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 CalixteDepartment of Planning and National Development,Ministry Of Finance,Government of Saint LuciaFebruary 2015
2 Presentation Outline Introduction Macroeconomic Challenges National Planning FrameworkSector Polices for a green EconomySaint Lucia’s efforts at Green Economy
3 IntroductionThe 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 alleviationIt 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 EconomyUNEP definition-one that results in improved human well being and social equality, while significantly reducing environmental risks and ecological scarcitiesThe term underscores the economic dimensions of sustainabilityIt 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 yearsAverage growth rate in the region -2.3%High degree of openness to the global economyInternational trade with goods and servicesInternational financing, including foreign direct investment and sovergn debtWorsening Trade balancesPoor trade performancesWeakening international competitivenessDeclining foreign direct invest
7 Growth in the ECCU: What Went Wrong and Can It Be Fixed
9 Macroeconomic Challeges A high dependence on strategic imports such as energy, food, industrial supplies and capital goods for agriculture and construction sectorsMakes it difficult to reduce imports in the short to medium termLong term macroeconomic vulnerability related to sectoral productivity and wider economic growthVulnerability to natural disasters and climate variabilityDespite significant investment in the education sectors there are issues of access, inclusiveness, quality and relevance of the sectorWeaknesses 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 UnemploymentLimited 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 visionNational Development PlanMedium Term DevelopmentSector plansPublic Sector Investment ProgrammeNational BudgetAgency Budget
13 Green Economy Sectors ENERGY Achieve energy security and independence by reducing reliance on fossil fuels and increasing the use of renewable energy technologiesopportunities- 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 AgricultureDiversify the agriculture sector away from banana production to increase food security through more efficient and less resource intensive production of non traditional cropOpportunities- 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 vehclesopportunities- 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 SectorsTourism-Providing incentives for investment and efficiency in the Tourism IndustryHighly 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 cultureDeficits --- The primary balance – net deficit less interest payments – will allow reductions in the debt as a proportion of GDP to less than 50% by 2025Corporatization --- 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 opportunitiesOpportunity-Training and re-skilling of workers, introduction of more efficient models of production, access to creditThese sector have strong potential for social inclusion, green jobs and achieving sustainable economic growth in Saint Lucia.
18 Other areasFiscal 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 CommiteeThere 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 ChallengesSome 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).