GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and...

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GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and Development Division, ESCAP

Transcript of GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and...

Page 1: GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and Development Division, ESCAP.

GTBR: Tool for Green Growth:

Rae Kwon ChungDirector

Environment and Development Division, ESCAP

Page 2: GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director 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

Page 3: GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and Development Division, ESCAP.

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

Page 4: GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and Development Division, ESCAP.

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

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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

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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

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Projected trends in annual GDP growth rate (2)

Source: UNEP Green Economy Report (2011)

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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

Page 9: GTBR: Tool for Green Growth: GTBR: Tool for Green Growth: Rae Kwon Chung Director Environment and Development Division, ESCAP.

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

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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

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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

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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

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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

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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

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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.

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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

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Eco-Tax Reform

REVENUE NEUTRALITY DOUBLE DIVIDEND

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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

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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

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ESCAP MCED5: Green Growth 2005• UNEP: Green Economy 2008• OECD: Green Growth Strategy 2009

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MCED6: Astana Green Bridge 2010linking Europe & AP with GG

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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

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• 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

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Turning crises into opportunities is surfing waves, not drawning! Only the Brave jumping into the water can swim and enjoy surfing

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FOSSIL

FUELS

Economy

Mitigation actions

BUSINESS AS USUAL

Mitigation actions

Mitigation actions

Mitigation actions

Mitigation actions

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CLEAN

ENERGY

Economy

LOW CARBON GREEN GROWTH

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Thank you for your attention

Rae Kwon ChungE-mail: [email protected]