or sector, for instance by consulting the private sector (see above). The government should only support companies in which foreign or domestic private companies are willing to invest subject to the removal of certain obstacles (or the provision of certain incentives). Likewise, the government could mainly support companies that are ‘vetted’ by IFIs such as EBRD.

The success of industrial policy depends not so much on ‘winner picking’ but on ‘loser sticking’: state support should stop as soon as the government discovers that a firm performs poorly. This will be very difficult in case of vested interests. A solution may be to introduce ‘sunset clauses’ that ensure that state-support is limited in time and that support is phased out automatically when projects fail.

Industrial policy should mainly be ‘horizontal’ in nature: making sure competition is encouraged across the board, for instance by improving infrastructure that is available to all firms. Improving education, in particular to alleviate shortages of managerial skills and entrepreneurship, is another effective ‘horizontal’ policy to stimulate sustainable development

Industrial policy cannot substitute for long-term deficiencies in state governance, such as red tape, corruption, and a weak rule of law. Industrial policy may even increase the scope for corruption. Sustainable long-term growth is only possible when it is embedded in a ‘deeper institutional transformation’ and democratisation. Here lies the real longer-term challenge for many transition countries and emerging markets.