towards a green economy
DESCRIPTION
Towards a Green EconomyTRANSCRIPT
Pavan Sukhdev
Special Adviser and Head – Green Econmy Initiative
United Nations Environment Programme
Lima,
Peru,
24th March, 2011
What is good about the GEI?
3. GEI AnalysisUNEP – GREEN ECONOMY INITIATIVE
Green Economy : Definition
“A Green Economy can be defined as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.”
What is good about the GEI?
3. GEI AnalysisUNEP – GREEN ECONOMY INITIATIVE
Green Economy - Definition
“A Green Economy can be defined as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.”
Operational level : a Green Economy is one whose growth of income and jobs is driven by investments that reduce carbon emissions & pollution, increase energy & materials efficiency, & enhance natural capital
Growth in per-capita inclusive wealth
Growth in Comprehensive wealth
Arrow, Dasgupta, Maler
Stiglitz - Sen –Fitoussi
“Environmentally friendly GDP Growth” nearest to UNESCAP 2005 & “Green Growth” models
Dasgupta
Stiglitz
Green Economy Initiatives
• Many developing nations are actively promoting transitions to a greeneconomy,
– Barbados National Strategic Plan for 2006-2025
– Brazil (State of Sao Paulo) Green Economy plan
– Cambodia Green Economy Roadmap, 2009
– China is investing US$ 468 bn. to green key sectors in its 12th five-year plan (2011-2015) versus US$ 211 bn over the last five years.
– Indonesia long-term development plan 2005-2025.
– South Africa national Green Economy Plan
• UNEP is supporting initiatives in around 20 countries.
UNEP – GREEN ECONOMY INITIATIVE
FOCUS• Designing and driving
transformation in key sectors critical or highly material for greening the global economy
UNEP’s Green Economy Report
UNEP – GREEN ECONOMY INITIATIVE
STRATEGY• Establish “Enabling Conditions”
(regulations, subsidies, taxes and related reforms)
• Promote public and private Investment
KEY SECTORS • Agriculture, Freshwater, Forests, Fisheries, Energy, Transportation,
Manufacturing, Waste, Buildings, Cities, Tourism
SCENARIO ANALYSIS • “T-21” model, includes Natural Capital , to forecast outcomes on
Capital stock, GDP growth, Employment
UNEP – GREEN ECONOMY INITIATIVE
FOCUS • Designing and driving
transformation in key sectors critical or highly material for greening the global economy
UNEP’s Green Economy Report
UNEP – GREEN ECONOMY INITIATIVE
STRATEGY • Establish “Enabling Conditions”
(regulations, subsidies, taxes and related reforms)
• Promote public and private Investment
KEY SECTORS • Agriculture, Freshwater, Forests, Fisheries, Energy, Transportation,
Manufacturing, Waste, Buildings, Cities, Tourism
SCENARIO ANALYSIS • “T-21” model, includes Natural Capital , to forecast outcomes on
Capital stock, GDP growth, Employment
Scenario
Investing 2% of global GDP into ten key sectors for a transition towardsa low-carbon, resource-efficient economy, as against a further 2%invested in “BAU”,
Key findings
Greening the economy by investing in natural capital, resource andenergy efficiency, & low carbon energy can lead to:
1. Enhanced wealth & natural capital
2. Higher rates of GDP growth over time
3. Decent employment
4. Reduced poverty
Green Economy : Scenario Analysis
Source : T-21 Model, Green Economy Report,
2% of GDP invested in Greening vs 2% more in BAU
Green Economy : reduces
ecological scarcities…
Source : T-21 Model, Green Economy Report,
2% of GDP invested in Greening vs 2% more in BAU
GD
P g
row
th (
%)
Source : T-21 Model, Green Economy Report,
2% of GDP invested in Greening vs 2% more in BAU
Green Economy : over time, achieves
higher rates of GDP growth …
• Agriculture: Over the next decade, global employment in Agriculturecould increase by 4%
• Forests: Forest conservation and reforestation could boost formalemployment in this sector by 20% by 2050.
• Transport: Improved energy efficiency across all transport modescombined with modal shift would increase employment by about 10%above business-as-usual
• Energy: employment that is 20% higher than business as usual by 2050,
while delivering robust economic growth and reduced emissions.
Green Economy : Creates Employment
24.03.2011 11Source: Gundimeda and Sukhdev, D1 TEEB
Indonesia India Brazil
25%
75%
47%89%
99 million 352 million 20 millionEcosystem services
dependency
Ecosystem services
Ecosystem services as a
% of “GDP of the Poor”
Ecosystem services as a
% of classical GDP
21%
79%
16%
84%
10%
90%
Green Economy : Natural Capital
and Poverty Alleviation
UNEP – GREEN ECONOMY INITIATIVE
FOCUS • Designing and driving
transformation in key sectors critical or highly material for greening the global economy
UNEP’s Green Economy Report
UNEP – GREEN ECONOMY INITIATIVE
STRATEGY • Establish “Enabling Conditions”
(regulations, subsidies, taxes and related reforms)
• Promote public and private Investment
KEY SECTORS • Agriculture, Freshwater, Forests, Fisheries, Energy, Transportation,
Manufacturing, Waste, Buildings, Cities, Tourism
SCENARIO ANALYSIS • “T-21” model, includes Natural Capital , to forecast outcomes on
Capital stock, GDP growth, Employment
Green Economy : Sectoral Success Stories
• Many developing nations demonstrate successful, scalable, sectoralmodels for transition to a green economy,
– Bangladesh “Grameen Shakti” – rural non-grid electrification usingSolar PV, microfinance, kerosene replacement cost pricing
– Brazil sustainable city : Curitiba - Bus Rapid Transit System, lowcongestion & fuel losses, lower fuel usage, green infrastructure
– China Solar Water Heaters – household cost saving, relief fromRheumatoid Arthritis, employment gains, reduced emissions
– India NREGA 2005, now $ 8 bn in local transfers, employing 30 milion, for water conservation reforestation,
– Kenya feed-in tariffs 2008, initially for wind, biomass & small hydro, now also geothermal & solar
– South Korea Extended Producer Responsibility (EPR) policy onpackaging & products, recycling rate increase, economic benefits
– Uganda Organic Agricultural transformation
UNEP – GREEN ECONOMY INITIATIVE
• Green farming practices have increased yields, especially on small farms, between 79 % (Pretty et al, 2006) and 180 %.
• 10 percent increase in farm yields -> 7 % reduction in poverty in Africa, more than 5 % in Asia
• Approximately 2.6 billion people rely on agricultural production systems for their livelihood. (FAO, 2009)
• 525 million small farms world wide, 404 million less than two hectares of land (Nagayets, 2005), Small farms cultivate 60 % of arable land (Herren et al. 2010)
An increase in overall GDP coming from agricultural labor productivity is on average 2.5 times more effective in raising the incomes of the poorest quintile in developing countries than an equivalent increase in GDP coming from non-agricultural labor productivity.
Agriculture : Challenges & Opportunities
UNEP – GREEN ECONOMY INITIATIVE
UNEP – GREEN ECONOMY INITIATIVE UNEP – GREEN ECONOMY INITIATIVE
• Rebuilding depleted stocks• Effective management
Marine fisheries catch
80 mil tons to 113 mil tons/ year
Source: World Energy Outlook 2008
Reductions in energy-related CO2 emissions in the climate-policy scenarios
Energy : Challenges & Opportunities…
• Establish sound regulatory frameworks
• Phase out harmful subsidies in energy, water, fisheries and agriculture
• Prioritize public investment towards greening
• Limit public spending that depletes Natural Capital
• Utilize smart market mechanisms and taxes
• Build capacity through training and technology transfer
• Strengthen international governence
Enabling the Green Economy…
• Modeled investments in the range of $1.3 trillion /year ( less than 1/10 of gross capital formation)
• Investment in green sectors is growing :
– Investments in clean energy of $200 bn + in 2010, up from $162 in 2009 and $173 in 2008.
• Policy & Subsidy Reform, Public investment, & Green Public Procurement can leverage private capital effectively
• Need for innovative financing routes…– Development Financing Institutions – local & global– Seeding with Public Finance – Green Climate Fund– REDD+ and other Payments for Ecosystem Services– Resource Taxation & other Eco-Taxes
Financing the Green Economy…
Thank You !