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10/11/2013 1 Why account for environmental change ? Hitomi Rankine Environment and Development Division Economic and Social Commission f dh f for Asia and the Pacific Valuing and Accounting for the Environment in the Asia region 8-10 October Bangkok Economic and Social Commission for Asia and the Pacific UN Regional Commission UN Regional Commission Promoting Green Growth since 2005 Green growth as A-P strategy for Sustainable development -5 th Ministerial Conference on Environment and Development (2005)

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Page 1: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

10/11/2013

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Why account for environmental change ?

Hitomi RankineEnvironment and Development Division

Economic and Social Commission f d h ffor Asia and the Pacific

Valuing and Accounting for the Environment in the Asia region

8-10 October Bangkok

Economic and Social Commission for Asia and the Pacific

UN Regional Commission UN Regional Commission

Promoting Green Growth since 2005

Green growth as A-P strategy for Sustainable development - 5th Ministerial Conference on Environment and Development (2005)

Page 2: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Asia-Pacific development context

U t d i t t tUnmet needs, persistent poverty

Rising inequality

Converging crises -food, fuel, climate & resource

Increasing risks - Natural disaster, climate change, economic

Asia-Pacific development context

Human CapitalHuman Capitalsocial exclusion

Low labor productivityWidening income gaps

social exclusionLow labor productivityWidening income gaps

Natural CapitalNatural Capital

ExploitingExploiting

High resource intensityRising environmental pressure

High resource intensityRising environmental pressure

Widening income gapsWidening income gaps

A vicious “growth” cycle

Low economicDynamism/ resilience

High economic vulnerability

Low economicDynamism/ resilience

High economic vulnerability

Page 3: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Asia-Pacific development context

The food-fuel crisis in 2008 exposed the vulnerability of Asian economies to resource

The food-fuel crisis in 2008 exposed the vulnerability of Asian economies to resource Asian economies to resource price volatility

Food prices increased 40% over the past year and will increase 30% in next 10 years (OECD, FAO)

volatile and high commodity prices are likely to become

Asian economies to resource price volatility

Food prices increased 40% over the past year and will increase 30% in next 10 years (OECD, FAO)

volatile and high commodity prices are likely to become $50

$75

$100

$125

$150

100

150

200

250

300

US

D /

Ba

rre

l

(20

02

-04

= 1

00

)

Food

Crude oil

Recent

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

p ythe “new normal” (ESCAP Survey 2012)

p ythe “new normal” (ESCAP Survey 2012) $0

$25

0

50

2004 2005 2006 2007 2008 2009 2010 2011

Ind

ex

( Recent trends

Why account for environmental change ?

More realistic economic strategies …

Page 4: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Unsustainable resource use Asia-Pacific uses > 3 x

resources to produce $1 of GDP, compared to th t f th ld

Domestic material consumption intensity

Asia-Pacificthe rest of the world

100-year global resource price trend reversing in last 10 years with AP region leading (McKinsey & C 2011)

Rest of world

Company, 2011)

Source: CSIRO and UNEP Asia Pacific Material Flows database - www.csiro.au/AsiaPacificMaterialFlows

Unsustainable resource use

Average Annual Growth Rate of material use

Page 5: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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2008

GKyrgyzstan

Mongolia

1990

Papua N. G.Mongolia

Intensity of material use (per GDP) – Mekong region countries

FijiSri Lanka

BangladeshIndonesiaCambodia

IndiaPakistan

TurkmenistChinaNepal

KazakhstanTajikistan

UzbekistanViet NamLao PDR

Papua N. G.

MalaysiaKyrgyzstan

TurkmenistanPhilippinesIndonesia

BangladeshThailand

KazakhstanFiji

PakistanViet NamLao PDR

IndiaChinaNepal

0 10 20 30 40

JapanSingapore

R. of KoreaN. Zealand

AustraliaThailandMalaysia

PhilippinesFiji

0 10 20 30 40 50

JapanN. ZealandSingaporeTajikistan

R. of KoreaAustralia

UzbekistanSri LankaMalaysia

ESCAP’s role - Expanding awareness & data access

www.csiro/AsiaPacificMaterialFlows

Page 6: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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ESCAP eco-efficiency indicator project 2007- 2009

Defined flexible EEI framework

Pilot applications in Viet Nam (Central Pilot applications in Viet Nam (Central Institute for Economic Management) & Cambodia (MoE)

EEI Viet Nam pilot – water intensities

Why account for environmental change ?

Better policy & decision-making tools …

Page 7: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Developing a new integrated economic modeling platform …ESCAP/CSIRO/Univ. of Sydney study tour, September 2013, Canberra

Linking climate change, resource use, land use and economic activityuse, and economic activity..

Can we really use this at the national level ?

- Yes .. but we need environmental satellite accounts

Page 8: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Why account for environmental change ?

For a better understanding of the quality of our growth

Green Growth Green Growth

Green GrowthStrategy 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

• 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)

(exploit)

Vicious cycle /Quantity of Growth

Virtuous cycle/Quality of Growth

Page 9: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Virtuous cycle/Quality of Growth

Human CapitalHuman Capital

High labor productivitySocial inclusion

Closing income gaps

High labor productivitySocial inclusion

Closing income gaps

Natural CapitalNatural Capital

g g pg g p

High resource efficiencyLow resource intensity

Lower environmental pressures

High resource efficiencyLow resource intensity

Lower environmental pressures

InvestingInvesting

High economicDynamism/ resilience

Low economic vulnerability

High economicDynamism/ resilience

Low economic vulnerability

A possible framework for assessing quality of growth (work in progress)

Page 10: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Assessing quality of growth indicators(work in progress)

Why account for environmental change ?

To support a shift to investment in natural capital “goods”

Page 11: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Environmental tax/fiscal reform : shifting tax base from income/labor to resource consumption/pollution Double Dividend

Powerful tool for GG/GE and sustainable development p• Double Dividend of improving ecological efficiency and increasing

Employment and Growth simultaneously (GE) is possible.

• Provides opportunities for financing “Goods” – revenue recycling into socially and environmentally desirable investments

Taxing the “Bads”

REVENUE NEUTRALITY 

Taxing the “Bads” not the “Goods”

Low CarbonGreen Growth Road Map for Asia and the Pacific 

• Main guide

• Summary for policymakers

• 63 fact sheets

• 51 case studies

• 8 policy papers

http://www.unescap.org/esd/environment/lcgg/

Page 12: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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New Learning Management System on-linewww.greengrowth-elearning.org/lms

Online e-learning facility

Environmental tax/fiscal reform : shifting tax base from income/labor to resource consumption/pollution

Double Dividend

Powerful tool for GG/GE and sustainable development • Double Dividend of improving ecological efficiency and increasing p g g y g

Employment and Growth simultaneously (GE) is possible.

• Provides opportunities for financing “Goods” – revenue recycling into socially and environmentally desirable investments

- Taxing the “Bads” not the “Goods”

REVENUE NEUTRALITY 

- Shifting investments to natural & human capital

Page 13: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Shifting investment patterns -expanding the investor base

•Global economies/

Biodiversity support

Soil erosion controlAquifer rechargeWater flow regulationWater quality

CO2 sequestrationsocieties

•Hydropower util.•Water util. •Beverage co. •H2O users•Agro-industry

•Ecotourism •Agro-industryy pp

Scenic/landscape beauty

Flood mitigation Coastal protection

Agro-industry•Rural communities

•Vulnerable Settlements•Private sector

Expanding the investor base (forests)

Traditional management

Management for How much management

for timber production

Private sector (plantations)

L l

service provision

Ecotourism operators Local governments Water utilities Hydropower companies Water users Energy users Beverage producers

should we invest?

Why should Local

governments

Local communities

Beverage producers Agro-industries Local communities Farmers

Why should we pay ?

Page 14: Why account for environmental change account for... ·  · 2015-01-30Converging crises - food, fuel, climate & resource ... Natural disaster, climate change, economic Asia-Pacific

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Thank youy