16.12.2009 1

Rethinking Economic Recovery : UNEP’s “Green Economy Initiative”

Rethinking Economic Recovery : UNEP’s “Green Economy Initiative”

“Changing Finance, Financing Change”23rd October, 2009

Cape Town

Pavan SukhdevSpecial Adviser & Head, Green Economy InitiativeUNEP

16.12.2009 UNEP ETB2

A “green economy” is not …

‘Ecological Footprint’ already exceeds Earth’s regenerative capacity… our demands on the planet have doubled over the last 40 years…

Global GHG Emissions at 42 GtCO2eper annum are 5 times higher thanthe Earth can absorb …

…One which Consumes Capital.. ….Or Risks Human Survi val ...

16.12.2009

UNEP ETB

Enabling Conditions

- Finance- Subsidies- Markets

-

UNEP’s Green Economy Report

To show that Greening the Economy is..a new engine of “growth”a source of new & decent employmenta sustainable solution to persistent poverty

16.12.2009 UNEP ETB4

16.12.2009

UNEP ETB

Enabling Conditions

- Finance- Subsidies- Markets

-

UNEP’s Green Economy Reports its offshoots

“Rethinking Economic Recovery”

Regional / Country Reports

Regional / Country Reports

GGND Policy Briefs

Why do we need a “Global Green New Deal” ?

1. Fiscal stimulus agreed as the way forward, but how sustainable is the recovery ?

2. “Green Investment” beats a “Shopping Spree”

3. “Win-Win-Win” solutions exist : Decent Jobs, Lower Risks, Higher Returns

4. Globalization is a fact : success lies in globallycoordinated action ..

5. “A crisis is a terrible thing to waste” : Seeding the “Green Economy”

Objectives of a Global Green New Deal

From : Edward B. Barbier, “A Global Green New Deal”, UNEP, Feb 2009

Components of a Global Green New Deal

� Inernational Policy Architecture

• International Trade• International Aid• Global Carbon Market• Global Markets for Ecosystems Services• Development and Transfer of Technology• GGND International Coordination

� Domestic Policy Initiatives• Perverse Subsidies• Incentives & Taxes• Land Use and Urban Policy• Integrated Management of Freshwater• Environmental Legislation• Monitoring and Accountability

� Fiscal Stimulus in 2009-2010

• Energy Efficient Buildings• Sustainable Transport • Sustainable Energy • Agriculture and Freshwater

Objectives of a Global Green New Deal.. relating to employment

� Revive the world economy, create new and decent create new and decent

jobs, jobs, and protect the vulnerable

� Reduce carbon dependency, ecosystem degradation, and water scarcity

� Eliminate persistent poverty by 2025…. Help achieve the MDG’s

From : Edward B. Barbier, “A Global Green New Deal”, UNEP, Feb 2009

““ GREEN JOBS REPORTGREEN JOBS REPORT ””

10

�� Renewable energy has more jobs than Renewable energy has more jobs than Renewable energy has more jobs than Renewable energy has more jobs than Renewable energy has more jobs than Renewable energy has more jobs than Renewable energy has more jobs than Renewable energy has more jobs than fossil fuels, and could reach 20 million jobs fossil fuels, and could reach 20 million jobs fossil fuels, and could reach 20 million jobs fossil fuels, and could reach 20 million jobs fossil fuels, and could reach 20 million jobs fossil fuels, and could reach 20 million jobs fossil fuels, and could reach 20 million jobs fossil fuels, and could reach 20 million jobs by 2030by 2030by 2030by 2030by 2030by 2030by 2030by 2030

�� Climate change will continue to impact Climate change will continue to impact Climate change will continue to impact Climate change will continue to impact Climate change will continue to impact Climate change will continue to impact Climate change will continue to impact Climate change will continue to impact workers and their families, especially those workers and their families, especially those workers and their families, especially those workers and their families, especially those workers and their families, especially those workers and their families, especially those workers and their families, especially those workers and their families, especially those dependent upon agriculture and tourism dependent upon agriculture and tourism dependent upon agriculture and tourism dependent upon agriculture and tourism dependent upon agriculture and tourism dependent upon agriculture and tourism dependent upon agriculture and tourism dependent upon agriculture and tourism

16.12.2009 UNEP ETB11

CountryRenewable Energy

Building Retrofits

Sustainable Transport

Sustainable Agriculture

Ecological Infrastructure

United States

South Korea

European Union

United Kingdom

Thailand

Colombia

TOTALS…20 million ? ….. ? ….. ? ….. ? …… ?

2 million Jobs

148,000 Jobs171,000 Jobs

1 to 2 million Jobs

160,000 Jobs

182,000 Jobs

170,000 Jobs

350,000 Jobs

Mapping “Green Jobs” Potential..

A : 50-year impact of inactionor ‘business as usual’

B : Natural Capital impact

Welfare losses equivalent to 7 % of GDP, horizon 2050

Natural Capital Lost : AnnuallyEUR 1.35 x 1012 to 3.10 x 10 12

(@ 4% (@ 1%

Discount Rate) Discount Rate)

Economic Size & Welfare Impact of Losses Global Forest Losses = “Natural Capital” Lost…

A : 50-year impact of inactionor ‘business as usual’

B : Natural Capital impact

Welfare losses equivalent to 7 % of GDP, horizon 2050

Natural Capital Lost : AnnuallyEUR 1.35 x 1012 to 3.10 x 10 12

(@ 4% (@ 1%

Discount Rate) Discount Rate)

Economic Size & Welfare Impact of Losses … which can also be opportunities

16.12.2009 UNEP ETB14

Ecological Infrastructure : “Adaptation & Employment” Double Opportunity ?

Measures

Sectors

Revenues (USD Bio)

Capital Employed

(USD Bio)

Direct Employment

Automobiles4

$ 1,882 Bio $2,217 Bio 4.4 Mio

Steel4

$ 530 Bio $ 588 Bio 4.5 Mio

IT Services & Software

4

$ 942 Bio $ 179 Bio 5.7 Mio

Protected Area Conservation

$ 4,500 Bio1

$ 125,000 Bio2

1.3 Mio3

1. Balmford et al, 2002, “Economic Reasons for Conserving Wild Nature”, Science 297, estimates Protected Areas could produce goods and services valued at between $ 4,400 billion - $ 5,200 billion per annum

2. Natural Capital : Present Value (PV) of a constant service annuity of $ 5,000 billion per annum, discounted @ 4% per annum3. Estimate of the number employed directly in the maintenance, protection, and oversight of Protected Areas globally 4. Global Business Sector estimates from Global Markets Centre (“GMC”), Deutsche Bank

Objectives of a Global Green New Deal..

related to poverty

From : Edward B. Barbier, “A Global Green New Deal”, UNEP, Feb 2009

Ecosystem Losses & Links to MDG’sExample : MDG # 1, 4, 5, 8…

HAITI

DOMINICAN REPUBLIC

16.12.2009 UNEP ETB17

India Example : 480 Million people earn their livelihood mainly i n small farming, animal husbandry, informal forestry, fisheries …

Ecosystem Losses & Poverty “GDP of the Poor” is

most seriously impacted by ecosystem losses…

Ecosystem services / classical GDP 7.3 %

Ecosystem services/ “GDP of the Poor” 57 %

Source: GIST’s Green Accounting for Indian States Project, 2002-03 data

16.12.2009 UNEP ETB18

Investment in Ecological InfrastructureSFPUC – Peninsula Watershed

16.12.2009 UNEP ETB19

�FC-ERC - P�FC-ERC - P

�FC-ERC

�Projects�x,y

�Projects�x,y

�Host Government

�Host Government

�Local Government

�Local Government

�Corporates/CSR

�Corporates/CSR

�Donor Govts�Donor Govts

�Financial Insts�Financial Insts

�Philanthropic Insts

�Philanthropic Insts

�National Govt�National Govt

�Market for Premium –

Biodiversity, ESS, etc

�Cap & Trade Market

for Forest Carbon

REDD+ in “Phase 3” and

a Market for Premium on “Co-benefits”

16.12.2009 UNEP ETB21

A new Engine for the Economy ?

16.12.2009 22