Saturday, June 25, 2011

Investing in Green Economic Growth

A report by the UN Environment Program (UNEP), indicates that a relatively small investment by governments can go a long way towards helping the green economy to grow. According to Pavan Sukhdev, head of UNEP's Green Economy Initiative:

"Governments have a central role in changing laws and policies, and in investing public money in public wealth to make the transition possible. By doing so, they can also unleash the trillions of dollars of private capital in favor of a green economy."

An investment of 2 percent of the global gross demestic product ($1.3 trillion), could generate momentum toward a low-carbon world. Investing in the greening of sectors such as construction, energy and fishing could jump start the new green economy.

"Investing 2 per cent of global GDP into 10 key sectors can kick-start a transition toward a low-carbon world," the Nairobi-based agency said in a statement.

Such investments would not slow the economy. The report indicates that this investment would grow the global economy at the same rate, or higher, then present economic policies. Greener policies would still grow economies while reducing the ecological footprint by nearly 50 percent in the next 40 years. Despite some job losses, investment in more sustainable jobs would offset losses.

"The sum, currently amounting to an average of around $1.3 trillion a year and backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast, under current economic models."

The report said that ten sectors (agriculture, buildings, energy supply, fisheries, forestry, industry, tourism, transport, waste management and water) could all benefit the environment if they were more green.

Left to purely market forces this transition would occur over time, however, the urgency of climate change demands immediate attention and these types of investments are the most productive way to spur the growth of the green economy.

© 2011, Richard Matthews. All rights reserved.

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