The Green Economy Programme

The UNEP-led Green Economy Initiative was launched in late 2008. UNEP defines Green Economy as “one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”. In other words, a economy with ” low carbon, resource efficient and socially inclusive” (UNEP,2008). Green economy is one where public and private investments will drive the growth in employment and income. These investments involve reducing the pollution and emissions of carbon, enhancing energy and resource efficiency and lastly preventing the loss of ecosystem services and biodiversity. These investments can be supported by public and private financing, reformations of policies and or changes in the regulations. It is a model based on knowledge of ecosystems and sustainable development. Green economy should lead to the development path by maintaining, enhancing and, where necessary, rebuilding natural capital as a critical economic asset and source of public benefits, particularly for those poverty people whose livelihoods and security depend strongly on nature .

Aims and Objectives

The aim of the Green Economy Programme is to provide analysis and policy support for green and greening environmental unfriendly sectors projects.

The Green Economy Initiative within the UNEP includes 3 sets of activities:

Generate a Green Economy Report and relevant research materials, which will aid in analyzing the macroeconomic, sustainability, and poverty reduction implications of green investment and providing advises on policies that can stimulate increased investment in a range of sectors from renewable energy to sustainable agriculture

Provide advisory services for some countries on ways for transiting to a greener economy

Implement the Green Economy Initiative by engaging a wide range of research, private organizations, business and UN partners

How it works

UNEP currently is engaging with over 20 countries in helping them to transit into a green economy by undertaking assessments of macroeconomic in either their national economies or specific economic sectors. These include fostering multistakeholder dialogue; identifying areas for capacity building and training; creating indicators for measurement frameworks; supporting Centres of Excellence; and, mainstreaming green economy into national development strategies.

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For example, Korea was one of the beneficiaries, the Waste management in Korea. The “Extended Producer Responsibility” (EPR) system was launched in 2003 in Korea. The requirement of recycling a certain amount of manufacturers and importers’ product benefited Korea financially and also environmentally. In 2008, 6.0667 millions of recycled waste is estimated to yield over US $1.6 billion during the 5 years. Moreover, the ERP system generated 3200 jobs from 2003 to 2006. Similarly, the environmental benefits are also impressive. The emissions of Carbon dioxide have been reduced by an average of 412,000 tons annually through recycling instead of incinerating or land filling. An estimation of approximately 23,532 tons of greenhouse gas emissions from incineration or plastic landfill was avoided.

Another success stories is the renewable energy in China. China’s Renewable Energy Law was introduced in 2005. It provides a variety of financial incentives to promote renewable energy projects. This had encouraged major advancement towards the development of wind and solar power. Policies such as subsidizing wind energy R&D expenses were implemented to encourage local wind turbine manufacturing. China is now one of the world largest solar Photovoltaic manufacturers. Due to the profitability and sanitization benefits for Solar Water Heater, it resulted into the rapid development for it. In 2007, policy was launched to promote Solar Thermal Utilization in China, major hot water consumers were prioritized for the installation of Solar Water Heating system. In 2009, output worth of US$17 billion was generated by the energy industries and an estimation of 30000 jobs was created. China is an epitome of policy-led growth in renewable energy that resulted in jobs creation and generated income and revenue streams for nascent low carbon industries.

From the 2 success examples, it can be seen that the Green Economy Programme have successfully helped the nations to transit into a greener economy.

Challenges and problems

The challenge towards a green economy varies among countries. It is dependent on the country’s natural and human capital and also its level of development. UNEP describe it as the “twin challenge”. For countries with high levels of human development, the challenge is to maintain their quality of life while reducing their per capita ecological footprint .For countries with relatively low per capita ecological footprints; they need to improve the general well-being of their citizens without increasing their ecological footprints.

Another challenges posed during the transition to a greener economy is the lack of technical capacity. This is applicable to both the developing and developed countries. There are3 kinds of technical barriers namely, lack of access to the technology, lack of standards and regulations the lastly the lack of effective technological systems to support the development of a green economy. Firstly, clean technologies are costly or hard to operate. In addition, there may be requirement of infrastructure and organization changes hence, preventing the utilization of the new technologies. Secondly, the absence of sound standards and regulations will lead to obstacles of transforming into a green economy. This is because the first movers will have to bear the higher short term production cost if the rest of the competitors do not adopt. Lastly, without the technological system to support the transition, there will be no expertise with skills to run the system. Hence, the obstacle will become more serious.

As the cities form a bulk of the world’s population and economy, the challenges for transiting into a greener economy are pass mostly to them. Furthermore, cities have the knowledge and innovation that can help to transit into a greener economy more viably. Hence, the challenges associated of transiting urban cities into Green Economy can be classify into 2 categories namely, Attitudes, Policies and Governance.

Attitudes

Firstly, some of the green initiatives may be in conflict with individuals’ and development interest. Thereby it is essential for the citizens to understand the possible behavioral changes as an implication of green economy. For instance, the greening of transport encourages the use of public transport and non-motorized transport. However, according to IEA(2009), there is a rapid increase in demand for transport activity and is expected to roughly double between 2005 and 2050. In addition, there is a trend of preference of motorized transport. Hence, changes in the societal behavior are essential. This imply that people may have to reject the mass consumerism that majority of modern societies are based on. Societal changes are not immediate; this entails a larger societal transition. Hence, nations face different challenges to transit into green economy depending on the citizens’ behavior and nature of their economic activities. As the relationship of good quality of life and good environmental quality are not generally perceived by public, thereby economic and social issues are prioritized. For instance, manufacturing sector contributed to 23% of global employment. The hazardous substances such as greenhouse gasses increases as the manufacturing sector continue to expand. 17% of air pollution related health damages are from the manufacturing industries and air pollutants are equivalent to 1-5% of global GDP. This definitely far outweighs the benefits for embarking on a green economy transition. Moreover, some of the green investments values cannot be fully calculated by economic valuation as some of the methodologies are not robust enough. Even if the values are known, they tend to reflect long-term benefits, which may clash with short-term goals. Thereby some government officials may choose to be more economic well off over environmental well off. Hence, right tools and mechanisms are required to transform the attitudes in behavior.

Governance and polices

Another challenge to a green economy is governance. The implementations of green economy policies require financial and human resources. For example, Green agriculture is characterized by shifting the current industrial farming practices towards a sound ecological ways. The challenge to ensure the feeding of the world without damaging their health and ecosystems under the conditions of increasing global temperature requires financial investments, physical capital assets, research and capacity building in managing soil fertility, efficiency and sustainability of water use, diversifying crop and livestock, managing biological plant and animal health and mechanizing appropriate farm level. Large amounts are needed upfront for green technologies and infrastructures and these investments do not offer a guarantee returns for investors in the short-term. In addition, the incentives provided by the government may not be attractive for the investors to invest or the change in the household behaviors. Another challenge is to align the new and old policies. In some cases, the current policies and regulations may be in conflict with the introduction and implementation of new laws and policies. Hence, this will lead to a lack of flexibility. As existing policies and legal frameworks may not be compatible with the new concepts, reforms are necessary to incorporate the new concepts and measures.

Future of the initiative

In order for successful green economy transition, enabling conditions are important. Thereby there are a few aspects which can be improved to be able to transit into a Green economy more effectively.

Firstly, the Green Economy Initiative should focus more on strengthening the international governance. International environmental agreements can facilitate and drive transition to green economy. Multilateral Environment Agreement is an epitome. For instance, the current World Trade Organization Doha Round negotiation provides the chance to foster a green economy. Currently, there are negotiations on removing of fisheries subsidies and reducing tariff and non-tariff barriers on environmental goods and services. According to A World Bank study, trade liberalization could lead to a 7-13% increase in trade volumes in environmental goods. In addition, negotiations of liberating trade in agriculture will lead to a drop in subsidies for it in some developed countries. This in turn will drive up the efficiency and sustainability agriculture production in developing countries. The international trading system can have great impact on green economic activity. It can either enable or obstruct the flow of green goods, investments and technologies. With proper pricing of environmental resources at national level, countries can to sustainably exploit in comparative advantages in natural resources. However, it could also lead to a perception of trade protectionism by countries. Hence, it is very important for countries to strike a balance of safeguarding market access and environmental protection.

Secondly, as huge amounts are needed to green the entire global economy, the Green Economy Initiative should engage with more financial institutions and investment sectors as they are able to provide the bulk of financing for a green economy transition. The minimization of environmental, social and governance (ESG) risks are seen as opportunities by the long-term investors such as insurance companies and pension funds .For instance, from 2007 to mid 2010, private capital of approximately US$627 billion had already been invested in the renewable energy sector. Retail and commercials banks are also considering to include ESG as their lending policies and coming out with “green” financial products. All these can be supported by establishing a regulatory framework. Another financing vehicle for green economy, the Global Environment Facility needs to be scaled up and strengthened.

Thirdly, there should be more emphasis on training and education as they are essential to prepare the workforce towards a transition of green economy. Extravagant consumption and high wasteful usage of resources to meet one needs is a trend of current modernized life. As mentioned in the earlier part about urban citizens’ attitudes towards green economy, it is essential to influence preferences in terms of green lifestyles. The effect is definitely not immediate. It probably needs to take a few generations for the societal changes to transit into a greener economy. Hence, it is very important to teach from young about the importance of sustainable development. Government could probably have “sustainable developments” as one of the compulsory subjects. There should also emphasize on trainings on “green” expertise.

Top-level advisory panel (2012) warns that “The world is facing a major shortage of experts capable of tackling sustainable development challenges that could undermine efforts to achieve a green economy”. Hence, they could set up more of institutions in grooming the green expertise or invest in the re-skilling of the workforce.

Lastly, as the government plays an important role in the transition towards a green economy, the Green Economy Initiative should engage with more countries especially the developed countries. There are many areas in which the government can help in stimulating the green economy. By passing legal laws such as prohibit un-environmental activities or having standards is an effective way. Government can also aid in transforming the citizen into a green lifestyle. Investing in green buildings is an example. It is able to reduce resource consumption and mitigate global warming concurrently. Government can also encourage the use of green products for instance provides subsidies on public transport, having progressive taxes on electricity consumption and other environmentally harmful urban activities. Market based tools can be employ by the government. In addition

Conclusion

In conclusion, a green economy has the potential to the path of sustainable development. It can also help to eradicate poverty. However, the speed of the transition into a green economy varies among country. Knowledge, information and resources are essential during the transition to greener economy. During the progress, there will be new challenges posing during the journey to Green economy.