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.
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.