Green Economy what is it? Why? and how?

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2 Green Economy what is it? Why? and how?

3 What is a Green Economy? A Green Economy is one that results in increased human well-being & social equity, while significantly reducing environmental risks & ecological scarcities. A Green Economy is the economic vehicle for sustainable development. A Green Economy has strategies to end the persistence of poverty. It is a new economic paradigm that can drive growth of income and jobs, without creating environmental risk.

4 Green economy 1. Conceptual clarity: Parallel political and substantive debates on GE led to various interpretations and precautionary negotiating positions compromising the conceputal calrity which still exist even after Rio Missing macroeconomic link of environmental measures: While environmental considerations have been incorporated into various policies and plans, their macroeconomic implications are not well analyzed. 3. GE is a transformational change, it needs broad partnerships: It requires thinking beyond GDP and actions beyond three pillars of SD put in silos.

5 Income distribution under the current growth scenario In 2009, global GDP reached US$58.22 trillion and yet, almost 80% of humanity continues to live on less than US$ 10/day. The poorest 40 percent of the world s population produce only 5 percent of global income. All kinds of services provided by poor people in terms of natural resource management are not being taken into account, and neither is the way in which environmental degradation affects the poor. The threat to the planet and inequality go hand in hand.

6 UNEP s Green Economy Report Investing or reallocating just 2% of global GDP in 10 key sectors can kick-start a transition to a low-carbon, resource-efficient economy. Investing in natural capital, resource and energy efficiency can lead to: Higher rates of GDP growth over time and enhanced wealth Natural capital stocks Reduced poverty Decent employment UNEP makes use of system dynamics modeling tools (T-21) to assess the impact of policies in terms of economic growth, social inclusion / job creation and environmental sustainability.

7 Growth: the green economy scenario exceeds BAU over time

8 SIDS economies are vulnerable Economies in small states have key common characteristics: 1. Small population, market and geographic size hence the need to export to realize economies of scale. 2. Limited resource base and reliance on few natural resources: fishery, agriculture, minerals hence 3. Narrowness of output and exports 4. Openness to trade and often dependency on imports (food and energy) hence a trade balance 5. Vulnerability to natural disasters and external economic shocks. Source: UNCTAD, Least Developed Countries Report 2010

9 Pacific Challenges Growth

10 Pacific Challenges Poverty

11 Pacific Challenges Land Tenure

12 Pacific Challenges Deforestation and Runoff

13 Pacific Challenges Fossil Fuel Import Reliance

14 Green Economy Initiative (GEI) Green Jobs Evaluating Biodiversity Business Evaluating Ecological Infrastructure Sizing and incentivizing growth in green & decent jobs GGND investment, education & training, metrics for green employment growth TEEB Demonstrating the value of ecosystems & biodiversity, capturing these values, and reversing the vicious cycle of environmental losses and persistent poverty Policy Insight UNEP proposals to policy makers on how to green fiscal stimulus packages Country and Regional Green Economy Roadmaps Green Economy Report Demonstrating that Greening is a new engine for growth, sizing sectoral opportunities, addressing hurdles & enabling conditions Decent jobs from Community-based Conservation, PES/ IPES implementation

15 Green Economy and Poverty Reduction 1. Over whelming majority of the poorest 2 billion people live on small farms, close to forests or in coastal areas 2. Their wealth creation and business opportunities mostly depend upon productive capacity of the nature (e.g soil fertility, reproductive capacity of fisheries, regeneration of non timber forest products including herbal, medicinal and aromatic plants, and wildlife. 3. Redirecting flows of capital and investments into building natural capital have disproportionate positive impact on income of the poor. A study by Uni of Essex found that sustainable agriculture increases farm yields between %. A 10% increase in farm yield can reduce poverty by 5% in Asia and 7% in Africa - much higher than poverty reduction resulting from increase in productivity in manufacturing or services sector.

16 Green Economy and Poverty Reduction (2) 1. Access to clean and sustainable energy is fundamental for poverty reduction. About 3.5 million people die each year from respiratory illness due to harmful indoor air pollution). 2. GE proposes use of economic instruments to attack energy poverty and catalyse development of clean energy source. Some major instruments include phase out of fossil fuel subsidies, establishing a price on carbon and substantial investment from the private sector in off grid renewable energy sources. Energy subsidy reform or removal needs to contain measures to protect or compensate the poorest people for any negative impacts. Alternatives to subsidies, such as cash transfers, can also be considered to enable chronically poor people to access modern energy services.

17 Massive potential with energy saving In a country such as Senegal, a 100% replacement of installed incandescent lamps with compact fluorescent lamps at an estimated cost of $ 52 million, could deliver annual energy savings of 73% and cost savings of nearly US$ 30 million

18 Seizing new trade opportunities 185,000 ha, 45,000 farmers (2004) 60%/ 359% increase 296,203 ha/ 206,803 farmers (2008) 48-68% less emissions and carbon sequestration The global market: 97% of buyers in OECD countries; 80% of producers in Africa, Asia and Latin America US$ 22.8 mil (2007/8) US$ 6.2 mil (2004/5) US$ 3.7 mil (2003/4) The case of Uganda A $ 50 bn market in 2007 growing at 10% per year

19 key policy drivers at the domestic level Providing support to exporters to meet standards in international markets Creating, maintaining and enforcing a stringent domestic standards Investments and reforming fiscal policy (e.g. phasing out environmentally harmful subsidies) and employing new market-based instruments (e.g. green public procurement) Promoting innovation (i.a. investment in education and training, support for R&D) 19

20 Policy and regulatory frameworks Government regulations and standards will provide the overall policy framework to encourage a transition to a green economy. A clear, predictable and stable policy environment can create the confidence required to stimulate private investment. Example: In Kenya, investment climbed from virtually zero in 2009 to $1.3 billion in 2010 across technologies such as wind, geothermal, small-scale hydro and biofuels - driven by a feed-in-tariff policy. A proactive engagement of government, industry and consumers would enable countries to fully participate in shaping the norms for environmentally sound goods and services.

21 Opportunities of reducing environmental degradation: economic benefits (Source: World Bank, 2012, Inclusive Green Growth)

22 Opportunities: Building on natural capital assets Fishery, sub-soil assets, cropland, timber resources, pastureland, non-timber forest, and protected areas form an essential aspect of economic activity. A number of studies have underscored the larger gains that could be achieved by expanding investments to enhance natural capital. Source: WB 2006, where is the wealth of nations? Measuring capital for the 21 st century

23 Employment opportunities under Green Economy Agriculture & Fishery- shifting to sustainable agriculture could increase global employment by as much as 4% by 2050 Forests - forest conservation and reforestation could boost formal employment in this sector by 20% by 2050 Transport - improved energy efficiency across all transport modes combined with modal shift would increase employment by about 10% above business-as-usual by 2050 Renewable Energy - expansion of renewables and investments in energy efficiency could generate employment that is 20% higher than business as usual by Source: UNEP Towards a Green Economy: Pathways to sustainable development and poverty eradication A synthesis for policy makers

24 Green economy country engagement strategy Official request received from government. Stakeholder consultations involving Ministries of Environment, of Economic Planning / Finance and others, representatives of civil society and the private sector. Green Economy Scoping Study (GESS), evaluating resource scarcities and environmental risks, stocktaking of policy frameworks, identify possible pathways for transition and investment options to enhance growth, preserve natural capital and create jobs. Green Economy Assessment (GEA), evaluating through quantitative modeling the potential of different investment scenarios and identify the policies required to support them. Support national development planning processes to mainstream the recommendations from the GESS and the GEA. Assist in the mobilization of funding.

25 Current Green Economy Engagement

26 Partnership for Action on 26

27 Partnership for Action on Green Vision Objectives Economy (PAGE) Joint GE Advisory by UNEP, ILO, UNIDO and UNITAR for accelerating and improving the transition to socially inclusive, resource efficient, low-carbon economies To strengthen the capacity of Governments and other stakeholders to manage the transition to socially inclusive, resource efficient, low carbon economies To provide a springboard for action on commitments made at Rio+20 To foster cooperation, pool resources, and ensure coherence between the activities of various stakeholders while drawing upon the best of their respective expertise and political leverage UNEP has a long-standing partnership with ILO s green jobs programme, which covers issues like training and capacity building and transitional support during the reallocation of jobs from energy-intensive to green sectors.

28 New Requests for PAGE Assistance New Requests: Angola, Bangladesh, Bosnia and Herzegovina, Colombia, Comoros, D.R. Congo, Dominica, Kazakhstan, Mauritius, Mongolia, Nepal, Pakistan, Peru, Seychelles, St Vincent and the Grenadines, Tunisia, Ukraine

29 Final words Return on investments under BAU will continue to decrease, mainly owing to the increasing economic costs of environmental degradation; The increasing cost of the externalities will initially neutralizing and eventually exceeding the economic and development gains; and By greening economies, more calories per person per day, more jobs and business opportunities especially for the poor, and higher market-access opportunities, especially for developing countries, will be available.

30 You cannot solve the problem with the same kind of thinking that created the problem. Albert Einstein Thank You Thank you to UNESCAP s Green Economy in a Blue World Pacific Perspectives 2012 for many Pacific facts and figures.