Bulgaria’s Green Potential: Knowing, Seeing, Acting

Photo by Julian Donov

Good morning, ladies and gentlemen. It is a pleasure to be here with you today to jointly explore Bulgaria’s green potential.

I have a 7 year old son, and he has many questions about our world. For my presentation today, I have borrowed 3 questions from him: First, What do we know? Second, What do we see? Third, How do we act?

So, globally, what do we know about climate change?

Imagine, you are about to board a plane when you get a warning that the plane is most likely going to crash. Who of you would still board this plane? How many of you would take a high risk to crash with this plane?

This is what I expected. Individually, most of us would not take such a high risk. But collectively, we are taking a huge risk, a major climate change risk.

Recent scientific reports commissioned by the World Bank– Turn Down the Heat – take stock of what we know today about climate change. We know that it is almost certain that by the end of this century, average global temperatures will be 2 degrees higher. And we know that we take a high risk that temperature increase will even reach 4 degrees. We also know that a 4 degree world still can and must be avoided. We know that it is technically and economically feasible to hold global warming at 2 degrees, but we also know that the window for avoiding a 4 degree world is closing rapidly. We know that the time to act is now.

Concerning climate change, what do we see?

In 2009, we saw this. We saw the President of the Maldives, a small island state in the Indian Ocean, holding an underwater cabinet meeting to symbolically alert the world about the impact of rising sea levels on his country. A 4 degree warmer world would lead to a sea level rise of about 1 meter, wiping out most of the Maldives, and threatening hundreds of millions of people living in coastal agglomerations around the world – from New York City to Bangkok.

What else do we see?

We see an increasing number of severe weather events around the globe, we see an increasing number of heat waves and floods, including here in Bulgaria - think of last week’s record high temperatures, think of last years’ floods causing the Biser dam to burst, killing several people.

But let’s be clear, what we see today is the impact of a 0.8 degree average temperature increase. What we will see tomorrow will be an unprecedented and much more dramatic increase in intensity and frequency of extreme weather events, including droughts and floods. And a 4 degree world would not simply be a linear extension of a 2 degree world; we would see much more drastic impacts caused by unpredictable tipping points. We even don’t know if we can adapt at all to a 4 degree world.

So, we know that climate change is happening; we know that we are taking a huge climate risk, and we already see the impacts of climate change all over the world. We also know that tomorrow’s impact of climate change will be much more severe than what we see today, and we know that its scale will depend on our today’s actions.

But how do we act?

Globally, we act far too cautiously. Actually, we act irresponsibly given the high risks. But acting on climate change is not only needed to avoid future disastrous climate change impacts, climate action also creates substantial benefits today.  

Which brings me to Bulgaria’s green potential. Let me highlight three potentials, three areas where coherent and bold action would create significant benefits today AND tomorrow: agriculture, energy efficiency, and green manufacturing.

First, AGRICULTURE.

What do we know about Bulgaria’s agriculture?

We know that there is a need to feed a rapidly growing world population. Demand for food is expected to double by 2050. We also know that what we need is “climate smart agriculture” – agriculture that increases food security and contributes to climate change adaptation and mitigation.

We know that organic agriculture is one form of “climate smart agriculture”, and we also know that it is rapidly growing global market, including in several EU countries. In Germany, for example, demand for organic agriculture products increased by 30 percent over the past 5 years, with sales reaching 7 billion Euros in 2012.

And we know that agriculture holds tremendous potential for Bulgaria, a country with vast agricultural land, fertile soils, and diverse agro-climates. Today, farming represents about 5 percent of GDP and secures about 20 percent of total employment.

What to do we see?

This, for example. Run-down irrigation infrastructure. In the 1980s, more than 1 million hectares of land were equipped with irrigation facilities, but this has dramatically dropped to just about 45,000 hectares today.

We also see fragmentation of land ownership, aging of farmers, and only 0.3 percent of Bulgaria’s agriculture being certified organic – compared to 20 percent of Austria’s agriculture - all this leading to the fact that today agriculture is the least productive sector of Bulgaria’s economy.

How could Bulgaria act?

By strategically positioning Bulgaria’s agriculture in the EU to increase its value added, its competitiveness, its environmental sustainability, and its climate resilience. Organic agriculture is one aspect of such a positioning for increased agricultural exports. This positioning needs a bold strategy and predictable, integrated support for farmers.

It also needs substantial investments to revise the trend of depleting irrigation infrastructure. Increased and more effective use of irrigation will not only lead to an improvement in agricultural productivity, it will also build a more climate-resilient agriculture sector.

The 2014-2020 EU Rural Development Fund provides an enormous opportunity to systematically position and strengthen Bulgaria’s agriculture - from competitiveness and an environmental point of view.

Second, ENERGY EFFICIENCY of buildings, in particular residential buildings

What do we know?

We know that Bulgaria’s economy is by far the most energy intense in the European Union. In order to produce one unit of GDP, Bulgaria uses four times more energy than the EU average.

We also know that 40 percent of all energy in the EU is consumed in buildings. And we know that the quality of Bulgaria’s building stock is below EU average, including a large part of Bulgaria’s residential buildings.

Finally, we know that about 60 percent of Bulgaria’s households are energy poor, meaning that they need to spend more than 10 percent of their household income on energy.

What do we see?

We see this. Poorly insulated apartment buildings with patchwork investments. According to the OECD, energy consumption of existing buildings can be reduced by up to 50%. Given the large share of old panel apartment buildings in Bulgaria – 2.7 million Bulgarians live in those buildings - the energy savings potential in Bulgaria is even higher.

But how could Bulgaria act?

Imagine all Bulgarians living in apartment buildings like these – modernized apartments with proper insulation? Wouldn’t it be a win-win-win situation to substantially scale up energy efficiency measures for residential buildings – win for homeowners, win for business, and win for the environment?

A recent World Bank report analyzed energy efficiency policies in 7 EU member states. Following lessons learned from these EU success stories, what would be needed for a large scale residential buildings energy efficiency program?

First, sustained top Government leadership and commitment. It takes more than a market for energy efficiency to work. Second, money. We know that on average one Euro invested in energy efficiency saves two Euro investments in new power generation capacity. We also know that retrofitting buildings saves money in the long term, but it needs money in the short term. The 2014-2020 EU funding period constitutes a huge opportunity to provide substantial financial energy efficiency support to homeowners. But even Government leadership and money alone will not be sufficient. What is also needed is a stable, clear and predictable enabling framework – a clear strategy and roadmap for the renovation of Bulgaria’s building stock, a simple regulatory and legal framework and substantially strengthened institutional and implementation capacity.

Ladies and gentlemen,

So far, I have highlighted the green potentials in agriculture and energy efficiency of residential buildings. Let me conclude with a third example.

GREEN MANUFACTURING

What do we know?

We know that this is Bulgaria’s past. We also know that Bulgaria’s exports are still dominated by natural resources-based and unskilled labor-intensive commodities. We know that only 3 percent of Bulgaria’s exports are high-tech, innovative goods and services, significantly below the EU average of 16 percent.

And we know that the large shifts over the next few decades will create entire new industries and businesses, we know that already today there are substantial green growth opportunities in newly emerging sectors.

What do we see?

We see an increase in green investments including foreign direct investments - investments in green manufacturing. For example investments in eco-friendly technologies in automotive manufacturing, manufacturing of charging stations for electric cars or production of high energy efficient LED lighting.

We also see a rapidly developing global market for green industries. The global market for renewable energy, for example, was about 200 billion Euro in 2011 – six times the amount invested just 7 years ago.

How could Bulgaria act

Being close to green growth leaders in Western Europe, Bulgaria can seek closer integration by encouraging green FDI and trade in green goods and components. Enterprises in high income economies will increasingly seek cost advantages by outsourcing production.

Attracting such investments requires a good business environment, but it also requires a better framework to stimulate and support green innovation. With determined actions, Bulgaria can position itself as a European investment destination for green manufacturing, leading to a diversification of its export basket with a higher share of innovative products, leading to job creation in sustainable sectors.

And with the EU 2014–2020 financing framework, Bulgaria has the opportunity to stimulate green business innovation by ensuring that the new operational program on Innovation and Competitiveness puts a particular emphasis on fostering green innovation.

Ladies and gentlemen,

I started with this slide and the question to all of you how much risk you would be willing to take.

I started with my 7 year old son. He will live in a world where the impacts of climate change will be much more severe than what we see today. But even many of us could experience the harsh impacts of a 2 degree warmer world within our lifetimes – 20 to 30 years from now. Our today’s actions will determine the scale of these impacts that our children and the future more than 9 billion people on our planet will need to cope with. Our successes and failures in the fight against climate change will define our generation.

Ladies and gentlemen,

Climate change and green growth has become highest priority at the World Bank Group, and we are determined to work with countries like Bulgaria to speedily find practical solutions. We must meet the climate change challenges with political will, intelligence, innovation and partnership.

Bulgaria’s “green potentials” are substantial, but Bulgaria would need to act strategically, systematically, and on a large scale. Bulgaria needs to act with the ideas and “green” commitment of many people – people like you.

Thank you.