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Realizing a "Green New Deal"
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 $750 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/
For More information Please Contact
Nick Nuttall, UNEP Spokesperson, Office of the Executive Director, on Tel:
+254 20 762 3084; Mobile: 254 733 632 755 or when traveling +41 795 965 737;
E-mail:
nick.nuttall@unep.org
Anne-France White at Mobile: +254 (0)728 600 494 or E-mail:
anne-france.white@unep.org
Shereen Zorba at Mobile: +254 (0)721 210 571 or E-mail:
shereen.zorba@unep.org
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