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‘Green Economy’ Can Lead To Faster Poverty Eradication
Says UNEP Paper

By Marianne de Nazareth

24 February, 2011

We should shake off the notion that shifting to ‘green development’ means losing on the gravy train to greater economic growth in our developing nations.There is this mental stumbling block where we believe that a change to ‘green’ is expensive and we the developing world will lose out on the race forward in development. Instead we should look at a Green Economy which can kick start quicker and faster poverty eradication and is a catalyst for growth with the shift reveals Pavan Sukhdev, in the synthesis report on the paper: Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication. Investing two per cent of global GDP into ten key sectors can invigorate a transition towards a low carbon, resource efficient Green Economy he reveals in the new UNEP report.

Two percent currently amounts to an average of around $1.3 trillion a year and backed by forward-looking national and international policies, would increase the global economy at around the same rate if not higher than those forecast, under current economic models. But without rising risks, shocks, scarcities and crises increasingly inherent in the existing, resource-depleting, high carbon ‘brown’ economy, says the study.

As such, it comprehensively challenges the myth of a trade off between environmental investments and economic growth and instead points to a current “gross misallocation of capital”. The report sees a Green Economy as not only relevant to more developed economies but as a key catalyst for growth and poverty eradication in developing ones too, where in some cases close to 90 per cent of the GDP of the poor is linked to nature or natural capital such as forests and freshwaters.

It cites India, where over 80 per cent of the $8 billion National Rural Employment Guarantee Act (NREGA), which underwrites at least 100 days of paid work for rural households, invests in water conservation, irrigation and land development. This has generated three billion working days-worth of employment benefiting close to 60 million households.

Two per cent of the combined GDP of Cambodia, Indonesia, the Philippines and Vietnam is currently lost as a result of water-borne diseases due to inadequate sanitation. Policies that re-direct over a tenth of a per cent of global GDP per year can assist in not only addressing the sanitation challenge but conserve freshwater by reducing water demand by a fifth by 2050 compared to projected trends.

Currently, the world spends between one and two per cent of global GDP on a range of subsidies that often perpetuate unsustainable resources use in areas such as fossil fuels, agriculture, including pesticide subsidies, water and fisheries.

Many of these are contributing to environmental damage and inefficiencies in the global economy, and phasing them down or phasing them out would generate multiple benefits while freeing up resources to finance a Green Economy transition.

The report makes the case that over time the number of “new jobs created” in sectors - ranging from renewable energies to more sustainable agriculture - will however offset those lost from the former “brown economy”. For example, investing about one and a quarter per cent of global GDP each year in energy efficiency and renewable energies could cut global primary energy demand by nine per cent in 2020 and close to 40 per cent by 2050, it says.

Employment levels in the energy sector would be one-fifth higher than under a business as usual scenario as renewable energies take close to 30 per cent of the share of primary global energy demand by mid century. Savings on capital and fuel costs in power generation would under a Green Economy scenario, be on average $760 billion a year between 2010 and 2050.

The UNEP report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, also highlights enormous opportunities of separating waste generation from GDP growth, including what is recovered in recycling.

Empirical examples include - The Republic of Korea has, through a policy of Extended Producer Responsibility (EPR), enforced regulations on products such as batteries and tyres to packaging like glass and paper, triggering a 14 per cent increase in recycling rates and an economic benefit of $1.6 billion. Brazil’s recycling already generates returns of $2 billion a year, while avoiding 10 million tones of greenhouse gas emissions; a fully recycling economy there would be worth 0.3 per cent of GDP.

“A Green Economy is not about stifling growth and prosperity, it is about reconnecting with what is real wealth; re-investing in rather than just mining natural capital; and, favouring the many over the few. It is also about a global economy that recognizes the intergenerational responsibility of nations to hand over a healthy, functioning and productive planet to the young people of today and those yet to be born,” added Mr. Sukhdev.

The report, compiled by the UN Environment Programme (UNEP), in collaboration with economists and experts worldwide, takes meeting and sustaining the UN’s Millennium Development Goals - ranging from halving the proportion of people in hunger to halving the proportion without access to safe drinking water - as one aim. Bringing down emissions of greenhouse gases to the much safer levels of 450 parts per million by 2050 is another overarching target.

The findings were presented to environment ministers from over 100 countries at the opening of the UNEP Governing Council/Global Ministerial Environment Forum and forms part of UNEP’s contribution to the preparation of the Rio+20 conference scheduled in Brazil next year.

(The writer is a media fellow with UNEP and is adjunct faculty at St. Joseph’s College & COMMITS, Bangalore)






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