Distinguished delegates, ladies and gentlemen SLIDE 1 Thank you for - - PDF document

Distinguished delegates, ladies and gentlemen SLIDE 1 Thank you for the opportunity to address this important event. The International Institute for Environment and Development is an independent research organisation based in

• London. We provide analysis of the interface between development and environment, and

we work in countries in Asia, Africa and Latin America. For the past decade we have worked closely with the LDC Group in the UN climate change negotiations, and more recently we have collaborated with OHRLLS and with the LDC Group in the development of the draft SDGs. IIED supported the creation of an LDC Independent Expert Group, which was the brainchild

• f USG Mr Gyan Acharya. This group has been set up to provide access for LDCs to a group
• f experts from LDCs on key aspects of sustainable development. We are delighted that a

number of members of the IEG are able to attend this conference and are taking part in a number of the sessions. The Chair of the IEG Dr Michele Pierre-Louis will give reflections on the key ideas and action points raised during the course of the conference in the closing session on Thursday. SLIDE 2 During the course of this presentation I will touch briefly on the following themes:

• 1. Characteristics of a green (or blue) economy

What does the concept mean and why is it relevant?

• 2. Green economy opportunities for LDCs

How can the concept be in the interest of LDCs?

• 3. Questions and concerns for LDCs

What are the problems and questions that have been raised about GE?

• 4. Implications of green economy for productive capacity building

How does GE relate to the IPOA

• 5. Synergies with the SD Goals

And the positions taken by LDCs in the discussions of the Open Working Group

• 6. Possible steps forward

SLIDE 3 What is a Green Economy? There are many definitions on green economy and there is a need for flexibility to make the concept relevant and understandable in different national and local contexts. But UNEP’s definition is a good starting point. UNEP states that A green economy is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. What does this mean in practice for LDCs?

A green economy has wellbeing and inclusion as its central purpose. It emphasises sustainability and resilience:

• as a condition of growth: by minimising environmental impacts on people and the

depletion of natural capital

• as a driver of growth: by optimising the economic potential of natural resources,

green markets and green finance and investment

• as an enabler of poverty eradication and equity, through jobs, small enterprise
• pportunities, more equitable access to natural resources

Green economy is not an alternative model of development in itself but rather is a useful way of approaching and understanding the economic dimension of sustainable development. SLIDE 4 Green economy has a number of potential benefits for LDCs LEAPFROGGING: LDCs can benefit from having only a few ‘brown’ heavily polluting industries, and being at relatively early stages in infrastructure development. Many are in a position to take advantage of new and emerging low-carbon technologies and gain a competitive advantage on countries with more established but outdated infrastructure. Recent IIED research has identified at least 9 LDCs that are making moves in this direction, for example Ethiopia, through its national Climate Resilient Green Economy Strategy. ADDING VALUE: There is much untapped potential in natural resource-based and other green products and services in LDCs. We will hear more about this from M. Chimere Diaw from the African Model Forests Network later in the session. CREATING NEW JOBS AND ENTERPRISES: Possibilities exist for both high-end enterprises and jobs employing new green technologies and micro-enterprises and jobs for workers in the informal economy. We will also hear more on this subject from Mr Aeneas Chuma from ILO. ACCESSING CLIMATE AND GREEN FINANCE: Much anticipated, the promised Green Climate Fund is still some years away from being operational, but several LDCs are already accessing green finance and setting up trust funds to manage it effectively. For example, Rwanda’s new green fund consolidates domestic funds with international (bilateral and multilateral) climate finance to incentivise green innovation through both grants and preferential credit to local businesses. SLIDE 5 Questions and concerns about viability of ‘greening’ the IPOA Is green economy consistent with the IPoA’s vision of development? YES

The IPoA’s success heavily depends on maintaining and enhancing the value of the natural resource base and building resilience to climate change to protect key sectors such as agriculture Can a green economy achieve the IPoA’s high growth target? POTENTIALLY By creating new economic activity and reducing the negative effects on economic growth of natural disasters, fuel importation and depletion of natural resources through commodity extraction can help spur growth. The World Bank has concluded that LDCs have highest rates of natural wealth depletion of any group of countries. Will green regulations from trading partners help or hinder LDC products? A LEGITIMATE CONCERN But this challenge can be overcome, initially through preferential and differential treatment

• f LDCs in trade regimes, while countries progressively build capacity and institutions to

establish, and conform to, international green standards. Will green economy support or divert attention from the major business of poverty reduction? DEPENDS ON THE STRATEGY Green initiatives can reduce poverty, for example through extending decentralised, renewable energy to poor communities; supporting small NR enterprises with high added

• value. But the evidence base, access to key resources and appropriate technology needs

improving to avoid inadvertent poverty traps. SLDE 6 What is the ‘fit’ between the IPOA focus on productive capacity building and prioritization

• f green and resilient economic growth?

The IPOA presents four major elements of productive capacity, all of which are highly compatible with a ‘green economy’ approach:

• 1. Infrastructure

It will be critical to make infrastructure climate-resilient – so including a key environmental threat in the IPOA model. There is also considerable scope to develop transport and market infrastructure for green products and services. As the African Union speaker mentioned earlier, the only LDCs which have made significant progress towards the MDGs are those which have diversified their economies.

• 2. Energy

Investment in renewables and small-scale sustainable energy services presents major

• pportunities for LDCs – not least as a key element in the UN Decade for Sustainable Energy,

which has just started. Development of renewables such as hydro, geothermal and solar can reduce dependence on fossil fuels and help expand energy to off-grid areas while creating

• pportunities for small-scale and community-based sustainable energy services.
• 3. Science, technology and innovation

The IPOA proposed creation of the LDC Technology Bank, which as we have been hearing is now well underway and can play a key role in supporting information needs and providing access to the most useful innovations. There is a widespread need for major investment in further research and development on assessing natural capital, value addition through natural resource-based products and services, and sustainable and low-carbon energy technologies suited to LDCs.

• 4. Private sector development

There is a need for greater awareness building on the role of the private sector in contributing to environmental management, capital formation and poverty reduction. Tax incentives and low cost loans will be needed to help enterprises move to inclusive and green business models. There is huge potential for green transitions in smaller enterprises and through community and NGO initiatives, and targeted programmes will be needed to build capacity at that level. SLIDE 7 What are the key aspects of ‘green economy’ in the draft SDGs that are relevant for LDCs? LDCs were actively involved in the Open Working Group process that developed a draft set

• f Sustainable Development Goals to be negotiated in the UN starting later this year. Some
• f the targets in that draft that would support actions on productive capacity building for a

green economy include these, for example: Target 9.1 Develop quality, reliable, sustainable and resilient infrastructure Target 9.2 Promote inclusive and sustainable industrialization Target 9.4 Upgrade infrastructure and retrofit industries … with increased resource use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes SLIDE 8 How to move forward? Five possible initial steps:

• 1. SCOPE DEMAND AND OPPORTUNITY

Build a national green economy vision through stakeholder dialogue (see for example the work of IIED and GEC, including IIED’s guide to national dialogues and diagnostics, “Scoping a green economy”). Explore immediate opportunities: what’s happening already that can be built on? Also give attention to building demand, for example through making a strong economic case for green economy to decision-makers and developing monitoring and evaluation systems to be able to demonstrate results. Jean-Jacob Sahou will say more about this later in the session.

• 2. MAINSTREAMING GREEN ECONOMY

This is already starting to happen in some LDCs. The Gambia has made a start on mainstreaming green economy in its national development plan PAGE (Programme for Accelerated Growth and Employment) and Minister Pa Ousman Jarju may say more about

this in the next session. Zambia is pursuing inclusive green growth strategy through the next National Development Plan.

• 3. CONSIDER DEVELOPING LOW-CARBON OR GREEN NATIONAL (OR SUB-NATIONAL)

ECONOMIC STRATEGIES As mentioned earlier in the presentation, several LDCs have already taken this step and some are moving into implementation.

• 4. SUPPORT SOME ‘BEST-BET’ GREEN INNOVATIONS

Nurturing best bets like these can generate interest and further uptake, for example:

• Soma Energy in Cambodia, creating biogas from agro-waste products
• Organic agriculture in Uganda, facilitated by a multi-stakeholder platform, the

National Organic Agriculture Movement of Uganda (NOGAMU)

• Small and medium forest enterprises in Mozambique employ more than 600,000

people and generate over US$30 in export revenue Mechanisms for South-South cooperation can help spread learning on new practices and approaches.

• 5. CONSIDER DEVELOPING A GREEN ECONOMY ‘ADDENDUM’ TO THE IPOA

An LDC joint framework on green economy could help guide national planning and direct international support and investment

Additional points to raise in discussion: 1 Green economy: concept and opportunities Since 2011, IIED has been holding multi-stakeholder dialogues, usually hosted jointly by ministries of finance or development, and ministry of environment or equivalent, so far in 11 developing countries: http://pubs.iied.org/16554IIED.html?k=scoping%20a%20green%20economy (and see downloadable reports on GE in Zambia, Kazakhstan, Brazil and Caribbean – more to come). From LDCs to MICs, there are some common factors:  Natural resource opportunities – Most countries see GE as being much more about sustainable agriculture, forestry, fisheries, ecotourism, etc, than about the greenhouse mitigation projects that have dominated some international initiatives. While they recognise that international climate funds can drive some GE opportunities, there is more to be explored in attracting investment into more productive use of increasingly scarce natural resources.  Poverty reduction, inclusion and informal economy – there is a very strong emphasis on making sure a GE supports those who have been failed by the current economic system. Some have emphasised green jobs. Others the real-world informal economy: a GE needs to work for poor people where they are today, in their own markets and informal enterprises, and not just for the big corporate partnerships and global value chains that dominate some initiatives. In response to this, IIED has published a review of where informal economies have produced green and inclusive outcomes: http://pubs.iied.org/16566IIED.html?k=informal%20and%20green . With CAFOD we are exploring issues of improving social justice in GE initiatives: http://pubs.iied.org/17219IIED.html?k=social%20justice%20green%20economy  Green industrialisation – the LDCs are calling for an ‘industrialisation’ SDG. There are the beginnings of an interest in what form ‘green industrialisation’ might take, for countries which are not burdened with an existing and entrenched brown economy, which can leapfrog to greener technologies, and develop industries that add value to natural resources (above). This is very much a capacity issue, and will be discussed at the end of July at the LDC ministerial meeting in Benin on building productive capacity.  Transformation – the discourse on GE varies depending upon the extent to which the economy has already mainstreamed environmental issues. Part of the problem with GE discussions internationally is that countries are at different stages, and people talk at cross-purposes. As your consultation document says (and Rio+20 concluded), it’s all about country tailoring, depending in part on which ‘stage’ the country is at:

• For a few countries, environment and economy have been totally separate

issues, rarely linked: in such cases, GE is not deemed relevant.

• In many countries, environment and economy are at the ‘mutual safeguard’

stage, and GE is viewed as being a matter of improving environmental assessment of social and economic plans, and social assessment of environmental plans. In such cases, GE can be viewed as an external imposition,

• r a constraint on development, or cautious development. It is not perceived as

an inspiring agenda.

• Other countries have advanced further, and environment and economy are at

the ‘synergies’ stage. In such cases, GE is about finding win-wins so that e.g. poor people can benefit as producers, employees and consumers from low-carbon investment – within the current systems of governance. Many countries treat GE in this way, and there is much interest; the discussion is about efficiency, incentives and innovation

• A few countries realise that there are limits to green economic activity that are

imposed by current economic governance and financial rules. For them, GE is about fundamental changes to development paradigms, metrics and rules of the game – transformative approaches to achieve much more for human and ecosystem wellbeing than can be done by ‘synergies’ alone EU development cooperation should therefore:  Recognise progress in developing countries and work with them as partners rather than aid recipients. There are some stand-out countries who the EC can learn from and support – Ethiopia, Nepal, South Africa, many small Caribbean states, etc. Some regions such as CARICOM and regional development banks such as ADB and AfDB have made real progress in partnership with countries. The Green Economy Coalition is an excellent multi-stakeholder vehicle for sharing progress, problems, ideas and solutions across countries, initiatives and sectors in genuine open partnership.  Support developing countries with their own multi-stakeholder dialogue, diagnosis and exploration so they can know where they are at in relation to GE. IIED has a standard set

• f questions to help stakeholders in each country work through these issues – how far

have we got, what policies and practices are already green and inclusive that we can build on, where do we need to go further, which stakeholders support and which are antagonists for change. See http://pubs.iied.org/16554IIED.html?k=scoping%20a%20green%20economy .  Give serious attention to the issues that arise from developing countries themselves (the OECD has held some consultations in developing countries that reveal similar issues as IIED found): inclusion, informal economy, NR valorisation and new forms of industrialisation, etc.  Exercise caution where international GE initiatives seem to be focused too much on supply-push ideas from outside, on deals between rich-country companies and national governments, on high technology, and on GHG abatement to the exclusion of other GE pathways that might produce higher value for developing countries. The GE Coalition produces regular papers that attempt to keep track of the evolution of GE initiatives and the drivers behind them: http://www.greeneconomycoalition.org/document/green- economy-barometer 2 Framework for addressing green economy in EU development cooperation

 Policy coherence – this can in part be improved by developing countries building inclusive GE into their mainstream planning and investment frameworks. For example, the Government of Zambia has asked IIED, AfDB and OECD to work together on mainstreaming GE into the National Development Plan. Improving environment/development information and getting it used in mainstream planning would be helpful: e.g. integrating GE considerations into public expenditure reviews and budgets (as the UN Poverty Environment Initiative is doing in several countries); green investment agreements and codes, as IIED has been working on for Lao and Myanmar with UNPEI; and Natural Capital Accounting – as an objective basis that works for accountants, statisticians, economists and natural scientists (and the World Bank is supporting through the WAVES programme)  Non-government stakeholders – these are critical to shaping a GE. Part of the challenge is to demonstrate that GE is a can-do affair, that is already present and can be built upon, rather than an imposed idea. This will identify leaders in GE. For example, IIED is planning work in specific countries with leading businesses in say agriculture and mining, to help them understand their current contributions to a GE (contribution to natural, social and human capital and not just financial – and at community and national level and not just within the corporation, and to externality management). Since both development and environment are intensely local affairs, it is also important to work with local authorities and not just with national governments – supporting studies of local green economies, and local stakeholder accords to work together on greener production and consumption; these levels are also those where poor people can most readily contribute to the discussion and solutions. The EC-supported Poverty Environment Partnership meeting in Durban last month demonstrated the GE innovation power of municipalities – and the current lack of resources available to them  A diversity of GE support organisations – Recognising the diversity of contexts for GE, the EC might want to ensure that it does not put ‘all of its eggs in one basket’ in supporting GE. For example, while it is excellent that a One-UN approach to GE has emerged (the UN Partnership for Action on a Green Economy – PAGE) and there is a relatively new intergovernmental organisation the GGGI with some excellent analytical frameworks, both of these aim at governments and the formal economy. Complements are needed that are deeply linked to diverse country and stakeholder circumstances. IIED is a member (along with two UN organisations ILO and UNEP and many civil society groups both international and national) of a multi-stakeholder network the Green Economy Coalition that is an excellent complement to PAGE and GGGI (http://www.greeneconomycoalition.org/ ). The GE Coalition deals with demand- side/bottom-up needs; provides a network for sharing the tough questions and solutions across geographies, sectors and types of organisation; and offers an excellent news and knowledge resource cataloguing GE in practice. I would hope that the EC could work with this type of complementary activity, too.