UN Calls for 2% GDP Investment in Green Economy
INVESTING two percent of global GDP into ten key sectors can kick-start a transition towards a low carbon, resource efficient Green Economy a new report launched this week states.
The report, ‘Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication’, says that investing 2% of worldwide GDP, which about $1.3 trillion a year and backed by forward-looking national and international policies, would grow the global economy at the same or higher rate than most forecasts. 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, which underwrites at least 100 days of paid work for rural households, is invested in water conservation, irrigation and land development.
Currently, the world spends between one and two per cent of global GDP on a range of subsidies that often perpetuate unsustainable resources use.
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 and decent 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 findings were presented on Monday to environment ministers from over 100 countries at the opening of the UNEP Governing Council/Global Ministerial Environment Forum.
UN Under-Secretary General and UNEP executive director Achim Steiner said: “The green economy as documented in UNEP’s report offers a focused and pragmatic assessment of how countries, communities and corporations have begun to make a transition towards a more sustainable pattern of consumption and production,”
“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,” says Pavan Sukhdev, head of UNEP’s green economy initiative and on secondment from Deutsche Bank.
Picture from lumaxart
Wednesday 23rd February 2011