1 Green Growth through Regional Cooperation Hongpeng Liu Chief Energy Security & Water Resources Section Environment and Development Division UN Economic and Social Commission for Asia and the Pacific ASEAN-China Environmental Cooperation Forum 2011 Innovation for Green development

2 Current challenges  Volatile prices, inflation - food, fuel & commodities  Economic uncertainty  Threats of climate change  Poverty reduction slowing  Achievement of MDG 1 in doubt in many developing countries

3 Poverty reduction jeopardized… FAO food price index and brent crude oil price, January 2004 to December 2010 FAO food price index and Brent crude oil price, January 2004 to December 2010 FAO food price index and brent crude oil price, January 2004 to December M fall into poverty M affected by rising prices (oil/energy/ resource/food)

4 Unsustainable Resource Use Patterns  A-P uses > 3 x resources to produce $1 of GDP, compared to the rest of the world * biomass, fossil fuels, metal ores, industrial & construction minerals Domestic material consumption intensity Asia-Pacific Rest of world Source: CSIRO and UNEP Asia Pacific Material Flows database

Scope of Green Development/ Green Growth Investing in Natural Capital VS Greening of the Economy Improving efficiency of the way we use natural capital currently  Green economy

Key Features for GD/GG  Sustainable development: concept & principle  GD/GG: integrating 3 pillars; economy, environment & social  Turning resource / climate crisis into Economic Opportunity  Higher & sustainable growth, more job

 Not for an incremental change, e.g. limited to green technologies, agro-forestry, etc.  Greening whole economy  Creating economy where investing in green can generate profits  With highlights on integrated policy intervention GG/GD aims at System Change - paradigm shift

 By Initiating Structural Transformation  Visible Structure : Development of Eco-Efficient Infrastructure (Built Structures, incl. Buildings, Urban Design, Transport, Energy, Water, Industry, IT application, etc.)  I nvisible Structure : Value Setting, Development Orientation, Internalizing Ecological Value into Price, Regulation, Eco-Efficient Technology, Institutional Capacity etc. Innovations for GG/GD

How to make it happen? How to make it inclusive?  GG/GD (energy/ resource/ carbon efficient growth) is not a choice, but a must  We do not have any other choice  Task: Identifying Enabling Policy Options

Leapfrogging economic policies and strategies for DCs  Internalizing Ecological Value into Price System  Market price does not reflect full cost of processing inputs and outputs  Economic distortions pushed Earth into an ecological deficit  Must internalize ecological costs natural resources into prices of goods  Vicious circle reversible by adopting new economic regime highlighting eco-efficiency

Tax system reform  Tax system based on resource consumption rather than income can stimulate resource efficient development  Tax neutrality  Government has to jump start system change  As GG cannot happen automatically by the current mechanism due to various reasons Indonesian Gov changed subsidies in 2008 Thailand EE revolving funds & tax reform on petro products Cambodia’s GG Committee & national strategy

Opportunities for regional cooperation  Green Business = linking Green Objectives with Profit motivation (new business = additional employment)  Improving ecological efficiency = more competitiveness and resilience when resource prices are high and always fluctuating  New and Growing Market  Environment Industry and management services  New & Renewable Energy Technologies (ASEAN-15% in the total power installed capacity 2015)  Energy / Resource Efficiency (ASEAN - Reduce regional energy intensity of at least 8% (based on 2005 level) by 2015)  3 R etc.

ESCAP: 5 Tracks for GG Roadmap Shifting Focus from Quantity to Quality of Growth Internalizing Ecological Cost: changing price structure Changing the design of infrastructure Promoting Green Business Establishing low carbon economics

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