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Accenture Outlook | Interview, Felipe Calderon Former President Mexico | Green Growth

Accenture Outlook | Interview, Felipe Calderon Former President Mexico | Green Growth

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Published by Accenture
Economic growth and protecting the environment are not incompatible, insists this statesman. But the need to act is urgent and will require a concerted global effort if the world's economy is to adapt successfully to future climate change.
Economic growth and protecting the environment are not incompatible, insists this statesman. But the need to act is urgent and will require a concerted global effort if the world's economy is to adapt successfully to future climate change.

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Published by: Accenture on Mar 28, 2013
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03/28/2013

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The journal of high-performance businessThis article originally appearedin the 2013, No. 2, issue of 
Interview
Felipe Calderón, former president, Mexico
Green Growth: How tomanage a false dilemma
 
Economic growth and protecting the environment are notincompatible, insists this statesman. But the need to act is urgentand will require a concerted global effort if the world’s economyis to adapt successfully to future climate change.
accenture.com/outlook
 
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It would be only a slight exaggerationto say that Felipe Calderón developedhis passionate concern about theenvironment at his ather’s knee. Asa teenager in the 1970s, he watchedas Luis Calderón Vega, a ounder o Mexico’s Partido Acción Nacional,warned his party about the grave impacto climate change, one o the ew senior politicians at the time to raise the issue—in Mexico or anywhere else.Perhaps the most important lesson helearned rom his ather, the younger Calderón recalls today, is never tounderestimate the ability o one personto eect change. As Mexico’s energy secretary andlater as president, Felipe Calderónemerged as a global leader in ghtingthe threat o climate change andpromoting sustainable human devel-opment. In an exclusive interview, hisrst on Green Growth since leavingoce in December 2012, Calderónsat down with Peter Lacy, managingdirector o Accenture’s Strategy and Sustainability businesses in the Asia Pacic region, to discuss GreenGrowth, the eorts to date to addressclimate change and the outlook or the uture.
PETER LACY: One o the dening themeso your public lie, both domesticallyand globally, has been Green Growth.What does Green Growth really mean?FELIPE CALDERÓN:
I always depart roma alse dilemma. During the last decade,nations and governments believedthat it was not possible to achieve twogoals at the same time, that growthand protecting the environment wereincompatible. That is a alse dilemma.It is possible to make economic growthand the protection o the environmentcompatible; it is possible to tacklepoverty and, at the same time, totackle climate change. The mix o policies—all those policies to tackleclimate change and, at the same time,to produce economic growth—is GreenGrowth, in my opinion.Finding the way to make economicpolicies compatible with environmentalpolicies is probably the most importantchallenge or human beings in thiscentury. I know that given the currentinternational economic situation, itis really dicult to also think aboutclimate issues. But the act is, sooner or later, we will need to ace the problem—not only the environmental problemitsel but the economic problem o adap-tation to climate change in the uture.
Can you give us some examples o howyou managed that alse dilemma whenyou were president o Mexico?
 We tried to apply policies that could beunderstood by people, companies andthe government. A lot o people insidethe government actually don’t believein the challenge we have ahead.One example: a massive programto substitute all appliances or newappliances, mainly rerigerators andair-conditioning equipment, to reducecarbon emissions rom domestic sources. We were able to exchange more than2 million rerigerators in three years. We pioneered a mix o public policy,small subsidies to the very-low-incomeamilies and an aordable creditprogram or everyone.Secondly, the so-called green mortgages.In Mexico, the low-income amilies,especially low-income workers, haveaccess to mortgages. But it wasimpossible to reach the workers belowa certain income level. We started anew program—again, not only withthe aordable mortgages but also withupront subsidies, a down payment or all those workers earning minimumsalaries or less. All those mortgages—and we are talking about hal a milliona year—are provided on the conditionthat the house they are buying hassome kind o innovative energy-savingmechanism. It could be solar panels or heating water, whatever. Another example: the public sector itsel, PEMEX [the state petroleum
 
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company]. We established clear and concrete goals or payments toreduce carbon emissions, or instance. Another is regulation. We areestablishing better parameters or the vehicle industry. Another ispromoting mass transit in somecities. We are preparing—through thepublic works bank or inrastructurebanks and other development banksin Mexico—aordable credits or municipalities. They can promotepublic/private projects related withmass transit in order to reducecarbon emissions.
One o the barriers oten cited to doingmore in this area is vested interests—groups that stand to be disadvantagedby regulation—slowing down the process.Oten, the argument is about whetheror not it makes you non-competitivecompared to other countries. How didyou tackle that issue?
It is very important to understandthe companies’ point o view, andthey have a point. The question is,how can we apply neutral policies inorder to avoid these kinds o biases,or these kinds o situations o onecompany or one country ullling thenew regulation about the environmentand suering a loss o competitivenessas a result? At the national level,we need to involve the industries inthe general discussions.It’s not enough to try to wake upsome kind o national commitmentto the environment. Something elseis needed, and that could be the righteconomic incentives or all thoseinterested. And that could be relatedto taxes, or instance, or some kindo policy which gives incentive or saving energy.
How did this work in Mexico duringyour administration?
One example: At the beginning o my administration, there were nowind arms. In Mexico today, we have3,000 megawatts rom wind and agrowing number o projects. Some o them are made by private companies. We provided them with the rightincentives. We are not paying any subsidy, but we acilitated their accessto the grid in a more competitive way and more aordable way, becauseit’s a public utility.
But there is no one-size-ts-all-industriesapproach, right?
 We need to establish some kind o order or the measures we will apply at the aggregate level. My point isthis: It is very expensive, or instance,or a company which is on the rontier o technology to make marginalreductions o carbon emissions, andthat could be very expensive or someindustries. However, there are other projects where we can get a lot o advantage in terms o carbon reduction.One o the most important tasks or the international community is todetect what projects are more viablethan others or reducing more carbon.
What sort o progress is being made inthis area?
There is some interesting researchthat is estimating the net present valueo the grid measures. It’s clear, oinstance, that energy-saving programsor energy-intensive industries arenot only good or the environmentbut are also absolutely viable innancial terms. In other words, thatkind o measure applies not only tocarbon reduction but also to protsor the industry. We need to establishthe right public policies and economicincentives in order to move thecompanies to take those measuresto reduce emissions.I we are able to make the rightestimation o the net present value o dierent projects related to savingenergy or reduction o carbon emissions,we could make the rst step. Someonedid research in Mexico; they oundthat there are 140 projects in whichthe net present value is positive.

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