Global Green New Deal
The world today finds itself in the worst financial and economic crisis in generations. The financial crisis has triggered an unprecedented policy response: interest rates have been dramatically reduced, in some cases down to almost zero, and hundreds of billions of dollars in liquidity support and fresh capital have been provided to banking systems around the world. Moreover, governments are planning to deploy fiscal resources on an unprecedented scale: at the time of writing, proposed fiscal stimulus packages totalled around US$ 3.0 trillion globally.
The question arises: are these responses going to create a post-recession economy that is sustainable in the medium to longer term? And would it not be efficient and wise to invest now to build that future sustainability, whilst stimulating the economy for growth, jobs and tackling poverty?
A recent research paper
commissioned by UNEP argues that an investment of 1 percent of global GDP over the next two years could provide the critical mass of green infrastructure needed to seed a significant greening of the global economy (of course, the specific focus of the investment will differ between developed and developing countries, as would the mix of fiscal and aid funding). The overall size of this recommended ‘green’ stimulus is well within the realm of the possible: at 1 percent of global GDP, (i.e. approximately US$ 750 billion) it is only a fourth of the total size of proposed fiscal stimulus packages.
The “Global Green New Deal” (GGND) presented here has three broad objectives. It should make a major contribution to reviving the world economy, saving and creating jobs, and protecting vulnerable groups. It should promote sustainable and inclusive growth and the achievement of the MDGs, especially ending extreme poverty by 2015. Also, it must reduce carbon dependency and ecosystem degradation – these are key risks along a path to a sustainable world economy.
Our consultations and our commissioned research
, summarized here in this Policy Brief, make a strong case for the active ‘greening‘ of proposed fiscal stimulus packages. However, this must also be backed by necessary changes in international and domestic policy architectures, as the current framework is biased in favour of resurrecting an unsustainable “brown economy”. Our proposals are therefore grouped under three categories – targeted stimulus spending in 2009-10, changes in domestic policies, and changes in international policy architecture. Furthermore, we recognize that many less developed countries do not have the resources of their own and will have to rely on foreign aid and support, both financial and non-financial. We propose that the fiscal stimulus (to be applied over 2009 and 2010) should prioritize energy efficient buildings and investments in sustainable transport and renewable energy. Developing countries should prioritize investment in agricultural productivity measures, freshwater management, and sanitation, as these have demonstrable and exceptional social returns. Domestic policy reforms are recommended to substantially reduce perverse subsidies (eg: fossil fuels) and instead to create positive incentives and appropriate taxes which will encourage a greener economy.
Domestic reforms should also address some common issues in land use and urban policy. Integrated management of freshwater would also require some domestic policy changes, and this should be prioritized by developing countries. Domestic policy responses should be based on effective monitoring and accountability and integrate the principles of environmental accounting.
International policy architecture needs attention in the areas of trade, aid, carbon pricing and
technology and policy coordination. Global carbon markets should be created through the Copenhagen process under the United Nations Framework Convention on Climate Change (UNFCCC) in order to improve the price signaling thus far achieved, and a re-vamped and more inclusive Clean Development Mechanism (CDM) is part of that need. Proposals to develop global markets for ecosystems services should also be tabled. The GGND will need international coordination to be effective, and the UN organization should support and provide that function.
