GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and...
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Transcript of GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and...
GTBR: Tool for Green Growth:
Rae Kwon ChungDirector
Environment and Development Division, ESCAP
Why Green Growth/Economy ? 1. Brown Growth cannot continue due to rising oil price & climate impact
- Lesson from Fuel & Food Crisis: Poor will suffer most from the Brown Growth
- Thus GG & Poverty: win-win synergy
- If oil/energy price is to rise & resource crisis to continue, then we need new paradigm
2. Mismatch of Market and New Reality - Market Price: only for capital & labor Ecological services: No price, climate etc.
- New Reality: Capital & Labor: readily available Ecology: getting more scarce
- Gap: Market Price < Ecological Price Market Cost Efficiency < Ecological E. 3. Financial Crisis: Green New Deal
What is GG/GE?
• Investing in Green can generate, profit employment & growth
• Green: driver of growth, not cost • Not replacing SD • SD: concept & principle, MDG: list of
goals, lack strategy • GG: implementing strategy for 2 pillars
of SD; GG process to arrive at GE
Is it feasible? How about Poverty ?
• “How to make it happen?” rather than “Is it possible?”• As we do not have other choices • GG: in the long run will support poor by
investing in natural capital on which poor depends more
• has to supported by inclusive approach • ESCAP: inclusive & sustainable Dev since 2007
What is new ?
• Integrating Economy & Env. is not new• However, this is NEW - turning climate/resource crisis into economic opportunity - in the long run, GE will end up in higher growth than BAU • No guarantee that Higher Growth will be
fairly distributed: need inclusive approach
Projected trends in annual GDP growth rate (2)
Source: UNEP Green Economy Report (2011)
Assumption
• Green scenario : 1-2 percent of global GDP is channeled to green investment.
• Focused Sectors: agriculture, buildings, energy (supply), fisheries, forestry, industry, tourism, transport, waste, water
• Green scenario 2: 2 percent of global GDP is invested prioritizing energy and climate change
• BAU: 1-2 percent of global GDP is invested across the economy in a BAU context
GG will not happen automatically by Market
Due to Time/Price gap 1. Time gap: Short term cost < Long term gain 2. Price gap: market < ecological price
Government have to jump start GG
• By closing 2 gaps Price Gap: by internalizing Ecological Price into
Market Price by Ecological Tax Reform (ETR) Time Gap: by investing in long term gains through Green Budget Reform (GBR) • GG is not just an incremental change promoting
green technologies and removing subsidies
DC are taking actions
• Korea: Low Carbon Green Growth 2008• China: Green Development • Kazakhstan: Green Bridge 2010• Cambodia: Green Growth Roadmap 2010• Indonesia, Thailand • Learning by doing: with political commitment • Leapfrogging strategy
GG applicable to DCs?
• AP DC lack financial resources & technology• GG: not only a matter of money & technology but also policy options• Greater potential to leapfrog• Easy to initiate at the early stages of
development• Strong Political Commitment & Leadership • Kazakhstan & Korea : good example • The Sooner, The Better : Singapore from 70’s
Vision for Rio+20, 2012 • How to work together to make GE to happen ? which is NOT an automatic process • Opportunity for mobilizing political
commitment & leadership • Partnership for GG/GE Government Lead Private Sector Grasp as Business Opportunity People accept lifestyle change & provide
political support
Economic System Change • By internalizing ecological prices into market
price• Thus improving ecological efficiency of growth• But can we internalize Ecological Price without
damaging economy? • YES!!!!!! • Through ETR/GBR: GTBR • 6 European Countries have tried: Positive
results
Structural Transformation • Restructuring Invisible/Visible Structure 1. Invisible Structure: internalizing EE Price, Regulation, Lifestyle, Value, Technology, Institutional Capacity etc. 2. Visible Structure: based on EE Built Environment, Building, City Design,
Transport, Energy, Water infra.
Getting the Price Right is Critical • Eco-Tax Reform: Powerful tool for GG/GE - shifting tax base from Labor to Pollution without raising tax burden (revenue neutrality) - then Double Dividend of improving ecological efficiency & increasing Employment & Growth is possible. Some empirical evidence - Income Regressive, Competitiveness Issue can
be addressed
Eco-Tax Reform
REVENUE NEUTRALITY DOUBLE DIVIDEND
Double Dividend of ETR• Key Driver of Green Growth/Economy• Potential of ETR: yet to be fully discovered • Applicability in DC: to be explored• How to make Double Dividend to happen ? In DC ? Is The Question we all have to work together .• ESCAP: working on ETR as 1of the 5 tracks of GG Roadmap
ESCAP leading Inclusive & Sustainable Development
• GG Ministerial Declaration 2005• Astana Green Bridge Initiative 2010• Developing Roadmap for GG 2011• UNEP Green Economy 2008/2011• OECD Green Growth 2009 • G20: Green New Deal 2009/GG 2010
ESCAP MCED5: Green Growth 2005• UNEP: Green Economy 2008• OECD: Green Growth Strategy 2009
MCED6: Astana Green Bridge 2010linking Europe & AP with GG
5 Tracks of ESCAP GG Roadmap
• Policy Options for System Change 1. From quantity to quality of growth2. Internalizing ecological price3. Sustainable Infrastructure: Re-design city, building,
transport, energy, water system 4. Promoting Green Business5. Enabling Low Carbon Economics
• To be completed by the end of 2011
• Justify unbridled greed of speculation Financial crisis
• Pushing maximization of production Quantity of GDP-only paradigm
• Uncontrolled exploitation of ecology Climate Change
• GG/GE could turn these crisis into new opportunities
Limits of Conventional Economy
Turning crises into opportunities is surfing waves, not drawning! Only the Brave jumping into the water can swim and enjoy surfing
FOSSIL
FUELS
Economy
Mitigation actions
BUSINESS AS USUAL
Mitigation actions
Mitigation actions
Mitigation actions
Mitigation actions
CLEAN
ENERGY
Economy
LOW CARBON GREEN GROWTH
Thank you for your attention
Rae Kwon ChungE-mail: [email protected]