UNEP Report Cites Long-Term Savings From Global Conversion to 'Green Economy'

International Environment Reporter™ helps you understand environmental laws, regulations, policies and trends in major industrialized and developing nations, as well as in international governmental and nongovernmental organizations.

GENEVA--Conversion to low-carbon, sustainable growth can be achieved at a minimal cost and eventually at a savings to the global economy, the United Nations Environment Program said Feb. 21.

In a new report, the U.N. agency said conversion to a “green” economy could be achieved at a cost of about $1.3 trillion a year, the equivalent of 2 percent of global gross domestic product (GDP).

This cost can be quickly replaced by savings, UNEP said. If governments adopted a green investment scenario, higher annual economic growth rates could be achieved within five to 10 years.

A green investment scenario would also help produce advances in energy efficiency, which would reduce energy demand by about 40 percent and carbon dioxide emissions by about one-third by 2050 compared with a “business as usual” scenario, UNEP said.

Launching the report in Nairobi at the UNEP Governing Council/Global Ministerial Environment Forum, UNEP Executive Director Achim Steiner said governments “must move beyond the polarities of the past, such as development versus environment, state versus market, and North versus South.”

In his introduction to the report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Reduction, Steiner noted that a transition to a green economy is “already well under way.” UNEP said new investments in clean energy were estimated at between $180 billion and $200 billion in 2010, a record.

This growth is increasingly driven by developing countries such as China, Brazil, and India, whose share of global investment in renewables jumped from 27 percent in 2007 to 40 percent in 2008 alone.

The “challenge is clearly to build on this momentum, Steiner said.

Focus on 10 Key Sectors.

The report identified 10 sectors as key in converting to a green economy: agriculture, buildings, energy supply, fisheries, forestry, industry (including energy efficiency), tourism, transport, waste management, and water.

Of the $1.3 trillion a year that should be spent on greening the global economy, UNEP identified energy supply as requiring the biggest investment--over $360 billion per year, mainly for low-carbon generation, renewable generation, and energy efficiency measures.

Transport will require $194 billion per year in investment, with the emphasis on lower energy consumption and emissions targets and expanded public transportation. The buildings and tourism sectors each will require a $134 billion annual investment, the report said.

UNEP said the building sector “is the single largest contributor to global greenhouse gas emissions, with one-third of global end-energy use taking place in offices and homes.”

“The construction sector is responsible for more than a third of global material resource consumption, including 12 percent of all freshwater use,” the U.N. agency said, adding that a combination of applying existing technologies and growth in renewable energy supply could “dramatically reduce emissions at a savings equal to $35 per (metric) ton of CO2.”

One major potential source of savings is reducing subsidies that contribute to pollution and over-exploitation of natural resources, the report said. UNEP said the world’s governments currently spend between 1 percent and 2 percent of world GDP each year on a “range of subsidies that often perpetuate unsustainable resources use in areas such as fossil fuels, agriculture (including pesticide subsidies), water, and fisheries. Included is an estimated $46 billion each year in subsidies to the fossil fuel and gas sector and $27 billion per year to subsidize excess fishing capacity.

EPA Administrator Says 'Engagement' Needed.

In a keynote address to the Global Ministerial Environment Forum plenary, attended by delegates from 140 counties, U.S. Environmental Protection Agency Administrator Lisa Jackson said there is an urgent need to focus on issues related to electronic waste, indoor air quality, clean fuels, deforestation, and environment degradation.

“The success of a global green economy depends on governments' engagement with all stakeholders that include public and private sectors and civil societies,” Jackson said.

She and Steiner signed the first Memorandum of Understanding between the two organizations, committing the United States to collaborate to promote global environmental sustainability.

The UNEP Governing Council/Global Ministerial Environment Forum continues through Feb. 24.

By Daniel Pruzin and Wachira Kigotho (Nairobi)


Full text of the report, Towards a Green Economy: Pathways to Sustainable Development and Poverty Reduction,, is available at http://www.unep.org/GreenEconomy/Portals/93/documents/Full_GER_screen.pdf.