Green Economy Initiative

1. Green Economy Initiative United Nations Environment Programme Moustapha Kamal Gueye Acting Head, Green Economy Advisory Services Unit

2. A multidimensional crisis rooted in patterns of development

3. 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.

4. 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

5. Discounting Natural Capital • Global GDP more than doubled between 1981 – 2005. • But 60% of world’s ecosystems degraded/exploited unsustainably (MEA, 2005).

6. Distribution of Costs -> Poor people Natural capital is critical to wealth creation in low income countries. The role of environmental resources in reducing poverty, fighting hunger, and lowering child mortality “…natural capital is essential to wealth creation, accounting for a quarter of 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?

7. Our Capital Space… and our Economic Compass… GDP Growth • Natural Capital • Human & Social Capital • Financial & Physical Capital “We cannot manage what we do not measure” 7

8. Opportunity Amid Crisis

9. 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

10. Green Stimulus

12. 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.

13. Beyond Green Stimulus:Transition towards a Green Economy

14. 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.

15. Green Economy Initiative Components

16. 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

17. Enhancing natural capital, Expanding wealth creation • Approximately 2.6 billion people rely on agricultural production systems for their livelihood (FAO 2009) • 10% increase in farm yields -> 7% reduction 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) • Small farms cultivate 60% of arable land (Herren et al. 2010) • Green farming practices have increased yields, especially on small farms, between 79 and 180%. • 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

18. 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 countries A $ 50 bn global market growing at 10% per annum. US$ 22.8 mil (2007/8) US$ 6.2 mil (2004/5) US$ 3.7 mil (2003/4) OA Exports in Uganda UNEP – Green Economy Initiative

19. Greening Industrialisation Comparison of Energy Intensities 0.45 0.4 0.35 (kg of oil per constant 2005 PPP $ 0.3 Unit of energy use per unit of GDP equivalent) 0.25 0.2 0.15 0.1 0.05 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2006 2007 1990 1991 1992 1993 2003 2004 2005 Year World Sub-Saharan Africa Latin America & Caribbean South Asia Source: International Energy Agency, and World Bank PPP data.

20. GDP and Environment Performance Index in Africa The EPI is constructed from the scores of two policy objectives: Environmental Health, and Ecosystem Vitality. Source: 2010 Environment Performance Index

21. 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).

22. 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.

23. Harnessing Africa’s Clean Energy Potential Source: REN21, Figures from Renewable Energy Potentials 2008

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

25. Measuring Progress: Green Economy Indicators Investment in green sectors Well-being… Supply Demand A set of indicators capturing different aspects of a green economic transition Investment, employment, and output in key sectors of the green economy Decoupling economic growth from impacts on the environment Aggregate indicators of economic progress and well being, including poverty alleviation and natural capital depreciation Green Economy UNEP – Green Economy Initiative

26. Supporting National Initiatives:Green Economy Advisory Services

27. Current Active Engagement Deliverables: • Green Economy Scoping Studies • Green Sector Studies • Green Jobs • Enabling policies • Multistakeholer 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.

28. More Information UNEP Green Economy Website http://www.unep.org/greeneconomy/