Transcript Presentation on Green Economy Background paper for GC

Fiscal and Trade Policy Drivers
Steven Stone
Chief, Economics and
Trade Branch
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Modeling
Enabling Conditions
Agriculture
Building
Cities
Energy
Finance
Forest
Manufacturing
Tourism
Transport
Waste
Water
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Green Economy: Approach and Focus
APPROACH
FOCUS
• Selecting and driving transformation in
• On enabling conditions (finance, subsidies,
key sectors - critical or highly material
for greening the global economy
taxes, regulations, and related reforms that
achieve GE objective)
taxes, regulations
Enabling
Conditions
finance
subsidies
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UNEP – GREEN ECONOMY INITIATIVE
UNEP – GREEN ECONOMY INITIATIVE
Fisheries
Business as usual is not an option: State of fish stocks
Source: Froese and Pauly (2004)
UNEP – GREEN ECONOMY INITIATIVE
UNEP – GREEN ECONOMY INITIATIVE
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Fisheries
Example: Fisheries sector
Types of subsidies – leave $ 8 bio ‘good’ subsidies:
MPA’s, fleet buyback, skills training
Investments
Reversing
harmful
subsidies
Type
of subsidies
Impact
Example
Good
Enhance the
conservation
of fish stocks
over time
Bad
Lead to
overcapacity
and excessive
catches
Can either
conserve a
fish-stock or
deplete it
further
Funding fisheries
management/
Using government
spending to
operate marine
protected areas
Fuel subsidies
Managing
Transition
Fiscal policies
Strengthening political
consensus
Ugly
Buyback (or
decommissioning)
to fishing vessel to
reduce a fleet size
Amount
(US dollars in
2003)
$ 7.9 bn
$ 16.2 bn
$ 3 bn
Source: Sumeila et al (2006)
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UNEP – Green Economy Initiative
Fisheries
Distribution of fishing effort around Georges Bank closed areas
Source: Fogarty & Botsford, (2007) , Oceanography 20 (3); pp 112-123
73% of the US haddock catch are taken within 5 km of a
fishery closed area, off the New England Coast.
UNEP – GREEN ECONOMY INITIATIVE
UNEP – GREEN ECONOMY INITIATIVE
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Green economy: What leaders are saying
“What is critical for Barbados and other small island developing states is that the green
economy debate recognizes our structural vulnerabilities, offers a model to assist us in
further realizing our sustainable development aspirations and creates the institutional
platform that enables us to participate in innovative partnerships to help save the
planet.”
H.E. Freundel Stuart , Prime Minister of Barbados, 28 March 2012
“China will honor its commitment to growing a green economy and promoting the
conservation culture. … The key is to combine economic growth, equality and of course
the protection, preservation or even the rehabilitation of natural resources or natural
capital.”
H.E. Hu Jintao, President of China, 12 November 2011
“It seems to me that structural economic transformation and green development in
Africa not only go together but are virtually inseparable.”
H.E. Meles Zenawi, Late Prime Minister of Ethiopia, 25 November 2011
“Our green economic mantra is pro-growth, pro-job, pro-poor, pro-environment – and of course
pro-business….The success of this program (REDD+ Initiative) is critical to our success in
pursuing a green economy. Therefore, let me once again invite all captains of industries here
to contribute to the creation of a green economy and low-carbon future.”
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H.E. Susilo Bambang Yuhoyono President of Indonesia, 28 April 2011
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Green economy: What leaders are saying
“If we want to solve financial and environmental crises, we need to find a solution for
both – and that solution involves green growth - sustainable growth.”
H.E. Felipe Calderón, Former President of Mexico, January 2011
“We have spoken a great deal about using cleaner sources of energy. Today we reaffirm
that commitment and determination to move towards a low-carbon economy.”
H.E. Jacob Zuma, President of South Africa, 5 December 2011
“The challenge of attaining a green economy and sustainable society is huge, but there
is no alternative. …We need a better common understanding of green economy, and
Rio+20 could get us closer to such an understanding.”
H.E. Fredrik Reinfeldt, Prime Minister of Sweden, 11 May 2011
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Rio+20 Outcomes on Green Economy
• Support for those countries wishing to transform their
economies through sharing knowledge, best practices, and
capacity development
• Going “beyond GDP”
• Sustainability reporting
• Sustainable Development Goals
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PAGE – Partnership for Action on Green Economy
UNEP, WB, OECD,
GGGI
UNEP, UNDP, ILO,
Governments, National
Institutions
Green Economy
Report
Green Growth
Demonstrating that Greening
Knowledge
is a new engine for growth,
Platform
addressing hurdles &
Advisory
Services
enabling conditions
UNEP working with 40
Agencies in the UN system
TEEB
ILO, ITUC, IOE,
UNEP
ecosystems & biodiversity,
capturing these values, and
Green Jobs
Initiative
Inter-agency
Partnerships
Networking with
Civil Society and
Private Sector
GEC, GGGF, UN Global
Compact
GEC Green Economy Coalition
GGGF Global Green Growth Forum
Development
GGGI Global Green Growth Institute
ILO International Labour Organization
IOE International Organization of Employers
ITUC International Trade Union Confederation
OECD Organization of Economic Cooperation &
UNDP United Nations Development Programme
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WB World Bank
Advisory Services Countries
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Green Economy and Trade – assessing
risks and opportunities
• GE Transition not without
challenges, particularly for poor
• Previous studies focused on
potential risks, including
related to trade protectionism
GE needs to be
implemented in a fair, open
and transparent manner to
mitigate risks
• BUT, number of trade
opportunities that can create
and strengthen developing
countries’ capacity to benefit
from a transition to a GE and
contribute to poverty reduction
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Preliminary findings – Selected Sectors
•
GE transitions can create economic
benefits, particularly for developing
countries, to expand their presence
in export markets for sustainable
food, products and services
•
Green trade opportunities also exist
in terms of value-addition
relationships, e.g. through
certification
•
Due to growing wealth and changing
consumer preferences, and growth of
cross-border trade, demand for
sustainable goods and services is
likely to further increase
•
GE shift can also yield significant
environmental and social benefits
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Agriculture
•
Strong comparative advantage for many
developing countries, inter alia:
– suitable climatic conditions and rich biodiversity
– less contaminated soils
•
Organic:
– 2010: $59 billion > 2015: $105 billion
– most production is in developing countries (>
75%), most consumption in developed countries (>
95%)
– development of regional organic trade (e.g. South
America)
– increasing demand for value-added organic
products (e.g. juices, spices)
•
Higher price premiums
•
Improved trade balances: use of local, instead
of costly imported, inputs and increased exports
of sustainable agrifood products
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Fisheries
•
Demand for certified fish products
(such as eco-label products) has
gained momentum
•
Sustainable procurement policies
of large international food firms are
likely to further drive demand
•
Processing: developing countries yet
to exploit additional gains with
product certification:
– Growth areas include frozen
organic fish and sustainable
aquaculture
•
Tourism: recreational fishing, whale
watching, scuba diving, etc.
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Forests
•
Developing Countries Trade and Export
opportunities in the forest industry
include:
– certified timber
– recycled timber
– non-timber forest products (NTFPs):
food items, pharmaceutical
ingredients and cosmetic products,
etc.
– forest tourism
•
Currently, demand outstrips supply
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Manufacturing
•
Switching to more efficient
manufacturing will save energy and
resources and enable developing
countries to produce goods for export
at a lower price -> increased
competitiveness
•
Potential to generate new business
from remanufacturing: -> technology
and knowledge transfer, increased
employment and exports
•
Eco-labels to market sustainably
manufactured products -> growing
demand in developed countries
•
New greener products, e.g. energy
efficient products like light bulbs -> new
market opportunities
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Renewable Energy
•
Growing export opportunities for raw
materials and components for renewable
energy supply products (e.g. solar panels,
wind turbines)
•
Entry into supply chains through trade in
intermediate goods key opportunity for
developing countries (encouraged by
government policies, such as feed-in tariffs)
•
Exports of renewable energy: many
developing countries have abundant
renewable energy resources (potential to
export), including solar energy, wind power,
geothermal energy, biomass and hydro
•
Potential opportunities for sustainable
second-generation biofuels
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Wrap- Up: What are the key policy
drivers? On the domestic level…
• Providing support to exporters to meet standards in
international markets
• Creating, maintaining and enforcing a stringent domestic
standards
• Changing fiscal policy (e.g. phasing out environmentally
harmful subsidies) and employing new market-based
instruments (e.g. green public procurement)
• Promoting innovation (i.a. investment in education and
training, support for R&D)
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On the international level?
• Concluding the WTO Doha Round on:
(i) reduction of tariffs and non-tariff barriers to trade in EGS
(ii) discipline of fisheries and agriculture subsidies
• Creating an agreement on a joint effort to bring new
technologies more quickly to the market (open innovation
schemes, international R&D, publicly backed patent pools,
etc.)
• Harmonising or granting equivalency of standards –
ensure that different standard schemes for sustainable
producers do not exclude developing country producers
• Promoting public awareness to increase consumer demand
for sustainable food, products, and services
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Questions for Discussion
• How to ramp up and effectively support those
countries showing leadership in low income
countries?
• How to best leverage financing for green
investments in today’s economies?
• How to begin creating trust at the international
level in facing collective challenges?
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Thank you!
[email protected]
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