towards a green economy...south korea from green new deal (2008) to “5yggp” (2009-2013) green...

Pavan Sukhdev

McKluskey Fellow 2011, Yale University

Founder-CEO, GIST Advisory

Towards a Green Economy

Bogota, 29th February

“A Green Economy is defined as one that results in improved human well-being and social equity, whilst significantly reducing environmental risks and ecological scarcities.”

Green Economy and Sustainable Development: Green Economy is the best economic vehicle to achieve sustainable development goals.

Source: UNEP Green Economy Initiative

Green Economy : Definition


Growth in per-capita inclusive wealth

Growth in Comprehensive wealth

Arrow, Dasgupta, Maler

Stiglitz - Sen – Fitoussi

“Environmentally friendly GDP Growth” of UNESCAP 2005 & “Green Growth” models

Dasgupta

Stiglitz

Green Economy and Sustainable Development: Green Economy is the best economic vehicle to achieve sustainable development goals.


Green Economy : Definition



Green Economy / “Green

Growth”

From GGKP, Mexico City, Jan 2012 :- “Green Growth is about making growth processes (a) resource-efficient, (b) cleaner and (c) more resilient without necessarily slowing them.” (Geoff Heal) “Green Growth is when economic growth and environmental gain are complements not substitutes” (Richard Morgenstern)

Developing nations actively promoting green economy Barbados National Strategic Plan, 2006-2025

Brazil (State of Sao Paulo) Green Economy plan

Cambodia Green Economy Roadmap, 2009

China investing US$ 468 bn. to green key sectors in its 12th five-year plan (2011-2015) vs US$ 211 bn. in the last plan

Indonesia (Province of Kalimantan Tengah) Green Economy Taskforce, 2012, and National Planning to “Green” Economic Corridors

Malaysia (State of Sabah) Development Corridor Plan, 2008-25

Mexico to launch “Green Economy Scoping Study”

South Africa National Green Economy Plan

South Korea from Green New Deal (2008) to “5YGGP” (2009-2013)

Green Economy Initiatives


UNEP is supporting initiatives in over 20 countries Africa as a Focus Region : Ghana, Egypt, Mali, Burkina Faso, Rwanda,

Senegal, South Africa, Africa Regional (UNU-INRA)

Emerging Europe : Armenia, Azerbaijan, Moldova, Montenegro, Serbia, Regional (UNECE)

Green Economy Initiatives


UNEP – GREEN ECONOMY INITIATIVE UNEP – GREEN ECONOMY INITIATIVE

Source: United Nations Human Development Index

Meeting the dual goals of sustainability – High human development and low ecological impact

Source: WWF Living Planet Report 2006

Green Economy: Two Pathways

UNEP – GREEN ECONOMY INITIATIVE

FOCUS • Design and drive

transformation in key sectors critical / highly material for “greening” the global economy

STRATEGY • Establish “Enabling Conditions”

(regulations, subsidies, taxes and related reforms)

• Promote public and private investment

KEY SECTORS • Agriculture, Freshwater, Forests, Fisheries, Energy,

Transportation, Manufacturing, Waste, Buildings, Cities, Tourism

SCENARIO ANALYSIS • “T-21” model, includes Natural Capital , to forecast outcomes

on Capital stock, GDP growth, Employment

UNEP’s Green Economy Report



• Green farming practices have increased yields, especially on small farms, between 79 % (Pretty et al, 2006) and 180 %.

• 10 percent increase in farm yields -> 7 % reduction in poverty in Africa, more than 5 % in Asia

• Approximately 2.6 billion people rely on agricultural production systems for their livelihood. (FAO, 2009)

• 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)

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.

Agriculture : Importance of Small Farms


Green Economy: Reduces

Ecological Scarcities

Source: T-21 Model, UNEP Green Economy Report

GDP growth (%)

Green Economy: over time,

achieves higher growth rates

Source: T-21 Model, UNEP Green Economy Report

Green Economy Sectoral Success Stories

Economic Benefits

Industry/ Highly profitable

Household/ save fuel costs (342 – 3321 yuan)

Environmental Benefits

Reduce fossil fuel consumption

Save 348,000 t SCE of fossil energy/ year

Social Benefits

Reduce risk of CO poisoning, Rheumatoid

arthritis

600,000 employed

China is world’s largest market for Solar Water Heaters • 2/3rd of global capacity

• 10% of population • 4o mil SWH systems

Implementation Plan on Promoting Solar Thermal

Utilization in 2007 (under 11th Five-Year Plan for New and

Renewable Energy)

1. Solar Heaters in China

Source: UNEP Green Economy Initiative (Developing Countries Success Stories)

15 MW(2008)

35 MW

Observed Impacts

Mumias Sugar Company + ten-year power purchase agreement

@US Cents 6/kWh

“TRIPLE WIN”

Reducing fuel dependence

Coping with fuel scarcity and price

Enhancing competitiveness (5-6m factories)

Environmental Integrity

Enhancing energy security (500MW)

Job Creation (200,000 farmers)

Expected Benefits

• Facilitate resource mobilization

• Reduce transaction costs

• Encourage private investors

FTI Policy

Access to Grid

Long-term Power

Purchase

Set Price per kWh

Mandatory Use

FTI Aspects


2. Feed-in Tariffs in Kenya

185,000 ha, 45,000 farmers (2004)

60%/ 359% increase

296,203 ha/ 206,803 farmers (2008)

OA Growth in Uganda

US$ 22.8 mil (2007/8) US$ 6.2 mil (2004/5) US$ 3.7 mil (2003/4)

OA Exports in Uganda

Environmental Impact

48-68% lower carbon emissions Carbon Sequestration

Low fertilizer use

Business Opportunity

Organic food & drink market 97% revenue in OECD countries 80% producers in developing countries


3. Organic Agriculture in Uganda

Policy to transform city and industry

Flood control -> turned vulnerable areas

into parks

Park with buses and bicycle paths (ecological asset +

green infrastructure)

Curitiba Industrial City (CIC) 700 companies, 50,000 direct

jobs, 150,000 indirect jobs

Population increase in a sustainable way

361,000 (1960) – 1,797,000 (2007)

Transport Planning

City Management

Urban Planning

Economic Benefits

Per capita loss from severe congestion 6.7-11 times less

than other cities

Annual fuel losses (per capita) 4.3-13 times less than others

Fuel usage 30 percent lower than other cities


4. Sustainable Urban Planning in Brazil

5. Rural Ecological Infrastructure in India

National Rural Employment Guarantee Act 2005 (NREGA)

Objectives Guarantee wage and employment; Strengthen rural natural resource management Strategy Labor-intensive implementation in 615 rural districts

Ecosystem Initiatives under NREGA Financing for rural works addressing causes of drought, deforestation and soil erosion

Key Benefits and Impacts Improved rural livelihoods &inclusive growth -Work for 30 mln. families per year - Wage increases of 25 % in 3 years

Improved rural ecological infrastructure - 850,000 water conservation works completed from 2006-08 - Estimated 5 mln. liters of water conserved (in Uttar Pradesh,) - Increased crop yields and ground water replenishment (in Andhra Pradesh)


1.9% rate of forest decrease 1.35% annual increase

1990s: Before community forestry

2000-05: With community forestry


6. Forest Management in Nepal

Community Forest User Groups (CFUGs) manage 25% of forest area

Develop their

own

operational

plans

Set

harvesting

rules

Set rates for

products

Decide

surplus

income

distribution

Economic Benefits

Environmental Benefits

Social Benefits

Employment & income for local users

Increased forest area &

density

Community acceptance &

goodwill

Enhanced soil & water

management

Sustainable wood fuel

sources

Quito, Ecuador gets 80% of its water supply from two

ecological reserves

Water users contribute to Trust Fund for Protection of Water

(FONAG)

FONAG finances critical ecosystem services for key

hydrological functions

Results 65,000 ha of watersheds in improved management Upstream farmers and local communities benefit 1800 people receive economic benefits from conservation


7. Ecosystem Services in Ecuador


8. Solar Energy in Tunisia

Solution: Development & use of renewable energy

Challenge: Reduce Tunisia’s oil dependency

National Solar Energy Plan Increase share of RE sources from below 1% to 4.3% by 2014 Tunisian Solar Programme (PROSOL) for solar water heating systems - Financial and fiscal support -Reduced interest rates, VAT and customs duty benefits -20% subsidy on purchase & installation

- 50,000 Tunisian families benefit - 214,000 tonnes of cumulative CO2 emissions avoided -$1.1 billion energy savings, relative to $200 million investment in clean energy infrastructure

By 2016, - expected energy savings of 22% - reduction of 1.3 million tonnes per year in CO2 emissions

Future Benefits

Current Benefits

Planning a Green Economy Example : Kalimantan, Indonesia

22

Pro-growth

Pro-job

Pro-poor

7% (2014)

6.5% (2012)

11% (2012)

Pro-green 26%-41% (2020)

+

Indonesia’s development goals

Source: UKP4

Key Opportunities

Dynamic economy: 5% annualized growth for 2001-10

Bright growth outlook supported by buoyant commodity markets, investor interest and improving macro parameters

Favourable demographics: Half the population is below 30, growing middle class with rising incomes and consumption

Key Challenges

Infrastructure: transport infrastructure in poor condition, telecom and energy infrastructure also a concern

Rigid labor markets and large, inefficient informal sector

Poverty reduction: 1/5th of population still in poverty

Opportunities and Challenges

Source: World Bank, Deutsche Bank

Objectives Investments

Economic Growth

Social Equity

Environmental Health

Tertiary Sectors

- Healthcare - Tourism - Education - Recreation - Cities

- Public Education

- National Health - A.B.S. - Microfinance

- Eco-Tourism - Waste Mngmt. - Public Transport

Secondary Sectors

- Manufacturing - Construction - Power

- Cottage Industry - Renewable Energy - Energy Efficiency - Materials

Efficiency

Primary Sectors

- Agriculture - Timber - Pelagic Fishing - Mining

- Small Farms - Artisanal Fishing - Silvipasture

- Sust. Forestry - REDD+

Master Plan Structure for

“Green Development”

Denpasar

Mataram

Jakarta

Medan

Pekanbaru

Jambi

Lampung

Semarang

Banjarmasin

Palangkaraya

Pontianak

Makassar

Manado

Kendari

Gorontalo Manokwari

Jayapura

1

2

3 4

Serang

Mamuju

IMT-GT

BIMP-EAGA

Surabaya

Merauke

Kupang

Samarinda Sofifi

Wamena

Sorong

Ambon

Palu

Banda Aceh

Padang

Bengkulu

Jogjakarta

Palembang

Tj. Pinang

Pkl. Pinang

6

5

Land-based Products

and Energy Mining and Energy Agriculture, Farming,

and Fisheries

Natural and Human

Resources Tourism and Food

Security

Industry and Service

Indonesia’s Master Plan for

Economic Corridors (MP3EI)

Source: MP3EI, UKP4

Kalimantan : Key Questions…

• What will drive Economic Growth locally ?

• What will reduce rural Poverty ?

• What will reduce urban Poverty ?

• What will secure & create local Jobs ?

• What will maintain local environmental health ?

Objectives Investments

Economic Growth

Social Equity

Environmental Health

Tertiary Sectors

- Healthcare - Tourism - Education - Recreation - Cities

- Public Education

- National Health - A.B.S. - Microfinance

- Eco-Tourism - Waste Mngmt. - Public Transport

Secondary Sectors

- Manufacturing - Construction - Power

- Cottage Industry - Renewable Energy - Energy Efficiency - Materials

Efficiency

Primary Sectors

- Agriculture - Timber - Pelagic Fishing - Mining

- Small Farms - Artisanal Fishing - Silvipasture

- Sust. Forestry - REDD+

Master Plan Structure for

“Green Development”

Amazonas state has the lowest population density in Brazil

But, Manaus is among the top 10 cities in the country

Source: Encyclopaedia Britannica

Green Economy Case Study:

Amazonas, Brazil


Amazonas, Brazil

Reasons for Amazonas’ Rapid Growth

1. Increased Clustering & Urbanization

- 78% ‘cities’ population

Manaus City Population, 1991-2010 (millions)

Source: Wolfram Alpha

Source: IBGE Brazil

0%

20%

40%

60%

80%

2003 2004 2005 2006 2007 2008

Industry Services


Amazonas, Brazil

Reasons for Amazonas’ Rapid Growth

2. Focus on Services

- For Manaus, services were 52.7% of output in 2008 (versus 26.3% in 2003)

- Industry share fell from 73.3% to 47.1% in the same period

Amazonas and Manaus: Key Economic Drivers Industrial Pole of Manaus (PIM) Free trade zone: No import/export taxes Decreasing role of timber, agriculture and livestock Creates sustainable development model, harmonizing economic growth, job creation and forest conservation Key Industries: Brewing, shipbuilding, chemicals, electronics equipment, petroleum refining and tourism Principal exports: electrical equipment, petroleum, chemicals,

forest products

Source: Encyclopaedia Britannica


Amazonas, Brazil

Kalimantan: Low urbanisation and

few large cities

Source: Statistics Indonesia

PROVINCE POPULATION (2010) % IN CITIES

West Kalimantan 4,393,239 25.1

Central Kalimantan 2,202,599 27.5

South Kalimantan 3,626,119 36.3

East Kalimantan 3,550,586 57.6

CITIES PROVINCE POPULATION ANNUALISED

% GROWTH 1990 2000 2011 (Est.)

Palangkaraya Central Kalimantan 99,693 148,197 221,122 3.70

Balikpapan East Kalimantan 334,851 396,909 464,499 1.44

Samarinda East Kalimantan 334,851 346,959 349,238 0.06

Pontianak West Kalimantan 387,441 432,732 475,272 0.86

Banjarmasin South Kalimantan 443,104 527,724 619,570 1.47

Sampit Central Kalimantan 76,821

Tarakan East Kalimantan 75,508 89,161 104,282 1.43

Singkawang West Kalimantan 79,260 94,009 110,331 1.47

Martapura South Kalimantan 140,508

TIER 1 CITIES PROVINCE MAJOR INDUSTRIES

Palangkaraya Central Kalimantan Household industries (wood carving, plaiting,

weaving and beadwork)

Balikpapan East Kalimantan Oil refining, trading of timber, mining &

petroleum products

Samarinda East Kalimantan Timber and logging

Pontianak West Kalimantan Shipbuilding, trading of agricultural products

Banjarmasin South Kalimantan Processing industries (plywood, rattan and

rubber manufacturing)

TIER 2 CITIES PROVINCE MAJOR INDUSTRIES

Sampit Central Kalimantan Timber processing and shipping

Tarakan East Kalimantan

Major port and trading centre for fisheries, forest products and domestic goods

Singkawang West Kalimantan Ceramics, tourism (former gold mining town)

Martapura South Kalimantan Domestic seaport, diamond cutting

Kalimantan: Key industries in

urban areas

Source: United Nations, Tourism Indonesia

Potential “green economy” opportunities for Kalimantan

• REDD+: Average payments estimated at about 2.5% of GDP (or $750 mln) between 2011 and 2030 under GE scenarios

• REDD+ with biodiversity premium around species (for eg. orangutans)

• Sustainable forestry and resource extraction: 25% increase in NTFP income for rural communities by 2030 under GE scenarios

• Ecotourism: Estimated to double by 2030 under GE scenarios

• Sustainable oil palm: Under GE-Sustainable Palm Oil REDD scenario, growth is superior to a BAU approach

• Investments into peat lands and mangrove conservation, with opportunities for PES and climate change adaptation

• Ecologically friendly and sustainable agriculture focused on smallholdings and subsistence farmers

Thank You! www.unep.org/greeneconomy

www.gistadvisory.com

towards a green economy...south korea from green new deal (2008) to “5yggp” (2009-2013) green...

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