Monitoring the Transition Towards a Green Economy

Seminar on Green Economy and Official Statistics, Seoul, 6 July 2011

Fulai ShengHead, Research and Partnerships Unit

Economics & Trade BranchDivision of Technology, Industry and Economics

UNEP

A Green Economy is one that results in increased human well-being & social equity, while significantly reducing environmental risks & ecological scarcities.

What is a Green Economy?

In Other Words…

A Green Economy is one whose growth of income and jobs is driven by investments that reduce carbon emissions and pollution, enhance efficiency and sustain biodiversity and ecosystem services.

Why a Green Economy?

• It was born out of multiple crises and accelerating resource scarcity.

• A Green Economy is the economic vehicle for sustainable development.

• A Green Economy has strategies to end the persistence of poverty.

• It is a new economic paradigm that can drive growth of income and jobs, without creating environmental risk.

China - investing US$ 468 billion in greening key sectors by 2015; >double past five years.

Barbados - National Strategic Plan includes green economy as one of its six goals by 2025.

South Africa - launched a process to develop a national Green Economy Plan.

Indonesia - national development plan has a goal of a “green and everlasting Indonesia” by 2025.

Brazil – State of Sao Paulo developed a green economy plan with targets and indicators.

Green Economy in Action

UNEP’s Green Economy Report

Investing or reallocating just 2% of global GDP in 10 key sectors can kick-start a transition to a low-carbon, resource-efficient economy.

BAU vs. a Green Scenario

Green Scenario

2 % of GDP or 1.3 trillion USD per year invested in greening 10 key sectors from 2010-2050.

Policies adopted to help reduce harmful CO2 emissions and subsidies, and incentives created to increase investments, i.e., in natural capital and energy efficiency.

Business as Usual

Current trends assumed to continue with 2% of GDP per year allocated in a BAU across 10 key sectors from 2010-2050.

Policies continue to support investment in non-green infrastructure, harmful fossil fuel and fishing subsidies, etc.

Key Findings

Investing in natural capital, resource and energy efficiency can lead to:

– Higher rates of GDP growth over time and enhanced wealth

– Natural capital stocks– Reduced poverty– Decent employment

Results by 2050

… While preserving

NATURAL CAPITAL

…createemployment

… ensure economic growth

…alleviatepoverty

… outperformBAU

GREEN ECONOMYcan…

UNEP’s Role in Monitoring Progress• Facilitating and catalytic:

what are important issues

• Work in partnership: UNSD, OECD, WB, EUROSTAT, ILO, etc EMG

• Emphasize user perspective policy

• Collaborate with developing countries and promote capacity building

Some Important Issues

National tailoring vs

International comparisons

Relevance vs Data availability

Measured vs Modelled indicators

Basic framework for monitoring the transition

1. Green Investments, Jobs and Sectors

• Investment (monetary)• Employment (jobs)• Output (monetary)

Key SectorsAgricultureBuildings

CitiesEnergyForests

FisheriesManufacturing

TourismTransport

WasteWater

2. Decoupling Impacts & Resource Productivity

GDP per unit…• GHG emissions • Energy use• Water use• Material use• Waste generation

Economy-wide

Selected key sectors

3. Aggregate indicators of progress and well-beinge.g. Adjusted net savings, expanded

wealth estimates, indices of well-being, poverty reduction, Genuine Progress Indicator, etc.

Green Sectors, Jobs …

Economic variables

Economic sectors

Environmental domains

Type of output

TurnoverValue addedEmploymentExports

Env. specific & connected servicesConnected goodsAdapted goodsEnd of pipe technologiesIntegrated technologies

Environmental protection

Resource management

Corporations

General Government

NACE 2-digits levels

Administrative levels

Different levels of detail for presenting data in EGSS (EUROSTAT)

UK market value and employment, LCEGS sector, 2008/09

Sector Market value (£ billion)

Total employed (thousands)

Environmental 22 192

Renewable energy 31 257

Emerging low carbon 53 432

Total 107 881

Source: Innovas 2010

… & Green Investments

52

76

113

151

180 187

243

0

50

100

150

200

250

300

2004 2005 2006 2007 2008 2009 2010

US

$ B

illi

on

Total new investments in sustainable energy

Source: Bloomberg New Energy Finance

Concluding Remarks

• Coordinated efforts, but flexibility

• Importance of economic statistics on the green economy

• Recognize value of SEEA accounting framework for statistics and indicators at national level

• To respond to policy makers urgent needs, explore new approaches