As price-hikes within the energy and food sectors put tough restraints on the flourishing of many countries’ GDP, the world’s economy could be described as crawling along at best. At the same time, the scientific community is still warning of global climate change and impending environmental catastrophe.
It has long been recognised that humanity’s current economic systems coupled with an over-reliance on fossil fuels is not conducive to a sustainable, low carbon economy. As part of a response to this, the United Nations Environment Programme (UNEP) has recently produced a report [1] claiming that investment in green economies will stimulate economic growth and lead the world toward an age of sustainable development.
The report, which has been published at a meeting in Kenya this week (22.2.2011), states that an investment of just 2 percent of current global GDP (about US $1.3 trillion) can deliver a green economy and kick start the transition to an economic system that would avoid the risks of climate change, water scarcity and the loss of ecosystem services [2].
The report’s findings claim that with a redirecting of investment and a reformation of domestic and international policies, the global economy would grow by higher levels than predicted in other scenarios. It is argued that by 2050 this could lower the global ecological footprint by 50 percent compared to a business as usual scenario.
The method for achieving the report’s goals is fundamentally a decoupling from growth that relies upon the material and energy intensive investments of today. It will involve the reallocation of subsidies that are currently given to sectors within the ‘brown’ economy. For example, the fossil fuels industry receives around $600 billion in subsidies and the phasing out and redirecting of these would go a long way to funding the transition.
There are ten key sectors that have been cited as the main areas for change if a green economy is to be realised, these are: agriculture, buildings, energy supply, fisheries, forestry, industry including energy efficiency, tourism, transport, waste management and water. The $1.3 trillion would be invested as follows:
- $108 billion for greening agriculture.
- $134 for greening the building sector.
- $360 billion for greening the energy supply sector.
- $110 billion for fisheries, including what would be a controversial reduction in fleet sizes.
- $15 billion for forestry.
- $75 billion for greening industry.
- $135 billion for greening the tourist industry.
- $190 billion on greening the transport industry.
- $110 billion on waste and recycling.
- A similar amount on the water sector.
Achim Steiner, UNEP Executive Director and UN Under-Secretary General said “The Green Economy provides a vital part of the answer of how to keep humanity’s ecological footprint within planetary boundaries. It aims to link the environmental imperatives for changing course to economic and social outcomes—in particular economic development, jobs and equity,”
Another catalyst for growth is poverty eradication. The report highlights a case study in India where over 80 percent of the £5 billion of a rural employment guarantee act has been invested in water conservation, irrigation and land development. This has resulted in not only major environmental gains and better sanitary conditions for millions of people, but also the creation of employment benefiting nearly 60 million households.
The upshot of adopting the ideas put forward in the report would be a redistribution of the winners and losers, with the environment faring better than it does today. In turn the result would be a low carbon, resource efficient economy that would benefit both the developed and developing worlds.
Opinion
While this report makes many very good arguments, it is unlikely to be realised in anywhere near the numbers that are spoken about. A major objective of this report is to underline the sustainable public policy and investment path on the Road To Rio+20 in 2012. As such it will form an initial part of the green lobby’s negotiating at this conference. As it will involve the shrinking of some industries and the reallocation of money and jobs to other, greener, sectors, this proposition will not go unopposed.
Naturally by sticking its head above the parapet and calling for such huge amounts of capital to be reinvested in so many sectors, the report is going to come under fire from many areas. This does not, however, undermine the validity of the UNEP’s findings.
While it may involve massive investment, it must be remembered that the report calls for only 2 percent of GDP to be invested. A few years ago, the $1.3 trillion dollars cited in the report would have seemed like an astronomical sum of money. However, compared to the figures seen in the media recently associated with the near collapse of the banking system, this doesn’t seem so high a price for a large step towards sustainability.
References
[1] http://www.unep.org/greeneconomy/GreenEconomyReport/tabid/29846/Default.aspx
[2] http://www.unep.org/greeneconomy/Portals/88/documents/ger/GER_summary_en.pdf
