Green Economy: Background Paper for the Ministerial Consultations

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The 11th session of the UNEP Governing Council will offer Ministers the opportunity to discuss and debate the issue of a Green Economy, building on the fruitful discussions from last year.

Some of key points addressed in the background paper are as follows:

• Though the dominant economic paradigm as benefited many people and led to an improvement in wellbeing in many parts of the world, its shortcomings are characterised by a lack of consideration of the negative environmental externalities (i.e. the degrading ecosystem impacts of economic activities), as well as a lack of recognition of ecological scarcity (i.e. natural resource scarcity on a finite planet). The lack of accounting for environmental externalities is demonstrated by Gross Domestic Product (GDP) continuing to be the dominant indicator of economic success.
• For UNEP, a “green economy” can be defined as a system of economic activities related to the production, distribution and consumption of goods and services that result in improved humanwell-being over the long term, while not exposing future generations to significant environmental risks or ecological scarcities
• Decoupling – to achieve a Green Economy as defined by UNEP, economic growth must be decoupled from resource use and environmental impacts. This requires the investment in ‘green’ sectors including renewable energy, and policy to encourage sustainable consumption and production.
• Generic Green economy ‘indicators’ will be difficult to establish due to the specific economic, social and environmental circumstances of individual nation states, and the varying abilities of different countries to invest in a transition to a green economy.
• Addressing a green economy can also be done so in the context of re-examining the international institutional architecture that will be required to respond to the increasing challenge of global environmental issues.

Green Economy and Climate Change

• International Energy Agency scenarios suggest that if current rates of energy consumption continue unchanged, CO2 emissions may increase by 130% by 2050, risking a possible 6 degree global temperature rise, which would have catastrophic social, environmental and economic costs.
• Investing in low carbon energy options offers a way to deviate from business as usual scenarios – in 2008 global investment in renewable energy surpassed investment in fossil fuels for the first time (140 to 110 billion)
•  If CO2 emissions are to be reduced in line with IPCC recommendations of 50-85% per year by 2050 to limit temperature increases to 2- 2.4 degrees, this will require annual global investment of $1 trillion in alternative energy, generating hundreds of millions of jobs and representing a major transition to a green economy.
•  Investing in ecosystems including forests through the REDD agenda both enhances resilience to climate change and also benefits countries socially and economically through preserving and maintaining ecosystem services and natural capital.

Sustainable Consumption and Production and the Green Economy

• Investing in sustainable production that produces more for less, and promotes the consumption of more sustainable products and services helps to decouple economic growth from ecosystem impact. There is an emerging and growing market for sustainable goods and services that should be exploited in the transition to a green economy.
• The Marakesh Process on Sustainable Consumption and Production and the Commission on Sustainable Development 2010-11 are two international processes dealing with SCP that should enhance momentum towards better consumption and production policies.

Green Economy, chemicals and waste management
The use of harmful chemicals that damage both human health and the environment has negative knock-on effects on societies and economies – the costs of ‘clean-ups’ as well as medical treatment is a significant burden on any economy. Increasing levels of waste, especially in developed countries, put a strain on the natural environment in terms of the landfill, and managing waste is resource and energy intensive. Providing policy incentives to reduce waste ultimately saves time, space and money and encourages investment in low-waste and recyclable products.