With the worsening impacts of climate change, Asia-Pacific Economic Cooperation (APEC) member countries may consider policy approaches to realize a sustainable future inspired by the Bio-Circular-Green (BCG) economy, including promotion foreign links between companies to facilitate technological dissemination.
Sylwyn Calizo Jr., a researcher at the APEC Policy Support Unit and author of the policy brief, “Charting New Pathways for APEC: A Sustainable Future Inspired by the Bio-Circular-Green (BCG) Economy,” said that a BCG economy integrates policies the bioeconomy, the circular economy and the green economy. BCG’s economy solutions combine the individual strengths of all three.
He said that the adoption of policies to encourage foreign links between companies for BCG economic solutions will be useful, especially for sectors with relatively low penetration rates of environmental technologies – transport and mobility; and farming, food and hospitality.
Citing previous work, Calizo said foreign links, such as foreign direct investment (FDI) and international trade, have been observed empirically to inspire product and process innovation, horizontal (within the industry) and vertical (backward or upstream) technology spillovers and technology Transfers between companies.
He said foreign connections are also able to provide access to the right technologies and encourage collaboration and coordination between companies.
The easing of restrictions on foreign direct investment, such as Requirements such as market entry, ownership and local content requirements can be an important step in fostering these foreign connections, Calizo said.
“Another important policy is to provide the necessary IPR (intellectual property rights) to strike a balance between protecting innovation and facilitating technology transfer. This should of course be accompanied by proper enforcement procedures,” he added.
Because complying with IPR rules could be costly, Calizo says regulators should look to domestic capacity to facilitate and absorb innovation, as the spread of technology will have “little impact” if those who must receive it do not have sufficient financial and technical capacity to use these technologies.
Aside from this policy approach, Calizo also underscored the need for economies to provide investment opportunities to expand the renewable energy sector and niche markets such as electric vehicles.
He said expansion can also be done by supporting start-ups by encouraging investment in strategically located labs with access to manufacturing equipment.
Calizo identified other policy approaches to achieve sustainable growth by adopting the BCG economic model, including strengthening institutions through good governance and sound regulatory tools, encouraging hands-on participation to enlist the support of the local community, and supporting the Expansion of BCG economy solutions in APEC.
He said policymakers can support key drivers — the regulatory environment, technology and innovation, and stakeholder engagement — by addressing challenges.
Calizo says environmental services regulations are typically implemented by multiple agencies, but without a clear coordination strategy to prevent sectoral silos.
“What the BCG economy can do is strengthen institutions by promoting good governance. This could take the form of regular channels for coordination and the exchange of ideas between authorities, an economy-wide coordination strategy, or robust regulatory tools such as carbon budgeting and ex-ante environmental impact assessments,” he added.