The five sectors, from renewable energy to freshwaters, could in conjunction with other measures play an important role in reviving the global economy and boosting employment while accelerating the fight against climate change, environmental degradation and poverty.
These are among the findings of a new policy brief by economists and the United Nations launched in advance of the G20 meeting of world leaders in London in early April.
It also supports UN Secretary-General Ban Ki-Moon’s message that in rescuing the global economy the world must not lose sight of the development agenda and the need to protect vulnerable groups.
The report fleshes out the multiple economic, environmental and social benefits of investing a significant amount of the $3 trillion-worth of stimulus packages in five areas.
- Raising the energy efficiency of old and new buildings
- Renewable energies including wind, solar, geothermal and biomass
- Sustainable transport including hybrid vehicles; high speed rail and bus rapid transit systems
- The planet’s ecological infrastructure including freshwaters, forests, soils and coral reefs
- Sustainable agriculture including organic production
It also calls for a range of specific measures aimed at assisting poorer countries to reach the Millennium Development Goals (MDGs) and green their economies.
These include an expansion of microcredit schemes for clean energy; agreement on a new climate deal in December in order to power the reach and range of the carbon markets into Africa, Asia, Latin America and Small Island Developing States; reform of subsidies from fossil fuels to fisheries and the greening of overseas development aid.
Japan , which has already launched a multi-billion green stimulus package for its economy, has just announced a $5 billion loan fund for developing economies seeking to boost their renewable energy sector.
Achim Steiner, UN Under-Secretary General and Executive Director of the UN Environment Programme (UNEP) said: “The G20 meeting needs to be a milestone in terms of focusing investments that address the crises of today and those emerging from climate change, natural resource scarcity and lack of decent employment for close to two billion unemployed or underemployed people over the coming decade”.
“Take energy use in buildings. It can already be cut by 80 per cent in a cost-effective manner using existing technologies. Additional investments in this sector would not only stimulate the recovery of the construction and allied industries but also generate tens of millions of jobs--indeed an estimated two million to 3.5 million green jobs could be generated in Europe and the United States alone with an even higher potential in developing countries,” he said.
“The large scale stimulus investments planned over the coming months and the next two to four years represent a once in a life time opportunity to make a transition to a low carbon, resource efficient society—this opportunity must not be lost,” added Mr Steiner.
Pavan Sukhdev, team leader of the UNEP Green Economy initiative, highlighted that: “The recommendations for a Global Green New Deal should be discussed over the next few months by world leaders at every major international forum including the G20 Summit; the World Bank/International Monetary Fund Spring Meetings, and the forthcoming Commission on Sustainable Development gathering”.
“The sums of money being lined up to stimulate the global economy, unheard of only 12 months ago, will either mortgage the world’s future based on a ‘business as usual’ model or deliver an opportunity to transition to a new and more sustainable path. That courageous choice needs to be made now and accelerated over the coming weeks and months,” he said.
Energy Efficient Buildings
The global construction industry has an annual turnover of $3 trillion and employs large numbers of people. Many of these jobs are now under threat as a result of the financial and economic crisis.
Buildings are also responsible for 30 per cent to 40 per cent of global greenhouse gas emissions—reducing this impact represents one of the most cost effective measures to combat global warming, according to the Intergovernmental Panel on Climate Change (IPCC).
In the United States, where the new government is planning to spend close to $900 billion stimulating the economy, a large portion of these funds will be focused on greening the economy, including plans to cut energy demand by one fifth from all federal buildings at an estimated cost of $9.4 billion.
Likewise, the US government is investing $6.2 billion to ‘weatherise’ a million homes at an average cost of just over $1,600 per property.
The brief estimates that $100 billion invested over four year in improving energy efficiency in buildings and cities across the United States will generate two million jobs.
Globally a world-wide transition to energy-efficient buildings would create millions of jobs as well as ‘greening’ existing jobs for an estimated 111 million people employed in the sector.
The brief calls on world leaders to not only back such large-scale investments but to also invest in training, capacity building and transfer of green building skills, technologies and materials to developing economies including local authorities who are a key partner in passing regulations and promoting energy efficiency measures.
An estimated $45 trillion will be needed up to 2025 if increasing energy demand is to be met while simultaneously moving to climate-friendly generation—the current stimulus packages can lay the foundation fo a green energy revolution.
The brief estimates that $630 billion invested in renewables by 2030 would translate into at least 20 million additional jobs of which over two million would be in wind energy; 6.3 million in solar photovoltaics and 12 million in biofuels.
This compares with total employment in oil and gas industries, currently estimated at just over two million.
Developing economies are already benefiting from backing renewable energy. In China the sector generates $17 billion and already employs one million people.
A biofuels industry based on cassava and sugar cane could generate 200,000 jobs in Nigeria and India has the potential to create 900,000 jobs by 2025 in biomass gasification.
At least 20,000 jobs have been generated in Bangladesh as a result of the installation of some 200,000 photovoltaic solar home systems; 6,000 biogas plants and 20,000 more energy efficient cooking stoves.
The policy brief calls for a greater roll out of microcredit schemes alongside a reform of the Clean Development Mechanism (CDM) of the Kyoto Protocol, the greenhouse gas-cutting treaty.
Central will also be the sealing of a deep and decisive new climate deal in Copenhagen in December later this year.
“The CDM has helped expand the reach of renewable energy projects for power production to low-income countries such as the Democratic Republic of the Congo; Madagascar; Mauritius; Mozambique, Mali and Senegal,” says the brief.
“Assuming governments agree a new climate agreement in 2009, Africa could overall see roughly 230 projects by 2012. These could cumulatively generate over 65 million certified emission reductions worth close to one billion US dollars at a conservative carbon credit price of $15 per tonne,” it adds.
The global car fleet is expected to triple by 2050 with more than 90 per cent of the growth in non-OECD countries.
The IPCC has recommended that vehicle fuel economy needs to improve by 50 per cent.
The policy brief suggests that accelerated investments in high fuel efficiency vehicles including hybrids and ones powered by alternative fuels could create close to four million jobs world-wide with an additional 19 million jobs in areas such as sales, repairs and servicing.
UNEP has launched a global initiative to double the fuel economy of the global vehicle fleet - in line with IPCC and G8 recommendations. Together with the International Energy Agency, FIA Foundation and the International Transport Forum the Global Fuel Economy Initiative (GFEI) promotes the investments in green, efficient cars.
Applying technologies available today, this could save 6 billion barrels of oil, or 2 gigatonnes of CO2 emissions per year (similar to half of all EU emissions today).
Meanwhile investments in cleaner, more efficient and less polluting urban public transport has even more potential prospects as sustainable public transport systems have secondary employment generation multipliers of up to four jobs per direct job created.
- The report says that in the United States a 10-year federal investment in new high-speed rail could generate 250,000 jobs.
- In the Republic of Korea, the $7 billion to be invested in mass transit and railways over the next three years—as part of its ‘green new deal’ –is expected to create 138,000 jobs.
Railways can, with forward-looking reforms and modernization, be profitable enterprises. Indian railways, which employs 1.4 million people, has been recently transformed into a ‘cash-rich enterprise’ and is undergoing a major modernization effort.
The policy brief argues that the stimulus packages, allied to incentives and fiscal measures, could accelerate these transitions by triggering changes in consumer and public behaviour and raising additional funds for sustainable transport.
- Reducing or scrapping the close to $300 billion-worth of annual, global fuel subsidies could generate investment funds for sustainable transport and clean energies
- Measures such as the gasoline or carbon tax on fuels like those introduced in Poland and Sweden.
- Other possible actions include Japan and the United States’ clean car rebates; London’s congestion charge; Singapore’s electronic road pricing or France’s insurance specific auto tax.
Freshwaters and Ecological Infrastructure
Investments in the water sector can be profitable not only for the people benefiting from clean water and sanitation but also the businesses involved.
The global water market for supply, sanitation and water efficiency is estimated to be worth over $250 billion and is likely to grow to nearly $660 billion by 2020.
- An investment of $15 billion a year towards meeting the MDG of halving by 2015 the number of people without sustainable access to safe water and basic sanitation could generate global economic benefits worth $38 billion annually--$15 billion of which would be in sub-Saharan Africa alone.
Some stimulus packages are targeting this sector:
- In the United States $4 billion for clean water infrastructure and $2 billion for drinking water infrastructure is to be provided.
- The Republic of Korea’s stimulus package includes nearly $12 billion for improvements for four major rivers.
- In Australia, the most recent stimulus package was only passed by parliament when provisions for investing in the Murray-Darling River system, which underpins almost half of the nation’s agricultural output, were included.
The brief also calls on developing country governments and international development organizations to back investments in other ecological infrastructure such as soils, forests, oceans, coral reefs and wetlands.
Currently their contribution to national economies and global economic output and in particular to the livelihoods of the poor are undervalued despite their importance.
- It is estimated that the ecological services provided by India’s forests account for over seven per cent of its overall GDP and account for close to 60 per cent of the “GDP of the poor”.
“Evidence is however accumulating to show that it makes economic sense to invest in ecological infrastructure,” says the policy brief.
- A global marine protected area network, involving the closure of 20 per cent of the total fishing grounds, could sustain fisheries worth $80 to $100 billion a year while ensuring a future for 27 million fishing-related jobs and generating one million more in areas such as conservation.
- The world’s wetlands, which have suffered extensive drainage over the past 100 years, produce 25 per cent of the world’s food from activities like fishing, farming and hunting.
The report urges developed economies to invest part of their stimulus packages to develop sustainable agriculture, both at home and in developing economies.
This should be allied to the opening up of markets to sustainably made produce from developing economies as this will not only support poverty reduction efforts but also improve food security and minimize pressure on ecosystems including soils, and climate.
The report cites the case of organic agriculture in which four guiding principles are health, ecology, fairness and care.
A study of 114 cases of conversion to organic or near organic production method in Africa, surveyed by UNEP and the UN Conference on Trade and Development, found that yields had risen by over 100 per cent after switching to organic or near organic production.
The data on organic production and trade is now available for more than 140 countries. Sales of organic products have increased by over $5 billion a year for the last few years, reaching more than $46 billion by 2007.
“Organic agriculture offers a real trade and poverty reduction opportunity for developing countries, as more than 97 per cent of the revenues are generated in Europe and North America whereas more than 80 per cent of the producers are in Africa, Asia and Latin America, “ says the report. The countries with the most producers are Uganda, followed by India, Ethiopia and Mexico
Sustainable agriculture also offers the potential to mitigate climate change through decreased emission of greenhouse gases, improved energy efficiency and increased carbon sequestering.
According to one study conducted by the UN’s Food and Agricultural Organisation: “CO2 emissions per hectare of organic agriculture systems are 48 per cent to 68 per cent lower than in conventional systems”.
Various studies have shown that organic fields sequester 3- 8 tone more carbon per hectare compared to conventional agriculture.
As a climate change adaptation strategy, organic agriculture already addresses the key consequences of climate change, namely increased water stress, drought, flooding and extreme temperatures by increasing water filtration and retention capacity as well as organic nutrient content of organic fields.
The policy brief also points out that organic agriculture also uses 30 per cent more labour than conventional agriculture. In Mexico over 170,000 jobs were created by organic agriculture in 2007.
Notes to Editors
The Policy Brief for a Global Green New Deal is aimed at informing members of the G20 meeting in the UK on 1 April and members of the G8 meeting in Italy on policies that can deliver multiple benefits and set the stage for a Green Economy for the 21 st century.
It is a policy-orientated update of the Global Green New Deal report launched at UNEP’s Governing Council/Global Ministerial Environment Forum on 16 February.
The report is the latest in a pipeline of reports supporting the UNEP Green Economy initiative announced in October 2008 and led by Pavan Sukhdev, on secondment from Deutsche Bank and UNEP’s Economic and Trade Branch headed by Hussein Abaza.
Consultations in preparing the brief have been carried out with over 20 UN agencies and organizations as well as with the World Bank, OECD and the International Monetary Fund. The brief draws from the findings of the UNEP-commissioned report “A Global Green New Deal” authored by Professor Edward B. barbier of the University of Wyoming.
The Policy Brief is available for download at http://www.unep.org/greeneconomy/
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