1. Derek Eaton Division of Technology, Industry & Economics Economics & Trade Branch Geneva, Switzerland “Designing the Green Economy” Centre for International Environmental Studies The Graduate Institute 13-14 December 2011

2. Why a Green Economy? Initiative born out of multiple crisis and accelerating resource scarcity An economic strategy for sustainable development, driving growth in income and employment, without creating environmental risks A Green Economy can, and should, contribute to poverty reduction

3. 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?

4. 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.

5. Green Economy Report FOCUS Designing and driving transformation in key sectors critical for greening the global economy STRATEGY Establish “Enabling Conditions” (regulations, subsidies, taxes and related reforms) Promote public and private Investment KEY SECTORS Agriculture, Forests, Fisheries, Water Renewable Energy, Transportation, Manufacturing, Waste, Buildings, Cities, Tourism SCENARIO ANALYSIS “T-21” model, includes natural resource stocks, to forecast outcomes on Capital stock, GDP growth, Employment

6. Resource efficien cy GDP Demand of Natural Resourc es Supply of Natural Resourc es Fossil fuels, water, forest Approach – Methodology (3)

7. Green Investment Scenario Scenario Investing 2% of global GDP into ten key sectors for a transition towards a low-carbon, resource-efficient economy. Key findings Greening the economy by investing in natural capital, resource and energy efficiency & low carbon energy can lead to: 1.Enhanced wealth & natural capital 2.Higher rates of GDP growth over time 3.Decent employment 4.Reduced poverty 5.Enhanced natural capital

8. GDP growth (%) Green Economy : over time, achieves higher rates of GDP growth …

9. Green Economy : reduces ecological scarcities…

10. CO 2 Emissions

11. Enabling the Green Economy Establish sound regulatory frameworks Phase out harmful subsidies in energy, water, fisheries and agriculture Prioritize public investment towards greening Limit public spending that depletes Natural Capital Use smart market mechanisms and taxes Build capacity through training and technology transfer Strengthen international governence

12. Financing the Green Economy Investments in the range of $1.3 trillion /year (less than 10% of gross capital formation) Investment in green sectors is growing : Renewable energy of $211 bn + in 2010, up from $160 in 2009 and $33 in 2004. Policy & Subsidy Reform, Public investment, & Green Public Procurement can leverage private capital effectively Need for innovative financing routes… Development Financing Institutions – local & global Seeding with Public Finance Green Climate Fund REDD+ and other Payments for Ecosystem Services Resource Taxation & other Eco-Taxes

13. Green Economy Initiatives Many developing nations are actively promoting transitions to a green economy, – Barbados National Strategic Plan for 2006-2025 – Brazil (State of Sao Paulo) Green Economy plan – Cambodia Green Economy Roadmap, 2009 – China is investing US$ 468 bn. to green key sectors in its 12th five-year plan (2011-2015) versus US$ 211 bn over the last five year. – Indonesia long-term development plan 2005-2025. – South Africa National Green Economy Plan UNEP is supporting initiatives in more than 20 countries.

14. Emerging Economies Leading Transition Countries are developing Green Economy strategies and activities to spur greater economic growth and jobs, environmental protection and equality. Emerging economies are playing a driving role -- Indonesia, the Republic of Korea and South Africa, already have national Green Economy plans. Initiatives cover energy-related measures but also decoupling materials use and waste generation: The Republic of Korea’s policy of Extended Producer Responsibility has triggered 14% increase in materials recycling rates, providing an economic benefit of $1.6 billion Brazil’s recycling already generates returns of $2 billion a year, while avoiding 10 million tones of greenhouse gas emissions; a fully recycling economy there would be worth 0.3 per cent of GDP.

15. China’s 12 Five Year Plan China is the world’s lead investor in renewable energy, overtaking Spain in 2009 and spending US$ 49 billion in 2010. Overall, China is committed to spending US$ 468 billion over the next five years, more than double the previous five years, on key industries, including renewable energy, clean technologies and waste management Objectives of 5 year plan include (among others):  Reduce water consumption of unit of industrial added value by 30%  Increase agricultural water irrigation efficiency by 53%  Increase percentage of non-fossil fuel among primary energy consumption by 11.4%  Reduce energy consumption per unit GDP by 16%  Reduce CO2 emission per unit GDP by 17%  Increase forest coverage by 21%.

17. Innovation, Growth & Resources GER: increasing resource scarcity & local/regional externalities Role of innovation and technological change in driving green growth: resource-efficient, low-carbon, complementary to natural capital Policies / enabling conditions especially in emerging economies and developing countries (innovation & technology transfer)

18. McKinsey Global Institute – Resource Revolution November 2011

19. Derek Eaton Division of Technology, Industry & Economics Economics & Trade Branch Geneva, Switzerland “Designing the Green Economy” Centre for International Environmental Studies The Graduate Institute 13-14 December 2011