UNEP-Commissioned
Report Underlines How Environmental investments
Can get the Global and National Economies
Back to Sustainable Work
25th Governing Council/Global
Ministerial Environment Forum 16-20 February
Nairobi, 16 February
2009 - One third of the around $2.5 trillion-worth
of planned stimulus packages should be invested
on 'greening' the world economy.
This would assist in
powering the global economy out of recession
and onto a Green, 21st century path a new
report released today by the UN Environment
Programme (UNEP) says.
The estimated $1000
billion of green investment, equal to about
one per cent of current global GDP, could
trigger significant, multiple and potentially
transformational returns.
Allied to innovative
market mechanisms and fiscal policies, these
include:
-Stimulating clean tech
innovation, stabilizing and boosting employment
in decent jobs and protecting vulnerable
groups
- Cutting carbon dependency
and greenhouse gas emissions, reducing degradation
of multi-trillion dollar ecosystems and
their goods and services and tackling water
scarcity
- Furthering the opportunity
to achieve the Millennium Development Goal
of ending extreme poverty by 2015
The G20, comprising
of the 20 largest developed and developing
economies, who next meet in London in April,
is the first opportunity to begin shaping
a Global Green New Deal.
Such a Deal can also
set the stage for a successful outcome to
the crucial UN climate change meeting later
in the year in Copenhagen, Denmark.
These are among the
findings of the Global Green New Deal report,
written in consultation with experts from
over 25 UN bodies and external organizations
including the OECD, the International Monetary
Fund and the World Bank.
The report, A Global
Green New Deal, commissioned on behalf of
UNEP's Green Economy Initiative was written
by Professor Edward B Barbier of the University
of Wyoming.
Prof. Barbier is a leading
expert on the economics of sustainability,
and co-authored with the late Prof. David
Pearce, the landmark Blueprint for a Green
Economy.
Its findings, alongside
those of the UNEP Year Book 2009, are being
presented today to over 100 environment
ministers attending UNEP's Governing Council/Global
Ministerial Environment Forum.
Achim Steiner, UN Under-Secretary
General and UNEP Executive Director, said:"
The $2.5 to $3 trillion to be mobilized
over the next 24 months to tackle the economic
crisis are sums almost unthinkable just
12 months ago".
"Spent wisely and
creatively they offer the chance to deal
with the today's immediate crises and begin
focusing and framing a response to those
on the horizon from future food shortages,
natural resource scarcity, energy security
and climate change," he added.
"The Global Green
New Deal report, part of the UNEP Green
Economy initiative, is being presented here
to ministers from the North and the South
as an anti-dote to the current economic
woes. It represents an opportunity to accelerate
towards innovation-led, low carbon, low
waste Green Economy societies with decent
employment prospects for many more millions
of people," said Mr Steiner.
"Several economies,
such as the United States; China; the Republic
of Korea; Japan; Germany, Denmark, France
and the United Kingdom are already earmarking
parts of their multi-billion dollar stimulus
packages for environmental investments.
This report is designed to inform a public
debate and perhaps assist those who may
be unsure how to proceed so they too can
turn crisis into opportunity," he added.
Mr Steiner emphasized:
"This agenda - this locomotive for
sustainable development - is as relevant
to developing and emerging economies as
it is to industrialized ones.
"Greening the economy
is as much about greening overseas development
aid development; bilateral and multilateral
assistance; south-south cooperation and
direct foreign investment as it is about
national investment.
Pavan Sukhdev, Project
Leader of UNEP's Green Economy Initiative
who is on secondment from Deutsche Bank,
said: "Prof Barbier's report is the
third in our ongoing stream of work to rethink
economic models and target job growth in
a world where leveraging 'Natural Capital'
is both an increasing constraint and an
untapped opportunity, and where failing
to pursue sustainable development is no
longer an option".
He said the new report
built on two earlier reports - the Interim
Report on The Economics of Ecosystems and
Biodiversity (TEEB) published in May 2008
and an initiative of the G8+5 and the Green
Jobs Report of September 2008.
"Now 'A Global
Green New Deal' brings this thinking to
bear on the current economic crisis, with
a focus and on the reflationary packages
being planned to solve it. It shows how
"green" components of stimulus
packages together with appropriate policy
changes may be used to restore job growth
and achieve a more sustainable "green
economy," he said.
Mr Sukhdev added that
the new report demonstrated that "simultaneously
targeting the triple goals of job creation,
lower climate and ecological risk, and reduced
poverty is not only possible but also desirable
and timely".
"This report addresses
both developed and developing world challenges.
It recognizes that, in a highly globalized
world economy in serious recession, the
poor and the vulnerable are hit hardest,
and makes useful suggestions to prevent
worsening poverty," he said.
Based on consultations
with Governments over the next few days
at UNEP's GC, the Green Economy Initiative
will draft specific recommendations towards
implementing a "A Global Green New
Deal".
Today's 154 page Global
Green New Deal report outlines a rich array
of options and actions available to countries
at different points in their economic and
developmental paths some of which can be
undertaken nationally and others cooperatively
at the regional and global level.
The report shows that
some countries are at the national level
already exceeding, meeting or factoring
some proportion of the one per cent suggested
target.
The Republic of Korea
It cites the more than
$36 billion Green New Deal of the Republic
of Korea which under full implementation
involves an investment equal to around 3
per cent of GDP and a job creation potential
of close to one million jobs.
"The energy conservation
and green building investments that form
part of the Republic of Korea's Green New
Deal amount to 0.5 per cent of GDP and the
full, low carbon strategy accounts for 1.2
per cent of GDP," says the report.
These strategies alone
are expected to create over180, 000 and
more than 330,000 jobs respectively.
For example:
- The $7 billion to
be invested in mass transit and railways
over the next three likely to generate 138,000
- The $5.8 billion in
energy conservation in villages and schools
- 170,000 jobs
- Other parts of the
stimulus will also create employment including
the more than $10 billion river restoration
stimulus; close to 200,000 jobs
- The more than $1.7
billion forest restoration stimulus - over
130,000 jobs
- The $690 million water
resource management stimulus - over 16,000
jobs
China is expected to
spend $586 billion or just over eight per
cent of its GDP on a fiscal stimulus package
of which an estimated $140 billion or just
under two percent is earmarked for green
investments.
China's green investment
package is likely to boost further its $17
billion renewable energy sector which already
employs around one million people.
The United States stimulus
package, approved by Congress a few days
ago, amounts to $787 billion or around 5.7
per cent of GDP of which $100 billion (based
on estimates on the new package) or over
0.7 per cent are on directed towards greening
the US economy
- $18 billion for clean
water, flood control and environmental restoration
and $8.4 billion for transit, and $8 billion
for high-speed rail
- $4.5 billion to make
federal office buildings more energy-efficient.
- $30 billion for a
smart power grid, advanced battery technology
and other energy efficiency measures.
- $20 billion in tax
incentives for renewable energy and energy
efficiency over the next 10 years.
- $6.3 billion for energy
efficiency in multifamily housing that gets
federal assistance, such as HUD-sponsored
low-income housing and $5 billion to weatherize
more than 1 million homes owned by "modest-income"
families
The report cites a study
by the Peterson Institute of International
Economics and the World Resources Institute
that estimates that green energy investments
in the United States could save the economy
an average of $450 million a year for every
$1 billion invested.
And that every $1 billion
of government spending in this area will
create around 30,000 job years and reduce
annual greenhouse gas emissions by close
to 600,000 tons from 2012-2020.
- The Green New Deal
report urges all high-income OECD economies
to factor the one per cent green investment
goal into their stimulus packages.
- The report also recommends
that the remaining high income economies,
alongside middle-income ones of the G-20
to "as far as possible" to invest
similar amounts in national action plans
to reduce carbon dependency and boost environmental
sustainability - the G-20 is next set to
meet in London in April
- The remaining developing
economy countries should also consider investments
to reduce carbon dependency. Although the
amounts need to be determined, the report
claim such investments can assist in poverty
reduction, employment generation and livelihood
improvements.
Cutting Fuel Subsidies
- and Cap and Trade Carbon Markets
The report says some
of the needed investment income could be
raised by developing country governments
through reducing or phasing-out energy subsidies.
- Currently an estimated
$300 or more billion is being spent on energy
subsidies across developed and developing
economies, the lion's share on fossil fuel
subsidies.
- By far the largest
amount is spent by developing economies
with subsidies in 20 non-OECD countries
totaling $220 billion.
"Cancelling these
subsidies would on their own reduce greenhouse
gas emissions globally by as much as six
per cent and add 0.1 per cent to global
GDP," says the report.
"The financial
savings could also be redirected to investments
in clean energy R&D, renewable energy
development and energy conservation, further
boosting economies and employment,"
it says.
The report cites energy
sector reforms in several low-income economies
including Botswana, Ghana, Honduras, India,
Indonesia, Nepal and Senegal that have also
benefited poor households.
- Here every dollar
invested in boosting the energy efficiency
of electricity generation has led to savings
of up to $3.
The report counters
the idea that renewable energy is the preserve
of the well off economies. Small hydropower,
biomass and solar photovoltaics are already
providing electricity, heat, water pumping
and other activities for tens of millions
of people in rural, developing country areas.
- 25 million developing
country households now use biogas for cooking
and lighting and 2.5 million developing
country homes now use solar lighting systems.
- Indeed contrary to
popular belief, developing economies account
for 40 per cent of existing global renewable
energy resource capacity, 70 per cent of
solar water heater capacity and 45 per cent
of biofuels production.
- "Expansion of
these existing sectors (in part by redirecting
fossil fuel subsidies) will not only increase
the availability and affordability of sustainable
energy services for the world's poor but
provide much needed (often local) employment
opportunities," says the Global Green
New Deal report.
The report also recommends
that developing economies spend one per
cent of the GDP on improving water clean
water and sanitation provisions for the
poor in line with recommendations by the
UN Development Programme.
- A dollar invested
in clean water and sanitation in developing
countries gives returns of between $5 and
$11 and in some cases up to $28 for some
low-cost measures - benefits including reduced
days spent away from work or from school,
reduced costs to local health services and
reduced costs in medicines as a result of
falls in water borne diseases such as diarrhea
- Indeed the overall
economic boost of halving by 2015 the number
of people without access to safe drinking
water and sanitation would be around $38
billion annually.
- In sub-Saharan Africa
alone, the stimulus would be $15 billion
annually equivalent to around 60 per cent
of the Continent's current aid flows.
The report makes the
point that the current economic crisis,
which is reducing international trade and
may lead to declines in aid and private
investment flows, demands an even more targeted
and focused response in order to maximize
returns.
"Addressing the
gap in overseas aid for clean water and
sanitation in developing economies needs
to be a priority of the international community
under a Global Green New Deal," it
says.
The report makes a series
of additional recommendations in order to
achieve a Global Green New Deal and set
the stage for Green Economy growth.
- All economies to consider
removing water subsidies and adopting market-based
instruments to boost water efficiency, with
measures to ensure the protection of vulnerable
groups, alongside better governance of shared
or transboundary rivers and lakes
- The adoption of national
action plans by developing economies for
improving the sustainability of primary
production activities.
The report cites the
case of Malaysia where annual growth rates
have exceeded four per cent by investing
25 per cent of the financial gains from
sectors like forests and fisheries in diversifying
the economy; education and training; social
safety nets and other pro-poor measures.
It also calls on groups
like the G-20 to underpin Green Economic
growth by addressing some of the aid and
trade shortfalls emerging as a result of
the economic crisis alongside falls in private
investment.
Other actions that the
report suggests at the international level
include:
1. The most likely global
policy forum for promoting urgent international
action on the GGND is the G20 forum of the
world's 20 largest rich and emerging economies,
although all international fora, and the
UN system especially, have a role to play
in promoting, developing and enhancing the
GGND.
2. At its April 2009
London meeting, the G20 should consider
proposals for a GGND, such as the actions
recommended by this report, and help develop
framework ideas towards securing a global
climate change agreement at Copenhagen in
December 2009.
3. The international
community should reach agreement on extending
the CDM beyond 2012 as part of a global
climate change agreement, and reforming
the mechanism to increase the coverage of
developing economies, the sectors and technologies
and the overall financing of global GHG
emission reductions.
4. The international
community should support efforts to improve
payment for ecosystem services targeted
to the poor and to include more ecosystems,
and efforts to improve governance and shared
use of transboundary water resources.
5. The international
community should adopt as soon as possible
reforms to the governance of the financial
system that increase transparency and simplicity,
and improve the alignment of incentive structures.
6. Bilateral and multilateral
aid donors should increase their development
assistance over the next few years, and
target it to the sectors and actions that
comprise the key components of the GGND.
7. The international
community should develop and expand innovative
financing mechanisms, such as the International
Finance Facility, Climate Investment Funds
and Global Clean Energy Cooperation, as
possible means to fund key components of
the GGND.
8. The international
community should develop and expand new
trade financing and trade facilitation financing
packages, and use them to target support
to the GGND.
9. The international
community should review existing trade agreements
and shape future agreements to identify
and minimize barriers to enhance effective
support of the proposed GGND actions.
10. The international
community needs to reach successful conclusion
of the Doha Round trade negotiations, especially
on fishery subsidies, clean technology and
services and reducing agricultural protectionism.
Notes to Editors
The Global Green New Deal report, written
for UNEP by professor Ed Barbier, benefited
from wide-ranging consultations held at
UN headquarters in New York, 2-3 February
with experts from amongst others the European
Environmental Agency, ICTSD, ILO, IMF, OECD,
UNCEB, UNCSD, UNCTAD, UNDESA, UNDP, UNECE,
UNEP, UNECLAC, UNESCAP, UNFAO, UNFCCC, UNIDO,
UNSD, the World Bank and the UN Secretary
General's Office.
A consultation meeting
was also held at the UN Foundation, Washington
DC, 4 February 2009 with experts, amongst
others, from the Center for American Progress,
Pew Center on Global Climate Change, Union
of Concerned Scientists, UN Foundation,
World Resources Institute and the Worldwatch
Institute.
The full report and its Executive Summary
can be found at www.unep.org or at http://www.unep.org/greeneconomy/
The 25th UNEP Governing Council/Global Ministerial
Environment Forum http://www.unep.org/gc/gc25/
Nick Nuttall, UNEP Spokesperson, Office
of the Executive Director
Anne-France White
Shereen Zorba
