Green Economy Coalition reveals their initial policy thinking for Rio+20
At the UNDPI Conference the Green Economy Coalition, the largest coalition of organisations working on a green economy, opened up discussion on their initial policy thinking for Rio+20 in order to accelerate the transition to greener, fairer economy. These included:
- Driving investment: Sustainable Public Procurement (SPP)
All public procurement contracts should include specifications for labour and environmental sustainability standards.
Our governments are major global consumers. On average, the public sector spends 45-65 per cent of their entire budgets on public procurement, which amounts to 13-17 per cent of GDP.
Directing governments’ purchasing power towards environmentally and labour friendly goods, services and work would drive investment and innovation towards new, green markets. Well-designed purchasing rules will stimulate a critical mass of demand for more sustainable goods and services; drive innovation across the supply chain; and generate green, decent jobs.
- Generating new funds: Financial Transaction Tax (FTT)
All foreign exchange transactions and foreign exchange derivatives should be subject to a Financial Transaction Tax (FTT).
The idea for a transaction tax has had a long history. The scale and wide reaching implications of the recent financial crisis – one that everyone in the world is still paying for – has brought this simple policy back into the political spotlight. The FTT has come of age.
Numerous reports have demonstrated the multiple benefits of an FTT. A below-1-per-cent tax would curb flash trading and speculation without harming genuine investors. It is a socially progressive tax mechanism that will tax the wealthy. It is easy to track and collect from online trading platforms. A tax of 0.0025 per cent on foreign exchange (FX) transactions through the CLS (settlement system) would yield revenue of 16 billion USD a year.
The funds levied from the tax should be ear-marked for environmental goods and services, social protection, poverty eradication and climate change mitigation and adaptation.
- Accounting for the environment: quantifying the value that natural systems bring to our economies
Commitment for green accounting frameworks to be integrated into national accounting practices
As the TEEB report highlighted, unlike economic and human capital, natural capital has no dedicated systems of measurement, monitoring and reporting. This is astonishing given its importance for jobs and mainstream economic sectors as well as its contribution to future economic development.
Our national dialogues have highlighted the extent to which developing countries depend on natural capital for their national competiveness. For example, the Caribbean’s economy is largely dependent on tourism whilst participants at the India dialogue underlined the critical role of agriculture to their national economy.
The monetary value of these ecosystems needs to be recognised within their national accounting systems, so that long-term accountability for their preservation is ensured.
- Redefining progress: beyond GDP
Commitment to develop and implement new ways of measuring national ‘wealth’, specifically with new indicators on societal wellbeing and environmental health
GDP was never intended to measure national welfare. Not only does it fail to address the well being of people or environmental quality, but the averaging of incomes per capita in GDP masks poverty gaps, and inequity and social justice issues. It is a flawed metric by which to inform policy debates.
A global metric should build on and develop the work already carried out by NGOs and governments, including the Stiglitz Report and the Genuine Progress Indicator, to measure the sustainability of income through access to a range of indicators including health, education, political decision making, security and the fair allocation of resources.
The measurement should also build on existing indicators of environmental health including the Millennium Ecosystem Assessment, 9 planetary boundaries and ecological footprint to incorporate a holistic understanding of demands on bio-capacity beyond just carbon alone, e.g. demand on fisheries, cropland, grazing land, forest land for wood and wood products, urban land, and forest for carbon sequestration.
- Protecting the most vulnerable through the transition
Implementation of the Social Protection Floor for the most vulnerable members of society
Reforming our economic sectors into low carbon and resource efficient sectors will have implications for all communities, sectors and nations. The poorest, who have the least access to decision making processes and only limited economic and social protection, will be the most vulnerable to the shift.
To reduce vulnerability, it is important to maintain and strengthen social protection systems where these exist, and to establish systems where none are in place. This should be done by carefully taking into account the effects of the transition toward a green economy and paying particular attention to the transitions in employment.
Social protection can also play a key role in sustaining existing environmental protection practices. By providing the poorest communities with a “protected” income and the capacity to have more sustainable lifestyles, social protection systems can reduce poor families’ pressure on natural resources.
- Holding corporations to account
All corporations must be mandated to report on their environmental impacts and contribution to wellbeing
There must be fundamental changes to the legal framework in which companies operate. These include social and environmental duties being placed on directors to counterbalance their existing duties on financial matters, legal rights for local communities to seek compensation when they have suffered because directors have failed to uphold those duties, complaints procedures, independent monitoring, compliance with national and international law and other agreed standards, and redress for malpractice.
- Catalysing a transformation in the poorest countries
All countries, both developed and developing, must meet ODA commitments by 2015
To date, only 10 out of 33 donors from the OECD’s Development Assistance Committee have met or exceeded the 0.7 per cent target for ODA.
ODA remains the main source of foreign capital in the Least Developed Countries (LDCs) and in turn can help to leverage private investment for sectors such as manufacturing and infrastructure, which will lead a transformation to a green economy.
We would really welcome everyone’s thoughts, feedback and comments on some of these very initial policy areas. Please come join the debate at www.greeneconomycoalition.org