Environment & Poverty Times (Sep 09)

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Environment & Poverty Times UNEP/GRID-Arendal06 2009

ByAchim Steiner

I the recent ood, uel, nancial and eco-nomic crises have taught us anything it is thatnarrow denitions and objectives or growthare unlikely to serve society well in the 21stcentury. Indeed, unless we put the green intogrowth we are in danger o repeating the mis-takes o the past which have led in large part tothe current economic crisis and have pushedmillions back into hunger and poverty.

For the crises o the here and now will palebesides the ones to come i you layer on topo them, the climate and looming natural re-source scarcity crises on a planet o 6 billion,expected to rise to over 9 billion by 2050. Whenthe nancial crisis occurred, employment wasalready a global major challenge, with 1.3 billionpeople under or un-employed, and another hal

a billion young people worldwide poised to jointhe job market over the next 10 years.But though we cannot disregard the crises,something quite undamental has also beenhappening in many countries, developedand developing alike.

The last 12 months have seen a markedlydierent discourse, and a set o responses

A new deal or a resource-efcient and Green Economy

that indicate a willingness to seize the op-portunity to drive tomorrows development

by making the transition towards a GreenEconomy i only we can hold our collectivenerve and stick with it.The multi-trillion dollar stimulus packageshave served as adrenaline shots to save theailing global economy or the time being.But some nations and regions, rom Japan toChina and the United States to Europe andMexico are going beyond this investing sig-nicant slices to revive economic activity thatare expected to emerge tter, leaner, healthierand with a smaller ecological ootprint.

In short they are actoring in the broader eco-nomic, social and environmental opportuni-ties possible via a transition to a low carbon,resource ecient development path. Take

the Republic o South Korea i you look atthe stimulus there, the range o environmen-tal investments and the systematic approachinvolving the public and the private sector,then perhaps this is the most comprehensiveGreen Growth package o them all.South Koreas green deals target investmentin renewable energy and transport but alsoecosystems including reshwater and orests.

The close to $40 billion green stimulusis also expected to generate 1 million jobs

by 2012 in areas rom clean technology tonatural resource management.Meanwhile UNEP launched its annual glob-al trends report under its Sustainable EnergyFinance Initiative (SEFI) in June 2009. Thisreport conrmed that investment in renew-ables in 2008 was $155 billion, higher orthe rst time than investment in new ossiluel generation, at $110 billion. Investmentin renewables was up rom only about $35billion in 2004. How many economistsin the 1990s would have predicted such aturn-around? And by ar the largest growthwas not in the developed economies, but inChina and India.

Other highlights, showing progress towards

a Green Economy uture include:

A On World Environment Day 2009,President Calderon announced that Mexicowas taking on voluntary greenhouse gasemission cuts o 50 million tonnes o C02a year or a reduction o around 8%. He alsoannounced that, with the right nancingin place, this could rise to a reduction oclose to 16%.

Page 23

Greening the world economy meansturning markets and fnance intopartners in sustainable development.With the world in the grip o an ominous

fnancial crisis, we are only just realising how

important the way we manage our money canbe or the uture.

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Economics or the planet goes onestep beyond greening the economy.Debate on the economics o nature is only now

beginning, but depending on the direction it

takes, we may see new models or business and

government accounting emerge, new currencies

expressing natural and social assets. We may

even see a GDP o the poor. Time will tell. One

thing is certain, we are all part o the puzzle.

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Business opportunities and newgreen jobs are the lie blood o amore sustainable uture.New opportunities are shaped by drivers such

as changing consumer tastes and preerences,government regulations and innovation. This

may also lead to more meaningul new jobs or

individuals all over the planet.

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Land and sea abound with exampleso change and imminent action or agreen economy.

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Energy or a sustainable uturemeans ulflling demand efciently,drawing on renewable sources.It involves providing sustainable energy

services and solutions, sometimes requiring

o-grid solutions or the development o more

eective technologies and inrastructures to

optimize energy production and consumption.

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Waste equates to unused resources.It calls or new inrastructure and a change in

individual behaviour. In the drive to achieve

resource efciency, waste is uneconomical as

well as raising healthcare and cultural issues.

Above all, it is simply a waste!

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Urban planning and construction arecornerstones or human habitat.Both hold enormous potential or resource e-

fciency, with construction currently generating

a substantial share o our waste burden. To

house growing urban populations the need or

more sustainable cities is increasingly urgent.

Page 2427

Tourism and travel are both a bless-ing and a burden or communitiesworldwide.They raise major challenges, but oer count-

less opportunities or social, cultural and

economic development. When properly man-

aged, environmental stress can be minimized

and action can be taken to adjust behaviour

and attitudes to suit a living planet.

Page 2829

Framework building prepares theground or change, a task in whichgovernments and international orga-nizations play a key role.The emergence o public-private partnerships

over the past decade has amply supported

such eorts. Non-governmental organisations

and research enhance ongoing processes with

essential intellectual input.

Page 3237

Building resilience by empoweringindividuals in communities is a keyprocess in bottom-up growth.Capacity development comes in many

shapes and sizes, but a critical actor is

giving people a sense o personal belonging,

ownership and collaboration.

Contents

ENVIRONMENT&POVERTY TIMES06Sept 200932 pagesA periodic publication by UNEP/GRID-Arendal,

Compound annualgrowth rate in GreenEnergy investments

(2004-2008)

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Source: UNEP - SEFI, Global trends in sustainable energy investment ,2009.

Euro

pe

Ch

ina

India

Sou

thKo

rea*

As

ia

and

Oce

ania

Nor

thAmerica

South

Ame

rica

Brazil

Middle Eastand Africa

Africaonly

Pacific

Ocean

Atlantic

Ocean

Indian

Ocean

Note: South Korea inestments and variations relative to 2008-2009.

50

30

20

1

Green energyinvestments in 2008.

Billion US Dollars

(continues next page)


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Environment & Poverty Times 06 2009

By Ban Ki-moon andAl Gore

This article was originally published in the Finan-cial Times 16th February 2009 (www.ft.com)

Economic stimulus is the order o the day.This is as it must be, as governments aroundthe world struggle to jump-start the globaleconomy. But even as leaders address the im-mediate need to stimulate the economy, so too

must they act jointly to ensure that the new deacto economic model being developed is sus-tainable or the planet and our uture on it.

What we need is both stimulus and long-term investments that accomplish twoobjectives simultaneously with one globaleconomic policy response a policy that ad-dresses our urgent and immediate economicand social needs and that launches a newgreen global economy. In short, we need tomake growing green our mantra.

First, a synchronised global recession re-quires a synchronised global response. Weneed stimulus and intense co-ordination oeconomic policy among all main economies.We must avoid the beggar-thy-neighbour poli-

cies that contributed to the Great Depression.Co-ordination is also vital or reducing nan-cial volatility, runs on currencies and rampantinfation as well as or instilling consumerand investor condence. In Washington lastNovember, G20 leaders expressed their deter-mination to enhance co-operation and worktogether to restore global growth and achieveneeded reorms in the worlds nancial sys-tems. This needs to happen urgently.

Green growth is essential to any stimulusStimulus is intended to jump-start the econo-my, but i properly conceived and executed itcan also launch us on a new, low-carbon pathto green growth. Some $2,250bn (1,750bn,

1,569bn) o stimulus has already been an-nounced by 34 nations. This stimulus, alongwith new initiatives by other countries, musthelp catapult the world economy into the21st century, not perpetuate the dying indus-

tries and bad habits o yesteryear. Indeed,continuing to pour trillions o dollars intocarbon-based inrastructure and ossil-uelsubsidies would be like investing in subprimereal estate all over again.

Eliminating the $300bn in annual global os-sil uel subsidies would reduce greenhousegas emissions by as much as 6 per cent andwould add to global gross domestic product.Developing renewable energy will helpwhere we need it most. Already, developingeconomies account or 40 per cent o exist-ing global renewable resources as well as 70per cent o solar water heating capacity.

Leaders everywhere, notably in the USand China, are realising that green is not

an option but a necessity or rechargingtheir economies and creating jobs. Glob-ally, with 2.3m people employed in therenewable energy sector, there are alreadymore jobs there than directly in the oil andgas industries. In the US, there are nowmore jobs in the wind industry than inthe entire coal industry. President BarackObamas and Chinas stimulus packagesare a critical step in the right direction and

their green components must be ollowedthrough urgently.

We urge all governments to expand greenstimulus elements, including energy e-ciency, renewables, mass transit, new smartelectricity grids and reorestation, and to co-ordinate their eorts or rapid results.

Second, we need pro-poor policies now.In much o the developing world, govern-ments do not have the option to borrowor print money to cushion the devastatingeconomic blows. Thereore, governments inindustrialised countries must reach beyondtheir borders and invest immediately in thosecost-eective programmes that boost the pro-ductivity o the poorest. Last year, ood riotsand unrest swept more than 30 countries.Ominously, this was even beore Septembersnancial implosion, which sparked the globalrecession that has driven a urther 100mpeople deeper into poverty. We must act nowto prevent urther suering and potentialwidespread political instability.

This means increasing overseas develop-

ment assistance this year. It means strength-ening social saety nets. It means investingin agriculture in developing countries bygetting seeds, tools, sustainable agriculturalpractices and credit to smallholder armersso they can produce more ood and get it tolocal and regional markets.

Pro-poor policy also means increasing in-vestments in better land use, water conser-

vation and drought-resistant crops to helparmers adapt to a changing climate, which i not addressed could usher in chronichunger and malnutrition across large swathso the developing world.

Third, we need a robust climate deal inCopenhagen in December. Not next year.This year. The climate negotiations must be

dramatically accelerated and given attentionat the highest levels, starting today. A success-ul deal in Copenhagen oers the most potentglobal stimulus package possible. With a newclimate ramework in hand, business andgovernments will nally have the carbon pricesignal businesses have been clamouring or,one that can unleash a wave o innovation andinvestment in clean energy. Copenhagen willprovide the green light or green growth.Thisis the basis or a truly sustainable economicrecovery that will benet us and our childrenschildren or decades to come.

For millions o people rom Detroit to Delhithese are the worst o times. Families have lostjobs, homes, healthcare and even the prospecto their next meal. With so much at stake, gov-

ernments must be strategic in their choices.We must not let the urgent undermine the es-sential. Investing in the green economy is notan optional expense. It is a smart investmentor a more equitable, prosperous uture.

About the authors: Ban Ki-moon is UN Secretary-General. Al Gore is ormer US Vice-President.

Copyright: The Financial Times Limited 2009

ABrazil, with close to 50% o its energy al-ready coming rom renewable sources suchas hydro and ethanol, announced a 30,000 to40,000 megawatt wind power programmeearly 2009, which will be backed by incen-tives and market mechanisms.

A In July 2009, a consortium o some 20

rms started raising money or the Arican-European Desertec project building solarcollectors in an area o desert in the Sahara800 kilometres square that receives enoughsunlight to generate the whole worldsenergy needs.

A Kenya has announced plans to doubleits current installed electricity capacity by2012 thanks to sources such as geothermaland wind power, but also drawing in part onits roughly 10% share o the Clean Develop-ment Mechanism in Arica.

A Also in Kenya, a private sector consor-tium is building sub-Saharan Aricas largestwind arm, with an initial installed capacityo some 300 megawatt whereas Tanzania iscurrently installing wind turbines equal to10% o its current energy needs.There is optimism and there is transorma-tional change underway, but there is also agreat deal o uncertainty. I a Green Economyis to be nurtured and sustained then severalactors need to be continued or put in place.We need to make every dollar and euro, everyrupee and peso work harder and on multipleronts that will really accelerate the transi-tion towards a Green Economy that is hereto stay, through decoupling and resourceeciency, getting more with less.

Let me make a ew suggestions:

A The green stimulus packages need tobe invested now, not in six months time

nor in two years time there is an urgentneed to overcome the current credit crunchand the diculties o raising nance viabanks or on the stock markets this was

a central message rom renewable energydevelopers on behal o rich and poorereconomies involved in the UNEP SEFIreport mentioned earlier.

A There needs to be a greening o devel-opment cooperation one o the recent sur-prises in Kenya was that the government was

planning to bridge an energy gap by buyingin diesel-generated power rom independentpower producers simply because the higher,up ront nancing o clean energy was notavailable. This is surprising given the actthat diesel electricity is more expensive perunit than geothermal electricity.

A Perverse subsidies, such as the over$250 billion-worth o ossil uel subsidies,need to be reviewed and phased-down there is little or no evidence they addresspoverty. The unds reed-up could be spenton clean technology and perhaps on climateadaptation investments various estimatesindicate that adaptation unding o between$28 billion to close to $90 billion is neededannually over the coming years. Phasing-out such perverse subsidies would alsoreduce greenhouse gas emissions by anestimated 6% and contribute to global GDPto the tune o 0.1%.

AOpening up, rather than protecting, mar-kets is likely to accelerate the dispersion o cleantechnology and the transer o climate-riendlytechnology rom developed to developingeconomies. This was highlighted in a reporton trade and climate change, which UNEP andthe World Trade Organization released in June.The report estimates that one-third o CleanDevelopment Mechanism projects involvetechnology transer. It cites a study showingthat between 1998 and 2008 some 215,000patents were registered globally or low or zero-carbon technologies such as waste-into-energy,biomass, wind, wave and uel-cell power.

A Above all, perhaps, it is o crucial im-portance or governments to seal a credibledeal at the UN climate convention meeting

in Copenhagen to raise the price o carbonand give certainty to the carbon markets.

At its heart the transormation towards aGreen Economy is about ensuring that theull costs o pollution and environmentally-damaging activities are internalized ratherthan externalized so that real choices can

be made. At the same time, establishing aGreen Economy is about more intelligentmanagement o resources nancial, humanand natural thus ensuring that economiesinvest and re-invest in them to maximizeresource eciency and sustainable economicbenets, and achieve the best possible returnor current and uture generations.

The international community is only justscratching the surace in terms o captur-ing the true value o the Earths natural ornature-based assets which underpin vastsectors o the global economy including ag-riculture. The Economics o Ecosystems andBiodiversity assessment o which UNEP isproud to host the secretariat estimates thatin terms o orest ecosystem services alonewe are losing services at a rate o $2 trillionto $5 trillion a year. The global communityis also increasingly realizing the damages oour unsustainable consumption and produc-tion patterns through the Marrakech Processin active collaboration with all the regions ordening an adequate enabling policy rame-work and setting the oundations or a trulyculture o change. This is being urther main-streamed through the UNEP InternationalPanel or Sustainable Resource Managementin demonstrating the necessity to decouplethroughout a lie cycle approach.A good deal in Copenhagen is thereorealso very important as it will likely stimu-late investment in orest ecosystems withmultiple opportunities including reducedgreenhouse gas emissions, soil stabiliza-

tion, improved water supplies and reducedbiodiversity loss. This may open the doorto investing in other ecosystems or theirclimate benets with multiple spin os.

This deal should also give due considerationto reducing greenhouse gas emissions romthe building sector, one o the largest con-sumers o energy and producers o CO2.

The world has had a serious wake-up callin terms o the global economy and its cur-rent trajectory the vulnerable are being hit

the hardest with an estimated 100 millionpeople likely to be plunged back into povertyand a record 1 billion people expected to behungry by the end o 2009.But governments have re-engaged not as med-dlers as some purists might claim but asmanagers on the global stage. And we are see-ing a resh set o values and a serious discoursere-emerging in terms o what is real wealth orthe many, rather than or only a ew.Come what may, the international com-munity is going to have to embrace a GreenEconomy the question is whether it doesso in a timely, ocused and well-directed way.Or whether it will come by deault, orcedupon policy-makers by the world rapidlyrunning out o resources, rom sheries toorests, while struggling under the yoke ounchecked climate change.The current stimulus packages and risinggreen investments represent a striking, per-haps once-in a lie time opportunity to achievethat stable and sustainable transition i theseinvestments can be ully realized and backedby orward-looking policies and measuresover the medium to long term. The packagescan, and indeed are, driving more sustainableconsumption and production patterns. Theyare also driving to more sustainable marketsthat in turn are triggering demand or moresustainable Green Growth technologies,goods and services that are giving rise to thekinds o sustainable businesses, industriesand jobs we need in this new millennium

About the author: Achim Steiner is UN Under-Secretary General and Executive Director, UNEnvironment Programme.

Greening the world economy means turning markets and fnance into partners in sustainable development. With the world in the grip o an ominous fnancial crisis, we are only just

realising how important the way we manage our money can be or the uture.

Greening the world economy

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A Low-Carbon Economy (LCE) reers to an economy that limits the output o greenhouse gas(GHG) emissions into the biosphere. The objective is rst to take into account all GHG emis-sion sources, rom the large industrial plant to the private household. There are then threeways to lower GHG emissions: avoid unnecessary GHG emissions, limit necessary emissions,and trap the greenhouse gases that are still emitted (carbon storage).

Avoiding unnecessary emissions can, or example, mean using carbon-ecient transportation (trainsand boats instead o planes, cars or trucks) or avoiding overheating or overcooling buildings.

Along the same lines, limiting necessary emissions might involve building more ecientbuildings (that require less heating, cooling and lighting) or using more ecient transporta-tion (electric or hybrid cars, more ecient trains or planes).

Low-Carbon Economy

By Najib Saab

This article was originally published in the DailyStar (http://www.dailystar.com.lb)

Were you the one who wrote that speech?my son enquired ater we listened to the UNSecretary General Ban Ki-moons graduationspeech to the class o 2009 at the JohnsHopkins School o Advanced InternationalStudies in Washington. William, who gradu-ated with a degree in energy and environ-ment policies, was taken by surprise withthe high environmental tone o the secretarygeneral, compared to the usually subduedinternational statements meant to pleaseeverybody, while saying nothing.

The global economic crisis is a genuinewake-up call that requires shakeup o theold development patterns, said Ban as hecalled or a new green deal that invests inclean and renewable energy resources. Byinvesting in green, we create jobs and spureconomic growth. At Copenhagen, we needto unleash green investment and jump-starta lasting economic recovery.

Moreover, the secretary general urged gov-ernments, companies and individuals totake eective steps to saeguard the planet:use public transport systems, recycle wastes,plant trees, make companies accountable ortheir environmentally damaging practicesand ask your representatives in governmentto strike a historic deal in the CopenhagenClimate Change conerence.

This candid language that calls or haltingsavage development patterns is new to thehead o the UN, as until recently it has beenconned to staunch environmental groups.

But Ban has shown an unprecedentedcommitment. In act, the Green Economy

Green economy: From Ban Ki-moonto Fuheid al-Shari

Initiative launched by the United NationsEnvironment Program (UNEP) last year wasnot destined to such acclaim without thesupport o the highest authority at the inter-

national organization. This initiative appearsto have succeeded in turning the economiccrises into an environmental blessing, asmany countries have allocated a reasonablepercentage o their economic incentivepackages to green economy programs. Hereare a ew examples: South Korea, Banshome country, has allocated 80 percent oeconomic incentives to green economy,while China allocated 38 percent, the US 25percent and Germany 12 percent.

Governments are now convinced that al-locating resources to green economy is nota luxury, but an option which stimulatesgrowth and creates jobs as well. In theUS it is envisaged that a new $100 billionprogram or energy eciency in buildingsand towns will create two million new jobopportunities within our years. On anotherront, the market or organic agriculturehas increased rom $15 billion in 1999 to$50 billion in 2008, creating enormousjob opportunities, being a labor-intensiveactivity- an ideal option or unemployedagricultural labor in many parts o theArab region.

Apart rom renewable energy, retro-ttingor energy eciency, organic and sustainableagriculture, the Arab countries can investin countless sectors in order to create newjob opportunities within a green economy,such as water management and ecotourism.About 50 million citizens in the Arab coun-tries currently lack access to clean drinkingwater resources and 100 million lack access

to water needed or proper sanitation. TheWorld Bank estimates that Arab countries

need to invest up to $200 billion until 2020in water management. Such investmentscan enhance environmental conditions andcreate new job opportunities that the Arab

countries badly need, knowing that 25 per-cent o young people below 30 years old and17 percent o the total workorce are currentlyunemployed.

The wave o green economy that hasstarted to disperse globally, rom the US,to the UK, Korea and China is starting tohit the Arab World. The Arab Forum orEnvironment and Development (AFED)has nished last month the rst series oworkshops in seven countries in partner-ship with UNEP or the launch o the ArabGreen Economy Initiative, with the par-ticipation o the private sector and publicand civil organizations. National commit-tees that emerged within this process willrecommend programs to the annual AFEDconerence in November 2009, paving theway or real action.

Fuheid al-Shari, governor o Saudi ArabiasGeneral Corporation or Water Desalination,has called or the nationalization o desali-nation technology and its associated equip-ment: It is not logical that we own the big-gest desalination plant in the world and arethe greatest producer o desalinated water,while we are still importing the technologyand equipment entirely, at a time when wehave all the opportunities and capabilitiesor locally developing all o those.

This is only one o the many ields oproductive investment in green economy,that meets the real needs o the region,while supporting the national economy

and creating hundreds o thousands o jobopportunities.

The world is changing or the better, gov-erned by the will to survive. As we welcomeBans statements about green economy, weare more thrilled with the statement o the

head o Saudi Desalination Corporation thatrefects the spirit o the recommendationsrom the AFED annual Conerence orcapacity building in desalination technolo-gies and local production o equipment andspare parts.

Imagine how many million jobs can be cre-ated and how many billions o dollars canbe gained rom the use o the sun in theArab world to desalinate water or producehydrogen rom sea water and export it pres-surized as clean energy.

The US committed or the rst time in Bonnlast month to reduce carbon dioxide emis-sions by 17 percent in 2020, compared to2005 levels. Concurrently, the EU countrieshave committed to reduce emissions by 20percent with promises rom both sides toincrease the ceilings o reduction, i Chinaand India join the system. This approach isan indicator o a complete new phase, ush-ering a historical deal on climate change inCopenhagen next December.

With US President Barack Obama and Ban,we should be witnessing a new era in inter-national cooperation on climate change notwitnessed beore. Countries which choose tostay on the sidelines will be let behind.

About the authors: Najib Saab is Secretary Gen-eral o Arab Forum or Environment and Develop-ment and Editor in Chie o Al-Bia Wal-Tanmia.www.najibsaab.com.

Copyright: The Daily Star 2009

We are consuming more than nature can regenerate and we are producing waste aster than theearths systems can process it. A WWF study released in 2008 reinorce the message clearly:human consumption o the earths resources outstrips the planets capacity to regenerate byabout 30%. As a result o continuing population growth and increasing demand or resourcesin many parts o the world, this ecological decit is amplied each year.

Resource eciency is about ensuring that natural resources are produced, processed andconsumed in a more sustainable way, reducing the environmental impact o the consumptionand production o goods and services over their ull lie cycles. By producing greater wellbeingwith less material consumption, resource eciency enhances the way in which human needsare met while respecting the ecological carrying capacity o the earth.

Improved resource eciency is also essential or achieving the Millennium DevelopmentGoals (MDGs). MDG 7, or example, denes the our targets or ensuring environmental

sustainability reversing the loss o environmental resources, reducing biodiversity loss,increasing access to sae drinking water and basic sanitation, and improving the lives o atleast 100 million slum dwellers. I these targets are to be reached, greater resource eciencyand more sustainable production and consumption patterns will be required. SCP oersdeveloping countries new opportunities such as the creation o new markets, job generation(or example, markets or organic ood, air trade, sustainable housing, renewable energy)and the improved use o natural resources.

See also: www.unep.org/resourceefciency

Resource Efciency

2 3

Every product has a lie cycle. Products are designed, produced, launched, used and main-tained, and at some point, may die (disposal or recovery).

Lie cycle analysis moves beyond the traditional ocus on a production site and manuacturingprocesses to include the environmental, social and economic impact o a product or servicesystem over its entire lie cycle, rom cradle to grave. This analytical tool helps us to understandhow production systems and consumer choices are one part o a whole system o events.

Indeed, a lie cycle approach identies both the opportunities and risks o a product or tech-nology, rom the extraction o raw materials to disposal, and can provide relevant inormationto determine and infuence patterns o consumption and production.

Lie cycle analysis


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By Fatma Ben Fadhl, Moustapha KamalGueye andNicholas Bertrand

Global crises and linkages

The cumulative eect o the nancial andeconomic crisis has been a contractiono economic growth in many parts o theworld. Falling growth has quickly translatedinto decline in incomes and rise in poverty.It is estimated that every 1% all in growthin developing economies translates into anadditional 20 million people consigned topoverty. The United Nations Departmento Economic and Social Aairs estimatesthat world income per capita could drop by3.7% in 2009. The number o people livingon less than $2 a day could rise by some100 million and those below $1 a day by40 million. According to the InternationalLabour Organization (ILO), the number ounemployed could rise rom 190 million in2007 to 210 million in late 2009.

As world leaders battle to counter recessionand ace the triple ood, energy and nancialcrises, longer-term challenges lay ahead: theseinclude climate change, ossil uel depletion,and ecosystem degradation. Figure 1 shows thecause-to-eect interlinkages between the cli-mate, nancial, energy and ood crises, whichare the rationale or a holistic approach advo-cated or by the Green Economy Initiative.

The economic crisis is indicative o faws inpatterns o growth and development over thepast 50 years that have excessively relied oninvestment in nancial capital without equalattention to investment in human and naturalcapital. The global Gross Domestic Product(GDP) has doubled between 1981 and 2005

while 60% o the worlds ecosystems havebeen degraded or exploited unsustainablyaccording to the Millennium AssessmentSynthesis report released in 2005. This is un-dermining the basis o livelihoods and wealthcreation, particularly aecting the poor andmost vulnerable segments o society. In low-income countries, natural capital accountsor up 26% o the wealth, compared to 2%in the richest countries. The imbalance inpatterns o investment in economic, humanand natural capital represents a challengeor long-term sustainable development andmust be given due attention in the globaleort to rebuild economies.

These challenges and contradictions will notdisappear i economic growth were to resumein a business as usual manner. Once global

growth resumes, the price o oil is expected

Putting the global economy on a green pathto rise to $180 a barrel. The impact will beelt especially by the poor. In 2008 rising uelprices cost consumers in developing econo-mies $400 billion in higher energy expendi-

ture and $240 billion in dearer ood. The risein ood prices in 2007 is estimated to havealready increased global poverty by between130 million and 155 million people.

Consumers who do have access oten payhigh prices or erratic and unreliable servic-es. In 2008 the International Energy Agency(IEA) estimates that currently some 2.4Billion people use unsustainable traditionalenergy sources in Arica, Asia and LatinAmerica. The expected increase in energyprices will add to global energy poverty.

Furthermore, the IEAs 2008 World EnergyOutlook estimates that, with current prac-tices, despite the slowing down o popula-tion growth and uture economic growth

prospects, the number o people withoutaccess to electricity in 2030 will still be 1.4billion. About two-thirds o this number willlive in sub-Saharan Arica.

UNEPs call or a Global Green New DealIn the wake o unprecedented economicstimulus packages a recent UNEP reportreleased in December 2008 called or aGlobal Green New Deal and a subsequentPolicy Brie to G20 heads o states urgingthem to turn the crisis into an opportunityby enabling a global green economy drivenby massive job creation rom a more e-icient use o resources, energy-eicientbuilding and construction, widespread useo modern clean public transport, the scalingup o renewable energy, sustainable waste

management as highly lucrative sectors, andsustainable agriculture that refects the lat-est thinking in ecosystem management andbiodiversity and water conservation.

The GEI seeks to make the economic casethat the right mix o policy actions can stimu-late recovery and at the same time improvethe sustainability o the world economy.Over the next ew years, these policies holdthe potential o creating millions o jobs,improving the livelihoods o the worldspoor and channel investments into dynamiceconomic sectors. The Global Green NewDeal (GGND) as called or by UNEP reersto such a timely mix o polices.

A number o governments are respondingto the nancial crisis by stimulating their

economies through public investment.

By April 2009 the G20 nations had an-nounced nearly $3 trillion o scal stimuluspackages, representing approximately 6%o their total GDP. Twelve o these major

economies included green stimulusmeasures or diverse green sectors totallingover $400 billion, among which $183 billionor renewable energy (see gure 2). Greenstimuli account or 6% o the total recoverypackages announced but the countries varysignicantly in terms o investment and theclarity o their measures.

A world economic recovery that revives os-sil uel consumption will accelerate globalclimate change. Greenhouse gas (GHG)emissions are expected to increase by 45%to 41 gigatonnes (Gt) in 2030, with three-quarters o the rise generated by China,India and the Middle East. The IEA warnsthat the atmospheric concentration o GHGcould double by the end o th is century, and

lead to an eventual global average tempera-ture increase o up to 6C. Such a scenariois likely to cause a sea level rise between0.26 and 0.59 meters, and severely disruptecosystem services. According to the SternReview o the Economics o Climate Change,with 5-6C warming, the world economycould sustain losses equivalent to 5-10%o global GDP. Poor countries will suercosts in excess o 10% o GDP. Reports bythe IPCC indicate that by 2020, rain-edagricultural production in several sub-Saha-ran Arican countries could decline by over50%. Changes in agricultural productivitywill not only hit GDP growth expectations,but also exacerbate many o the agriculturaland ood security challenges already acingthe worlds poorest countries. In 2007 the

OECD note that across all cities worldwide,about 40 million people are exposed to a 1in 100 year extreme coastal fooding event,and by the 2070s, the population exposedcould rise to 150 million.

Investing in green sectorsResponding to these challenges requirestransormative change in the way resourcesare allocated in the economy. There is grow-ing indication that investment in the so-calledgreen sectors could oer solutions to themyriad o environmental, economic andsocial challenges o today. During 2008, theUnited Nations Environment Programme(UNEP), the International Labour Organiza-tion (ILO), the International Organisation oEmployers (IOE), and the International TradeUnion Conederation (ITUC) jointly commis-

sioned Green Jobs: Towards Decent Work ina Sustainable, Low-Carbon World which isthe rst comprehensive report on the emer-gence o a green economy and its impact onthe world o work in the 21st Century.

The report showed that employment will beaected in at least our ways as the economyis oriented toward greater sustainability:

Additional jobs will be created as inthe manuacturing o pollution-controldevices added to existing productionequipment.Some employment will be substituted asin shiting rom ossil uels to renewables(see gure 3), or rom truck manuacturingto rail car manuacturing, or rom land ll-ing and waste incineration to recycling.

Certain jobs may be eliminated withoutdirect replacement as when packagingmaterials are discouraged or banned andtheir production is discontinued.Many existing jobs (especially such asplumbers, electricians, metalworkers,and construction workers) will simply betransormed and redened as day-to-dayskill sets, work methods, and prolesare greened.

Building on these ndings, the UNEP -ledGreen Economy Report due to be releasedat the end o 2010 aims at proving thatsustainability in high impact sectors othe economy oer green opportunities oreconomic growth in the uture as sustain-able investments in these sectors can con-tribute to rapid economic recovery in theshort term and sustained economic growthover the next ew decades with positive

contributions to decent job creation andpoverty reduction.

ConclusionThroughout history, crises have always beentimes o quick and bold action. They havealso oered opportunities or transormativechange in society and their economies. Themultiple ood, energy, ecological, nancialand economic challenges witnessed inrecent years should be seized as a majoropportunity to reorient investment andnancing in a new set o economic, naturaland human assets that can drive recoveryand prosperity and address poverty over thelong run by laying the oundation o a globaltransition towards a green economy.

Through the GEI, UNEP is committed to

work with governments, civil society and theprivate sector to identiy the most promisingstreams or enabling a green economy. Forinstance, the Green Economy Report (GER),a key component o the Initiative, will seek tomake a macroeconomic case or increasingpublic and private investments in 12 greensectors (the 12 sectors are as ollows: cities,buildings, nance, renewable energy, trans-port, waste management, industry, tourism,water, agriculture, orests and sheries). Thereports main objective is to motivate andenable policymakers, business executives,and stakeholders to invest in green sectors,to be supported by necessary policy andinstitutional reorms.

UNEP will also assist with the reviewing o

national or regional green policy initiativesto provide guidance to other countries,UNEP will also dene and assess promisingnancial instruments that will acilitate andsecure investments in green sectors.

About the authors: Fatma Ben Fadhl, Mousta-pha Kamal Gueye (PhD) and Nick Bertrand areEconomics Aairs Ocers at UNEP working onthe Green Economy Initiative.

Figure 2: Green Stimulus allocations to cleanenergy by Country ($bn)s

Total amount announced by the 12 economies amountsto $183.4bn. Source: New Energy Finance.

Technology

WindSolar

Solar ThermalBiomassHydropowerGeothermalRenewables combined

Global (2006)

300,000170,000

624,0001,174,000

39,00025,000

2,332,000

Table 1: Estimated employment in the renew-able energy sector

Source: UNEP/ILO/WorldWatch Institute

Figure 1: Inter-linkages between the climate, fnancial, energy and ood crises

Source: UNEP

Economics or the planet goes one step beyond greening the economy. Debate on the economics o nature is only now beginning, but depending on the direction it takes, we may see

new models or business and government accounting emerge, new currencies expressing natural and social assets. We may even see a GDP o the poor. Time will tell. One thing is

certain, we are all part o the puzzle.

Economics or the planet


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By Mathis Wackernagel

A version o this article irst appeared in theCommonwealth Ministers Reerence Book 2009

We are all amiliar with the concept o credi-tor countries, that is, countries that extend -nancial resources to regions ar outside theirborders. But there is another type o credi-tor nation that underwrites the economies

and livelihoods o distant shores. So-calledecological creditors are countries that havemore biocapacity (ability o their ecosystemsto produce resources) than they use or theirown benet. By providing ecological services ranging rom exporting resources in theorm o wood products, or example, toremoving CO2 rom the atmosphere theyprovide many ecological services the rest othe worlds countries rely upon.

More than three-quarters o the worldspopulation now lives in countries that areecological debtors they use more resourcesand ecological services than the ecosystemswithin their borders produce. This haschanged drastically since just ve decadesago, when the vast majority o the worldspeople lived in countries with ecological re-

serves. As the number o ecological creditornations dwindles, the resource pressures onthose remaining surpluses increase and aclear challenge emerges: not everyone can bea net importer o resources. Much o LatinAmerica, as well as New Zealand, Canada,Gabon, Finland, Botswana, Australia andothers, are still in an ecological creditorsituation, which might signicantly andpositively aect their uture economicstanding and competitiveness, i resourcesare managed well. Conversely, those eco-logical debtor countries that are preparingthemselves or resource constraints will bear better equipped to navigate the uture.Recognizing this new geopolitical shit canhelp put the climate negotiations on a muchmore productive path.

This is why: ecological debtor countriesdepend on the health o ecological assets increditor countries. It is very much in theirinterest both to become less dependent onsuch assets, and to support creditor coun-tries in managing those assets careully.

Through our Ecological Creditor and DebtorInitiative, Global Footprint Network is

Ecological creditors and debtors

convening key policy experts and decision-makers to initiate a dialogue on the growingsignicance o biocapacity or economic pros-perity and stability. I we succeed, policy-mak-ers will start to recognize both the tangiblebenets o maintaining ecological assets andthe risk that liquidating these assets poses totheir nations long-term interests.

Avoiding the impending resource crunchThe shit o many nations rom being eco-logical creditors our or ve decades ago toecological debtors today is part o a largerglobal trend. In the early 1960s, humanityconsumed only about hal o what planet Earthcould provide. In the mid-1980s, humanitybegan to demand resources and ecological ser-vices aster than the earth could renew them,a condition known as ecological overshoot.Since then, growing human population andper capita resource consumption have causedovershoot to escalate. Our accounts concludethat in 2005, the most recent year or whichdata are available, human demand exceededby 30% what the earth could renew.

The symptoms o overshoot are clear andpressing: rapid climate change, crop shortag-

es, biodiversity loss, reshwater stress, shrink-ing orests and depleted sheries. Yet, so ar,global negotiations around environmentalcrises have been mired in dragged-out debatesand deadlock, with no signicant moves to-ward implementation. Most political leaderssee little strategic upside to bold action andaggressive policy. The path to reaching globalagreements (such as the emerging Copenha-gen agreement on climate change) has beenextremely ragile; now with the worlds shakyeconomic situation, there is an especially highlikelihood o monkey-wrenching.

Incorporating a creditor/debtor view o theworld into the discussion brings an invigorat-ing element o national and regional sel-in-terest. Creditor countries have the economic,

political and strategic motive or preservingtheir ecological assets, while debtors have adirect interest in reducing their exposure byminimizing their resource dependence.

In recognizing that humanity is moving atgreat speed into resource constraints, andthat reinventing our urban inrastructureso it can cope with these constraints takestime possibly several decades it becomes

clear that there is no advantage in waiting.While collective agreements will certainlyaccelerate action, delaying action incurs agrowing cost and risk.

As ecological reserves become increasinglyrare, it will become critical or creditor anddebtor nations to orge new relationships andmove toward policies that protect natural as-sets while improving health and well-being.In this game, everyone can win. Every singleperson will benet rom early action.

The challenge or creditors and debtorsIt is now generally accepted that running atrade decit involves risks, but the same isnot true o ecological decits. Consider theUnited Kingdom. In 1961, it was one o onlya handul o countries in the world where thepopulations demands on nature exceededthe countrys biocapacity. At that time, itused nearly twice what its ecosystems couldrenew. In the last our and a hal decades,however, that spread has nearly doubled. TheUK now demands resources o more than

three times its biocapacity and at the sametime, the number o countries with eco-logical reserves able to provide the ecologicalservices it needs is shrinking rapidly.

As or ecological creditors, the uture doesntgive them an advantage i they dont preparewell and avoid the pitalls. Tanzania andBotswana are still creditors, but their ecologi-cal remainder is shrinking rapidly. Climatechange, expanding population and otheractors are increasing the pressure on eachcountrys ecological assets. Without such aremainder, it will be more dicult or thosecountries to succeed in the global economy,particularly as it will become increasinglydicult in a world with global overshoot toaccess ecological services rom abroad.

The Ecological Creditor Initiative will helpcountries think through these various chal-lenges and develop strategies that recognizenature as a core asset. In the long term, thesediscussions could shit the way we value andnegotiate resources in the 21st century, provid-ing clear strategic and economic advantagesor nations to become more resource-ecientand bolster their ecological reserves.

In April, Global Footprint Network met withpolicy experts and government representativesin Lima, Peru, to kick o the initiative andbegin a series o workshops on the growingsignicance o biocapacity and its potentialor competitive advantage in a resource-con-strained world. The organization will continueto hold meetings and convene internationalwork sessions throughout the year, includinghosting a side-event at Copenhagen. Next year,Global Footprint Network plans to present asummary o the work session ndings at awide range o international orums and con-erences, leading up to a Presidential Gather-ing on Biocapacity in late 2010.

Once leaders begin to understand the inherentvalue o ecological assets, the paradigm willshit rom the more we reduce resource con-sumption and waste emission, the more di-cult it is or us to be competitive to the morewe reduce resource consumption, the greaterour well-being and the lower our risk.

It changes the equation rom a negative sumgame, where nancial wealth is generated at

the expense o the environment, to a positivesum game, where the economic objectivebecomes securing the best lives using theewest resources.

About the author: Mathis Wackernagel, Ph.D.,is ounder and Executive Director o GlobalFootprint Network. For more inormation on theEcological Creditor and Debtor Initiative, go to www.ootprintnetwork.org/creditors.

4 5

World Ecological Footprint and

Biocapacity, 1961-2005

Global hectares per capita

1960

0

2

1

3

4

5

6

1970 1980 1990 2000

1960 1970 1980 1990 2000

1960 1970 1980 1990 2000

Tanzania Ecological Footprint and


0

1

2

3

4

5

Botswana Ecological Footprint and


0

5

10

15

20

25


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By Hkon F. Hydal,Anne SolgaardandHedda L. Bredvold(photo)

Based on an interview with Mr Pavan Sukhdev,study leader or the project on The Economics oEcosystems and Biodiversity and the UNEP GreenEconomy Initiative

Most o what nature provides us is ree.

It does not go through a market economy.That is why it tends to get ignored, saysPavan Sukhdev. The Indian economist aimsto include the natural environment in oureconomic calculations.

Pavan Sukhdev is the leader o the TEEBproject The Economics o Ecosystems andBiodiversity which was launched at the G8+5Environment Ministers meeting in Germanyin March 2007. I he achieves what he is work-ing or, we might in a ew years see a dierenteconomy, which includes the pricing o whatnature gives us. Even i nature may seem togive it or ree, that is no reason not to includeits value when measuring our economy, Sukh-dev tells Environment and Poverty Times.

In nature, you can appear to have a reelunch once in a while, but not continuously.We are ocusing too much on what humanbeings produce, and are missing the extent towhich nature creates and human beings useup those created resources. We give priorityto the market economy: to manuacturing,industrial processing and to the service sector,because these generate prots or corpora-tions and taxes or governments. What we aremissing is the importance o nature when itcomes to providing climate stability, ree fowso clean air and resh water and biodiversity.Services like food prevention and carbon se-questration are certainly not paid or. They areservices provided ree by nature that do not gothrough a market economy. And so they tendto get ignored in our modern world.

This is what TEEB wants to change. Theproject was started by the G8+5 conerencein 2007 in an eort to try and merge the twoecos: ecology and economy. The traditionalway o approaching and applying economicsis too narrow, and misses a lot o the equa-tion, Sukhdev explains.

Industrial processes are only the ag end othe overall process. Even i you make ood,it is not the harvesting and the processingthat are central in the production. It is theproduction and selection o the seeds, theircultivation, the growing o the ood, theertility o the soil, the cycling o nutrients,and the access to the use o resh water

The economics o natureresources. There is a lot o production in na-ture that goes into everything we consume.But traditionally we only look at the elemento production that is manuactured by man.Because o that limitation in our thinkingwe tend to take actions that are not good orthe survival o the economy and humanity,Sukhdev says. What TEEB tries to do is to

convert all this into numbers.

We try to calculate how much it is worth tohave these nature-given services. What is thevalue o biodiversity? How much is it worth?What are the costs o the alternatives? Howmuch will it cost not to have resh water, to re-place it with articial irrigation? Which costswould be incurred by the economy to providethe alternative? All this adds up to us workingout the economics o natures losses.

How is it possible to translate the multiplic-ity o our ecosystem into numbers?

Its not. Nature itsel is everything. All wecan calculate in economic terms is the valueo the services we receive. We cannot value

nature itsel. I we want to value nature, theanswer is very simple: its innitely valuable.With it we can survive, and without it wecannot. The dierence between survival andnon-survival is one divided by zero, and theanswer to that is innity. I dont need a projectto calculate the value o nature. I need a proj-ect to work out the value o ecosystem servicesand biodiversity benets to the economy.

Nature in numbers. How do you want touse these ecosystem spreadsheets?

We must make politicians and businessesunderstand what they are missing when theythink they can run the economy without pay-ing attention to these values. That is what theproject is about. We in TEEB are trying to

prove that without these values you wouldnthave the economy we have today.

Can you give us an example o how this isalready implemented today?

Yes, I can. In Costa Rica, or example, thegovernment has decided to charge a tax ontransportation by private cars through ueltax. The income rom this is used or pay-ments o environmental services. The gov-ernment identies armers who have patcheso orest on their arms, and they rewardthem or conserving these. The governmentpays or our values o the orest: carbon, wa-ter, the landscape and biodiversity. I the or-est has some o these values, the armers are

rewarded. So ar, they have identied 10,000armers to whom these payments are made.It has become so big it has become part othe environmental policy o Costa Rica. Thelogic is that you have to have a reward, andthe reward has to be material, otherwisepeople will not change. You can object thatthe money is only going to the rich armers,

because only rich armers have large armswith orests. But because o this, the overallertility o the soil will improve, so poor arm-ers are also benetting rom this.

Pavan Sukhdev hopes a similar systemsoon will be applied to his home countryIndia. In neighbouring Nepal, over 80% othe energy comes rom uel wood. Peopleare constantly chopping wood. This orestdegradation has a serious eect on foodingin Bihar, an Indian state south o Nepal andas a result, the food and mud fows downthe Nepalese hills to Bihar get worse everyyear. These foods cost Bihar a third o theirGDP. Thereore it makes sense or Bihar topay Nepal or protecting the orests in Nepal.It is not happening yet, but this is one o

the international payments or ecosystemservices which need to be worked out.

The basic problem is that nature gives usall this or ree. Why should producers orany o us be interested in giving value toresources and services or which consum-ers do not have to pay? I that resource wastaken away, the cost o replacing it wouldbe high. Take coal or example. It has takenseveral hundred million years with heat andvery high pressure to produce the coal whichwe mine. Try to estimate the value o that,imagine how much it would cost to replacethat process, to recreate coal. Its massive.

As a trained economist and devoted ecolo-gist, it is easy or Mr Sukhdev to talk about

nature in economic terms. He argues thatwe need to buy assurance rom nature, tosaeguard us rom a loss we cannot aord.

The risk comes in two ways. There is therisk o running out o resources. The otheris the climate risk: you burn ossil uels, thecompany which sells it doesnt pay or theresource, but only the cost o extracting it,nor does the individual who uses it pay orit. In the end we shall all pay or it by nothaving a world or our children. So you needto value this risk. In nance we always valuerisk. We pay premium or risk. But naturedoes not charge you a premium. Nature isno nancial institution. It is not charging apremium or the assurance o providing itsservices next year and the year ater. Youreassuming it, or there is no charge.

Pavan pauses briefy beore he continues,making exclamation marks by thumpinghis nger on the table:

Right now, there is no assurance! Nobodyis paying their premium. No one is puttingup the pressure to bring about real changesin consumption patterns, or political, eco-nomic or social structures or that matter.Governments are more ocused on ensur-ing employment, and will ensure that theymeet the needs o the people in the shortterm. And corporations are not interested incontrolling their externalities. A corporationis targeted at making a prot. So we have aundamental problem.

He is, however, optimistic.

Change is gradual. You cannot have a vi-sion or the uture without a plan or gettingthere. But nowadays, people do not have avision or a low-carbon economy. Graduallythe vision is coming, but we are struggling tond out how to get there. Transition is alwaysdicult, but it has to be done. It cannot justbe GDP growth that drives everything.

Regarding that, you are known or havingcalculated a GDP o the poor. What doesthat mean?

The whole world is as dependent upon na-ture as the poor are, but the result o the losso nature is more immediate or them. Forthe rich, biodiversity is perceived as a luxury.For the poor, it is part o their daily survival.What they get rom nature is vital. They getuel wood, resh water, ree honey, leaves orthe cattle, building materials, to mention aew gits o nature. Their livelihoods dependheavily on these things that are harvested

ree. We did the calculation in India: I youtake the ecosystem services not accountedor, it was only 7% o the national GDP. Buti you look at to whom these benets go, theanswer was almost 60% o the GDP or thepoor comes ree rom nature. So i you losebiodiversity you are condemning the poorto eternal poverty. There is a deep and eco-nomically proven link between what comesrom nature, and poverty. Developmenthas to happen by ensuring that those fowscontinue, and then by providing extra, likeeducation and health and new livelihoods.You cant say to a poor person so youve lostyour orest, but you now have a hospital anda school! What is he going to do? He canteat the hospital, he cant eed the cattle withthe school. We cant have development thatlooks only on building o schools and so on.You have to build livelihood, and respectexisting livelihoods o the poor.

This is why he is pessimistic about our achiev-ing the Millennium Development Goals.

They cannot be successul because peopledo not understand the connection betweenhaving a healthy environment and achievingthese goals. You cant solve health problemsjust by building hospitals. You have to look atwhat the people eat, how they live, what is theimpact o a healthy environment on them?

No budget ends with a total o innity. MrSukhdev is convinced this is also the case orthe budget o natures services and resourcesprovided to man. It is nite.

You cant have sustainability i you areeating capital. Today we are consuming ournatural capital. The Global Footprint Net-work has compared the bio capacity in manycountries to what they consume. The globalaverage is 1.35 we are consuming 35% morethan the Earths bio capacity. That is not agood idea. It is like living in a house and sayI need a re, so Ill chop up this window. Ineed some clothes, so Ill rip o the carpet.You have to live on the fows rom nature.

Right now, the rich world consumes at a ratethat would require 3 to 4 earths to sustain it.That does not worry Mr Sukhdev. Yet.

Right now, the rich world is so small it does

not seem to matter. But i the developingworld becomes richer, and ollows the samepattern o development, we will be in evenmore trouble than we are today. That is alsothe part o the problem or the Copenhagenmeeting in December: the developing worldis not coming to the table with an understand-ing that there is a low-carbon path to prosper-ity. All they see is what the developed worldhas done, which is a very high carbon path.

Economics or the planet

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By Tony Juniper

Ask a representative group o people what isthe greatest threat acing humankind in the21st century and many suggestions will ollow.Terrorism, hunger and poverty will be there,so might a violent superpower conrontation,and disease epidemics will likely be amongthem. A ew people would say that our ap-proach to economics should be at the top othe list. While all the others are real threats,

the evidence increasingly suggests that thislast one is most likely the correct answer.

The reason is simple. For all its sophistica-tions, mainstream neo-classical economicsdoes not account the needs o, and theimpacts o development on, nature. In act,nature is set to be the ultimate limiting actoron human progress, welare and ullmentas we head toward the middle decades o thiscentury. The developed worlds consumptionpatterns take little account o constraints thatcould in the not too distant uture create gravedangers or human societies. At the sametime, many environmental problems are notlimited by country borders, and oten poorcommunities in the developing world have tobear the greatest burden o impacts.

The scale o the oversight almost couldntbe bigger. One widely cited study by theecological economist Robert Costanza andhis colleagues published in 1998 gave anindication o just how big. He and his co-authors set out to estimate the nancial costo replacing all the services provided to us bynature. Pollination o crops, restoration o soilertility, recycling o wastes, the coastal protec-tion provided by coral rees and mangroves,the creation o rain by natural orests and theclimatic stability that enables human societiesto develop were estimated to be about doublethe value o global GDP in that year.

In other words this study suggested that thepart o the economy that we seek to grow andwhich is at the core o the political ambition

o countries worldwide is actually worth onlyabout hal as much as the part that we do notmeasure, and which is apparently providedor ree by nature.

We know now that those ree services havebeen taken ar too much or granted. Climatechange is the most prominent issue in termso media coverage and political attention.However, it is unortunately not the only eco-

Economics or People and Planetlogical concern that should be high on our list.The depletion o so-called ecosystem services,ranging rom deorestation to overshing androm soil erosion to the reduced availability oreshwater, is already an economic concern inmany parts o the world. So is the depletiono some non-renewable resources, such asconventional oil reserves.

While or many the relationship between eco-nomic and ecological conditions might seem

like an academic discussion, there is everyreason to believe that it is rapidly becoming apractical question o the most pressing kind.For while we treat nature as an endlessly avail-able and largely ree service, it is ast dawningthat on both counts these are dangerouslyfawed assumptions. While GDP has contin-ued to grow, nature has been progressivelydepleted, and this decline in ree eco-serviceswill increasingly limit GDP growth.

The main ndings o the Millennium Ecosys-tem Assessment, or example, set out in 2005how it will be very dicult to meet ocialpoverty reduction targets i the degradationo ecosystems continues unabated. Similarconclusions have been reached in relation toclimate change. I we change our approachtoward economics, and our expectations as

to what constitutes a good lie, we might stillavoid an ecological crash later this century.

The economic crisis that we are livingthrough right now might be just the oppor-tunity we need to make the transition neededor people and planet. The question is, canwe seize the moment, or will the temptationbe to return to the business as usual rombeore the crisis?

Clearly the possibilities are considerable.Equipping the world with the low carbontechnologies needed to cut emissions tothe level that will avoid the worst impacts oclimate change is perhaps the biggest busi-ness opportunity in history. Clean vehicles,super ecient appliances, renewable power

systems and smart grids could transorm theimpact o how we live i only the measuresare put in place to ensure these technolo-gies are deployed quickly and to those inmost need o development rst. Similarlywith the potential or resource eicientmanuacturing and genuinely sustainablearming the opportunity is there, i wewish to take it. Financial transers rom richto developing countries via innovative new

nancial mechanisms could help developingcountries to keep their remaining orests,cutting emissions and conserving the vastbiological wealth held in these ecosystems,while at the same time enabling sustainablepoverty reduction.

The transormation to a green economycould create millions o jobs, generate newmarkets, stimulate new technologies andprovide the opportunities or dynamic new

businesses, and in the process yield massivesocial and economic benets while at thesame time conserving the natural systemsupon which we all depend. New measures oeconomic development that consider humanwellbeing rather than simply consumptionlevels, while simultaneously accounting or

the state o natures capital, are needed. Iwe pursue dierent economic priorities withdierent measures, then perhaps sustainabledevelopment can still become a reality.

While such a transormation until recentlysounded like a utopian dream, it increas-ingly sounds like our only option to avoida humanitarian and ecological catastrophe.The moment has certainly arrived to harnesseconomics or people and the planet the

question is; how will we do it?

About the author: Tony Juniper is an indepen-dent campaigner or sustainable living. Special ad-viser to the Prince o Wales Rainorests Project anda Senior Associate with the Cambridge UniversityProgramme or Sustainability Leadership.

Whats your ambition or 2010?

He laughs and looks out on the Norwegianwood outside the window.

By the end o 2010? I want to see theglobal agenda seriously changed! TEEBand the Green Economy initiative havemany recommendations or policy-makers,and their time is now. I want governmentsto start recognizing and rewarding the

public benets o conservation. We have

to acknowledge the deep link o persistentpoverty with lost nature and seriously startreversing that vicious cycle. We have tounderstand that greening our economiesis not a cost but a gain, which will lead tosustainable wealth, lower risks, more jobs,less poverty, and so governments must startinvesting in this undamental change. Wehave to start refecting the economics onature in our National Accounts, and stopchasing that narrow measure o progress

called GDP growth, with which we are all

obsessed. And we must get these unda-mental game-changes going within thenext ew years, so that we can switch roman economy o unsustainable growth to aneconomy o permanence and a society inharmony with nature!

About the author: Hkon F. Hydal is a journal-ist at the Norwegian daily newspaper VerdensGang (VG), Anne Solgaard works as a CapacityDevelopment Ocer at GRID-Arendal and Hedda

L. Bredvold is a reelance photographer.

6 7


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contributions they make to society beyondtheir immediate economic value in themarketplace. For example, the contributionthat trees make to preventing soil erosion isalmost never ully refected in timber prices yet erosion control is a valuable ecosystemservice that improves water retention and soilertility, and lowers harmul sedimentation inwaterways. Such pricing inaccuracies drive

global markets toward overexploiting naturalresources and result in economic outcomessuch as the commodity price spikes o 2008.The populations that depend directly uponthese resources suer the most as a result.

As part o the recognition o the need togreen the global economy, important toolsare being developed and implemented thathelp to internalize the environmental andsocial values o our natural resources aglobal carbon market is one example.

But we need not wait or markets to perectnatural resource pricing in order to movetoward a more sustainable and inclusiveeconomy. Roots o Resilience highlightsone step we can take right now in this direc-

tion, by promoting rural ecosystem-basedenterprises.

The case studies o ecosystem enterprisesthat orm the empirical oundation or Rootso Resilience indicate that any success inovercoming poverty takes time and persis-tence (see Box 1: Forestry in Guatemala). Theactors that go into this success includinga wide range o governance variables are

complex and interrelated. Roots o Resilienceidentiies those elements without whichany promise o sustained growth is greatlydiminished, ocusing on three in particular:community ownership and sel-interest;intermediate organizations that oster ruralskills and capacity; and networks that supportrural producers and provide learning struc-tures. With these actors present, resourceul

and resilient communities can emerge.

Community ownership and sel-interestEnsuring that communities have sel-inter-est in stewarding the land around them isa undamental part o securing benets orcommunities rom their natural resources.While rural ownership rarely implies thatindividuals have the ull bundle o rightstypically associated with property ownership,it does mean that they have secure accessto a particular resource or an extendedperiod o time. Only by eeling that theiraccess is secure will individuals be willingto invest in the long-term sustainability otheir resource.

True ownership, as dened in Roots o Re-

silience, also involves not only a granting o rights but also a commitment by the com-munity or a subset thereo to maintainingthe resource. In a watershed managementproject, or example, individuals may makethis commitment in the orm o providinglabour to build watershed managementinrastructure, or sacriices o personalwater consumption or the benet o theull community.

Households across the developing world depend directly upon natural resources or daily sustenanceand livelihoods. Degradation o these resources orces women and children to walk long distances eachday sometimes more than 20 miles just to nd uel wood and water or their amilies. John Talbott,World Resources Institute, 2007.

The Guatemalan government divided 13 percent o the Petns tropical orest region into concessions inthe mid- 1990s. These parcels were then distributed to legally constituted community groups under 25year leases. NGOs and development organizations worked with these community groups to help them tosustainably manage and derive value rom the orest.World Resources Institute, 2008.

Business opportunities and green jobsBusiness opportunities and new green jobs are the lie blood o a more sustainable uture. New opportunities are shaped by drivers such as changing consumer tastes and preerences,

government regulations and innovation. This may also lead to more meaningul new jobs or individuals all over the planet.

By Lauren Withey

Three-quarters o the worlds poorest citizens those living on less than $2 per day aredirectly dependent on natural resources ora signicant part o their daily livelihoods.Yet the sustainability o such resources andthe rural poors access to them is requentlyunder threat rom more powerul orces.Artisanal shermen are losing their catchto large trawlers, orest-dwellers are losingtheir homes to timber companies, and ruralwater supplies are being diverted to urbanareas and large-scale commodity arming.Climate change, meanwhile, is altering natu-ral resource patterns around the world.

Without secure access to the natural resources

upon which they have traditionally relied,the rural poor look elsewhere to create liveli-hoods. This leads to relocation and accompa-nying social strie, as well as less sustainableresource stewardship i a armer believes theland he is arming will only be his or one ortwo cropping seasons, he is likely to arm itdierently than i he were condent that hewould have access to the land or a decade.

Yet where the rural poor are oered secureand long-term access to natural resources,they are oten able to build enterprises thatcreate economic, social, and environmentalresilience. The steps to ostering such re-silience are also steps along the path out opoverty. These ndings, which emerge romthe World Resources Report, Roots o Resil-

ience: Growing the Wealth o the Poor, aremore important than ever within the currentglobal downturn building greener, moreresilient, and more inclusive societies is theonly road to lasting economic recovery.

Setting the contextThe ocus o Roots o Resilience emergedrom a growing awareness that a number otroubling eatures o our global communityare tightly intertwined and that addressingthem will require equally integrated solu-tions. These eatures include:

The world is wealthier, but wealth tends tobe highly concentrated in a small percent-age o the population.The Millennium Ecosystem Assessmento 2005 ound that 15 out the 24 majorecosystem services it assessed are being

degraded or used unsustainably.We are already experiencing the conse-quences o climate change; the pace o theseearly changes, such as polar ice melt, is morerapid than any models had predicted.

We have made commendable progress inreducing the number o people living inpoverty; but that achievement has been lim-ited to China and a handul o South Asiacountries. The plain act is that almost halthe worlds population 2.6 billion people continues to live on $2 per day or less; onebillion o them on $1 per day or less.In spite o becoming a predominatelyurban world in 2007, three-quarters othe poorest amilies still live in rural areas.High population growth rates in rural ar-eas and the return o unemployed urbandwellers back to the countryside is drivingthese numbers up. These rural-dwellersdepend in large measure directly on natu-ral resources or their existence.

These ve eatures o our global societyare tightly connected. For example, woodusage and meat consumption has risenrapidly in wealthier countries and ast-growing states like China and India inrecent years. This has increased pressureon orest resources in developing states,pushing the poor o their ormer land.Higher logging rates and burning o theorest or agriculture and cattle ranchingcontributes to the degradation o orestecosystems and to climate change. Giventhe interconnectedness o these issues, anyattempt to address one o them must alsoaddress their links.

Roots o Resilience identies an intersec-tion point at which all ve o these eatures

can be addressed: ecosystem-based enter-prise development. The book contendsthat the scaling up o ecosystem-basedenterprises, such as shermens or coeecooperatives, increases rural resilience,reinorcing the ecological oundationso the rural resource base and providingcommunities with a stepping-stone alonga pathway out o poverty.

Ecosystem-based enterprises and agreen economyIn the year since Roots o Resilience was rstpublished, the global economic downturnhas sparked an increasing awareness o theunsustainable nature o the global growthmodel. Though it was tempting to think thatthe strong growth trend o the past mightlast indenitely, such optimism has been

grounded in inaccurate valuations o assets,including natural resources.

Any accurate valuation o these resourcesshould take into account the wide-ranging

Growing the wealth o the pooror a green economy


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Intermediate organizationsIn addition to examining the importance oownership or successul ecosystem enter-prises, Roots o Resilience also looks closelyat the increasingly critical role o intermediateorganizations in promoting rural enterprisedevelopment. These organizations, whichmay be national, international or regional inscope, provide critical skills and access to keyresources or rural enterprises.

An organization like Washington DC-basedNew Ventures, or example, provides busi-ness mentoring or small and medium en-terprises, and links enterprises to potentialinvestors. The Rainorest Alliance, mean-while, helps small producers o orest prod-ucts to receive sustainability certicationand nd appropriate market pathways orthese goods. Such intermediaries are otennon-prot in nature, but they can also takethe orm o government extension services,or or-prot development companies.

NetworksThe value o networks such as arming orshing cooperatives, micronance associa-tions or orums that connect local ocials

with members o national governments isalso highlighted in Roots o Resilience as a keyto the success o rural enterprises. Horizontalnetworks like producer cooperatives allowcommunities to learn rom one another andtake advantage o economies o scale, increas-ing the power o individual producers in themarketplace and improving the quality ogoods via communication o best practices.

Vertical networks, which link producers orlocal organizations to international NGOsor government ocials, are also critical orscaling up ecosystem-based enterprises.Where these relationships exist, it is notuncommon or practices implemented at thelocal level to be used as models or nationalstandards. In Bangladesh, or example, a

wetland management project piloted by a

coalition o NGOs with connections to thenational government was ultimately success-ul enough at improving the health o criticalwetlands and at providing sustainable liveli-hoods to local populations that the nationalgovernment has used the project as a modelor its national orestry law.

Resilience or the road aheadThe three actors described above all con-tribute to the scaling up o rural ecosystementerprises, and simultaneously enhancethe resilience o rural communities in threeways: they make them more economicallyresilient better able to ace economic risks;they add to their social resilience better able

to work together or mutual benet; and they

make them more ecologically resilient moreproductive and stable in the ace o environ-mental changes such as climate change.These three orms o resilience are critical orsustainable development. A community withthese qualities will tend to develop strongerecosystem-based enterprises, while such en-terprises will in turn enhance all three types oresilience. Importantly, a communitys levelo resilience will shape its capacity to deal withsystemic shocks such as climate change.

The key lesson that emerges rom Roots oResilience is that ocusing on the needs othe rural poor the de acto stewards o nat-ural resources around the world can help

address the combination o challenges that

our society aces. Supporting the capacityo these rural residents to create and scaleup ecosystem enterprises is one powerulway o helping to meet these needs whilebuilding resilience within rural communi-ties. Those looking to lead a shit toward atruly sustainable global economy can ndvalue in these lessons. Only by ensuringthat the poor have lasting access to bothnatural resources and a vibrant marketplacecan we begin to meaningully address theenvironmental, economic and social chal-lenges around us and create an inclusiveand green global economy?

About the author: Lauren Withey works or

World Resources Institute.

8 9

Guatemalas northernmost region, El Petn, hosts a unique blend o natural beauty, biologicaldiversity, and archaeological heritage dating back to ancient Mayan civilization. The Petns33,000 square kilometres o relatively undisturbed lowland tropical orests shelter 95 specieso mammals, among them spider monkeys and pumas, and 400 species o birds, includingthe iconic scarlet macaw. The region is also home to an expanding melting pot o Guatemalancitizens: indigenous descendants o the Mayans, political reugees who sought reuge during20 years o civil war, and economic migrants rom the countrys overpopulated cities anddegraded highlands. A decade ago, deorestation had diminished biodiversity and threatenedorest-based livelihoods in the region. Northern El Petn serves as the setting or one o thethree main case studies examined in Roots o Resilience, or it is now home to successulcommunity-run orestry enterprises whose sustainably harvested wood and non-timber orestproducts (NTFPs) are attracting the attention o overseas buyers.

With the support and supervision o non-government organizations (NGOs), donors and gov-ernment agencies, community-owned orestry enterprises now steward more than 420,000 hain the multiple use zone o the renowned Maya Biosphere Reserve (MBR). These enterprises areeach in charge o one distinct parcel o land a concession that the Guatemalan governmenthas leased to them. Forest product sales rom these enterprises have brought new employment,inrastructure, social cohesion and income. Between October 2006 and September 2007, theconcessions produced some $4.75 million in certied timber sales and close to $150,000 in saleso xate (palm leaves used or fower arrangements) and other non-timber orest products. Undervillage management, biodiversity has fourished and orest res, illegal logging and huntinghave declined dramatically, while continuing unabated in neighbouring national parks. By 2000,the orest concessions in the reserve managed by these community enterprises had becomethe worlds largest tract o sustainably certied and community-managed orest. Many o theregions enterprises meet the international certication standard o the Forest StewardshipCouncil (FSC) or sustainably harvested wood, and several sell high-income nished productssuch as decking and foor panels in addition to timber.

This transormation o ragmented communities o armers and illegal loggers into ecoen-trepreneurs did not occur in a policy vacuum. Government decentralization policies, whichawarded communities tenure rights and resource management responsibilities, provided an

enabling environment and motivation or communities to protect their orests. Substantialassistance rom donors and intermediary support organizations provided the unds andthe technical expertise to make the concession model work. Progress toward nancial andorganizational independence or the enterprises has been slow, but the more successul onesnow show signs o increased resilience. The overall results have proved promising enoughor policymakers to consider scaling up the eort across the region. Already, communities inHonduras are replicating the concession model, while government agencies rom Nicaragua,Panama and Peru have hired members o Petns community-owned enterprises as consultantsin sustainable orest management.

Forestry in Guatemala benefts and challenges o ecological enterprises

The sustainable management o resources has be-come a critical objective in the eort to reconcilesocio-economic development and environmentalpreservation. It means we need to reduce over-all resource requirements and environmentalimpacts to a level within the natural capacity oecosystems, while increasing economic welare andsocial well-being. This is reerred to as decoupling environmental impacts rom economicgrowth. It is also associated with increased resource productivity. Increasing resource pro-ductivity is indeed a win-win strategy, in particular or developing countries at the early stageso development.

International pressure to decouple is mounting in the ace o converging priorities to cre-

ate wealth, alleviate poverty and protect the environment. Dealing with such a complexproblem requires cross-cutting solutions. Furthermore, a general consensus about thegoals and roadmaps or the way orward i s needed. However, such consensus does not yetexist, as the nature and scale o the problems and the solutions are dicult to estimate.Despite the developments in environmental sciences and methodologies, the results arestill disputed. The technicali ty o the debates has been an impediment to the integration oscientic ndings into the eective management o natural resources. A solid understand-ing and consensus on the scientic basis or decoupling is urgently needed to achievesustainable development.

The International Panel or Sustainable Resource Management (Resource Panel) waslaunched in 2007 to help bridge this knowledge gap. The Panel aims at providing deci-sion makers and other interested parties with independent and authoritative inormationabout sustainable resource management. Brought together by the United National Envi-ronment Programme (UNEP), it consists o eminent scientic experts, highly reputed inthe eld o resource management. Its role is to provide policy relevant assessments thatcrystallize and evaluate the latest scientic, technical and socio-economic literature onglobal resource use, and highlights the means on how to move towards more sustainableresource management.

The Resource Panel expects to play a key role in linking the eorts o the business and scienticcommunities with policy makers. The business community, with its rst hand knowledge olarge scale resource consumption and the benets o resource eciency, has made strongcontributions. In parallel, the scientic initiatives rom academia and NGOs have led theway in providing a orewarning that humanity is acing severe resource constraints and keyknowledge such as lie cycle databases and material accounting.

For more inormation on the resource panel: www.unep.r/scp/rpanel

International Panel or Sustainable Resource Management


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ByAlice Ruhweza

Markets and payments or ecosystem ser-

vices are gaining momentum in Arica, butgovernment support is vital or scaling up.

Payments or Ecosystem Services (PES) isan arrangement whereby those who ben-et rom services provided by ecosystems such as water supply and ltration, foodcontrol, erosion protection, biodiversityconservation and carbon sequestration can pay or them, while those who providethe services can secure nancial benetsrom their eorts. Markets or ecosystemservices some regulatory and othersvoluntary now exist, the most commonbeing those related to greenhouse gases(otherwise known as the carbon markets),water, and even biodiversity. The innova-tion that dierentiates PES rom previousparadigms or approaches is that the pay-ments are contingent on the ecosystemservice provider maintaining continuity othe specied ecological service.

In Arica, markets and payments or eco-system services have been growing steadily.Two inventories o PES schemes by theKatoomba Group in 2005 and 2008 showgrowth rom 45 to 68 PES and PES-likeinitiatives, an increase in money exchang-ing hands and considerable diversity in theprojects and dierent types o paymentsbeing made (See Table 1). However, the in-ventories also report long gestation periodsand lack o assurance that some projects willmove rom design to implementation. Fewlegal and policy changes have be

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