CLIMATE CHANGE: Deciphering a green economy

Shaping a greener future for our children/Photo: Jaspreet Kindra/IRIN
Two consecutive power outages affecting at least 600 million people spelt out India’s energy crisis as August began. Caused in part by a coal shortage and in part by poor rains, the lack of power makes a strong case for an urgent global need to consider alternative sources of electricity.

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Electricity is the engine that drives modern lives and economies, so seeking innovative sources of power implies that economies will also have to be run differently.

It is in this context that the term “green economy” – an alternative to a conventional or “brown” one that spews greenhouse gas emissions and warms the atmosphere – has gained some traction. A major internet search engine shows more than 29 million hits on “green economy”, which is considerable for a phrase that only came into regular use five years ago.

“Green economy” was the cause of controversy in the recent Rio+20 Earth Summit. Here is a quick look at what it is about, and whether we should be concerned about it.

What does it mean?

There is no common understanding of what is meant by a green economy. The term emerged in 1989 to describe environmental economics, according to the UN Council for Sustainable Development. Many use it in that sense – an economy in which there is an improved sense of human wellbeing and social equity, with reduced environmental and ecological risks.

The UN Environment Programme (UNEP), which has spent considerable resources on promoting the concept, defines it as “[An economy] which is low-carbon, resource-efficient and socially inclusive.”

But the continuing volatility in international markets, the hike in fossil fuel prices, the food price crisis, and the unfolding impact of climate change have pushed the concept in various directions and given it different definitions and agendas. The approach varies according to who is behind it.

Die-hard environmentalists say a green economy relies completely on renewable energies with “zero” greenhouse gas emissions, and they do not regard a “low-carbon” economy as “green” because it still releases harmful emissions.

The Centre for Community Innovation at the University of California reviewed several reports on the green economy in 2008 and found few had bothered to define it, but all agreed that “clean energy is its core”.

Making the switch

The countries that signed the Kyoto Protocol in 1995 under the UN Framework Convention on Climate Change (UNFCCC), agreeing to reduce their greenhouse gas emissions, sooner or later will have to switch to greener sources of energy.

But when to make the switch, and how, has been hotly contested in negotiations to extend the Kyoto Protocol, the first phase of which expires in December 2012. When UNEP introduced the term “green economy”, many developing countries regarded it with some suspicion. Most of them would like to chart their own development routes based on equity, to ensure that all their citizens have access to clean energy and opportunities to grow, rather than being dictated to by anyone.

Almost all countries have a policy or proposal for a “greener” economy that details their plans to make the transition to greater dependence on renewable energy, but it is based on their own level of preparedness and comfort.

For instance, South Africa, which depends on local coal for about 77 percent of its energy needs and raises revenue from exports (it is the world’s fourth largest exporter), says it is not going to give up on coal for at least two decades. Coal mining employs more than 250,000 people and provides electricity in a country where most people still rely on wood and paraffin, which have health risks. The coal deposits are relatively shallow and therefore cheap to mine, and will last for at least another 50 years.

But the government does have plans to make use of renewable energies – wind and solar power, low-carbon sources such as gas,nuclear energy, and imported hydroelectricity – and wants to create “green jobs” that will take care of people and the environment.

The science

Warnings from science to make the switch have grown more insistent and frequent. The International Energy Agency (IEA) warned in 2011 that reliance on coal – expected to increase to 65 percent by 2035 – will “lock” the world in the next five years on a path that could see global temperatures soar by two degrees Celsius and beyond by the turn of the century. Energy experts point out that to prevent this scenario, all future energy needs would have to be zero-carbon.

The Intergovernmental Panel on Climate Change (IPCC) and other climate scientists regard global warming of two degrees Celsius as catastrophic, bringing water stress to arid and semi-arid countries, more floods in low-lying coastal areas, coastal erosion in small island states, and the elimination of up to 30 percent of animal and plant species.

But such warnings have only added fuel to hotly contested debates in the UNFCCC process on who should make drastic cuts in their reliance on fossil fuels first. Developing countries stand by the Kyoto Protocol, which places the onus of making mandatory cuts on the developed world, as it is held responsible for historical emissions.

At the 2011 UNFCCC conference in Durban, South Africa, countries agreed to set up a mechanism by 2012 to support developing countries in adopting cleaner energies by providing the technology and capacity to do so.

The Rio+20 outcome

Some developed countries put a “green economy” on the agenda for the Rio+20 meeting in Brazil in 2012 as a roadmap to global sustainable development, which the UN defines as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

But developing countries at Rio+20 were concerned that the developed world, using their own interpretation of the term “green economy”, could abuse it to impose trade restrictions or set new conditions for providing loans.

Most developed countries supported a text calling for a transition to a green economy that included phasing out fossil fuel subsidies, the use and production of renewable energies, and creating “green” jobs in this new economic model.

“While we do not object to this vision, the way it was set out meant a major economic restructuring, with the possible trade-offs and implications that could be involved in the process down the road not really spelt out for us,” said Qazi Kholifuzzaman Ahmad, an economist and member of Bangladesh’s negotiating team at Rio+20.

“We remember the time we were asked to restructure [by the Bretton Woods institutions in the 1990s], with the condition that if we did not we would not receive finances, and everyone knows its consequences,” he noted.

Brazil’s chief negotiator at Rio+20, Andre Correa Do Lago, pointed out that there are no examples of a green economy to emulate, even in the developed world. The final outcome left it to countries to determine their own pathways to sustainable development, suggesting that a green economy could be one such approach.

What models are there?

South Korea, which is credited with coining the term “green growth” in 2008, when the global economy began to slow down, is still trying to fine-tune the concept. In 2009 the South Korean government responded to the recession by announcing a US$38.1 billion stimulus package, 80 percent of which it devoted to efficient use of resources such as fresh water, waste, energy-efficient buildings, renewable energies, low-carbon vehicles and the rail network.

It also announced an $83.6 billion five-year plan for green growth. UNEP said the country faces enormous challenges in making the transition, as it imports 97 percent of its energy needs. Nevertheless, it is setting up a policy architecture for such an economy, which could be useful for other countries.

The South Koreans have adopted a green procurement law to promote the consumption of environmentally friendly products. It introduced a carbon cash-back system that awards carbon points to people purchasing such products, which can be exchanged for concessions at government outlets.

The “development first” approach to the green economy has been pushed by the African Union, said eminent African scientist Youba Sokona, the co-chair of the IPCC’s Working Group III (mitigation issues). In a paper prepared by him as the coordinator of the African Climate Policy Centre, Sokona described this approach as an “opportunity to transform climate challenges into development opportunities … to modernize and upgrade their water, energy, urbanization plans and agricultural systems.”

He said countries in the region had adopted the concepts of a “green economy” and “green growth”, which did not “originate in Africa”, but that these concepts “needed to be re-articulated to have real meaning in the African condition, and the entry point for us is that it has to reduce poverty and make us climate resilient.”

Sokona called for “leapfrogging” directly to cleaner technologies and sustainable land-use solutions, but said these should be home-grown, built by an African pool of researchers and industry that needed to be nurtured. Importing technology to produce renewable energy could be prohibitively expensive.

A number of networks of organizations and the private sector have suggested ways, or developed frameworks, on how to initiate a green economy.

Everyone acknowledges that “going green” is a complicated process, and each country will have to determine the colour of its future.



Theme (s): Economy, Environment, Natural Disasters,

[This report does not necessarily reflect the views of the United Nations]