1. Key issues to ensure a transition towards green economy 1 Joy Kim Economic and Trade Branch Division of Industry, Technology and Economics UNEP

2. 2 Key concerns surrounding green economy?  Can developing countries afford this given that the global community is still in the wake of the global financial crisis?  Would a transition to a Green Economy hinder economic growth and the ability to reduce poverty?  Would countries lagging in green technology know-how lose the competitive disadvantage in the race for future markets?  How to avoid "green protectionism"?

3. 3 Mobilizing public finance through green fiscal policy reforms  In the US, $25 per ton of Co2 could bring in about 1 percent of GDP or over $1 trillion over a decade  Removing $500 billion of FF subsidies could boost the global economy by around 0.3%  In November 2010, Vietnam passed its first law on environmental taxation, which is expected to generate between US$ 757 million to US$ 3 billion.  Fossil fuel subsidy reforms (Indonesia, Nigeria)  Many countries consider revenue-neutral taxes (e.g. use eco-taxes to reduce labour taxes) or green ear marking (e.g., use carbon taxes to support RW)

4. 4 Seizing the moment for green fiscal policy reforms  External crisis-fiscal, economic or environmental-often played a role as a catalyst for environmental policy reform  Higher political acceptability of green fiscal policy reforms when they were introduced as part of broader fiscal reform.  Thus the key question is ‘how to ensure cost-effectiveness and envisage green fiscal policy reforms in the overall fiscal reforms?’

5. Key finding: A green economy stimulates growth, exceeding BAU over time… 5

6. Key findings of Kenya green economy assessment: GDP and income  Annual real GDP growth rates with and without intervention are 4-5% and 3.7% respectively in the 2010- 2030 period on average.  Real per capita national income would rise to Ksh 57,000 – 64,000 in 2030 compared to Ksh 40,000 in 2010 and Ksh 53,000 in 2030 under the BAU scenario.  The MDGs composite indicator is projected to improve to 0.67-0.72 in 2030 compared to 0.63 in a BAU scenario.  The proportion of population below poverty line is expected to be about 3% points lower than the baseline, at 23% by 2030.

7. Key findings of South African green economy assessment: GDP and income  The growth in real GDP in the green economy scenarios is projected to reach 2867 billion Rand and 2907 billion respectively in GE2% and GETS respectively.  These exceed the projections in the BAU scenarios, which were projected as 2850 billion Rand in BAU and 2879 billion Rand in BAU2%.  The lower growth in the GDP in BAU and BAU2% scenarios relative to GETS and GE2% is because the natural resources are strained, depleted or polluted.

8. Key findings of South African green economy assessment: GDP and income Inextricable link between poverty alleviation and wise management of natural resources and ecosystems. Ecosystem services and other non-marketed natural goods account for 47 to 89% of the so-called ‘GDP of the Poor’ Hence need to invest in natural capital as a source of growth and well-being Natural-resource dependent sectors and ESS (2005) BrazilIndonesiaIndia Original share of GDP (%): agriculture, forestry, fisheries 6%11%17% Adjusted share of GDP (%): including non market/ESS 17%15%20% Share of ESS/non market goods of total income of the poor (%) 90%75%47%

9. Technology innovation for Green Economy  Green economy policies improve resource efficiency and induce domestic companies to innovate, which may provide them with a competitive edge – first mover advantage – vis-à-vis their competitors.  Diffusion and technology transfer is the key to success for developing countries to benefit from green innovation.  The priority for developing countries should be to invest in their capacity to adapt green technologies, and to encourage diffusion.  By designing appropriate policies, developing countries can strengthen  their capacity to adapt green technologies according to their national context and hence become receptive to a flow of benefits from the green economy.

10. Trade implications of green economy policy and actions  A green economy transition entails some degree of economic restructuring.  Various green economy policy measures need to be put in place: standards, fiscal measures (e.g. carbon taxes or subsidies).  Competitiveness concern (e.g. boarder measures)  The challenge in developing standards is to ensure a balance between the need to safeguard market access and harvesting benefits of green economy.

11. National level actions to address trade related concerns  helping exporters meet environmental and social standards, both private and public;  setting nationally appropriate and ambitious targets for cleaner energy provision, including removal of obstacles such as subsidies for energy sources and technologies that are not environmentally sound;  engaging in “smart” industrial policy, including diversification and measures in favour of Resource Efficient and Cleaner Production (RECP), geared towards the green economy of the future;  creating and promoting national systems of innovation through, for instance, investment in education and training, support for research and development, and establishing facilitative IPR protection;  identifying and removing non-tariff barriers to imports of environmental goods and services.

12. International level actions to address trade related concerns  agreement at the WTO on the reduction or elimination of tariffs and non-tariff barriers to trade in environmental goods and services  agreement on government support to “green” products, services and technologies, which would reduce the risk of lengthy and costly trade disputes;  agreement that IPR regimes should be sensitive to the country’s level of development, respecting the reality that strong national-level innovative capacity and broad dissemination of ESTs are in the global interest;  agreement on environmental standards and labelling, with due regard for full life cycle (environmental and socio-economic) criteria.

13. 13 http://www.unep.org/greeneconomy/ Thank you