Policy Frameworks for Green Growth in Developing Countriesin Developing Countries
Second Annual Conference on Climate Change and Development in AfricaAddis Ababa, 20 October 2012
Alexandra Trzeciak-Duval, Head of Policy DivisionDevelopment Co-operation Directorate
OECD
Outline
1. Global and Regional Specific Challenges
2. Rationale for Green Growth in Developing Countries
3 A P li F k f G G th ith3. A Policy Framework for Green Growth with International Support
4. What’s Next?
Global Emerging Trends and Challengesg g g
6 000irrigation domestic livestock manufacturing electricity
Global freshwater demand between 2000 and 2050 World primary energy demand between 1980 and 2050
3 000
4 000
5 000
6 000
Km3
0
1 000
2 000
2000 2050 2000 2050 2000 2050 2000 2050
OECD BRIICS RoW World
Particulate Matter
Global premature deaths from selected environmental risks: Baseline, 2010 to 2050
Ground-level ozone
Unsafe Water Supply and Sanitation*
Indoor Air Pollution
2010
2030
2050
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
Malaria
Deaths (millions of people)
Regional impacts from climate change
• Africa: by 2020, between 75 and 250 million people are projected to be exposed to increased water stress; yields from rain‐fed agriculture couldexposed to increased water stress; yields from rain fed agriculture could be reduced by up to 50% in some regions by 2020; agricultural production, including access to food, maybe severely compromised.
• Asia: Freshwater availability projected to decrease in Central, South, East and Southeast Asia by the 2050s; costal areas will be at risk due to increased flooding; the death rate from diseases associated with floodsincreased flooding; the death rate from diseases associated with floods and droughts is expected to rise in some regions.
• Latin America: gradual replacement of tropical forest by savannah in• Latin America: gradual replacement of tropical forest by savannah in eastern Amazonia; risk of significant biodiversity loss through species extinction in many tropical areas; significant changes in water availability for human consumption, agriculture and energy generation.for human consumption, agriculture and energy generation.
Specific Challenges in Africa
• Poverty and job creation: 47% of the African population still lives below the $1.25 per day poverty line
• Hunger and Food Security. Need to increase by 70 % global food production by 2050 (due to population growth and change in consumption patterns). Agriculture is the k d h f ( % f l l h d)key to reducing hunger in Africa (33 to 35% of population in SSA is malnourished) –but productivity is low.
• Natural Capital Degradation: 24% of per capita wealth in LIC, 12% in MIC and 2% in OECDOECD.
• Accelerating Urbanization: By 2030, 50% population will be in urban areas, yet there is a large infrastructure gap in Africa.
• Lack of Energy, Water and Sanitation Access: 74% of Africans still lack access to electricity ,more than 1/3 of the 884 million people today have no access to safe drinking water live in SSA
To tackle these challenges, a new growth and development model is required.
...to start with, a definition of Green Growth
Green growth is about fostering economic growth andGreen growth is about fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well being relies To do this it must catalyse investmentour well‐being relies. To do this it must catalyse investment
and innovation which will underpin sustained growth and give rise to new economic opportunities. (OECD, 2011)
Green growth must lead to short‐termmainstream improvements –g pmore GDP, jobs, poverty reduction, social equity
…as well as long‐term resilience and resource security
What should GG policies deliver for all countries?
ECONOMIC BENEFITS1 Increases GDP1. Increases GDP2. Incentivises ecosystem service production3. Increases economic diversification4. Stimulates innovation and use of green technologies
ENVIRONMENTAL BENEFITS5. Increases natural resource productivity 6 U l i l i hi l i l li i6. Uses natural capital within ecological limits 7. Uses non‐renewables to increase capital base8. Reduces adverse environmental/climate impact and improve resilience
SOCIAL BENEFITS9. Increases livelihood opportunities and income, especially poverty reduction10. Creates and sustains decent jobs11. Enhances social, human and knowledge capital 12. Improves inclusion and equality
OECD Proposed Green Growth Frameworkfor Developing Countriesp g
National Planning and Goal‐setting: GG mainstreamed
• GG integrated into existing econ, env, social, sectoralpolicies and strategiesGG mainstreamed
into existing plans / GG umbrella
plan
p g• Umbrella National GG Strategy developed if needed
• Strengthen enabling conditions for Green Growth
GG Policy Instruments: Proven and
• Environmentally‐harmful Subsidy Reform
• Environmental Fiscal Policy Reforms• Payments for Ecosystem Services• Inclusive Green Social Enterprise
promising incentives to deliver GG
• Inclusive Green Social Enterprise• Sustainable Public Procurement
Certification of Sustainable Production• Green Investment Policies e.g. For
energy• Green Innovation Policies• Green Innovation Policies
GG Institutional Mechanisms: stakeholders linked for
• Councils and Inter‐Ministerial Coordination Mechanisms e.g. for Sustainable Development, etc.
• Green Accounting / alternative linked for continuous improvement
measures• Public Expenditure Review• Strategic Environmental Assessment
There has been some uptake in African countries
1. Green Growth Strategies in Ethiopia and Rwandag p
2. Green Growth Policy Instruments
• Sustainable public procurement that empower disadvantaged p p p ggroups in South Africa
• Environmental fiscal reforms – e.g. Forest Taxation Regime to t t i bl f t t i Cpromote sustainable forest management in Cameroon.
• Green energy investment frameworks in Kenya and Uganda
3 I tit ti l h i3. Institutional mechanisms
• Water Accounting in Namibia has led to improved water management. Public Expenditure Reviews in Malawimanagement. Public Expenditure Reviews in Malawi highlighted the cost of environmental degradation
How can the global community help?
ENHANCE CAPACITIESCAPACITIES
• mainstreaming GG in plans, budget, sector operations
STRENGTHEN DEVPROMOTE
DEVELOPING
STRENGTHEN DEV CO‐OPERATION
leverage private investment
• mainstream GG d i d
PROMOTEGREEN TECH
• help developing country science• ease tech
transfer and IPR COUNTRY GG POLICY FRAMEWORK ‐ driven
by national stakeholders
and env in dev programmeuse
FACILITATE TRADE in Env Goods and
Services
• harmonise
POLICY COHERENCE
• whole‐of‐gov• avoid offshoring
international SD standards
• build envservices markets
avoid offshoring unsustainability
• public/consumer awareness
Trends in ODA to the Environment, 2001‐2010
Trends in ODA to the Environment, 2001-2010 Environmental-related ODA at Sectoral Level, 2009/10(% share marked as environmental related)
25
30
USD billion
Bilateral commitments, annual average, constant 2010 price
76%5
6USD billion
Environmental‐related aid as a share of total aid in the sector: 100%
Bilateral commitments, annual average, constant 2010 price
10
15
20
25
60%38% 39%
2
3
4
5
0
5
2001‐02 2003‐04 2005‐06 2007‐08 2009‐10
General environmental protection
Other activities scored "principal objective"
20%
0
1
Gral. env. protection
Water & sanitation
Energy Transport & storage
Agr. & rural develop.
Industry, mineral res. &Other activities scored principal objective
Total environment‐focussed aid
& constr.Principal objective Significant objective
Top DAC donors support to environment in Africa
USD million commitments, average 2009‐10, constant 2010 price
12851400USD million
12851151
962838 788
736
1000
1200
736
417
321 305 299400
600
800
321 305 299
0
200
Beyond ODA… Energy sector in AfricaGrants, concessional and non‐concessional loansGrants, concessional and non concessional loans
Annual average commitments, constant 2010 price, all donors (USD million)
8000
9000
10000
5000
6000
7000
Non-Concessional Loans
Concessional Loans
2000
3000
4000Concessional Loans
Grants
0
1000
2003-04 2005-06 2007-08 2009-10
While aid for energy rose, non‐concessional energy finance rose even faster.
What’s next?
• Green Growth is assuming greater importance in partner g g p pcountry strategies, development co‐operation programming and South‐South Co‐operation.
OECD ill ti t i it li f k f• OECD will continue to improve its policy framework for green growth, working with developed and developing countries, and will encourage donors to provide more and better assistance to promote green growth.
• Regional Workshops in Africa early 2013 with the African Development Bank and 2 3 case studies (including Ethiopia)Development Bank, and 2‐3 case studies (including Ethiopia).
• Green Growth and Developing Countries Report will be published in early 2013.
Thank You For Your Attention.
For more informationFor more information
www.oecd.dac/greengrowth
