By Christian Schoen, presented at the 18th TCI Global Conference, Daegu, 2015.

1. Climate Smart Clusters
Christian Schoen, Mesopartner
PartG, Germany
Parallel Session 2.2: New Role of Clusters in the Broader Economic Context

2. What are interfaces between cluster
development and climate change?
1. Cluster Development primarily targets enterprises that are
– causing CC and environmental degradation
– affected by CC and environmental degradation
– benefitting through tapping into business opportunities
2. Many clusters or the value chains are ‘greened’ or focus on green
products, but are located in territories that need to offer a right policy
and regulatory framework for eco-friendliness and climate resilience
3. National top-down regulations and campaigns to stimulate climate
resilience and eco-friendly behavior of enterprises and local authorities
are enforced and implemented at sub-national, cluster level
4. Local actor networks and clusters have started to promote
decentralised approaches to increase their climate resilience from the
bottom-up, e.g. striving for local energy supply autonomy

3. Enterprise
What are interfaces between cluster
development and climate change?
Emissions
Opportunities
Value Chain
TopDownRegulations
Bottom-upInitiatives
Regional
Business
Environment
Economic Cluster
Prefer
ences
CC Impact

4. What are the determinants of a cluster’s
climate change vulnerability?
Source: Adapted from GIZ, 2014. The Vulnerability
Sourcebook
Exposure Sensitivity
Potential Impact Adaptive Capacity
Vulnerability
• Climate
variability/change
• Location / Infrast,
• Supply Chains
• Sector-specific
characteristics and
challenges
• Business
Environment
• Cluster Management

5. Why developing a Climate Smart
Cluster concept?
 Assessing the extent to which a cluster is prepared to
adapt/mitigate the impacts of climate change (in the location
where it is operating) and tap into business opportunities
 Identifying economic development tools, which can be “greened”
and incorporated into cluster development. In general, trying to
“short cut” scientific methods and instruments in a participatory
manner
 Pinpointing necessary actions to enhance preparedness to
address climate change issues that could potentially undermine
the competitiveness of a given cluster
 Supporting the process of climate-proofing business operations
and develop sustainable entrepreneurship

6. What is a Climate Smart Cluster (CSC)?
 Climate Smart Clusters (CSC) aim at maintaining or increasing long-
term competitiveness in times of climate change and environmental
degradation
 This goes beyond strengthening cluster enterprises in their purely
economic dimension of competitiveness, but targets the wider
definition of sustainability, including ecological and social dimensions
 CSC enable a stronger resilience of cluster enterprises and the value
chains they are embedded in, identifying resource efficient behavior
and cost saving potentials and looking for related business
opportunities
 CSC development addresses supply and demand side of cluster
enterprises and their framework conditions

7. What makes a cluster climate smart?
Climate Smart
Clusters
Climate Change
Awareness
Mitigating
Cluster Impact
National
Regulations
Local
Regulations
Eco-efficient
infrastructure
Vulnerability
Awareness
Public-Private
Collaboration
‘Green’
Monitoríng

8. Why are enterprises under-engaged in
responding to climate change?
 Low levels of awareness (lack of commercial rationale)
 Challenges in interpretation of available information
 Decision making under uncertainty
 Senior management buy-in only after climate-related events
 Focus on short-term costs and cash flows
 Lack of resources (finances, skills)
 Need for unprecedented levels of collaboration
Source: PwC 2010. Business leadership on climate change adaptation, PricewaterhouseCoopers LLP (UK)

9. Steps in the Approach
Environ./Climate Impact of
Cluster on the Location
Environ./Climate Impact of
the Location on Cluster
Assessment of Cluster &
Cluster Location
 Environmental/climate
impact assessment of
cluster and cluster
enterprises on location
 Assessment of Environ./ Climate
conduciveness of location
(Regulations, Green BDS/Finance
Offers, CC/Environ. Awareness)
 CC Vulnerability Assessment of
location and cluster
Formulation of Climate
Smart Cluster
Objectives
 Adaptive Capacity options /
targets of cluster
 Emission reduction targets
of Cluster
 Resource efficiency
targets of Cluster
 Conducive Regulations
 Expansion of Green BDS /
Finance
 CC / Environmental
Awareness Creation
 Adaptive Capacity targets
Climate Smart Cluster
Strategy and Measures
How could clusters become climate
smart?
 Regulatory Reform
 Promotion of Green BDS /
Finance
 CC Campaign
 Enhancing adaptive capacity
 Enhancing adaptive
capacity of Cluster
 Support cluster firms to
reduce emissions &
become more efficient

10. Cluster Framework for CC
Adaptation/Mitigation
• Awareness of CC &
Environmental
Degradation among
enterprises/population/o
fficials
• Acknowledgement of
CC as risk for
competitiveness of local
clusters
• Tool example: World
Café
Cluster CC
Awareness
• Environmental/climate
impact of cluster on
location
• CC vulnerability of
location and clusre
• Assessment of
Environ./ Climate
conduciveness of local
business environment
• Tool examples: Hot Spot
Analysis, Vulnerability
Assessment of
Location/Cluster
Cluster CC
Assessment • Identification of potential
adaptation / mitigation
options / targets
• Development of a CSC
strategy
• Implementation of CSC
management measures
• Monitoring and
measuring of CSC
management/progress
• Tool examples: Scenario
Writing, Mainstreaming
of Climate Smart Cluster
targets into local plans,
Balanced Scorecard,
Carbon Footprint
Assessment
Cluster CC
Management
Source: Adapted from Agrawala, S. et al. (2011). OECD Environment Working Papers, No. 39

11. • Vulnerability
Assessment (rapid)
• Hot Spot Analysis
• Enterprise Surveys
• Enterprise audits
• Compass of Local
Competitiveness
(Adjusted Balanced
Scorecard)
• Carbon
Footprint
Assessm.
• ‘Green’ Cluster Café
• Advocacy / campaigns
Assessments
Climate Smart
Strategies & Plans
CC Awareness
Green
Monitoring
Review Plans &
Regulations
• Review CC elements
in local / cluster
development plans
• Scenario Writing
• Design of Climate
Smart Cluster Measures
(Technology, Finance,
Capacity Building)
CSC Development
Cycle and Toolbox
Sensitization
Review &
Hypotheses
Analysis &
Understanding
Intervention
Design /
Strategizing
Monitoring &
Evaluation

12. Future Research Questions
1. How sensitive and aware are clusters about their interrelation with
climate change - in different parts of the world?
2. Do clusters usually assess their vulnerability, their contribution and
their opportunities with respect to climate change and, if yes, how?
3. How do clusters and cluster enterprises respond to threats and
opportunities of climate change in order to remain competitive?
4. How can small companies work together to create climate resilience?
5. What are sector-specific differences of adaptation/mitigation efforts?
6. How does a conducive business environment ideally look like that
enables clusters to become climate smart? How does climate smart
cluster policy could look like?
7. How to catalyze public-private action on adaptation and mitigation?
8. What should be the role of cluster managers, meso-institutions, large
enterprises and insurances?

13. THANK YOU!
www.mesopartner.com
Christian Schoen – cs@mesopartner.com
Mesopartner PartG, Germany
www.mesopartner.com