- low carbon green growth roadmap for asia and the pacific

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- Low Carbon Green Growth Roadmap for Asia and the Pacific

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Page 1: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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Low Carbon Green Growth Roadmap for Asia and the Pacific

Page 2: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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

Page 3: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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Green Growth Strategy for Asia and the Pacific: Challenges and Opportunities

Key points

Challenges and Opportunities for Asia and the Pacific region

Page 4: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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

Page 5: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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Vicious cycle/Quantity of Growth (GDP)

Natural Capital

Human Capital

ExploitingHigh resource intensityLow resource efficiency

Ecological unsustainability

Worsening social exclusionLow labor productivityWidening income gap

Low economicDynamism/ resilience

High economic vulnerability

Undermining economic vitality

Page 6: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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Virtuous cycle/Quality of Growth (GDP)

Natural Capital

Human CapitalHigh labor productivity

Social inclusionEquitable income distribution

High resource efficiencyLow resource intensityEcological sustainability

High economicDynamism/ resilience

Low economic vulnerability

Investing

Reinforcingeconomic vitality

Page 7: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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Sustainable Development Model: Purple & Green Growth have to go hand in hand (integration of 3 pillars)

SustainableDevelopment

Natural Capital

Human CapitalInvesting

Investing

Environmental Sustainability

EconomicGrowth

SocialInclusiveness

Inclusive<Purple>Growth

Ecological<Green>Growth

Social Quality Economic Quality

Economic Quality Ecological Quality

Page 8: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-Investment in Natural Capital

o Investments in natural capital: natural resources and ecological services can no longer be considered freeo Market prices need to reflect the change scarcity scale between capital, labor and ecological services, natural

resources and payment for environment serviceso Economy where economic growth trickles down to replenishment of natural capitalo Payment for Environment Services: economic reform of sectors such as agriculture, forestry, fisheries,

biodiversity, etc.

Page 9: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-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

Page 10: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-Five Tracks of Green Growth

Track 1: From quantity of growth toquality 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

Page 11: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-Eco-Efficiency

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

Page 12: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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

Page 13: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-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 2010-2035 (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

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Recent trends

FAO food price index and Brent crude oil price, January 2004 to December 2010

Page 14: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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 2000-2008, now hitting an all-time high in many countries recently in 2012.

• 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

Thailand

Sri Lanka

Singapore

Philippines

Pakistan

Nepal

Mongolia

Rep. of Korea

India

China

Bangladesh

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Net energy import costs as % of GDP

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Page 15: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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Growth cannot be sustained by business as usual practices

Resource constraints and climate impacts are limiting growth

Limiting Growth

Resource Constraints

Climate Impacts

Need to dramatically change the paradigm to improve the efficiency of the economy through economic system change that is:

• Low Carbon• Resource efficient

ESCAP Report (link)“Green Growth, Resources and Resilience”

ADB Report (link)“Past record doesn’t guarantee future growth”

ASIA 2050 – Realizing the Asian Century

Page 16: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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.

Page 17: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-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

Page 18: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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.

Page 19: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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

Page 20: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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

Page 21: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-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

Page 22: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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Visible StructureThe 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 StructureThe 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

Page 23: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-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

Page 24: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-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

Questions:Why does green growth provide a unique leapfrogging opportunity

for developing countries?

Leapfrogging opportunity for energy security, resilience, poverty reduction

Page 25: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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

Close the Time Gap

Environmental Fiscal

Reform (EFR)

Allocating public funds based on

ecological efficiency

Close the Price Gap

Environmental Tax Reform

(ETR)

Changes the tax base while

maintaining revenue

neutrality

Page 26: - Low Carbon Green Growth Roadmap for Asia and the Pacific

-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 resistingo Early mover advantageo Government support for green business

Page 27: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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

Page 28: - Low Carbon Green Growth Roadmap for Asia and the Pacific

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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