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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.
UNEP’s Green Economy Report

FOCUS STRATEGY
• Designing and driving • Establish “Enabling Conditions”
transformation in key (regulations, subsidies, taxes
sectors critical or highly and related reforms)
material for greening the • Promote public and private
global economy 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
UNEP’s Green Economy Report

FOCUS STRATEGY
• Designing and driving • Establish “Enabling Conditions”
transformation in key (regulations, subsidies, taxes
sectors critical or highly and related reforms)
material for greening the • Promote public and private
global economy 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
UNEP’s Green Economy Report

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