Lima,

Peru,
24th March, 2011

Pavan Sukhdev
Special Adviser and Head Green Econmy Initiative
United Nations Environment Programme
What is Green
good about the :GEI?
Economy Definition

A Green Economy can be defined as

one that results in improved human
well-being and social equity, while
significantly reducing environmental
risks and ecological scarcities.

3. GEI Analysis
UNEP GREEN ECONOMY INITIATIVE
What is Green
good about the -GEI?
Economy Definition

A Green Economy can be defined as Environmentally friendly GDP

Growth nearest to UNESCAP
one that results in improved human 2005 & Green Growth models
well-being and social equity, while
significantly reducing environmental Growth in
risks and ecological scarcities. per-capita
inclusive wealth
Dasgupta
Arrow, Dasgupta,
Operational level : a Green Economy is Maler
one whose growth of income and jobs is
driven by investments that reduce carbon
Growth in
emissions & pollution, increase energy &
materials efficiency, & enhance natural Comprehensive
capital wealth
Stiglitz

Stiglitz - Sen
Fitoussi

3. GEI Analysis
UNEP GREEN ECONOMY INITIATIVE
 Green Economy Initiatives

Many developing nations are actively promoting transitions to a green

economy,
Barbados National Strategic Plan for 2006-2025
Brazil (State of Sao Paulo) Green Economy plan
Cambodia Green Economy Roadmap, 2009
China is investing US$ 468 bn. to green key sectors in its 12th five
-year plan (2011-2015) versus US$ 211 bn over the last five years.
Indonesia long-term development plan 2005-2025.
South Africa national Green Economy Plan

UNEP is supporting initiatives in around 20 countries.

 UNEPs Green Economy Report

FOCUS
Designing and driving
transformation in key
sectors critical or highly
material for greening the
global economy
STRATEGY
Establish Enabling Conditions
(regulations, subsidies, taxes
and related reforms)
Promote public and private
Investment

KEY SECTORS
Agriculture, Freshwater, Forests, Fisheries, Energy, Transportation,
Manufacturing, Waste, Buildings, Cities, Tourism

SCENARIO ANALYSIS
T-21 model, includes Natural Capital , to forecast outcomes on
Capital stock, GDP growth, Employment
UNEP GREEN ECONOMY INITIATIVE
UNEP GREEN ECONOMY INITIATIVE
 UNEPs Green Economy Report

FOCUS
Designing and driving
transformation in key
sectors critical or highly
material for greening the
global economy
STRATEGY
Establish Enabling Conditions
(regulations, subsidies, taxes
and related reforms)
Promote public and private
Investment

KEY SECTORS
Agriculture, Freshwater, Forests, Fisheries, Energy, Transportation,
Manufacturing, Waste, Buildings, Cities, Tourism

SCENARIO ANALYSIS
T-21 model, includes Natural Capital , to forecast outcomes on
Capital stock, GDP growth, Employment
UNEP GREEN ECONOMY INITIATIVE
UNEP GREEN ECONOMY INITIATIVE
 Green Economy : Scenario Analysis
Scenario
Investing 2% of global GDP into ten key sectors for a transition towards
a low-carbon, resource-efficient economy, as against a further 2%
invested in BAU,

Key findings
Greening the economy by investing in natural capital, resource and
energy efficiency, & low carbon energy can lead to:

1. Enhanced wealth & natural capital

2. Higher rates of GDP growth over time
3. Decent employment
4. Reduced poverty

Source : T-21 Model, Green Economy Report,

2% of GDP invested in Greening vs 2% more in BAU
Green Economy : reduces
ecological scarcities

Source : T-21 Model, Green Economy Report,

2% of GDP invested in Greening vs 2% more in BAU
 Green Economy : over time, achieves
GDP growth (%) higher rates of GDP growth

Source : T-21 Model, Green Economy Report,

2% of GDP invested in Greening vs 2% more in BAU
 Green Economy : Creates Employment

Agriculture: Over the next decade, global employment in Agriculture

could increase by 4%

Forests: Forest conservation and reforestation could boost formal

employment in this sector by 20% by 2050.

Transport: Improved energy efficiency across all transport modes

combined with modal shift would increase employment by about 10%
above business-as-usual

Energy: employment that is 20% higher than business as usual by 2050,

while delivering robust economic growth and reduced emissions.
 Green Economy : Natural Capital
and Poverty Alleviation

Indonesia India Brazil

21% 10%
16%
Ecosystem services as a
79%
% of classical GDP 84% 90%

Ecosystem services 99 million 352 million 20 million

dependency
25%

Ecosystem services as a
75%
% of GDP of the Poor
89%
47%

Ecosystem services
Source: Gundimeda and Sukhdev, D1 TEEB
 UNEPs Green Economy Report

FOCUS
Designing and driving
transformation in key
sectors critical or highly
material for greening the
global economy
STRATEGY
Establish Enabling Conditions
(regulations, subsidies, taxes
and related reforms)
Promote public and private
Investment

KEY SECTORS
Agriculture, Freshwater, Forests, Fisheries, Energy, Transportation,
Manufacturing, Waste, Buildings, Cities, Tourism

SCENARIO ANALYSIS
T-21 model, includes Natural Capital , to forecast outcomes on
Capital stock, GDP growth, Employment
UNEP GREEN ECONOMY INITIATIVE
UNEP GREEN ECONOMY INITIATIVE
 Green Economy : Sectoral Success Stories

Many developing nations demonstrate successful, scalable, sectoral

models for transition to a green economy,
Bangladesh Grameen Shakti rural non-grid electrification using
Solar PV, microfinance, kerosene replacement cost pricing
Brazil sustainable city : Curitiba - Bus Rapid Transit System, low
congestion & fuel losses, lower fuel usage, green infrastructure
China Solar Water Heaters household cost saving, relief from
Rheumatoid Arthritis, employment gains, reduced emissions
India NREGA 2005, now $ 8 bn in local transfers, employing 30 mil
ion, for water conservation reforestation,
Kenya feed-in tariffs 2008, initially for wind, biomass & small hydro,
now also geothermal & solar
South Korea Extended Producer Responsibility (EPR) policy on
packaging & products, recycling rate increase, economic benefits
Uganda Organic Agricultural transformation
 Agriculture : Challenges & Opportunities
Approximately 2.6 billion 10 percent increase in farm
people rely on agricultural yields -> 7 % reduction in
production systems for their poverty in Africa, more than
livelihood. (FAO, 2009) 5 % in Asia

525 million small farms

world wide, 404 million less Green farming practices have
than two hectares of land increased yields, especially on
(Nagayets, 2005), Small small farms, between 79 %
farms cultivate 60 % of (Pretty et al, 2006) and 180 %.
arable land (Herren et al.
2010)

An increase in overall GDP coming from agricultural labor productivity is on average 2.5
times more effective in raising the incomes of the poorest quintile in developing countries
than an equivalent increase in GDP coming from non-agricultural labor productivity.

UNEP GREEN ECONOMY INITIATIVE

UNEP GREEN ECONOMY INITIATIVE
 Energy : Challenges & Opportunities
Reductions in energy-related CO2 emissions in the climate-policy scenarios

Marine fisheries catch

80 mil tons
Rebuilding depleted stocks to 113 mil tons/ year
Effective management

Source: World Energy Outlook 2008

UNEP GREEN ECONOMY INITIATIVE

UNEP GREEN ECONOMY INITIATIVE
Enabling the Green Economy

Establish sound regulatory frameworks

Phase out harmful subsidies in energy, water, fisheries
and agriculture
Prioritize public investment towards greening
Limit public spending that depletes Natural Capital
Utilize smart market mechanisms and taxes
Build capacity through training and technology transfer
Strengthen international governence
 Financing the Green Economy
Modeled investments in the range of $1.3 trillion /year ( less
than 1/10 of gross capital formation)
Investment in green sectors is growing :
Investments in clean energy of $200 bn + in 2010, up
from $162 in 2009 and $173 in 2008.
Policy & Subsidy Reform, Public investment, & Green Public
Procurement can leverage private capital effectively

Need for innovative financing routes

Development Financing Institutions local & global
Seeding with Public Finance
Green Climate Fund
REDD+ and other Payments for Ecosystem Services
Resource Taxation & other Eco-Taxes
Thank You !