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Sunday, September 23, 2018
Manipadma Jena interviews the Deputy Director and Water Sector Lead at the Global Green Growth Institute's (GGGI) Investment and Policy Solutions Division, PETER VOS.
STOCKHOLM, Sep 12 2018 (IPS) - Today just over two billion people live without readily available, safe water supplies at home. And more than half the world’s population, roughly 4.3 billion people, live in areas where demand for water resources outstrips sustainable supplies for at least part of the year.
Yet the world is not managing water well or making the most of it, the United Nations High Level Political Forum on Sustainable Development said in July this year. This is due above all to failures of policies, governance, leadership and markets.
By 2030, investment in water and sanitation infrastructure will need to be around USD0.9 -1.5 trillion per year, according to the New Climate Economy Report 2018. The Global Commission on the Economy and Climate released this major report earlier this month.
Maximising returns on water investment requires recognising the potential for natural or green infrastructure to complement or replace built infrastructure. It also requires mobilising private finance and investment at scale and generating adequate revenue returns. It will also be vital to put an appropriate value on water and sanitation services.
This is what the South Korea headquartered Global Green Growth Institute (GGGI) helps developing countries and emerging economies do, among other things. GGGI, an inter-governmental organisation with 28 member countries, supports and promotes strong, inclusive and sustainable economic growth in its partner countries. It supports countries’ national efforts to translate climate commitments, contained in their Nationally Determined Contributions under the Paris Agreement, into concrete climate action.
“GGGI delivers green growth services in the water sector that requires [the application of] market-based solutions for managing ecosystem services using innovative financial instruments such as Payment for Ecosystem Services (PES),” said Peter Vos, deputy director and Global Water Sector Lead during World Water Week in Stockholm, Sweden. Vos has extensive experience in international water projects both in the public and private sector.
He said that GGGI saw the PES model as not only providing a vehicle for incentivising ecosystem management, but also being able to help achieve long-term sustainable goals.
In a presentation on financing water conservation for ecosystem services at the global event organised by the Stockholm International Water Institute, Vos strongly emphasised PES as a powerful tool for enhancing economic, environmental and social returns from investments in integrated ecosystem management. Excerpts of the interview follow:
IPS: Please tell us about GGGI’s participation in the World Water Week and how it benefits from it.
PV: What is getting the attention of the water discussion now is ecosystem services. We try to get knowledge about the crucial elements of this aspect. GGGI is implementing PES in the water sector and has been involved in the development of financial instruments to support ecosystem services in several developing countries.
GGGI works to address issues impacting water availability and use by encouraging water-related innovation in industries and investment in green urban infrastructure, and through integration with policies on water allocation in economic sectors.
Secondly, there are the bilateral meetings which hold importance for our future work and at World Water Week we met a cross-section of stakeholders, including from ministries, donors, also NGOs.
We had very intense discussions and made good progress. GGGI is an international organisation focusing on green growth, and we need partners to pursue our agenda, not only in terms of attracting finance but also in ways in which we can work together, to cooperate, expand and have more impact. We are a small organisation and cannot do it alone.
IPS: GGGI’s water sector has been providing a range of appropriate technical guidance towards green growth to low and lower-middle income countries that are tailored to their socio-economic conditions, their capacity and demand. What are GGGI’s working strengths in this area?
PV: GGGI focuses on mainstreaming water resources management in green planning frameworks, decentralised sanitation and water quality investments, and innovation through bio-economy, including climate resilient food systems and payment for ecosystem services.
What makes GGGI’s operations successful is that we are embedded in the government. We are not outsiders but one of them. We have our staff sitting in the ministry itself, discussing constantly how to improve sustainable economic growth, looking at policy reform through the green pathway.
Green growth policies allow for limited water resources to be used more efficiently and enable access to all at a reasonable cost, while leaving sufficient quantities to sustain the environment. New green projects in water and sanitation not only improve overall capacity in sustainable water management, but also create additional green jobs.
The second aspect about the way GGGI works is that it is there with partner countries for the long haul. Our commitments are long term and we see it through from policy reforms all the way to supporting project implementation. We are there monitoring projects even five years after [implementation] and assist governments if something goes wrong.
Our linkages between policy reform and project development ensures implementation. But if it is only about policy reform then it is very likely that it will be written in a report and may never see the light of day. Without policy implementation, policy reform is a toothless tiger; it will not be successful…So we have two pillars. The first is policy reform to create a conducive environment. [And the] second is project implementation that creates the hands and feet of what we jointly want to achieve.
IPS: What are some of the implementation challenges GGGI faces and how does it handle them?
PV: In setting the ground for reforms, yes challenges are there. Politicians are there for the short term. Elected governments may be there for four years but ministers are often changed in a year’s time. One cannot rely on political support only; one has to work with all the layers below it – the civil service and municipalities – to make a policy or a project sustainable and internalise it.
We consider ourselves the strategic advisors, discussing policies and project extensively till the administration is fluent with them. We ensure that we have a broad base of support and not concentrated on one or two [powerful] persons.
We have been very nimble. The world is changing very fast and we need to adapt and respond quickly to the needs and opportunities for our member countries. So in the past year we have strengthened our presence in the countries of operations. With two-thirds of our staff in member countries, and just one-third at headquarters, we are closer than before to ground operations in member countries.
IPS: GGGI also helps member countries with investment strategies for their green projects. What is its investment mantra in an increasingly public fund-squeezed world?
PV: The mantra is that public investments are not sufficient to change the world. We need to attract other financing. Private financing is very important. There is a huge amount of private financing floating around. They are all looking for investment opportunities.
With current low interest rates it is difficult for them to find the right investment opportunities. So currently there is emerging a good opportunity to attract conservation finance for nature conservation, for water management, for sustainable landscapes.
Definitely there is a search for returns on investments but investors want impact; they want to do good for Nature, to do good for people. So this is also helping. Investors, especially in Germany, in the United Kingdom and the Nordic countries, are contributing to this shift. We have to find our opportunity in this shift to attract funding.
Since there is limited public money, we have to use it intelligently. What GGGI is doing is putting government and donor money or contributions from the Green Climate Fund into projects in such a way that the private investor feels confident that their investment will give assured returns. For instance, in Rwanda we are working on energy efficiency and climate change investments. Financial vehicles are designed with a foundation of public funds and this gives comfort to private investors.
IPS: How do you see the earth in 2050 and where do you see hope for sustainability coming from?
PV: In principle I am very optimistic. This is not a scientific answer but a personal opinion. I am also optimistic that we will be able to achieve positive results and in the end remain below the two degree warming limit.
This positivity is fed by the innovations for sustainability I see, that investors now are looking for impact rather than financial returns and the fact that the membership of GGGI increased to 28 members who remain very committed to a sustainable growth path. Countries like China may still be resorting to coal-powered electricity but they are taking big steps towards sustainability simultaneously.
Today, it is a combination of positive and negative factors, but I hope and expect the positive will prevail, that we will be able to turn the ship in the end. In the end it is all about people. If people want, it will happen.
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