PROMOTING GREEN TRADE IN A WORLD OF GLOBAL VALUE CHAINS Dale Andrew OECD Trade and Agriculture Directorate World Climate Summit Warsaw, COP 19, 17 November 2013

A world of GVCs… 5 1 4 6 2 3 7 Decomposition of gross exports Value added by second tier suppliers Decomposition of gross exports Value added by first tier suppliers Value added in the country of final production Final consumption Final assembly 5 Trade in final goods 1 4 6 Trade in inputs (second tier suppliers) 2 3 Trade in inputs (first tier suppliers) 7 OECD Trade and Agriculture Directorate

… where value is created in many places OECD Trade and Agriculture Directorate

Value chain for crystalline-silicon solar panels Solar Silicon Ingots & Wafers Cells Modules PV systems, installation, operation & maintenance, dismantling, recycling Dominated by 7 companies that supply around 90% of the total market. Barriers to entry: high. Top 5 companies have >90% of the market. Barriers to entry: low. Top 15 producers have 50% of the market. Barriers to entry: high. The biggest market share is Chinese companies (50%); Taiwan, Japan & US Barriers to entry low Usually taken up by local producers in a given country. Sources: Adapted from Voituriez and Balmer (2012): “The Muddle over Green Race”, IDDRI & Green Rhino Energy (www.greenrhinoenergy.com).

The wind energy value chain Upstream and midstream Wind turbine production Downstream - Onshore wind power generation R&D Key inputs (cast iron, forgings, fiber) Towers Blades Gearboxes Bearings Wind turbine deployment: sales, site assessment, financing, logistics, park construction Operations and maintenance, grid connection and power sales

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