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Why a Green Economy Matters for Least Developed Countries
Anna AutioLegal Officer
Economics and Trade Branch, United Nations Environment Programme
Workshop on Aid for Trade, Sustainable Development and Green Economy
World Trade Organization, 29 February 2012
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Characteristics of a green economy
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GD
P gr
owth
(%)
Source: T-21 Model, UNEP, 2011, Towards a Green Economy2% of GDP invested in “greening” v. 2% more in “business-as-usual”
Green economy, over time, achieves higher rates of GDP growth…
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…while reducing ecological scarcities and environmental risks
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Building on natural capital assets
Natural capital is essential to poverty reduction: it accounts for a quarter of wealth creation in the poorest countries, while such a share is
only 2% in the world’s richest countriesSource: World Bank, 2006, Where is the
wealth of nations?
• LDCs are well positioned in a transition to a green economy– Low levels of carbon
emissions – Low investment in polluting
technologies– Rich natural capital and
cultural assets
• Critical to promote investments and policy reform that reduce environmental risks and ecological scarcities
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Energy access is central
• 77% of the population in LDCs is without access to electricity; 71% of the population in rural regions rely on biomass burning as the only source of energy
• Decentralized forms of energy access are proving more effective in bringing energy to the rural poor
• Grameen Shakti Programme in Bangladesh - installed 320,000 SHSs by 2009, and aims to install over 1 million SHS by 2015, while also providing the necessary maintenance, thereby generating local employment
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Pathways to a green economy transition for LDCs
• Government policies to: – Encourage a shift in production processes in key sectors– Encourage technological shifts and uptake of clean technologies– Stimulate private sector engagement
• Targeted public spending
• Trade opportunities
• International cooperation
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Targeting public spending in LDCs
• Prioritize government investment in green sectors to promote inclusive growth and long-term sustainability– Public procurement represents a large proportion of
government spending: e.g. public procurement accounts for 8% of GDP in Tanzania and 30% in Uganda
• Use fiscal policy instruments to alter production and consumption patterns
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Trade opportunities for LDCs
• Trade can drive a green economy by: – Fostering the exchange of environmentally friendly goods and
services– Increasing resource efficiency – Generating economic opportunities and jobs– Contributing to poverty eradication
• Some key sectors:– Agriculture– Biodiversity businesses, e.g. tourism, cosmetics, pharmaceuticals– Certified timber
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Trade opportunities in organic agriculture
Source: UNEP, 2011, Towards a Green Economy
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International cooperation is crucial
• Financial assistance to LDCs to complement public financing and catalyze private investment
• Address concerns about trade protectionism and ensure fair and equitable trade norms at bilateral, regional and international levels
• Trade facilitation and capacity building to strengthen domestic institutions and regulations that govern trade
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Leapfrogging for energy and resource efficiency
Source: International Aluminium Institute, 2003; in International Energy Agency, 2007
Power consumption in aluminium smelting by region
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Moving away from two myths
• Economic growth OR environmental protection
• Green economy is a luxury reserved for developed countries