Karl Hallding Stockholm Environment Institute ”Is a Green Economy Possible? The Growth Dilemma of China and the Emerging economies” Karl Hallding Stockholm Environment Institute When I present I usually manage to stir up some controversy. But as I have listened to the earlier speakers here today I will most likely only kick in already open doors.  Is a green economy possible? And what is a ”green economy” really? Try to reflect on these questions by looking at what is happening around development and green economy in the emerging economies. Doing so by taking a view on these challenges from a emerging economy horizon with key examples from China.

Since half decade the momentum in the global economy is coming from the emerging economies. That is where the drama is unfolding. China and India combined, accounts for lion’s share of progress towards MDGs on poverty eradication. Almost ½ billion between 1990 and 2005 and an additional over 300 million people to 2015. Not public programmes or international aid programmes – reduced poverty is a side-effect of economic development. China and India are the most obvious examples. 2

At the same time it is economic development in China, India and the other emerging economies that accounts for the lions share of the growth in greenhouse gas emissions since 1990. China alone is the source of 60% of the global increase in CO2 emissions since 2000.

Does the pathway exist that combines lifting another billion people out of poverty and to meet the requirements of another 2 billion new global citizens, while keeping within the planetary boundaries? And which are the consequences of not finding that blessed but elusive path into the future? Growing pressures population and economic development drives the mounting pressures on limited common resource pools at global and local levels. Drama in emerging economies Still growing populations and a growth machinery driven by combination of thrift and real development needs

At the same time there are clear signs in the emerging economies of development of a “green economy” However not driven primarily by “green” concerns, but realisation about need to increase resource efficiency of the economy in general, and mitigate import dependency of fossil fuels in particular.

This is what brings the emerging economies together in a new geopolitical pattern of action in international affairs. There are not enough global resources for these populous countries to move towards affluence along the same path as the Global North has done.

COP 15 story and the new geopolitics of climate change

Zoom in on Chinas development dilemma and how the challenges for sustaining development has made China pass through a “political tipping point” Early 2000s endemic black-outs as result of rapid urbanisation and industrialisation took off

Since 2002-3 China’s rapidly need for oil imports drives world marked prices Boomerang effect on costs and inflation in China

China’s growing resources footprint is already causing geopolitical consequences that are bound to increase

Peak coal? Coal is also an increasingly scarce resource conditioned by several difficult bottlenecks

2007-9 China moved from a net exporter to a net importer of coal

Water stress risk profile Pressures on domestic resources, many of which are accentuated by climate change, adds motivation for change in line with a “green economy”

Total value added from cleantech (billion EUR) Big emerging economies are at the forefront of a global change where cleantech plays an increasing role in generating economic value added.

Dilemma that notwithstanding a revolutionary development of markets for and production of cleantech in China and the other emerging economies, this development is still outpaced by the monumental development needs and the momentum of the economic growth. The “brown” economy is still growing faster than the “green” Horse race – the green and the brown horse – which is winning?

economies. They play a decisive role for us to stand a chance to meet the crisis of environmental limits, changing ecosystems and mounting resources competition. These countries need to take on a bigger responsibility in line with their growing role in the global economy. But for that to happen they also need space to play a constructive role in the international system. What is a “green economy” then really? If I were a negotiator from an emerging economy I would be suspicious of this terminology. And I do not really like it myself. It makes us think of it as a “green” sector policy that is somehow divorced from the “real” economy. The “green” economy is of course really the “new” economy. It is the economy that is defining the future with winners and losers.