Environmental investments are what the world economy needs

Published on Sunday 8 February 2009 19:15

A Global Green New Deal could pave the way to a more sustainable future for our children, writes ACHIM STEINER

WITH unemployment soaring, bankruptcies climbing and stock markets in free-fall, it may at first glance seem sensible to ditch the fight against climate change and put environmental investments on hold. But this would be a devastating mistake of immediate, as well as inter-generational, proportions.

Far from burdening an already over-stressed, over-stretched global economy, environmental investments are exactly what is needed to get people back to work, get order books flowing and assist in powering economies back to health.

In the past, concern for the environment was viewed as a luxury; today, it is a necessity – a point now grasped by some, but by no means all, economic architects.

A big slice of President Barack Obama's $825 billion stimulus package for the United States includes a boost to renewable energy, "weatherizing" a million homes and upgrading the country's inefficient electricity grid. Such investments could generate an estimated five million "green-collar" jobs, provide a shot in the arm for the construction and engineering industries, and get America back into the equally serious business of combating climate change and achieving energy security.

The Republic of Korea, which is losing jobs for the first time in more than five years, has also spotted the green lining to grim economic times. President Lee Myung-Bak's government plans to invest $38 billion employing people to clean up four major rivers and reduce disaster risks by building embankments and water-treatment facilities.

Other elements of Lee's plan include construction of eco-friendly transportation networks, such as high-speed railways and hundreds of kilometres of bicycle tracks, and generating energy using waste methane from landfills. The package also counts on investments in hybrid vehicle technologies.

Similar pro-employment "Green New Deal" packages have been lined up in China, Japan and the United Kingdom. They are equally relevant to developing economies in terms of jobs, fighting poverty and creating new opportunities at a time of increasingly uncertain commodity prices and exports.

In South Africa, the government-backed Working for Water initiative – which employs more than 30,000 people, including women, youth and the disabled – also sees opportunity in crisis. The country spends roughly $60 million annually fighting invasive alien plants that threaten native wildlife, water supplies, important tourism destinations and farmland.

This work is set to expand as more than 40 million tons of invasive alien plants are harvested for power-station fuel. As a result, an estimated 500 megawatts of electricity, equal to 2 per cent of the country's electricity needs, will be generated, along with more than 5,000 jobs.

So it is clear that some countries now view environmental investments in infrastructure, energy systems and ecosystems as among the best bets for recovery. Others may be unsure about the potential returns from investing in ecosystem services such as forest carbon storage or in renewable energy for the 80 per cent of Africans who have no access to electricity. Still others may simply be unaware of how to precisely follow suit.

In early February, the United Nations Environment Program will convene some of the world's leading economists at the UN's headquarters in New York. A strategy for a Global Green New Deal, tailored to different national challenges, will be fleshed out in order to assist world leaders and ministers craft stimulus packages that work on multiple fronts.

The Global Green New Deal, which UNEP launched as a concept in October 2008, responds to the current economic malaise. Spent wisely, however, these stimulus packages could trigger far-reaching and transformational trends, setting the stage for a more sustainable, urgently needed green economy for the 21st century.

The trillions of dollars that have been mobilised to address current woes, together with the trillions of investors' dollars waiting in the wings, represent an opportunity that was unthinkable only 12 months ago: the chance to steer a more resource-efficient and intelligent course that can address problems ranging from climate change and natural-resource scarcity to water shortages and biodiversity loss.

Blindly pumping the current bail-out billions into old industries and exhausted economic models will be throwing good money after bad, while mortgaging our children's future. Instead, political leaders must use these windfalls to invest in innovation, promote sustainable businesses and encourage new patterns of decent, long-lasting employment.

If you look at the industrialised countries, their opportunities for investing in a green transformation have risen very quickly in the last few weeks. If you listened to the announcements not only in the United States, Germany, the UK and France, but also in Korea and Japan, there are literally billions of dollars that are now being earmarked for green job creation in new technology sectors.

But the big question is what about the global economic community, and how can countries in Africa, Asia and Latin America be part of investing in this transition?

In this context, Ban Ki-moon, the UN general secretary, is looking to Copenhagen at the end of this year, where the climate change negotiations must produce a follow-up agreement to Kyoto.

The question becomes one that is crucially linked to financing. If you cannot find answers to how industrialised countries can also assist developing economies with financing answers, it will be very difficult to reach an agreement on Kyoto II. That is why we need the concept of a global Green New Deal.

&#149 Achim Steiner is the Executive Director of the United Nations Environment Program. He grew up in Brazil. Steiner studied economics at Oxford and received a Masters degree in economics from the University of London.