Address by Ms. Angela Cropper, Deputy Executive Director
United Nations Environment Programme (UNEP)
Personalities to recognize:
H.E. Mr. Lee Manee, Minister for Environment, Korea [Host]
H.E. Mr. Yu Myung-Hwan, Minister for Foreign Affairs and Trade, Korea
Mr. Chung Rae-kwon, Ambassador for Climate Change, Korea
H.E. Mr. Haruhiko Kuroda, President, ADB
H. E. Dr. Kim Hyung-kook, Co-Chair of Presidential Committee on Green Growth
The financial and economic crisis that led the world into recession is not only indicative of imperfections in our global economic system. It is also the result of a yet inadequate balance in the way we leverage natural capital, human capital and economic capital in the pursuit of sustainable development.
Looking back, we see that global economic growth in the past 50 years has been accompanied by accelerated environmental decline. While global GDP more than doubled between 1981 and 2005, 60 percent of the world's ecosystems have been degraded or exploited unsustainably. Clearly, our current patterns of growth and development, that consume rather than renew natural capital, will eventually undermine the very basis of wealth creation and destabilize the source of livelihoods of the poor and most vulnerable segments of our societies.
To the richest countries of the world natural capital only accounts for 2 percent of the wealth but to the poorest natural capital accounts for 26 percent of the wealth.
The interrelated challenges we face require bold, mutually supportive and transformative responses by the international community. Our ability to respond to current economic challenges will not only by judged by success in restoring economic fundamentals. It will also be weighted on our ability to reorient economic growth and development towards a more sustainable path.
I applaud the initiative of the Republic of Korea in forming the East Asia Climate Partnership; and the very progressive steps it is taking towards a more sustainable path.
UNEP Green Economy Initiative
On 22 October 2008, UNEP together with many leading economists launched the Green Economy Initiative (GEI) aimed at seizing an historic opportunity to bring about tomorrow's economy today.
UNEP's initiative on a Global Green New Deal, inspired by President Roosevelt's concept of a New Deal in the aftermath of the Great Depression, but with an emphasis on "green", is to inspire and enable governments to begin the shift towards a global economy driven by massive job creation from the growth of resource- and energy-efficient building and construction, widespread use of modern public transport in mega cities, the scaling up of renewable energies and sustainable agriculture that reflects the latest thinking in ecosystem management and biodiversity and water conservation.
This Green New Deal Initiative is intended to provide governments with recommendations for consideration in designing and implementing stimulus packages in response to the financial economic crisis; while the Green Economy Report, which will be published in October 2010, will provide an economic analysis and recommendations for a longer-term transition to a green economy.
The green economy that we seek to enable is an economic system that relies on investment in natural, human and economic capital to drive economic prosperity, deliver decent jobs and maintain the Earth's bio-capacity, such that human well-being is created and sustained in a fair and equitable manner, for present as well as for future generations.
We feel that the green economy is an idea whose time has come. It is spearheaded by UNEP in putting together a framework for many pre-existing pieces, but with the backing of a host of UN, institutional, private sector and civil society partners, such as ESCAP in this region.
The road onto the green economy may be long, but we are taking the first steps now and looking forward to walking this greatest journey of the 21st century with like-minded partners. It requires of us innovative and transformative responses to a set of key questions such as: What is the potential for environmental industries to become drivers of future economic growth? What financial, policy and institutional barriers currently inhibit a shift towards a green economy? What national experiences currently exist?
A look at the present situation of many of the so-called green industries suggests optimistic prospects. Examples have been highlighted in a Policy Brief on the Global Green New Deal published by UNEP in March 2009 as well as Pavan Sukhdev's paper today.
A few notes on 3 areas of great potential
1. Renewable energies
Between 2004 and 2007, global new investment in sustainable energy increased from US$33.2 bn to US$148 bn. Countries and industries in East Asia are emerging as important players in these markets. About 2.3 million people have in recent years found new jobs in the renewable energy sector, even though these provide only 2 per cent of global primary energy. In comparison, total employment of the oil and gas, and oil refining industries in 1999 was just over 2 million jobs (UNEP 2008). Globally, projected investments of US$630 billion in the renewable energy sector by 2030 would translate into at least 20 million additional jobs: 2.1 million in wind energy, 6.3 million in solar photovoltaic (PV), and 12 million in biofuels related agriculture and industry.
Apart from its higher direct job creation potential, renewable energy is also expected to secure jobs in downstream industries by reducing related emissions and by reducing the costs of production in the future amidst the carbon constraint and reduced supply of oil and gas, thereby contributing to the competitiveness of final products.
2. Green buildings
Buildings are responsible for 30-40 percent of all energy use, greenhouse gases and waste generation. This is an area with the highest potential for improved efficiency as well as for job creation. Globally the construction sector has a turnover of US$3 trillion annually. A worldwide transition to energy-efficient buildings would create millions of jobs as well as "greening" existing jobs for the estimated 111 million people employed in the sector. Using current building technology, we can already cut energy use by around 80 percent compared to traditional designs. Retrofitting of the existing building stock could provide large investment opportunities and jobs in the immediate future.
Unless there is a major shift away from current patterns of energy use, world transportation energy demand is expected to grow by 2 percent per year, with energy use and greenhouse gas emissions at 80 percent above 2002 levels by 2030. New investment and financing should be directed towards developing an integrated approach to transportation planning and financing, particularly at the urban level, with priority given to investment in energy efficiency and low carbon mobility that is also cost effective, e.g. rail, bus rapid transit systems, integrated public and non-motorized transport, while supporting a doubling of vehicle fuel efficiency worldwide.
It is anticipated that between now and 2050 the global car fleet will triple, and more than 90 percent of this growth will take place in non-OECD countries. The Intergovernmental Panel for Climate Change (IPCC) has indicated that the global fleet's vehicle fuel economy needs to improve by 50 percent by 2050 to stabilize emissions from road transport. This can be achieved with existing technologies - the efficiency of light duty vehicles in OECD countries can already improve by 30 percent over the next 15-20 years. A 50 percent improvement will require the widespread adoption of this efficiency in non-OECD countries and greater hybridization and electrification of fleets.
More than 3.8 million jobs could be created globally through the increased production of low emission vehicles. Up to 19 million additional ancillary jobs worldwide could be created in fuel refining and distribution, sales, repairs, and services. Investment in clean and efficient public urban transit transport also contributes secondary employment effects, with a multiplier of 2.5 to 4.1 per direct job created.
Looking now at this region, we might say that a low carbon green growth in East Asia is central to the emergence of a global green economy
East Asia has become an engine for global economic growth and this region is poised to remain at the centre of global economic change in the decades to come. The remarkable economic performance of countries of the region comes with a central responsibility, as the world seeks to move away from fossil-based and nature consuming economic systems, towards a low carbon green path of development.
UNEP is pleased to see that political and business leaders of the region have not waited for the economic downturn to occur, to turn their attention towards the pursuit of a more sustainable pattern of growth and development. We commend the proposal to establish an "East Asia Climate Partnership" along with the financing Korea will provide.
We also feel encouraged by the early initiative taken by the Republic of Korea through the adoption of a national vision for "Low Carbon, Green Growth".
Initiatives taken by regional institutions, including the ESCAP-led Green Growth Strategy for Sustainable Development for the Asia and the Pacific region, are all an indication of a serious commitment to leverage political and economic capital
The current level of committed spending under stimulus packages announced in East Asia and in other Asian countries gives us confidence in governments' efforts to make the transition. As a whole, the stimulus packages of the Asia Pacific region reflecting "green spending" of about 23 percent of the total stimulus of the region. This compares with a 16.7 percent of green spending in Europe and 11.4 percent in USA (HSBC 2009).
In the Republic of Korea, 80 percent of the announced stimulus package will be on green spending, the highest percentage of green stimulus of all countries.
Republic of Korea and UNEP Collaboration on the Initiative for a Low-Carbon Green Growth in East Asia
We are delighted and encouraged by the fruitful collaboration that has been initiated between the Government of the Republic of Korea, other East Asian countries, regional institutions and UNEP in this process of transformative thinking and action, and we stand ready to support the Seoul Initiative for a Low-Carbon Green Growth in East Asia. I believe it is to date also the sole initiative of this kind.
Following a bilateral meeting between H.E. Mr. Lee Myung-bak, President of the Republic of Korea and Mr. Achim Steiner, Executive Director of UNEP, in October 2008 in Changwon, both sides have embarked on a dynamic effort on green economy.
UNEP is privileged to be working closely with the Korean Government in the process enabling the Initiative on Low-Carbon Green Growth in East Asia. This includes the production in October 2009 of a report on "Low-Carbon Green Growth Roadmap for Developing Countries in East Asia", which will be developed in collaboration with regional institutions and experts in East Asia.
Furthermore, we are also pleased to be working with the Korean Government in the "Korea Green Growth National Vision: Anniversary Review", a review process of the Green Growth National Vision of the Republic of Korea to take place in August 2009.
Ending note: These are challenging times but you are off to a good start. We applaud the initiatives that are being taken in and on behalf of this region, and we are confident that they will be an example to the rest of the world, while helping ASEAN to realize its Vision 2020 which calls for "a clean and green ASEAN with fully established mechanisms for SD to ensure the protection of the region's environment, the sustainability of its natural resources and the high quality of life for its people."
29 May 2009