Sixty-fourth General Assembly

Second Committee

Panel Discussion (AM)

With Copenhagen Conference Pending, Assembly’s Economic Committee Is Told

‘No Conflict’ Between Prosperity and Ambitious Climate Policies

Experts Say Challenge to Governments Is To Make Case That Growth

Not Threatened by ‘Essential’ Green Revolution; Long-term Benefits Great

Green growth would help mitigate climate change, it was good for the economy and the world had the money to fund it, several experts told the Second Committee (Economic and Financial) today during a panel discussion on “Green growth and sustainable development.”

“There is no contradiction between economic growth and ambitious climate policies,” said Carsten Staur, Permanent Representative of Denmark to the United Nations.  “Green growth is not an obstacle to economic growth -– on the contrary.”

Denmark had invested heavily in green energies and achieved notable results. Today, 17 per cent of the country’s energy consumption was derived from renewable energy sources, a fifth of them from wind power.  Denmark had built the largest offshore wind farm in the world.  Furthermore, green technology had become a major export, comprising 10 per cent of all exports, and it was growing rapidly.

The current economic crisis provided a “window of opportunity” and it had renewed thinking on sustainable investment, he said.  The upcoming Conference on Climate Change in Copenhagen, intended to flesh out remaining details in a new legal climate regime and encourage political commitments to combat global warming, should explore green growth options.

Tim Jackson, professor at the University of Surrey and Chair of the Economics Steering Group of the United Kingdom-based Sustainable Development Commission, said green macroeconomics should be the way forward.  That meant gearing investment toward low-carbon, resource-efficient models that provided jobs, supported communities and contributed to human flourishing.  Deficit spending was often used to finance ecological investment, but it was a flawed strategy because it relied on future growth to pay back debt.  Countries would fare much better if they enacted ecological tax reform, auctioned permits, issued green bonds targeting specific ecological investment, and created finance schemes that enabled communities to build their own resilience to ecological problems.

Mr. Jackson said his book, “Prosperity without Growth”, discussed the dilemma that economic growth was unsustainable, but zero growth or economic contraction was unstable and would lead to economic collapse.  The prevailing policy response to that dilemma was “decoupling” -- or separating out growth and profit from environmental impact.  But for decoupling to work, every dollar pumped into economic activity must result in a reduction of carbon in the atmosphere, and that was not happening.  The conventional model of socio-economic growth did not promote consumerism in an ecological way.

Rae Kwon Chung, chief negotiator of the Republic of Korea for climate change issues and a former Director of the Sustainable Development Division of the Economic and Social Commission for Asia and the Pacific (ESCAP), agreed that the current conventional economic growth paradigm was flawed and ignored the world’s ecological assets.  To rectify that, current price structures -- the biggest obstacle to green growth -- must be adjusted in line with ecological costs.  “We must move away from quantity of growth to quality of growth based on ecological efficiency instead of market efficiency,” he said.

Green growth had many merits, he said, but Governments and people rejected it because its positive results were long-term, while its burden and costs were short-term.  It was up to Governments to initiate action to close the gap and maximize the long-term gains.  The Republic of Korea was doing its part and had proved that decoupling could occur in developing countries through low-carbon economics.  From 1975 to 2006, the country’s economy expanded 7.5 times, while energy consumption grew 7.4 times.  The Government planned to invest 2 per cent of gross domestic product (GDP), or $86 billion, in the next five years to reduce fossil fuel use and improve energy security, develop green technology and industry, and launch a “green revolution” in people’s lifestyles.

Robert Pollin, Professor of Economics and founding Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst, spoke about clean energy investments in the context of the United States economy as an engine of growth and job creation, and noted that clean energy investments were a form of insurance policy against the effects of climate change.  The question was, he said, “how much are you willing to pay for that insurance?”

Within a historical framework, the average real wage in the United States has fallen from the peak in 1972 of $19.34 to $17.42 today, while productivity in the same time period has almost doubled, Mr. Pollin said.  Against the backdrop of the global recession, clean energy investments had a net positive effect on an economy in the doldrums.  Decision-makers could develop a unified strategy to tackle the environmental crisis and the employment crisis at the same time.

Mr. Pollin said that a $1 million investment in green energies created a net expansion of almost 17 jobs, while a similar investment in fossil fuels created a little more than 5 jobs, and that consequently, a $150 billion investment in fossil fuels would create about 800,000 jobs, whereas a similar investment in green energies would create 2.5 million new jobs, which would also be spread across sectors and geographies.  He pointed out ways to pay for that “transformational agenda”, noting that deficit spending was a short-term solution while in the longer term, carbon tax or cap-and-trade auctions, as well as mobilizing private credit markets, were among the options.

Pavan Sukhdev, Project Leader for the “Green Economy” initiative of the United Nations Environment Programme (UNEP) and the Chairman of Deutsche Bank’s Global Markets Centre in Mumbai, said that a changing mindset on climate change and the economy was gradually happening.  Various ecological infrastructure projects were already under way, among them a peninsula watershed near San Francisco and the $13 billion restoration of four rivers in the Republic of Korea.  Studies of the cost and benefit of restoration projects in different “biomes” showed a high rate of return, making a compelling case for Governments to look at such investments.

Mr. Sukhdev said that there would be three big consequences of climate change to adapt to:  freshwater scarcity, agricultural and fishery productivity and natural hazards, and he pointed out that within the next few decades, unless climate change was halted, there would be no more tropical coral reefs.  That, in turn, would have grave consequences, as fish would disappear and the food capacity of the reefs would be lost.

He outlined the objectives of the “Global Green New Deal”:  reviewing the world economy, creating new and decent jobs and protecting the vulnerable, reducing carbon dependency, ecosystem degradation and water scarcity, and eliminating persistent poverty.  And he highlighted the human and social dimension of those goals, arguing that the poor were the most seriously impacted by ecosystem losses.  “We absolutely need success in Copenhagen,” he said. “The green economy is not an option, it’s a necessity.”

Echoing the claims of the experts, the Committee Chairperson Park In-kook (Republic of Korea) said “green” and “growth” could go hand in hand and contribute to sustainable development.  “The crisis should not be used as an excuse to postpone crucial decisions for the future of the planet,” he said.  Green growth did not deplete natural capital or threaten human survival.  But achieving it required policies that encouraged a shift out of “business-as-usual” production and consumption patterns to ones that were less resource-intensive and less polluting, as well as public investment in sustainable infrastructure and incentives and regulations that encouraged private investment in renewable energy and other green sectors.

During the discussion, Mr. Pollin said that, for the first time, the United States was taking seriously its commitment to a green growth agenda, and seeing it as a tool to foster prosperity rather than a trade-off.  “The very idea of investing in a green economy, and that it’s good for poverty reduction, is in itself a major policy transformation,” he said.  Green growth was part of an overall United States stimulus package of between $80 billion to $100 billion.  The country’s investment in renewable energy would help lower costs and make renewable energy more competitive -- an area in which it still lagged behind.  The United States green growth framework could be helpful to developing countries, he said, but it should not be fully replicated elsewhere since not all countries’ needs were the same.

Mr. Jackson, picking up on a point about poverty, said combating it was a core component in green investment.  Ecological investments were an investment in the poor, and in bringing people out of poverty, he said, adding that it could transition economies to a model that was more fair and lasting.  With regard to unequal access to green technologies, he said it was important to transfer technologies to developing countries.  The green investment model was not designed to constrain the possibilities of the poor.

Mr. Chung also took up the question about technological inequity between developed and developing countries and agreed that, to a certain extent, it was the developing world that was excluded from green technologies.  However, shifting to green growth was not just a technology issue, he said, adding that Governments in developing countries could achieve a great deal by insulating houses, changing transportation and tax assistance -- efforts that did not require advanced technology.  Denmark’s green growth, which had been highlighted earlier by Mr. Staur, was specific to that country and couldn’t necessarily be replicated in other countries, and it was important to create a green growth roadmap that was relevant for developing countries.

Mr. Sukhdev, for his part, talked about the question of subsidies and, using the example of over-fishing in the high seas, said it had been driven partly by subsidies and open access.  The decline of fisheries, to the point where in 40 years the world would no longer have very many fisheries, could be reversed by the application of economic solutions.

Mr. Staur made a brief comment to say that it was obvious that with fewer than six weeks to go before the Climate Conference in Copenhagen, decision-makers were reaching the end of the road in terms of the negotiation process.  While there had been progress, there were still areas that needed work, he said, adding that the glass was “rather half full.”

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For information media • not an official record