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Green Economy Initiative

United Nations Environment Programme

Moustapha Kamal Gueye

Acting Head, Green Economy Advisory Services Unit
A multidimensional crisis
rooted in patterns of
development
The global context
Multiple crises: More than a financial and economic crisis:

• Social - 18 to 51 million unemployed over 2007 levels & the
number of extremely poor has increased by at least 100
million people worldwide.

• Fuel - rising prices cost developing economies US$ 400 bn in
higher energy bills in 2007.

• Food - prices cost developing countries US$ 324 bn in 2007.

• Ecosystems - EUR 50 bn worth of biodiversity is being lost
each year.

• Climate - current global GHG emissions at 42 Gt per annum
- 5 times higher than the threshold.
On a business as usual path…
By 2030 and beyond…

 Global energy demand up by 45%
 Oil price up to US$ 180 per barrel
 GHG emissions up 45%
 Global average temperature up 6°C in the next
century
 Sustained losses equivalent to 5-10% of global
GDP as compared to the 3% of GDP loss from
the current financial crisis
 Poor countries will suffer costs in excess of 10%
of their GDP
Discounting Natural Capital

• Global GDP more
than doubled
between 1981 –
2005.

• But 60% of world’s
ecosystems
degraded/exploited
unsustainably (MEA,
2005).
Distribution of Costs -> Poor
people

Natural capital is critical to The role of environmental
wealth creation in low resources in reducing poverty,
income countries. fighting hunger, and lowering child
mortality for a quarter of
“…natural capital is essential to wealth creation, accounting
wealth creation in the poorest countries, while such a share is only 2% in the
world’s richest countries.”
Source: World Bank, 2006, Where is the wealth of nations?
Our Capital Space… and our
Economic Compass…
Natural Capital

pita l
l Ca
cia
an & So
Hum
Financial & Physical Capital

“We cannot manage what we do not measure”

7
Opportunity Amid Crisis
The Global Green New Deal
• Revive the world economy, create new and decent
jobs, and protect the vulnerable

• Reduce carbon dependency, ecosystem degradation,
and water scarcity - 1% of GDP in green sectors over two
years

• Eliminate persistent poverty by 2015…achieve the
MDGs

• Seed a process of transformative change by rebalancing
financial and economic capital, human capital and natural
capital

From : “Rethinking the Economic Recovery: A Global Green New Deal”, UNEP, Feb 2009
Green Stimulus
G20 Green StimulusSpending Per Sector
(US$ Billion)
140
120
100
80
60
40
20
0
te
id

er

r
EE

les
il

he
Ra

as

ow
Gr

ing

hic
Ot
/w

eP

Ve
S/
ild
er

CC
bl
Bu
at

on
wa
W

rb
ne

Ca
Re

w
Lo
Source: HSBC Global Research, UNEP
South Africa’s Green Stimulus

• South Africa launched a $7.5 bn fiscal stimulus for 2009-2011.
• Around 11% or $0.8 billion was allocated to environment-related
themes.
Beyond Green Stimulus:
Transition towards a
Green Economy
Definition of Green Economy

• A Green Economy is characterized by
substantially increased investments in
economic sectors that build on and enhance
the earth’s natural capital or reduce
ecological scarcities and environmental
risks.

• These investments are driven by or
supported by national policy reforms and the
development of international policy and
market infrastructure.
Green Economy Initiative
Components
Fostering a Green Economy in
Africa

“We see the green economy as an
opportunity to respond to the notion that
there is a trade-off to be made between
faster economic growth and sustainable
development, and the preservation of our
environment”

President Jacob Zuma, South Africa
Enhancing natural capital, Expanding wealth
creation
• Approximately 2.6
billion people rely on
agricultural production • 10% increase in farm
systems for their yields -> 7% reduction
livelihood (FAO 2009) in poverty in Africa,
more than 5% in Asia
• 525 million small
farms world wide,
404 million less than
two hectares of land
(Nagayets 2005)
• Green farming
practices have
•Small farms increased yields,
cultivate 60% of
especially on small
arable land (Herren
farms, between 79 and
etAn
al.increase
2010)in overall GDP coming from agricultural labor productivity is on
180%.
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
Uganda’s Organic Agriculture Transformation

Organic Agriculture
48-68% lower carbon
emission
Carbon Sequestration

Organic food &
drinks:
97% of revenues
in OECD countries
80% of producer
in developing
US$ 22.8 mil (2007/8) A $ 50 bncountries
US$ 6.2 mil (2004/5) global market
US$ 3.7 mil (2003/4) growing at
OA Exports in Uganda 10% per
UNEP – Green Economy Initiative
annum.
Greening Industrialisation
Comparison of Energy Intensities
Unit of energy use per unit of GDP
(kg of oil per constant 2005 PPP $

0.45
0.4
0.35
equivalent)

0.3
0.25
0.2
0.15
0.1
0.05
0
1994

1996

1999

2000

2002

2006
1991

1995

1997

1998

2001

2003

2005

2007
1990

1992

1993

2004
Year

World Sub-Saharan Africa Latin America & Caribbean South Asia

Source: International Energy Agency, and World Bank PPP data.
GDP and Environment Performance Index in
Africa
Relationship between 2010 EPI and GDP for African Countries
Environmental Performance Index

100.0
90.0
Mauritius
80.0
Ivory Coast
70.0
Namibia Tunisia Morocco Algeria Egypt
60.0
(EPI)

Kenya Libya
50.0
South Africa
Ethiopia
40.0
Cameroon Angola Nigeria
30.0
Senegal
20.0 Niger 2
R = 0.0445
10.0
0.0
4.50E+08 1.00E+11 2.00E+11 3.00E+11
GDP (2010 US$)

The EPI is constructed from the scores of two policy objectives:
Environmental Health, and Ecosystem Vitality.
Source: 2010 Environment Performance Index
The Challenge of Energy
• Limited access to energy is one of the greatest
challenges to achieve the MDGs in Africa.

• African firms lose 5% of their sales due to frequent power
outages, a figure that rises to 20% for informal firms
unable to afford backup generation.

• Overall, the economic costs of power shortage are 1 to
2% of GDP (World Bank, 2010).

• Investments in clean energy remain minor in Africa,
totalling $0.9 billion in 2009 (SEFI, 2010).
Green Jobs through Clean
Energy

• About 2.3 million jobs in renewable energies in comparison to 2
million employed in oil & gas refining industry in 1999.

• Globally, investing US$630 bn in the renewable energy sector by
2030 would create 20 million additional jobs.
Harnessing Africa’s Clean Energy
Potential

Source: REN21, Figures from Renewable Energy Potentials 2008
Enabling Just Transitions

Pricing
Sustainable Instruments
Public
Favoring Procurement
Green over
Brown
Draw lessons
•Incentivize
Describe major
green
policies •Create and
investments
•Government stimulate
and correct
markets for
•From enabling policies and green goods
negative
conditions infrastructure Capacity
externalities
•Governments can and services Building
•Private identified in
sector encourage
investors
chapters private sector •“Enable the
•businesses to invest in enablers" in
environmenta developing
lly sustainable countries
ventures

UNEP – GREEN ECONOMY INITIATIVE
UNEP – GREEN ECONOMY INITIATIVE
Measuring Progress: Green Economy
Indicators
A set of indicators capturing different aspects of a green economic
transition

1. Investment,
Supply Demand employment, and
output in key sectors
of the green economy
2. Decoupling economic
growth from impacts
on the environment
3. Aggregate indicators of
economic progress and
well being, including
Green poverty alleviation and
Economy natural capital
UNEP – Green Economy Initiative
depreciation
Supporting National Initiatives:
Green Economy Advisory
Services
Current Active Engagement
2010 – 2012 rollout countries
• Africa: Regional project in 7 countries - Burkina Faso, Egypt,
Ghana, Kenya, Rwanda, Senegal, South Africa.
• East Asia: China, Indonesia, PNG, Philippines, Rep. Korea.
• Europe: Armenia, Azerbaijan, Moldova, Ukraine.
• Latin America and Caribbean: Barbados, Brazil, Dominica,
Mexico – regional initiative in the
Caribbean.
• West Asia: Jordan, League of Arab States.

Deliverables:
• Green Economy Scoping Studies
• Green Sector Studies
• Green Jobs
• Enabling policies
• Multistakeholer engagement
More Information

UNEP Green Economy Website

http://www.unep.org/greeneconomy/