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Macro Economic Policy Framework and Sector Policies for Green Economy

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Presentation on theme: "Macro Economic Policy Framework and Sector Policies for Green Economy"— Presentation transcript:

1 Macro Economic Policy Framework and Sector Policies for Green Economy
John Calixte Department of Planning and National Development, Ministry Of Finance, Government of Saint Lucia February 2015

2 Presentation Outline Introduction Macroeconomic Challenges
National Planning Framework Sector Polices for a green Economy Saint Lucia’s efforts at Green Economy

3 Introduction The concept of green economy has become a centre of debate in recent years. The concept carries a promise of a new economic growth paradigm that is friendly to the earths ecosystem and can contribute to poverty alleviation It provides a response to the multiple crises the world has been facing recent years-food, climate and economic crises. The transition to a green economy will entail moving away from the system that allowed and at time generated these crises to a system that proactively addresses and prevents them. Greening the growth path of an economy depends on its policy and institutional settings, level of development, resource endowments and particular environmental pressure points. Policy action requires looking across a very wide range of policies, not just traditionally “green” policies.

4 Definition of Green Economy
No unique definition for the Green Economy UNEP definition-one that results in improved human well being and social equality, while significantly reducing environmental risks and ecological scarcities The term underscores the economic dimensions of sustainability It responds to a growing recognition that achieving sustainability rests on getting the economy right

5 Macro economic Challenges
what are the macro economic challenges that would be considered when incoporating green economy principles into a macroeconmomic policy frame work

6 Macroeconomic Challenges
Decling growth rates over the last 20 years Average growth rate in the region -2.3% High degree of openness to the global economy International trade with goods and services International financing, including foreign direct investment and sovergn debt Worsening Trade balances Poor trade performances Weakening international competitiveness Declining foreign direct invest

7 Growth in the ECCU: What Went Wrong and Can It Be Fixed

8 Macroeconomic Performance

9 Macroeconomic Challeges
A high dependence on strategic imports such as energy, food, industrial supplies and capital goods for agriculture and construction sectors Makes it difficult to reduce imports in the short to medium term Long term macroeconomic vulnerability related to sectoral productivity and wider economic growth Vulnerability to natural disasters and climate variability Despite significant investment in the education sectors there are issues of access, inclusiveness, quality and relevance of the sector Weaknesses in the labour market reflects long term inequalities in the education system that fail to prepare students for the demands of a modern economy

10 Macroeconomic Challenges
High Unemployment Limited fiscal space caused by high debt to GDP ratios

11 The Need for Greening the Economy
With the current economic situation of low growth and, as a SIDS – justifies to a great extent our unstained economic growth path ways, with impacts on environment, resource efficiency, climate change, risk and vulnerability: thus provide few opportunities of greening few sectors Moving towards GE can; increase adaptive capacity and resilience in the face of mounting global challenges such as climate change, reduce unemployment and foster unstainable growth. How? –mainstreaming green growth in National Planning Framework

12 National Planning Policy Framework
National vision National Development Plan Medium Term Development Sector plans Public Sector Investment Programme National Budget Agency Budget

13 Green Economy Sectors ENERGY
Achieve energy security and independence by reducing reliance on fossil fuels and increasing the use of renewable energy technologies opportunities- solar energy tapping, biogas, geo- thermal exploration using investment partners, wind mills and even micro –hydro power, energy saving through the use of LED lights, green public buildings etc, Use of fiscal incentives to promote transition to renewable energy generation

14 Green Economic Sectors
Agriculture Diversify the agriculture sector away from banana production to increase food security through more efficient and less resource intensive production of non traditional crop Opportunities- Agriculture diversification-water harvesting, terrace farming, Niche organic products, Composting and integrated crop management, expansion of cottage industries, mature tourism product to foster linkages, ecommerce market, increase in value added agriculture products for exports and tourism.

15 Green Economy Sectors Transport
Achieving energy efficiency in the transportation sector and providing incentives for the use of hybrid vehcles opportunities- use of energy efficient vehicles, remove congestion, better infrastructure, alternate water taxi for travel, inter island connectivity improvement to reduce transport costs, improve public transport through public private partnership, increase in airlift through negotiations, improve airport facilities, improve port facilities

16 Green Economy Sectors Tourism- Providing incentives for investment and efficiency in the Tourism Industry Highly energy use and emission of greenhouse gases ( 70% in St Lucia) Energy audits would be required and based on that energy efficiency measures can be taken, tourism product diversification and preference for properly packed local products will boost social inclusion of the society in agriculture, creative industry and culture Deficits --- The primary balance – net deficit less interest payments – will allow reductions in the debt as a proportion of GDP to less than 50% by 2025 Corporatization --- With asset sales proceeds, priority will be given to repaying debt and investing in high-return projects in the PSIP. PPP’s ---- Reducing the burden on Government finances and allowing Government to direct public funds to investment projects to create public goods, with greater social benefits, which can easily be developed into viable cash flows. This refocusing of Government and restructuring of public services and assets is central to the achievement of the Strategic Priorities.

17 Green Economy Sectors MANUFACTURING-
To reduce trade barriers and to develop small and medium size enterprise by introducing new green technologies through appropriate incentive regime. Mobilisation of entrepreneurs interested in green investment business opportunities Opportunity-Training and re-skilling of workers, introduction of more efficient models of production, access to credit These sector have strong potential for social inclusion, green jobs and achieving sustainable economic growth in Saint Lucia.

18 Other areas Fiscal Incentives Align fiscal policy instruments such as tax exemptions, credits and duty waivers to green economy policies Reduce unemployment and improve opportunities for citizens through economic diversification including green job creation, green industry growth, training, and construction of green infrastructure ( mobilization of entrepreneurs and enterprises, increase awareness, and networking to increase capacity building and institutional strengthening, create infrastructure and bring in green technologies) Infrastructure and green Technologies Blue Economy Fiscal Incentives

19 Institutional Mechanism for Green Economy in Saint Lucia
Saint Lucia has undertaken foundational work in Integrated Development Planning (IDP), and identified a number of principles consistent with a Green Economy. A National Development Planning process is currently in progress, with a policy framework consisting sector-specific policies that identify cross-cutting issues, and containing unifying points. Several bodies have been created, and are expected to strengthen the institutional framework for Green Economy pursuits. These include: - National Environmental Commission (NEC); - National Climate Change Committee (NCCC); - Coastal Zone Management Advisory Committee (CZMAC); and - National Council for Science and Technology for Development (NCSTD) - Energy Policy Advisory Committee (EPAC) Green Economy Steering Commitee There are also initiatives geared towards natural resource management and conservation --- rainwater harvesting, solar energy, collection and exchange of spatial data, geothermal energy . **As part of the NSDP medium to long term, we are in the process of preparing an integrated GE frame work and strategies for adaptation.

20 Challenges Some challenges currently faced include problems associated with economies of scale, the level of political will, under-resourced agencies, and overall ownership of the relevant issues. Nevertheless, the GOSL is committed to advancing national Green Economy plans (including investing in key economic sectors and safeguarding natural resources to improve livelihoods).

21 Thank you


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