Green Economy

what is it? Why? and how?

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.

What is a 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+20.

2. 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.

Green economy

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.

Income distribution under the

current growth scenario

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.

Growth: the green economy

scenario exceeds BAU over time

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

Pacific Challenges – Growth

Pacific Challenges – Poverty

Pacific Challenges – Land Tenure

Pacific Challenges – Deforestation

and Runoff

Pacific Challenges – Fossil Fuel

Import Reliance

Green Economy Initiative (GEI)

TEEB

Demonstrating the value of

ecosystems & biodiversity,

capturing these values, and

reversing the vicious cycle

of environmental losses and

persistent poverty

Green Jobs

Sizing and

incentivizing

growth in green &

decent jobs

• Evaluating Biodiversity Business

• Evaluating Ecological Infrastructure

GGND investment, education &

training, metrics for green

employment growth

Decent jobs from Community-based

Conservation, PES/ IPES

implementation

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

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 69-179%. 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.

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.

Green Economy and Poverty

Reduction (2)

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.

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

Seizing new trade opportunities

185,000 ha, 45,000 farmers (2004)

60%/ 359% increase

296,203 ha/ 206,803 farmers (2008)

US$ 22.8 mil (2007/8)

US$ 6.2 mil (2004/5)

US$ 3.7 mil (2003/4)

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

A $ 50 bn

market in 2007

growing at 10%

per year The case of Uganda

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)

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.

Opportunities of reducing environmental

degradation: economic benefits

(Source: World Bank, 2012, Inclusive Green Growth)

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 21st century

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 2050.

Source: UNEP 2011. Towards a Green Economy: Pathways to sustainable development and poverty eradication – A synthesis for policy makers

• 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.

Green economy country

engagement strategy

Current Green Economy Engagement

Partnership for Action on

26

Partnership for Action on Green

Economy (PAGE)

Vision

Objectives

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.

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

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.

Thank You

You cannot solve the problem with the

same kind of thinking that created the

problem. Albert Einstein

www.unep.org/greeneconomy Thank you to UNESCAP’s “Green Economy in a Blue World – Pacific Perspectives 2012” for

many Pacific facts and figures.