UNEP: $1.3 Trillion a Year Would Turn World Economy Green

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Environmental News Service (ENS)

UNEP: $1.3 Trillion a Year Would Turn World Economy Green

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NAIROBI, Kenya - Investing two percent of the market value of all the world's goods and services into 10 key sectors can start a transition towards a low carbon, resource efficient Green Economy, the UN Environment Programme said today in a new report.

The sum, currently amounting to an average of $1.3 trillion a year, would grow the global economy at the same rate, if not higher, than forecast under current economic models, but without the rising risks, shocks, scarcities and crises common to the existing, resource-depleting, high carbon "brown" economy, says the study.

Compiled by UNEP in collaboration with economists and experts worldwide, the report was presented today to environment ministers from more than 100 countries in Nairobi at the opening of the UNEP Governing Council/Global Ministerial Environment Forum.

Part of a bigger macro-economic study published online, the report is aimed at accelerating sustainable development, meeting and sustaining the UN's Millennium Development Goals agreed by all world leaders in 2000, and lowering the atmospheric concentration of greenhouse gases.

It forms part of UNEP's contribution to preparations for the Rio+20 conference scheduled in Brazil next year - 20 years after 1992's landmark summit in Rio de Janeiro. There, countries agreed on Agenda 21, the world's first blueprint for sustainable development.

World leaders at the 2012 summit, set for May 14-16, are expected to agree on a political document that will guide action on sustainable development policy for decades to come and give rise to a World Environment Organization emerging from the upgrading of UNEP.

Achim Steiner, UN under-secretary general and UNEP executive director, said, "The world is again on the Road to Rio, but in a world very different to the one of the Rio Earth Summit of 1992."

"Rio 2012 comes against a backdrop of rapidly diminishing natural resources and accelerating environmental change," he said, "from the loss of coral reefs and forests to the rising scarcity of productive land; from the urgent need to feed and fuel economies and the likely impacts of unchecked climate change."

"The Green Economy, as documented and illustrated 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. It is rooted in the sustainability principles agreed at Rio in 1992, while recognizing that the fundamental signals driving our economies must evolve in terms of public policy and market responses," said Steiner.

UNEP defines a Green Economy as "one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities."

The 10 sectors identified in the report as key to greening the global economy are: agriculture, buildings, energy supply, fisheries, forestry, industry including energy efficiency, tourism, transport, waste management and water. Such investments must be accompanied by national and international policy reforms, the report emphasizes.

"We must move beyond the polarities of the past, such as development versus environment, state versus market, and North versus South," said Steiner.

"With 2.5 billion people living on less than $2 a day and with more than two billion people being added to the global population by 2050, it is clear that we must continue to develop and grow our economies," said Steiner. "But this development cannot come at the expense of the very life support systems on land, in the oceans or in our atmosphere that sustain our economies, and thus, the lives of each and everyone of us."

Said economist Pavan Sukhdev, on secondment from Deutsche Bank and head of UNEP's Green Economy Initiative, "Governments have a central role in changing laws and policies, and in investing public money in public wealth to make the transition possible. By doing so, they can also unleash the trillions of dollars of private capital in favor of a Green Economy."

"Misallocation of capital is at the center of the world's current dilemmas and there are fast actions that can be taken starting literally today - from phasing down and phasing out the over $600 billion in global fossil fuel subsidizes to re-directing the more than $20 billion subsidies perversely rewarding those involved in unsustainable fisheries," Sukhdev said.

A green investment scenario achieves higher annual growth rates than a business as usual scenario within 5-10 years, the report states. Global demand for energy rises somewhat but returns to current levels by 2050, which is about 40 percent less than what is expected under business as usual due to substantial advances in energy efficiency.

A green investment scenario is projected to reduce energy-related carbon dioxide emissions by about one-third by 2050 compared to current levels. The atmospheric concentration of emissions should be held below 450 parts per million by 2050, a level essential for having a chance to limit global warming to the 2ºC threshold most climate scientists say must be met to avert the most catastrophic effects of climate change.

"A Green Economy is not about stifling growth and prosperity," said Sukhdev. "It is about reconnecting with what is real wealth; re-investing in rather than just mining natural capital; and, favoring the many over the few. It is also about a global economy that recognizes the intergenerational responsibility of nations to hand over a healthy, functioning and productive planet to the young people of today and those yet to be born."

"The Green Economy provides a vital part of the answer of how to keep humanity's ecological footprint within planetary boundaries," said Steiner. "It aims to link the environmental imperatives for changing course to economic and social outcomes - in particular economic development, jobs and equity."

Transition to a green economy will not be without its risks and challenges - from "greening" traditional brown sectors to meeting rapidly changing market demands in a carbon constrained world, the report finds.

Therefore, it concludes, "world leaders, civil society and leading businesses must engage collaboratively to rethink and redefine traditional measures of wealth, prosperity and well-being. What is clear is that the biggest risk of all would be to continue with the status quo."

Click here to read the report, "Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication - A Synthesis for Policy Makers," and the full draft chapters, including the modeling and scenarios.

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