New UNEP Report Underlines
Sustainable Public Policy and Investment
Path on the Road to Rio+20
Nairobi/World, 21 February 2011 - Investing
two per cent of global GDP into ten key
sectors can kick-start a transition towards
a low carbon, resource efficient Green Economy
a new report launched today says.
The sum, currently amounting
to an average of around $1.3 trillion a
year and backed by forward-looking national
and international policies, would grow the
global economy at around the same rate if
not higher than those forecast, under current
economic models.
But without rising risks,
shocks, scarcities and crises increasingly
inherent in the existing, resource-depleting,
high carbon 'brown' economy, says the study.
As such, it comprehensively
challenges the myth of a trade off between
environmental investments and economic growth
and instead points to a current "gross
misallocation of capital".
The report sees a Green
Economy as not only relevant to more developed
economies but as a key catalyst for growth
and poverty eradication in developing ones
too, where in some cases close to 90 per
cent of the GDP of the poor is linked to
nature or natural capital such as forests
and freshwaters.
It cites India, where
over 80 per cent of the $8 billion National
Rural Employment Guarantee Act, which underwrites
at least 100 days of paid work for rural
households, invests in water conservation,
irrigation and land development.
This has generated three
billion working days-worth of employment
benefiting close to 60 million households.
Two per cent of the
combined GDP of Cambodia, Indonesia, the
Philippines and Vietnam is currently lost
as a result of water-borne diseases due
to inadequate sanitation.
Policies that re-direct
over a tenth of a per cent of global GDP
per year can assist in not only addressing
the sanitation challenge but conserve freshwater
by reducing water demand by a fifth by 2050
compared to projected trends.
The report has modeled
the outcomes of policies that redirect around
$1.3 trillion a year into green investments
and across ten key sectors - roughly equivalent
to two per cent of global GDP. To place
this amount in perspective, it is less than
one-tenth of the total annual investment
in physical capital.
Currently, the world
spends between one and two per cent of global
GDP on a range of subsidies that often perpetuate
unsustainable resources use in areas such
as fossil fuels, agriculture, including
pesticide subsidies, water and fisheries.
Many of these are contributing
to environmental damage and inefficiencies
in the global economy, and phasing them
down or phasing them out would generate
multiple benefits while freeing up resources
to finance a Green Economy transition.
Incomes and Employment
In addition to higher
growth, an overall transition to a Green
Economy would realize per capita incomes
higher than under current economic models,
while reducing the ecological footprint
by nearly 50 per cent in 2050, as compared
to business as usual.
The Green Economy report
acknowledges that in the short-term, job
losses in some sectors - fisheries for example
- are inevitable if they are to transition
towards sustainability.
Investment, in some
cases funded from cuts in harmful subsidies,
will be required to re-skill and re-train
some sections of the global workforce to
ensure a fair and socially acceptable transition.
The report makes the
case that over time the number of "new
and decent jobs created" in sectors
- ranging from renewable energies to more
sustainable agriculture - will however offset
those lost from the former "brown economy".
For example, investing
about one and a quarter per cent of global
GDP each year in energy efficiency and renewable
energies could cut global primary energy
demand by nine per cent in 2020 and close
to 40 per cent by 2050, it says.
Employment levels in
the energy sector would be one-fifth higher
than under a business as usual scenario
as renewable energies take close to 30 per
cent of the share of primary global energy
demand by mid century.
Savings on capital and
fuel costs in power generation would under
a Green Economy scenario, be on average
$1000 billion a year between 2010 and 2050.
The report, Towards
a Green Economy: Pathways to Sustainable
Development and Poverty Eradication, also
highlights enormous opportunities for decoupling
waste generation from GDP growth, including
in recovery and recycling.
The Republic of Korea
has, through a policy of Extended Producer
Responsibility, enforced regulations on
products such as batteries and tyres to
packaging like glass and paper, triggering
a 14 per cent increase in recycling rates
and an economic benefit of $1.6 billion
Brazil's recycling already
generates returns of $2 billion a year,
while avoiding 10 million tones of greenhouse
gas emissions; a fully recycling economy
there would be worth 0.3 per cent of GDP.
The report, compiled
by the UN Environment Programme (UNEP),
in collaboration with economists and experts
worldwide, takes meeting and sustaining
the UN's Millennium Development Goals -
ranging from halving the proportion of people
in hunger to halving the proportion without
access to safe drinking water - as one aim.
Bringing down emissions
of greenhouse gases to the much safer levels
of 450 parts per million by 2050 is another
overarching target.
The findings were presented
today to environment ministers from over
100 countries at the opening of the UNEP
Governing Council/Global Ministerial Environment
Forum.
The report, part of
a bigger macro-economic study published
online, is aimed at accelerating sustainable
development and forms part of UNEP's contribution
to the preparation of the Rio+20 conference
scheduled in Brazil next year.
The full report is available
online from today and countries are encouraged
to submit further Green Economy examples.
Over the coming months UNEP's Green Economy
team plans to present the report in capitals
around the world.
Here they also want
to learn firsthand how best to assist countries
and communities commence a transition to
a Green Economy within their national circumstances.
Achim Steiner, UN Under-Secretary
General and UNEP Executive Director, said:
"The world is again on the Road to
Rio, but in a world very different to the
one of the Rio Earth Summit of 1992."
"Rio 2012 comes
against a backdrop of rapidly diminishing
natural resources and accelerating environmental
change - from the loss of coral reefs and
forests to the rising scarcity of productive
land; from the urgent need to feed and fuel
economies and the likely impacts of unchecked
climate change," he added.
"The Green Economy
as documented and illustrated in UNEP's
report offers a focused and pragmatic assessment
of how countries, communities and corporations
have begun to make a transition towards
a more sustainable pattern of consumption
and production. It is rooted in the sustainability
principles agreed at Rio in 1992, while
recognizing that the fundamental signals
driving our economies must evolve in terms
of public policy and market responses,"
he said.
"We must move beyond
the polarities of the past, such as development
versus environment, state versus market,
and North versus South," said Mr. Steiner.
"With 2.5 billion
people living on less than $2 a day and
with more than two billion people being
added to the global population by 2050,
it is clear that we must continue to develop
and grow our economies. But this development
cannot come at the expense of the very life
support systems on land, in the oceans or
in our atmosphere that sustain our economies,
and thus, the lives of each and everyone
of us," he added.
"The Green Economy
provides a vital part of the answer of how
to keep humanity's ecological footprint
within planetary boundaries. It aims to
link the environmental imperatives for changing
course to economic and social outcomes -
in particular economic development, jobs
and equity," said Mr. Steiner.
Pavan Sukhdev, on secondment
from Deutsche Bank and head of UNEP's Green
Economy Initiative, said: "Governments
have a central role in changing laws and
policies, and in investing public money
in public wealth to make the transition
possible. By doing so, they can also unleash
the trillions of dollars of private capital
in favour of a Green Economy."
"Misallocation
of capital is at the centre of the world's
current dilemmas and there are fast actions
that can be taken starting literally today
- from phasing down and phasing out the
over $600 billion in global fossil fuel
subsidizes to re-directing the more than
$20 billion subsidies perversely rewarding
those involved in unsustainable fisheries,"
he said.
"A Green Economy
is not about stifling growth and prosperity,
it is about reconnecting with what is real
wealth; re-investing in rather than just
mining natural capital; and, favouring the
many over the few. It is also about a global
economy that recognizes the intergenerational
responsibility of nations to hand over a
healthy, functioning and productive planet
to the young people of today and those yet
to be born," added Mr. Sukhdev.
Notes to Editors:
Key Findings and Some Key Sectors
UNEP defines a Green
Economy as "one that results in improved
human well-being and social equity, while
significantly reducing environmental risks
and ecological scarcities".
A big part of that transition
involves policies and investments that decouple
growth from the current intensive consumption
of materials and energy use.
While there has been
some decoupling over the past 30 years,
the gains have been far too modest to put
the planet on a sustainable path and conserve
finite resources.
Pivotal Policy Role
of Governments
Innovative and imaginative
public policies will be vital to generate
enabling conditions that, in turn, can unleash
markets and direct private sector investments
into a Green Economic transition.
These include:
Sound regulatory frameworks,
a prioritizing of government spending and
procurement in areas that stimulate green
economic sectors and limits on spending
that deplete natural capital.
Taxation and smart market
mechanisms that shift consumer spending
and promote green innovation.
Public investments in
capacity building and training, alongside
a strengthening of international governance.
Public policy can also
ensure that the benefits of greening one
sector can trigger wider sustainability
benefits across others.
Overall, the report suggests that the lion's
share of the proposed two per cent of global
GDP will need to come from private capital,
primed by more modest amounts from the public
purse.
From Fisheries to Buildings
- Ten Key Sectors Underpin a Green Economy
The ten sectors identified
in the report as key to greening the global
economy are:
agriculture, buildings,
energy supply, fisheries, forestry, industry
including energy efficiency, tourism, transport,
waste management and water.
Of the two per cent
of GDP proposed in the report, the sums
invested by sector at current levels of
GDP would be:
$108 billion for greening
agriculture, including on small-holder farms.
$134 billion in greening the building sector
by improving energy efficiency.
Over $360 billion in greening energy supply.
Close to $110 billion for greening fisheries,
including reducing the capacity of the world's
fleets.
$15 billion in greening forestry with important
knock-on benefits for combating climate
change.
Over $75 billion in greening industry, including
manufacturing.
Close to $135 billion on greening the tourism
sector.
Over $190 billion on greening transport.
Nearly $110 billion on waste, including
recycling.
A similar amount on the water sector, including
addressing sanitation.
Some Sectoral Highlights
Agriculture
A Green Economy would
invest $100 billion, up to $300 billion
a year until 2050, in agriculture in order
to feed nine billion people, while promoting
better soil fertility management and sustainable
water use to improve biological plant management.
Scenarios indicate an
increase in global yields for major crops
by 10 per cent over current investment strategies.
Equal to raising and
sustaining nutrition levels to 2,800-3,000
kilocalories available per person by 2030.
Food waste globally
is translating into 2,600 kilocalories per
person per day; therefore, a transition
to a Green Economy needs to address these
challenges, which link to several of the
sectors concerned.
Buildings
The building sector
is the single largest contributor to global
greenhouse gas emissions, with one-third
of global end-energy use taking place in
offices and homes.
The construction sector
is responsible for more than a third of
global material resource consumption, including
12 per cent of all freshwater use.
Based on an IPCC scenario,
the climate footprint of the building sector
is projected to nearly double to 15.6 billion
tones of carbon dioxide equivalent by 2030,
or 30 per cent of total energy related C02.
A combination of applying
existing technologies and growth in renewable
energy supply under the Green Economy scenarios
could dramatically reduce emissions at a
saving equal to $35 per tonne of C02.
With the right government
policies, energy savings of around one-third
could be achieved worldwide in the building
sector by 2050 for an annual investment
of $300 billion to one trillion dollars.
Fisheries
Subsidies estimated
at around $27 billion a year have generated
excess fishing capacity by a factor of two
relative to the ability of fish to reproduce.
The report suggests
that investing in strengthened fisheries
management, including the establishment
of Marine Protected Areas and the decommissioning
and reduction of fleet capacity, as well
as retraining, can rebuild the planet's
fish resources.
Such an investment backed
by policy measures will result in an increase
in catches from the current 80 million tones
to 90 million tones in 2050, although between
now and 2020 there would initially be a
fall.
"The present value
of benefits from greening the fishing sector
is estimated to be three to five times the
necessary investment," says the report.
Jobs losses in the short
to medium term can be minimized by focusing
cuts in capacity on a small number of large-scale
fishers over small-scale artisanal fleets.
Jobs in fisheries are
expected to grow again by 2050 as depleted
stocks recover.
Forestry
Forests generate goods
and services, which support the economic
livelihoods of over one billion people,
recycle nutrients vital for agriculture
and harbour 80 per cent of land-based species.
Deforestation also currently
accounts for close to 20 per cent of the
world's greenhouse gas emissions.
"Reducing deforestation
can therefore be a good investment: the
climate regulation benefits of halving global
deforestation alone have been estimated
to exceed costs by a factor of three,"
says the study.
The report analyzes
the contribution that $15 billion a year
- or 0.03 per cent of global GDP - can make
to greening this sector, including triggering
greater investments in Reducing Emissions
from Deforestation and Forest Degradation
(REDD).
Such investments can
also assist in scaling-up tried and tested
market mechanisms, including certified timber
and the certification of rainforest products
to payment for ecosystems and community-based
partnerships.
Over the period 2011
to 2050, investment of $15 billion annually,
or 0.03 per cent of GDP, would raise the
value added in the forestry industry by
more than 20 per cent, relative to business
as usual.
The report suggests
that a transition to a Green Economy could
increase forested land - currently close
to 4 billion hectares - by over three per
cent in 2020, eight per cent by 2030 and
over 20 per cent by 2050, relative to business
as usual.
Fast tracking such recommendations
could make a key contribution to 2011 -
designated as the UN's International Year
of Forests.
Transport
The environmental and
social costs of transport in terms of air
pollution, traffic accidents and congestion
can currently cost around 10 per cent of
a region or country's GDP.
Policies for greening
transport range from those that shift journeys
to public and non-motorized transport to
ones which boost fuel efficiency and cleaner
vehicles.
In Europe, the analysis
indicates that public transport investments
yield regional economic benefits more than
twice their cost.
Reducing the sulphur
content of transportation fuels in Sub Saharan
Africa could save up to nearly $1 billion
a year in health and related costs.
Investing 0.34 per cent
of global GDP per year up to 2050 in the
transport sector can reduce oil usage by
as much as 80 per cent below business as
usual - increasing employment by six per
cent above business as usual, primarily
in expanding public transport.
Waste
By 2050, the world is
likely to be generating over 13 billion
tonnes of municipal and other wastes: currently
only 25 per cent of all waste is recovered
or recycled.
An investment of $108
billion a year in greening the waste sector
could lead to near full recycling of electronic
wastes, up from the current level of 15
per cent.
Such an investment could
also boost the overall waste recycling threefold
by 2050 and cut the amounts going to landfill
by over 85 per cent versus a business as
usual scenario.
Between 20 per cent
and 30 per cent of methane-related greenhouse
gas emissions could be reduced by 2030 with
associated financial savings.
Waste prevention and
management also remains a key challenge
for manufacturing, where approaches such
as remanufacturing and redesign of products
and processes can play a part in reducing
waste and resource use.
If the life of all manufactured
products was extended by 10 per cent, for
example, the volume of resources extracted
could be cut by a similar amount.
The recycling of heat
waste through combined heat and power (CHP)
installations presents high potential for
more efficient energy use. The pulp and
paper industry has CHP installations that
allow savings of over 30 per cent of primary
energy use.
Towards a Green Economy:
Pathways to Sustainable Development and
Poverty Eradication - A Synthesis for Policy
Makers, and the full draft chapters, including
the modeling and scenarios, will be available
after 1pm Nairobi time (or 1000 GMT) on
21 February 2011 at: www.unep.org and www.unep.org/greeneconomy.
The site will also showcase
the current compilation of Green Economy
case studies from countries and regions
around the world.
The 26th session of
UNEP's Governing Council/Global Ministerial
Environment Forum can be found at: http://www.unep.org/gc/gc26
The UN Conference on Sustainable Development
2012 or Rio+20 website is at: http://www.uncsd2012.org/
