Ecological modernisation of the economy

Context

Since the economic and financial crisis, the structural problems of the Ukrainian economy have become more apparent. Most of the country’s industry struggles to compete at international level. Production facilities are outdated and productivity is low. Ukraine is one of the world’s most resource-intensive and energy-intensive economies. Very little progress is being made towards the necessary diversification of economic structures and exports, a sign of low levels of innovation and weak market dynamics.

Small and medium-sized enterprises (SMEs) played only a minor role in the past. The government relied mainly on large companies from heavy industries such as steel and chemicals to drive the economy. In future, Ukraine must begin to transform its economic system into a green, diversified economy in order to become competitive.

Objective

Government institutions, small and medium-sized enterprises (SMEs) and business associations draw on current knowledge and new instruments for green economic development.

Approach

GIZ is advising Ukrainian ministries and facilitating dialogue processes. Using pilot and demonstration measures, the project is creating a conducive environment at local level and within companies. It is also supporting reform efforts by the partners to foster ecological modernisation of the economy, enhance energy efficiency and reduce dependency on energy imports. Moreover, it is encouraging more dialogue between the public and private sector.

GIZ operates at three different levels:

1. It is supporting the Ukrainian Government in developing laws and guidelines designed to promote investment in new technologies. It is advising the Ministry of Economic Development and Trade on a draft strategy for SME development in Ukraine that creates a conducive framework for a green economy. GIZ is also providing advisory services on developing a modern, efficient waste management system and a national waste strategy. This includes establishing an inter-ministerial steering group from the leading authorities.
2. By creating green economy platforms, it aims to promote structured dialogue between government institutions, chambers and associations, selected large companies, SMEs and civil society representatives on low-energy and resource-saving business management. The platforms encourage joint learning and transnational networks and partnerships. In addition, institutions such as chambers and associations are assisted in improving their advisory services on energy and resource efficiency, thus making them more attractive to companies. The project is organising the exchange of experience with the German private sector on resource-efficient business management and on corporate environmental and social responsibility.
3. It is supporting the work of business service providers by providing training and technical consultancy. This enables them to extend the range and improve the quality of their advice and services in the field of low-energy and resource-saving technologies. Following analysis for strategy development, experience at corporate level is fed into policy dialogue at national level.

Results

National and regional project partners are supporting ecological modernisation of Ukraine’s economy. In collaboration with the Ministry of Economic Development and Trade of Ukraine, three milestones were agreed in January 2016: development of a strategy paper on waste management, development of a policy paper to support SMEs in applying environmental guidelines, and adaptation of the Sustainable Development Goals for Ukraine.

Five non-governmental organisations operating on a nationwide basis that, together, strive to create better framework conditions for companies and to build a green economy have set up a platform for green economic growth.

Representatives of government, industry and the private sector in the region of Dnipropetrovsk have set up a regional committee for green business and implementation of regional development strategy. It is tasked with developing and implementing measures to modernise the regional economy.