United Nations Under-Secretary-General and United Nations Environment Programme Executive Director Achim Steiner Speech to the First Forum of Ministers & Environment Authorities of Asia Pacific
Bangkok, 19 May 2015
Ladies and Gentlemen,
2015 is a pivotal year for sustainable development.
The 3rd International Conference on Financing for Sustainable Development in July, the General Assembly’s finalization of the Sustainable Development Goals (SDGs) in September and the climate change meeting in December will all greatly affect the pace and commitment with which we proceed toward sustainable development.
While these are global processes, they will shape the future pathway of Asia Pacific. But more importantly global success will in large part be determined by their implementation in Asia Pacific.
Many Asia Pacific economies achieved rapid economic development during the last few decades. Millions have been lifted out of poverty and the region now boasts some 700 million middle high income consumers.
But this economic growth has come at a cost – social and environmental - that is undermining future prospects of growth and equity.
Asia Pacific consumes over half of the world’s materials and emits over half of the world’s GHG emissions. We will see a groundbreaking UNEP report launched tomorrow illustrating this. The global environmental health emergency - referred to by the WHO - is felt most acutely in Asia Pacific. And nowhere is this more visible than in air pollution, which that is the cause of an alarming 5 million premature deaths in the region — along with huge social and economic costs.
The rising costs and impact of climate change – something that is no doubt occupying a large part of your portfolios - is further magnifying these existing challenges. The regions high vulnerability to natural disasters and the adverse impacts of climate change is translating into a social and financial burden. Natural disasters, including the catastrophic typhoon Haiyan in the Philippines, cost Asia Pacific countries more than US$60bn a year — with the human cost much higher. I had an opportunity to see this for myself first hand on a recent visit to the Philippines with President Holland of France.
The move towards a green economy in Asia Pacific is already happening as a direct response to these challenges.
Green Economy Approaches Growing
From the “Sufficiency Economy” in Thailand and “Ecological Civilization” in China, to the “3R” approach in Japan and green national and local strategies and action plans in Cambodia, India, the Republic of Korea and many others, the region has recognized the urgency of embarking on green economy pathways to sustainable development.
We are also witnessing a gradual alignment of financing with the sustainable development and green economy aspirations of the countries of Asia Pacific. The region’s renewable energy investment provides evidence of this.
According to the 2014 Global Status Report on Renewables, excluding China and India where annual investment continued its uninterrupted rise, the Asia-Oceania region saw renewable energy investment increase by 47 per cent over 2012 to a record high of US$43.3 billion.
In 2014, clean energy investment in developing countries rose 36 per cent to US$131 billion, on track to surpass investment in developed countries. Of this figure, almost half of the global investment came from China and Japan on solar projects — China up 45 per cent on the previous year, and Japan up 13 per cent according to the Global Trends in Renewable Energy Investment 2015.
In trade, half of the top 10 global exporters of Environmental Goods and Services are Asia-Pacific Economic Cooperation (APEC) member states who have committed to liberalize trade South-South trade is booming and the ASEAN Economic Community and initiatives like China’s “One Belt One Road” initiative promise to accelerate this trend. These initiatives are the chance to turn Asia Pacific not only into the engine of growth, but the engine of green growth with a focus on the opportunities presented by the move towards renewable technologies, energy efficiency services, cleaner production and resource efficiency.
According to a recent report from the Asian Development Bank and other partners, achieving the SDGs will require moving from billions to trillions in resource flows.
For Asia Pacific, some US$2.5 trillion is needed in annual investment for sustainable development — to close gaps in basic services and infrastructure and to protect the environment, enhance energy efficiency and respond to climate change.
But we should look beyond these incremental costs alone. The entire financial system – comprising more than US$250 trillion dollars in assets – needs to be deployed to make our economies green, inclusive, and fit for purpose in delivering on improved human well-being and equitable development.
Each year, between 15-20 per cent of global GDP is invested in infrastructure, education, health and other forms of capital – are these resources, totaling up to USD 15 trillion annually, positioning our economies for performance and prosperity?
There are examples of how capital markets and institutional innovation can be deployed to solve complex environmental challenges.
This year marks the 30-year anniversary of the Vienna Convention for the protection of the ozone layer. In addition to preventing millions of skin cancer cases, the phase-out of ozone depleting substances brought investment, changed production and consumption patterns, and stimulated more-efficient production processes and innovative redesigning of products and equipment using greener chemicals.
Ozone protection has also led to technology transfer, with the Multilateral Fund contributing more than US$3.7 billion to all developing countries from 1991 to today — out of which more than US$1.8 billion came to South Asia, South East Asia and the Pacific region.
Public finance alone is inadequate to provide the financing required for green transition, however. The rapid development and scaling of financial and capital markets in the Asia Pacific region will be a keystone in the region’s development financing alongside growing public financing, as well as a growing source of inter-regional investment.
We are already seeing striking examples of financial innovation in Asia Pacific that are changing the landscape of capital flows.
For example, the New Development Bank created by the BRICS, the Asian Infrastructure Investment Bank (AIIB), and the growing number and scale of sovereign wealth funds in the region provide an opportunity to introduce longer-term risk analysis and policy mandates aligned to sustainable development considerations.
The UNEP Inquiry into the Design of a Sustainable Financial System has also identified potential roles of central bankers, financial regulators and financial policy makers in delivering financing for sustainable development.
Central bankers and financial regulators from the region have provided inspiring leadership in introducing sustainable development considerations into their activities, such as the Bangladesh Bank, the Indonesian financial regulator Otoritas Jasa Keuangan (OJK) and the People’s Bank of China.
The recent UNEP Inquiry Report on Asia Pacific, released two weeks ago, identified potential options for the region to promote a more sustainable financial system shaped around sustainable banking, green bonds, green budget tax reform, removing perverse fossil fuel subsidies and mainstreaming environment into national budgeting processes.
UNEP has also actively engaged with financial actors. Just yesterday, the UNEP Finance Initiative, together with the United Nations Conference on Trade and Development and other co-organizers of the Sustainable Stock Exchange Initiative, concluded the first dialogue for South East Asia in Bangkok.
Six CEOs of stock exchanges, senior capital market regulators and leaders from companies, investors and international organizations demonstrated the potential of an aligned financial system to better integrate sustainability considerations into investors’ fiduciary duties and corporate governance practices, and ultimately help align investment decisions and corporate performance with green economy and sustainable development objectives.
The way forward
Ladies and Gentlemen,
UNEP will continue working closely with Asia Pacific on the green transition. Over the past few years, UNEP and partners have worked with more than 30 countries around the globe to provide policy advice, technical assistance and capacity building — through programmes such as green economy in Small Island Developing States for the implementation of the SAMOA Pathway, the Partnership for Action on Green Economy (PAGE), the 10-Year Framework of Programmes on Sustainable Consumption and Production Patterns (10YFP), Switch Asia, and other green economy flagships.
The region is home to a number of international and regional institutions that have championed the green growth and green economy agenda - UN-ESCAP and the UN family, the Asian Development Bank and the Global Green Growth Institute (GGGI) to name a few – and there are ample opportunities for joining forces in delivering technical, policy and capacity support to the countries of the region.
The next UNEA, which will be held on 23-27 May 2016 in Nairobi, will continue to provide a robust policymaking platform that truly places the environment at the heart of sustainable development by reflecting the latest global, regional and national development agendas.
And the Forum of Ministers and Environment Authorities of Asia Pacific provides a unique opportunity to develop your common environmental agenda and help lead and shape the outcomes of the UNEA.
In summary, there is a common realization shared by the many groups that are meeting over the course of this week — from financiers and chief justices, to environment ministers and civil society — that a healthy environment is a pre-requisite for socio-economic development and human wellbeing.
2015 offers us the opportunity to turn this common understanding into clear global agreements on finance, SDGs and the climate.
We can translate these lofty ambitions into clear actions that build the resilience of communities, decouple growth from resource use and contamination and realign our financial systems to invest in natural capital and green technologies.
I fully expect this landmark Forum to contribute to this process.