"Green" technologies in the global economy

The main hope in solving the most pressing environmental problems (and also resource problems) is imposed today on technological breakthroughs. In recent years, developed countries are reorienting their development strategies for the implementation of environmentally-oriented growth, one of the main components of which is "green" technology. Developing economies are becoming more and more involved in these processes. Russia needs to pay significantly more attention to these aspects of development, so as not to lose out on another crucial transformation of the global economy.

The main hope in solving the most pressing environmental problems (and also resource problems) is imposed today on technological breakthroughs. In recent years, developed countries are reorienting their development strategies for the implementation of environmentally-oriented growth, one of the main components of which is "green" technology. Developing economies are becoming more and more involved in these processes. Russia needs to pay significantly more attention to these aspects of development, so as not to lose out on another crucial transformation of the global economy.

What is a "green" technology?

In recent years, in a strategy of environmentally-oriented growth, developed countries have been rapidly developing "green" technology. The most important drivers of growth are various measures of public policy, as well as new opportunities to businesses in the environmental market that is growing rapidly under the influence of consumer demand (so-called "stick" and "carrot" approach).

As in the case of the environmental market and other similar definitions, there is no single definition of "green" or environmentally friendly (environmental) technology. The general approach is to achieve their main goal - to reduce the negative impact on the environment, for example, by reducing waste, increasing efficiency, improving design to reduce the amount of resources consumed.

According to the classification of the Organization for Economic Cooperation and Development (OECD), "green" technologies cover the following areas:

• general environmental management (waste management, pollution control, water, air, land rehabilitation, etc.);
• Production of energy from renewable sources (solar energy, biofuels, etc.),
• Mitigation of climate change, reducing harmful emissions, increase in fuel efficiency and energy efficiency in buildings and lighting fixtures.

In fact, "green" technologies cover all economic sectors: energy, industry, transport, construction, agriculture, etc. They are currently being implemented in the entire chain of companies’ activities, including, not only the production, but also the consumption, management and methods of production.

Environmental technologies tend to significantly reduce resource consumption, by the increased use of by-products. So, today's refrigerators consume 75% less electricity than their counterparts did in 1975 with a 20% increase in power, in particular through better insulation and more efficient cooling systems. Air transport in the developed world uses 50-60% less energy per passenger compared to the early 1970s, and freight transport uses 10-25% less fuel per ton-kilometer. Oil and gas production is becoming more and more efficient: in the past gas was flared, today it is actively used, advanced technology allows for even old oil fields being exploited longer. "Green" building means not only using recycled building materials, but also recycling waste and applying new insulating materials and alternative energy sources, when the waste going to produce warm air heating, etc.

Energy is key area among the main areas of development of "green" technology. The main directions of this “green” energy efficiency are new energy sources, especially renewable energy. The most simple and effective methods of reducing energy consumption and other environmental issues are the use of technologies aimed at improving the thermal insulation of buildings, the use of lighter materials in vehicles, reducing the leakage of water in municipal systems, as well as improved methods of storage of agricultural products. In fact, any measures to reduce resource consumption in the use of materials and design can have a significant impact on the environment. For example, the largest U.S. retailer Wal-Mart has set its suppliers a goal of reducing packaging costs by 5% in 2008-2012. Given the annual revenue of 400 billion dollars, this is a significant indicator, which can achieve a very tangible impact on the environment: fewer resources required for the production of packaging, for transportation of fuels and other lighter loads.

Structure and Geography

The "Vagueness" of definitions does not allow us to operate with precise statistics on "green" technology; rather it is a question of estimating the extent of their development, based on different approaches.

Thus, according to the OECD, the share of public spending on research and development (R & D) in energy and environmental protection in the overall budget for R & D in 2008 on the average for members of the organization exceeded 5% and in the EU this indicator more than 7%. The highest rate was registered in New Zealand (almost 14%), Japan and the Republic of Korea (12-13% in 2010). Less than 2% of the state budget accounted for environmental technologies in the USA, Russia, Switzerland and Israel. However, in absolute terms, the USA ranked second ($ 3.7 billion) after Japan ($ 4.2 billion). The fastest growing investments in R & D are in the production of second generation biofuels (among the most promising developments are cellulosic and biodiesel from algae), the Intelligent Networks technology, lighting equipment, high-temperature superconductors and the development of solar energy.

Many developed countries have ambitious national plans and programs aimed at stimulation of the development of environmental technology and innovation, and creation of special research centers and foundations. A major impetuses for the development of “green” technologies are standards, taxes, subsidies and other measures of public policy. Thus, the Seventh Framework Programme of scientific and technological activities of the EU in 2007-2013, provides for the allocation of 10 billion Euros for the development of clean technologies. The USA operates a variety of programs aimed at encouraging the development of environmental technologies.

A trend of recent years is the increased attention to environmental technologies in rapidly developing countries. For example, significant amounts are allocated for their development in China and India. Currently in China there are over 1,600 public incubators and science parks, most of which are involved in projects to develop environmentally friendly technologies. Because of this, China is one of the leaders in the world in terms of patents in six major areas, including wind power, biofuels and cleaner coal use.

An important role in research and development is played by private companies (including small and medium enterprises), which view them as opportunities to improve production efficiency and, hence, their competitive advantage. Thus, the bulk of global investments in clean technologies, which in 2006-2008 increased by 60% to 148.4 billion dollars, accounted for private companies.

Significant activity in this area was shown by venture capital firms. The financial and economic crisis, which had a negative impact on venture capital investments, affected the "green" projects to a much lesser extent. According to Cleantech Company, venture capital and corporate investments in clean technology grew in 2011 to 8.99 billion dollars.

One of the main indicators of the development of "green" technologies is patent activity. In the 2000s the technologies to mitigate climate change have showed a significant increase. The greatest rate of increase in the number of patents was in the field of renewable energy and control of air pollution. Thus, when compared with 1997-1999, the number of patents in the field of solar energy increased threefold. However there was a much slower growing number of patent applications in the field of energy storage and processing of materials. In the inventive activity of the production of energy from renewable non-fossil sources, European countries continue leading: in the late 2000s, they accounted for 37% of patents in this area, followed by the United States and Japan. China in terms of these patents, occupies eighth place. In some areas different countries are the main developers. For example, the USA has a leading position in the number of patents in the field of electric and hybrid vehicles, the Netherlands in energy efficiency in buildings and lighting.

According to the research company “Plunkett Research”, corporate income from sales of "green" technologies in 2010 totaled more than $ 2 trillion and by the year 2020, according to forecasts; they will grow up to 8.33 trillion dollars.

Most of the "green" technologies are concentrated in a relatively few countries, with different countries specializing in certain types of technology. Technologies to combat water and air pollution and waste management are actively developed in OECD countries: Australia specializing in combating water pollution and in Denmark renewable energy (primarily wind) energy is the main activity in this regard, Germany implements technologies mainly aimed at combating air pollution and in Spain Solar Energy. Significant progress in the development of "green" technology is also noted in BRIICS: Brazil, Russia, India, Indonesia, China and South Africa are developing technologies for waste management, control of water pollution and renewable energy.

In the future, we expect a further acceleration in the development of a wide range of environmentally friendly technologies. According to the experts of the strategic consulting company “Roland Berger”, environmental technology will lead the development of the world economy in the XXI Century.

Among the most pressing of global environmental issues today are climate change, access to quality water and other resources, as well as loss of biodiversity, so we can assume that technological development will be focused on these issues.

According to experts, the priority will be to develop technologies aimed at improving vehicles and building materials. New methods of production, in all probability, will combine a number of technologies such as nano; bio and information technology will continue the trend towards miniaturization of products. Breakthroughs are expected in the field of energy storage devices, which play a special role in the development of renewable energy, as it allows the storage and use of these types of energy. The lack of such potentials is now severely limiting progress in this area. Great hopes are pinned on biotechnology (especially in the field of environmental restoration, including the cleanup of heavy metals and chemicals), nanotechnology in agriculture and energy (for example, in the manufacture of LEDs, nanocoatings for storage and energy production, as well as in buildings) and so on. It is projected that in the future we will further develop technology for using natural gas as a fuel for transportation, including light rail (tram, monorail).

Advantages and disadvantages of "green" technologies

The benefits of implementing "green" technologies are, first of all, the improvement of the environment and human health, conservation of resources, and increasing efficiency, and hence the competitiveness of its products. For Russia it is especially important.

However, the major issue is the economic efficiency of the development and application of "green" technology, which largely depends on the circumstances. In the initial stages development of "green" technologies can be quite expensive, but in the future, studies show that "greening" can provide not only an increase in natural capital, but also a higher level of GDP. This largely depends on the state's policies to smooth out differences in the prices of "brown" (technologies, characterized by high levels of pollution), and "green" technology. It is the high price of electric cars that still serves as one of the major constraints of the sector. Despite significant subsidies, the share of electric vehicles in overall car sales in the Western European market is still less than 1%.

Among other important limitations to introduction of "green" technologies are the following:

• disadvantages of regulation in this area (not only in Russia but also in developed countries);
• duration of the process of their development and implementation, often with unpredictable results (which affects the decisions of companies);
• complexity of the restructuring of bulky energy and transport infrastructure;
• shortage of skilled researchers and managers;
• psychological unwillingness of people to accept major changes in business and private life.

Nevertheless, the developed (and some rapidly developing) countries are reorienting their policies on "green" development, to stimulate the development and implementation of environmental technologies, and to orient educational programs on the formation of environmental awareness, including awareness campaigns.

"Green" technology in Russia

The modern "green" technology level in Russia can hardly be described as high, as similar environmental technologies are developing unevenly in different areas. This can be explained by a number of reasons, including because of the nature of the historical development of the country's deep economic crisis of the 1990s and the characteristics of our economic structure and policies.

The level of development of "green" technology in many areas of Russia lags behind developed countries. Russia's share in the total number of "green" patents in the world is less than 1% [1]. In terms of the costs of "green" R & D, as well as the number of patents in the major "green" areas (air and water pollution, waste management), Russia is not only inferior to many developed countries, but even to China and India. Very low levels of spending on R & D are typical for Russian companies. Even more serious problems arise in the implementation of environmental technologies.

The report on countries rankings in terms of created favorable conditions for new business development in the field of clean technologies by the World Wildlife Fund (WWF) and Cleantech Company, first published in 2012, shows, that Russia was in last place - along with Saudi Arabia, Romania, Greece and Turkey. Among the leaders of the rankings were Denmark, Israel, Sweden, Finland and the United States. The study of thirty-eight major developed countries used estimates of fifteen indicators characterizing the state of innovation in "green" technology startups, correlated with the size of the country. The rankings show, in which countries such companies are likely to be created in the next ten years. The analysis showed that Russia had a poor position in all areas of "green" innovations, except for the area of the private funding of research and development. In particular, our country is characterized by an underdeveloped overall innovative and entrepreneurial culture, and a low demand for renewable energy.

In recent years, Russia has witnessed intensification of technological activities in the framework of the idea of an innovative economy. It will adopt new programs, plans and laws. In particular, in early 2012 the government approved a draft Presidential Decree "On the basis of state policy on environmental development of the Russian Federation until 2030", which indicated the need to redirect the economy towards environmentally-oriented growth. Among other measures, the document identifies the need to develop and implement innovative resource-saving and environmentally friendly technologies.

While developed countries have already launched a campaign to promote the development of clean technologies, in Russia this process has just begun. The lag is largely due to low demand from businesses and citizens. However, recent years have seen a trend to increase in demand and investments, particularly in solar energy, energy conservation and the development of electric vehicles.

The development of environmental technologies in Russia has great potential in the case of implementation of these plans, especially given Russia's potential for development of macro-technologies (nuclear power, power equipment, communications, etc.), laser, nanotechnology, biotechnology, and other growing investments in environmental innovation, including on the part of Russian business, investments in the "institutions of an innovation economy”. However, given the pronounced growth of global development, it can be argued that, despite the rhetoric of our times, not enough has been done in Russia to eliminate the lag in this area from the more advanced countries in this regard.

1. Invention and Transfer of Environmental Technologies. OECD, 2011.