Steiner on Green Economy: Is it a Solution and what are the Implications for Rio+20?

At a Side Event hosted by the Permanent Mission of the Federal Republic of Germany to the United Nations and the Permanent Mission of the Republic of Yemen to the United Nations

New York, 17 May 2010 - H E Ambassador Peter Wittig of the Federal Republic of Germany

H E Ambassador Abdullah M. Alsaidi of the Republic of Yemen

Distinguished delegates, members of the United Nations family, ladies and gentlemen,

Two years ago, UNEP launched the Global Green New Deal/Green Economy Initiative, as nations around the world struggled with successive food and fuel price surges and persistent environmental challenges, compounded by a deep financial and economic crisis.

The basic thrust behind the Green Economy thinking is that the economic models of the 20th century are unlikely to assist in achieving the multiple goals the international community has set ranging from combating climate change to supplying freshwater, sufficient food and overcoming poverty.

Indeed it is clear that a fresh and more sophisticated lens and strategy is needed if we are collectively thrive, let alone survive over the coming years and decades.

A Global Green New Deal report, released to coincide with UNEP's annual gathering of environment ministers in February last year, recommended that one per cent of global GDP or somewhere under a third of the global stimulus packages, might assist in seeding a process of transformational change.

Such investment, allied to smart policy reforms, market mechanisms and creative fiscal measures, could set the stage for a transition to a low carbon, far more resource efficient global Green Economy.

More importantly, it could make a significant contribution to reducing poverty and expanding the range of economic, social and environmental benefits that our society could generate from a better management of our "natural capital".

Many Governments shared the idea of the Green New deal

These principles, vision, goals and arguments gained traction across capital cities world-wide.

Indeed, many governments responded to this call by allocating, to various degrees, portions of their fiscal stimulus to green economic sectors such as renewable energies and energy efficiency improvements, sustainable agriculture, and better management of water and waste.

The Republic of Korea was particularly engaged in this respect, having earmarked $31 billion, over 80 per cent of its total stimulus to Green New Deal.

The Republic of Korea went further by expanding its Green New Deal and turning it into a full Five-Year Plan for Green Growth, with a commitment to spend 2 per cent of GDP over the next five years.

I would like to stress here that while a large junk of fiscal stimulus emanated in developed countries, it was not confined there.

Developing countries too committed important sums to foster an economic recovery conducive to more economic and environmental sustainability, social inclusion, and poverty reduction.

China's green stimulus of $218 billion, out of a total $650 billion stimulus, included as a key element the construction of much needed water infrastructure expected to benefit 14.6 million people, thereby contributing to the achievement of the related MDG.

The Indonesian government's stimulus package of $6.3 billion included $1.05 billion spending on infrastructure projects and empowerment programs for people living in rural areas

About $172 million would be spent to build roads in villages and municipalities, and irrigation schemes, which ―can quickly generate employment.

The Republic of South Africa launched a $ 7.5 billion fiscal stimulus for period 2009-2011 with a primary focus on investments that create more decent jobs, and related to this, investments in infrastructure.

Nearly $ 1 billion is being spent in railways, energy efficient buildings, and water and waste management.

Green Economy can indeed be a solution

Excellencies and delegates, while these are remarkable steps, we are even more encouraged by further signals of a clear long-term commitment to the vision of a Green Economy.

Last year, the Government of Cambodia adopted a National Green Growth Roadmap which proposes a number of interventions aimed at mainstreaming Green Growth into the overall development framework of Cambodia.

Last month, Indonesia's Finance Minister announced the launching of Green Economy programme, as, I quote, "part of Indonesia's sustainable development plan which is pro-growth, pro-job, and pro-poor"

This month, the Republic of South Africa is hosting a Green Economy Summit on 18-20 May 2010 that would set the stage for the development of a Green Economy Plan for that country.

Today, the Government of Kenya is seeking to implement a $ 99 million restoration of the entire Mau Forest Complex, the largest closed-canopy forest ecosystem in Kenya covering over 400, 000 hectares.

It is doing so, recognizing, in Kenya's Prime Minister's own words, that "Kenyans have accepted that the restoration of the Mau and other water towers is a critical sustainable development imperative. Consensus has now emerged that the very existence of many communities and the welfare of the country depend on how we live with our forests and our ecosystems, and indeed how we address the key environmental challenges of our time."

These very important strategies, plans and policy goals are illustrative of a belief and resolve.

This belief is that indeed, the new economic systems that we seek to promote could provide opportunities for both developed and developing countries alike.

It could indeed be a solution.

I refer to a recent statement by President Felipe Calderón of Mexico at the United Nations University, that "there are opportunities of commercial and industrial growth for developing countries from the new economy, which will be a green economy".

In September last year, APEC Economic Leaders adopted a declaration making a commitment to seek sustainable economic growth, recognizing that "responding to climate change through transition to green economies also offers opportunities."

In the same vein, in May of last year, the first ever joint meeting of African Finance, Economic Planning and Environment Ministers in Kigali, Rwanda, adopted a communiqué of historical importance.

Ministers "recognize that opportunities do exist for Africa but some prerequisites need to be put in place. These include creating an enabling environment to support the transition towards a green economy and pursuing low carbon growth, as well as facilitating the private sector to play a crucial role in the transfer and adoption of clean technologies."

I could go on with similar examples from around the world, where not only rethoric, but also concrete actions are starting to take place, that seek new approaches to building lasting prosperity.

Increasing evidence of the benefits of green investment

We are gaining increasingly evidence that green investment does generate better economic, social and environmental returns.

Countries and companies that are investing in tomorrow technologies are already seeing the benefits starting to accrue today.

Germany, which invested in the development of renewable energies, has a renewable energy industry that generates $240 billion a year and employs 250,000. It is estimated that by 2020, renewable energies will generate more jobs than the country's automobile industry.

In China, renewable energies generate revenues of $17 billion per year and employ 1 million people, of which 600,000 are focused on the construction and installation of solar thermal heaters.

These trends are being carefully observed by investors, leading to new patterns of investment.

For example, in 2008, for the first time, investments in renewable energy power generation at $140 billion surpassed investments in fossil fuel power generation at $110 billion.

These benefits are not limited to the developed and rapidly emerging economies. Developing countries also could gain significantly in areas where they can be more competitive.

For instance, global sales of organic foods and drinks are estimated to be at US$50 billion, and the market is increasing by US$5 billion a year. While 97 per cent of the revenues are generated in OECD countries (Europe, US, and Japan), 80 per cent of the producers are in Africa, Asia and Latin America.

This not only presents an opportunity for increasing trade and incomes in developing countries, it also provides these countries with an opportunity to be an active part in addressing global environmental challenges such as climate change and soil and water conservation.

Fisheries are another economic sector that is so vital for livelihoods, employment, food security and development in many parts of the world.

This sector offer huge opportunities for a Green Economy.

When we look at global marine fisheries today, an industry employing directly 35 million people and indirectly up to 170 million, we see a total value added of $17 billion (in 2005).

Yet, our analysis tells that this sector is underperforming both in economic and social terms.

Greening the fisheries sector by rebuilding depleted stocks and putting in place effective management could increase marine fisheries catch from about 80 million tons to an estimated 113 million tons a year.

This gives a total catch value or gross revenue of about $ 120 (against the current $ 85) billion annually.

The Economics of Ecosystems and Biodiversity (TEEB) is another facet of this new knowledge generation.

Funded by among others the European Commission, Germany, Norway and the UK, it is taking the invisibility of the world's natural or nature-based assets into the visible spectrum.

TEEB's final report will be launched before the Convention on Biological Diversity's big meeting in Nagoya, Japan later in the year.

But let me perhaps leave you with one fact from TEEB's interim report.

Across the tropics, mangroves are being cleared for shrimp farms. Subsidized commercial shrimp farms can generate returns of around US$1,220 per hectare by clearing mangrove forests.

But according to a TEEB study from Thailand this does not take into account the deficits to local communities totaling over $12,000 a hectare linked with losses of wood and non-wood forest products, fisheries and coastal protection services.

Nor does the profit to the commercial operators take into account the costs of rehabilitating the abandoned sites after five years of exploitation - estimated at over US$9,000 a hectare.

North-South and South-South Cooperation

Excellencies, delegates,

There is no doubt in our mind about the resolve of developing countries to seek a new approach to growth and development -

- One that ensures that the potential for long-term gains for the global, regional, and national economies are not overshadowed by a focus of short-term benefits that undermine our chances for a sustainable future.

For this inspirational goal to materialize, and to do so in as many parts of the world as possible, countries will need to further promote international exchange, cooperation and mutual support.

Developing countries will need to be supported in their national efforts by the international community.

We can see encouraging efforts starting to take place. For example, under the German Transfer Renewable Energy and Efficiency (TREE) project, launched in 2008 with annual project funding of US$ 130 million, technical support on the development of renewable energy is being provided to over 50 countries.

Equally important is the promotion of South-South cooperation.

South-South cooperation has proven to be successful in many areas where rapidly developing countries can share their experiences with the other developing countries.

Supporting national Green Economy initiatives

UNEP and other agencies within the United Nations system are keen to bring our support to regional and national initiatives on Green Economy.

Many economies, including a large number of developing ones, are now requesting assistance on how best to tailor a Green Economy to their often differing developmental, social and environmental departure points and circumstances.

And this is right across the sectors identified by the Green Economy partnership including clean energy and cities to transport and agriculture and what I would term ecological infrastructure?forests, wetlands, soils and so on.

To date, close to 30 countries have requested UNEP's assistance towards making the Green Economy a reality in their economic planning and development strategies.

We are committed to work together with Governments, and to build critical partnerships with other agencies, the private sector and civil society to support processes of transformative change that we see taking shape around the world.

This support is taking the form of policy advice and macro-economic assessments to better understand the full range of opportunities and challenges of a Green Economy in specific country and regional contexts.

It also occurs through facilitation of national consultations on Green Economy, which can be informed by international experience in other regions and countries of the world.

Excellencies, delegates,

As you are well aware, the Green Economy will take centre stage in the process towards the Rio+20 conference scheduled for 2012.

This represents a major opportunity to reshape our economic thinking, revamp processes of reform, and reframe our approach to development such that its delivers more effectively on the economic, social and environmental dimensions of sustainability.

The body of analytical work and knowledge that is being generated in various fronts would certainly provide useful information to inform the process towards Rio+20.

We are delighted to engage further with you in this journey, and look forward to working closely so that collectively, we can deliver on the promises of the Green Economy.

Thank you


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