- Low Carbon Green Growth Roadmap for Asia and the Pacific

- Turning Resource Constraints and the Climate Crisis into Economic Growth Opportunities necessary to reduce Poverty The Low Carbon Green Growth Roadmap is about changing the way we produce and consume, hence changing the way we operate our economy

- Green Growth Strategy for Asia and the Pacific: Challenges and Opportunities Key points Challenges and Opportunities for Asia and the Pacific region

- Green growth - strategy to cope with resource and climate crisis Conventional growth paradigm based on cheap labor and resources Focuses on quantity of growth, not quality Low productivity of labor & very resource and pollution intensive Leads to social exclusion and environmental unsustainability Brown Growth (exploit) Investment in human (labor) and natural (resources) capital Improvement of labor productivity and resource efficiency Improves quality of growth: higher productivity and resource efficiency Green Growth (invest) Cheap Resources Resource Efficiency Cheap Labor Productive Labor Force Vicious cycle/ Quantity of Growth Virtuous cycle/ Quality of Growth

- Vicious cycle/Quantity of Growth (GDP) Natural Capital Human Capital Exploiting High resource intensity Low resource efficiency Ecological unsustainability High resource intensity Low resource efficiency Ecological unsustainability Worsening social exclusion Low labor productivity Widening income gap Worsening social exclusion Low labor productivity Widening income gap Low economic Dynamism/ resilience High economic vulnerability Low economic Dynamism/ resilience High economic vulnerability Undermining economic vitality

- Virtuous cycle/Quality of Growth (GDP) Natural Capital Human Capital High labor productivity Social inclusion Equitable income distribution High labor productivity Social inclusion Equitable income distribution High resource efficiency Low resource intensity Ecological sustainability High resource efficiency Low resource intensity Ecological sustainability High economic Dynamism/ resilience Low economic vulnerability High economic Dynamism/ resilience Low economic vulnerability Investing Reinforcing economic vitality

- Sustainable Development Model: Purple & Green Growth have to go hand in hand (integration of 3 pillars) Sustainable Development Sustainable Development Natural Capital Human Capital Investing Environmental Sustainability Economic Growth Social Inclusiveness Inclusive Growth Ecological Growth Social Quality Economic Quality Ecological Quality

- Investment in Natural Capital o Investments in natural capital: natural resources and ecological services can no longer be considered free o Market prices need to reflect the change scarcity scale between capital, labor and ecological services, natural resources and payment for environment services o Economy where economic growth trickles down to replenishment of natural capital o Payment for Environment Services: economic reform of sectors such as agriculture, forestry, fisheries, biodiversity, etc.

- Investment in Human Capital In the long run, a green economy can have great impact on poverty reduction because it increases growth prospects and reduces the vulnerability of socio-economic systems to external shocks and crises. Impact on poor: GG can sustain growth but no automatic guarantee for equitable and even distribution of benefits and costs thus has to be supplemented by inclusive Social policies GG is an economic strategy to sustain economic growth necessary to reduce poverty

- Five Tracks of Green Growth Track 1: From quantity of growth to quality of growth Track 2: Changing the invisible structure of the economy Track 3: Changing the visible structure of the economy Track 4: Turning green into a business opportunity Track 5: Formulating and implementing low-carbon development strategies

- Eco-Efficiency o Ecological Efficiency o Economic Efficiency o Green Growth = Strategy to close the gap between ecological and economic efficiency

- Eco-efficiency = Core of Green Growth Green growth as understood by ESCAP has four main features: i) investing in natural capital, ii) greening of the economy by improving the efficiency of using natural resources and ecosystem services, iii) strengthening environmental management and promoting environmental goods and services and iv) generating a double dividend for the economy and the environment. LCGG is a strategy to turn resource constraints and the climate crisis into an economic opportunity that generates a double dividend) by improving the efficiency of resource use and increasing investments in natural capital to drive economic growth. GG Green Economy SD Focus on shifting away from energy, resource and carbon intensive growth patterns to EFFICIENT growth patterns

- Energy/Food/Water Crisis 100-year global resource price trend reversing in last 10 years with AP region leading (Mckinsey & Global energy demand to increase by 30% between (IEA, 2011) Company, 2011) Copper and aluminum prices doubling in the last 20 years Food-fuel crisis in 2008 exposed the vulnerability of Asian economies to resource price volatility Business as usual is no longer an option FAO food price index and Brent crude oil price, January 2004 to December 2010

- Low carbon: Critical for Energy Security and Sustaining Growth necessary to Reduce Poverty Share of GDP spent on fossil fuel imports more than doubled in many countries in Asia-Pacific during , now hitting an all-time high in many countries recently in Can countries afford to pay rising oil import bill? What will happen if oil price rises to 150 USD per barrel? Improving Energy Efficiency & Sustainable Energy Plan critical: key component of GG A low carbon development path is crucial for enhancing energy security and sustaining growth in the region

- Growth cannot be sustained by business as usual practices Resource constraints and climate impacts are limiting growth Need to dramatically change the paradigm to improve the efficiency of the economy through economic system change that is: Low Carbon Resource efficient

- Total domestic material consumption in the world, in the Asia-Pacific region and in the rest of the world Resource intensity and vulnerability to resource prices Between 1970 and 2005, domestic material consumption in the region more than tripled – compared with an approximately 50 per cent increase in the rest of the world – to an annual use of some 35.3 billion tons of biomass, fossil fuels, metal ores and industrial and construction minerals The region needs now to urgently shift away from business-as-usual resource-intensive strategies and embrace a growth strategy that is based on resource efficiency.

- Worsening Resource Constraints Domestic material consumption per unit of GDP and per capita, Asian and Pacific countries The resource-intensive growth pattern of the region cannot be sustained. Developing countries in the Asia Pacific region have experienced rapid economic growth in recent years, taking advantage of the opportunities brought about by globalization and the export-led growth model. Asia-Pacific uses > 3 x resources to produce $1 of GDP, compared to the rest of the world

- Depletion of natural capital- land use change and degradation > The depletion of natural capital links to increasing demand for agricultural products as inputs to industrial production and for energy. > The growing demand means that land is expected to provide a broader array of ecosystem services while excessive exploitation is undermining its ability to do so. Worrying signs that the carrying capacity is stretching to its limit are: Water resource use Asia’s production of non-food crops is growing at the expense of food crops Food insecurity Production of feedstock for biofuels is a particular source of competition for food production Agricultural production trends The growing demand for water and energy may impact on food production. While the region has access to the lowest per capita supply of water, it withdraws the world’s largest proportion from the available renewable supply.

- Asia Pacific suffers most from climate and disaster impacts The Asia-Pacific region is among the most vulnerable to climate-related disasters. A joint report by ESCAP, UNEP and the ADB underscores that the resource environmental and economic risks are perhaps higher in the Asia-Pacific region than elsewhere The Asia-Pacific region, while emitting relatively low levels of greenhouse gases on a per capita basis, is one of the fastest-growing sources of climate-impacting emissions Average annual population affected by natural disasters in global regions, 2001–2010

- Question: Is higher growth under a green economy (double dividend) really possible? Is there proof? GG: operationalizing Double Dividend Green growth offers the greatest opportunity for developing countries because the economic system change allows them to leapfrog to a new development stage where they can compete with industrialized countries on more equal terms. Low carbon green growth can turn the crises we are now experiencing into opportunities. The system change required can be pursued in a way that brings a double dividend: more growth and employment and less environmental impact. Improving Eco-Efficiency

- Green Growth: Projected trends Source: UNEP ‘Towards a Green Economy’ (2011):  Shifting from focus on quantity of growth to quality of growth ultimately delivers higher growth  This is the evidence: net growth is higher under green growth than the ‘business as usual’ scenario

- Visible Structure The visible structure is the built environment that affects the way we produce and consume, such as urban design and planning, buildings, transport, energy, water and waste systems – the physical infrastructure of our societies. These need to be restructured and redesigned, based on energy, resource and ecological efficiencies. Invisible Structure The invisible structure consists of the intangible patterns that affect the way we produce and consume, such as market prices, fiscal policy, financial systems, regulations, social values, lifestyles, know-how and technologies. These need to be re-aligned, based on ecological efficiency. Economic System Change based on Eco- Efficiency The shift towards green growth requires a fundamental system change

- What about money and technology? Environmental Tax and Fiscal Reform can change market price signals In turn, this will encourage the mobilization of financing and investment The implementation of ETR/EFR requires strong political leadership Environmental Tax Reform Environmental Fiscal Reform Change Market Price Signals Mobilize finance and investment Stimulate R&D and Innovation Pricing policies are the central element in the transition to a green economy. Changing market price signals critical in mobilizing finance and stimulation innovation and R&D

- Why developing countries? Because developing countries are the most vulnerable! Resource price hikes Climate-related disasters Rio +20 outcome document: development strategy, not ecological conditionality Leapfrogging opportunity for energy security, resilience, poverty reduction

- Political Commitment and Leadership The process of greening economy will not happen automatically and cannot be driven by the market: Only government can make it happen This is mainly due to two gaps time gap between short term costs and long term benefits - price gap between current market prices and ecological prices Role of the Government The process of greening the economy will not take place automatically through the markets and laissez-faire approaches. Only government policies can bridge these gaps and jump-start the green growth. Green growth requires strong government leadership and political commitment

- Role of the private sector In the longer run, Green Growth will be driven by the private sector and by markets In the short and medium terms, however, Green Growth requires government to drive the process and manage the transition It requires strong government leadership and political commitment o Seize business opportunity rather than resisting o Early mover advantage o Government support for green business

- Green Growth has to be supported by inclusive growth There is no automatic guarantee that benefits or gains obtained from green growth will be evenly distributed This is the same case as brown growth Green Growth needs inclusive approach to be evenly distributed

- Global Partnerships and Regional Initiatives Seoul Initiative on Green Growth East Asia Climate Partnership Global Green Growth Institute Astana Green Bridge Initiative Collective action & partnership can reduce risk and uncertainty Asia and the Pacific can drive global agenda on green economy and green growth Developing Countries need to be supported by global partnerships Regional Initiatives also necessary > ESCAP is doing it via Low Carbon Green Growth Roadmap No country has done green growth yet > Roadmap is the blueprint