Environment & Poverty Times


06 2009


Greening the world economy


Greening the world economy means turning markets and finance into partners in sustainable development. With the world in the grip of an ominous financial crisis, we are only just realising how important the way we manage our money can be for the future.


(continued)


A Brazil, with close to 50% of its energy al- ready coming from renewable sources such


as hydro and ethanol, announced a 30,000 to 40,000 megawatt wind power programme early 2009, which will be backed by incen- tives and market mechanisms.


A In July 2009, a consortium of some 20 firms started raising money for the African-


European Desertec project – building solar collectors in an area of desert in the Sahara 800 kilometres square that receives enough sunlight to generate the whole world’s energy needs.


A Kenya has announced plans to double its current installed electricity capacity by


2012 thanks to sources such as geothermal and wind power, but also drawing in part on its roughly 10% share of the Clean Develop- ment Mechanism in Africa.


A Also in Kenya, a private sector consor- tium is building sub-Saharan Africa’s largest


wind farm, with an initial installed capacity of some 300 megawatt whereas Tanzania is currently installing wind turbines equal to 10% of its current energy needs.


There is optimism and there is transforma- tional change underway, but there is also a great deal of uncertainty. If a Green Economy is to be nurtured and sustained then several factors need to be continued or put in place. We need to make every dollar and euro, every rupee and peso work harder and on multiple fronts – that will really accelerate the transi- tion towards a Green Economy that is here to stay, through decoupling and resource efficiency, getting more with less.


Let me make a few suggestions:


A The green stimulus packages need to be invested now, not in six months’ time


nor in two years’ time – there is an urgent need to overcome the current credit crunch and the difficulties of raising finance via banks or on the stock markets – this was


a central message from renewable energy developers on behalf of rich and poorer economies involved in the UNEP SEFI report mentioned earlier.


A There needs to be a greening of devel- opment cooperation – one of the recent sur-


prises in Kenya was that the government was planning to bridge an energy gap by buying in diesel-generated power from independent power producers simply because the higher, up front financing of clean energy was not available. This is surprising given the fact that diesel electricity is more expensive per unit than geothermal electricity.


A Perverse subsidies, such as the over $250 billion-worth of fossil fuel subsidies,


need to be reviewed and phased-down – there is little or no evidence they address poverty. The funds freed-up could be spent on clean technology and perhaps on climate adaptation investments – various estimates indicate that adaptation funding of between $28 billion to close to $90 billion is needed annually over the coming years. Phasing- out such perverse subsidies would also reduce greenhouse gas emissions by an estimated 6% and contribute to global GDP to the tune of 0.1%.


A Opening up, rather than protecting, mar- kets is likely to accelerate the dispersion of clean


technology and the transfer of climate-friendly technology from developed to developing economies. This was highlighted in a report on trade and climate change, which UNEP and the World Trade Organization released in June. The report estimates that one-third of Clean Development Mechanism projects involve technology transfer. It cites a study showing that between 1998 and 2008 some 215,000 patents were registered globally for low or zero- carbon technologies such as waste-into-energy, biomass, wind, wave and fuel-cell power.


A Above all, perhaps, it is of crucial im- portance for governments to seal a credible


deal at the UN climate convention meeting


in Copenhagen to raise the price of carbon and give certainty to the carbon markets.


At its heart the transformation towards a Green Economy is about ensuring that the full costs of pollution and environmentally- damaging activities are internalized rather than externalized – so that real choices can be made. At the same time, establishing a Green Economy is about more intelligent management of resources – financial, human and natural – thus ensuring that economies invest and re-invest in them to maximize resource efficiency and sustainable economic benefits, and achieve the best possible return for current and future generations.


The international community is only just scratching the surface in terms of captur- ing the true value of the Earth’s natural or nature-based assets which underpin vast sectors of the global economy including ag- riculture. The Economics of Ecosystems and Biodiversity assessment – of which UNEP is proud to host the secretariat – estimates that in terms of forest ecosystem services alone we are losing services at a rate of $2 trillion to $5 trillion a year. The global community is also increasingly realizing the damages of our unsustainable consumption and produc- tion patterns through the Marrakech Process in active collaboration with all the regions for defining an adequate enabling policy frame- work and setting the foundations for a truly culture of change. This is being further main- streamed through the UNEP International Panel for Sustainable Resource Management in demonstrating the necessity to decouple throughout a life cycle approach.


A good deal in Copenhagen is therefore also very important as it will likely stimu- late investment in forest ecosystems with multiple opportunities including reduced greenhouse gas emissions, soil stabiliza- tion, improved water supplies and reduced biodiversity loss. This may open the door to investing in other ecosystems for their climate benefits with multiple spin offs.


This deal should also give due consideration to reducing greenhouse gas emissions from the building sector, one of the largest con- sumers of energy and producers of CO2.


The world has had a serious wake-up call in terms of the global economy and its cur- rent trajectory – the vulnerable are being hit the hardest with an estimated 100 million people likely to be plunged back into poverty and a record 1 billion people expected to be hungry by the end of 2009.


But governments have re-engaged not as med- dlers – as some purists might claim – but as managers on the global stage. And we are see- ing a fresh set of values and a serious discourse re-emerging in terms of what is real wealth for the many, rather than for only a few.


Come what may, the international com- munity is going to have to embrace a Green Economy – the question is whether it does so in a timely, focused and well-directed way. Or whether it will come by default, forced upon policy-makers by the world rapidly running out of resources, from fisheries to forests, while struggling under the yoke of unchecked climate change.


The current stimulus packages and rising green investments represent a striking, per- haps once-in a life time opportunity to achieve that stable and sustainable transition if these investments can be fully realized and backed by forward-looking policies and measures over the medium to long term. The packages can, and indeed are, driving more sustainable consumption and production patterns. They are also driving to more sustainable markets that in turn are triggering demand for more sustainable Green Growth technologies, goods and services that are giving rise to the kinds of sustainable businesses, industries and jobs we need in this new millennium


About the author: Achim Steiner is UN Under-


Secretary General and Executive Director, UN Environment Programme.


Green growth is essential to any stimulus By Ban Ki-moon and Al Gore


This article was originally published in the Finan- cial Times 16th February 2009 (www.ft.com)


Economic stimulus is the order of the day. This is as it must be, as governments around the world struggle to jump-start the global economy. But even as leaders address the im- mediate need to stimulate the economy, so too must they act jointly to ensure that the new de facto economic model being developed is sus- tainable for the planet and our future on it.


What we need is both stimulus and long- term investments that accomplish two objectives simultaneously with one global economic policy response – a policy that ad- dresses our urgent and immediate economic and social needs and that launches a new green global economy. In short, we need to make “growing green” our mantra.


First, a synchronised global recession re- quires a synchronised global res¬ponse. We need stimulus and intense co-ordination of economic policy among all main economies. We must avoid the beggar-thy-neighbour poli- cies that contributed to the Great Depression. Co-ordination is also vital for reducing finan- cial volatility, runs on currencies and rampant inflation as well as for instilling consumer and investor confidence. In Washington last November, G20 leaders expressed their deter- mination “to enhance co-operation and work together to restore global growth and achieve needed reforms in the world’s financial sys- tems”. This needs to happen urgently.


Stimulus is intended to jump-start the econo- my, but if properly conceived and executed it can also launch us on a new, low-carbon path to green growth. Some $2,250bn (€1,750bn, £1,569bn) of stimulus has already been an- nounced by 34 nations. This stimulus, along with new initiatives by other countries, must help catapult the world economy into the 21st century, not perpetuate the dying indus- tries and bad habits of yesteryear. Indeed, continuing to pour trillions of dollars into carbon-based infrastructure and fossil-fuel subsidies would be like investing in subprime real estate all over again.


Eliminating the $300bn in annual global fos- sil fuel subsidies would reduce greenhouse gas emissions by as much as 6 per cent and would add to global gross domestic product. Developing re¬newable energy will help where we need it most. Already, developing economies account for 40 per cent of exist- ing global renewable resources as well as 70 per cent of solar water heating capacity.


Leaders everywhere, notably in the US and China, are realising that green is not an option but a necessity for recharging their economies and creating jobs. Glob- ally, with 2.3m people employed in the renewable energy sector, there are already more jobs there than directly in the oil and gas industries. In the US, there are now more jobs in the wind industry than in the entire coal industry. President Barack Obama’s and China’s stimulus packages are a critical step in the right direction and


their green components must be followed through urgently.


We urge all governments to expand green stimulus elements, including energy effi- ciency, renewables, mass transit, new smart electricity grids and reforestation, and to co- ordinate their efforts for rapid results.


Second, we need “pro-poor” policies now. In much of the developing world, govern- ments do not have the option to borrow or print money to cushion the devastating economic blows. Therefore, governments in industrialised countries must reach beyond their borders and invest immediately in those cost-effective programmes that boost the pro- ductivity of the poorest. Last year, food riots and unrest swept more than 30 countries. Ominously, this was even before September’s financial implosion, which sparked the global recession that has driven a further 100m people deeper into poverty. We must act now to prevent further suffering and potential widespread political instability.


This means increasing overseas develop- ment assistance this year. It means strength- ening social safety nets. It means investing in agriculture in developing countries by getting seeds, tools, sustainable agricultural practices and credit to smallholder farmers so they can produce more food and get it to local and regional markets.


Pro-poor policy also means increasing in- vestments in better land use, water conser-


vation and drought-resistant crops to help farmers adapt to a changing climate, which – if not addressed – could usher in chronic hunger and malnutrition across large swaths of the developing world.


Third, we need a robust climate deal in Copenhagen in December. Not next year. This year. The climate negotiations must be dramatically accelerated and given attention at the highest levels, starting today. A success- ful deal in Copenhagen offers the most potent global stimulus package possible. With a new climate framework in hand, business and governments will finally have the carbon price signal businesses have been clamouring for, one that can unleash a wave of innovation and investment in clean energy. Copenhagen will provide the green light for green growth.This is the basis for a truly sustainable economic recovery that will benefit us and our children’s children for decades to come.


For millions of people from Detroit to Delhi these are the worst of times. Families have lost jobs, homes, healthcare and even the prospect of their next meal. With so much at stake, gov- ernments must be strategic in their choices. We must not let the urgent undermine the es- sential. Investing in the green economy is not an optional expense. It is a smart investment for a more equitable, prosperous future.


About the authors: Ban Ki-moon is UN Secretary-


General. Al Gore is former US Vice-President. Copyright: The Financial Times Limited 2009


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36