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POLICY AND FINANCING MEASURESBesides solutions like the ones outlined above, it is imperative that governments create policy frameworks (governing, among other things, public procurement, Total Cost of Ownership, and fiscal incentives) that stimulate clean, smart innovation, as well as adopting more ambitious energy and resource efficiency performance standards. At the same time, governments need to facilitate reform of healthcare systems, in order to make them more accessible and affordable, with greater focus on prevention and home healthcare solutions. It is also vital that we drive the renovation of all existing building stock and other city infrastructure with energy and resource-efficient solutions and approaches. An annual commitment to a 3 per cent energy-efficiency improvement in this area (compared to the current 1 per cent) would lower Europe's required investment in zero-carbon energy infrastructure - renewable energy; nuclear; carbon capture and storage - up to 2050 by a factor of three. Likewise, we would benefit greatly by moving financing mechanisms away from "lowest initial cost" to integral "life-cycle value"-based. This involves developing new business models that balance operating expense and capital expenditure. In this respect, it is important to recognise that when people or projects need financing mechanisms and solutions, there is a budgeting issue that must be addressed too. As we move from lowest initial cost/linear business models to address our medium and longer-term challenges, we have to do the same with our budgeting processes and financial planning. Too often, budgets have a one-year scope, or companies are judged on annual or even quarterly performance. By taking resource efficiency considerations into account when making budgetary projections, we - politicians, businesses, the electorate - will be able to make better choices with real long-term benefits.At Philips, we are designing and testing innovative new business models that can help foster sustainable development. For example, the "Pay per Lux" lighting concept currently being trialed in the Netherlands provides companies with state-of-the-art energy-saving lighting systems without any capital expenditure. It works like this: after installation, we retain ownership and maintenance of the lighting, and in return the customer pays only for the amount of light emitted. This encourages the deployment of energy-efficient solutions and advanced lighting controls. CONCLUSIONWith a forward-looking agenda focused firmly on the greater common good in the long term, and based on a collaborative model that brings together Above: The Sustainable Development Challenge018 industry intro

Above: SchoolVision lighting by Philips Below: Harry Verhaarboth the private and public sectors, we can move toward a healthy and more sustainable world. Key to that approach is to drive social and ecological innovation simultaneously. In this regard, reform of healthcare systems and the concept of a "circular society" are the main drivers that will enable all economies and geographies to develop healthy, prosperous and equitable lifestyles that can be sustained far into the future. n For more information: THE AUTHORHarry Verhaar has over 20 years of experience in the lighting industry, and is currently Head of Global Public & Government Affairs for Philips Lighting. He is responsible for the strategy, outreach and stakeholder management on energy & climate change, resource efficiency and sustainable development, with a key focus on the role of the LED lighting revolution.Since the end of 2003, Mr Verhaar has been the architect of the lighting strategy on energy and climate change, which has resulted in a global momentum for phasing out of old lighting technologies for street-ligthing; non-residential buildings and homes. Furthermore, he is responsible for the 'off-grid lighting' program at Philips Lighting, aimed at supporting sustainable pathways for developing countries. He is an active member of a number of partnership networks, among which The Climate Group; WBCSD; World Green Building Council; Prince of Wales Corporate Leadership Group on Climate Change; several UN organizations and a member of the Advisory Board of The Lisbon Council. Mr Verhaar is a recipient of the 2011 UN Leader of Change Award, and has received the Carbon War Room's Gigaton award on behalf of Philips. He holds an MSc in Solid State Luminescence from the University of Utrecht, The Netherlands.Contact details:Harry VerhaarPhilips Lighting B.V.Mathildelaan 1, Bldg EEC1.175611 BD EindhovenThe Netherlandsharry.verhaar@philips.comindustry intro 019