Investing 2% of global GDP into ten key sectors can kick-start a transition towards a low carbon, resource efficient Green Economy, a new United Nations Environmental Programme (UNEP) report suggests.
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.
It comprehensively challenges the myth of a trade-off between environmental investments and economic growth and instead points to a current ‘gross misallocation of capital’. The report suggests the green economy model would deliver higher annual growth rates within five to ten years than a business-as-usual scenario.
The report sees a Green Economy as not only relevant to more developed economies, but as a key catalyst for growth and poverty eradication in developing ones too, where in some cases close to 90% of the GDP of the poor is linked to nature or natural capital such as forests and freshwaters.
The authors recommend a number of investments with the money generated from the 2% GDP, including:
- $108bn on greening agriculture, such as encouraging and supporting smallholder farms
- $134bn on the building sector, including improving energy efficiency
- $110bn on improving fisheries, including reducing the capacity of the world’s fishing fleet
- $15bn on forestry, with ‘important knock-on benefits for combating climate change’
- almost $110bn on both water and waste, including sanitation and recycling.
The findings are being published at the 26th session of Unep’s Governing Council/Global Ministerial Environmental Forum, which is being held in Nairobi, Kenya, until 24 February 2011. This new UNEP Report underlines the sustainable public policy and investment path on the road to Rio+20 in 2012.