‘Green Economy’ Needs $1.3 Trillion Investment Per Year, UN Says

 

Feb 06, 2011 - Alex Morales - bloomberg.com

Nations can kick-start a “green economy” by redirecting $1.3 trillion a year from industries that overuse resources to 10 areas ranging from forestry to buildings, the United Nations Environment Program said.

The expense -- about 2 percent of economic output -- would help cut greenhouse gases and avoid price shocks associated with a dependence on fossil fuels and other commodities, UNEP said today in a report.

“Governments have a central role in changing laws and policies, and in investing public money in public wealth to make the transition possible,” said Pavan Sukhdev, a Deutsche Bank AG banker temporarily serving as head of UNEP’s green economy initiative. “By doing so, they can also unleash the trillions of dollars of private capital in favor of a green economy.”

The study examined measures to make buildings and vehicles more energy efficient, boost renewable energy and promote more sustainable farming and fishing. The new policies could be brought in without diminishing growth prospects, while also reducing greenhouse gas emissions to “safer” levels and helping the UN towards development goals such as halving the number of people without access to safe drinking water, it said.

Countries are already spending billions of dollars to reduce emissions and promote renewable energy. Low-carbon energy investment surged to a record $243 billion last year, Bloomberg New Energy Finance said on Jan. 11.
$521 Billion

The International Energy Agency said last year that global subsidies for clean and low-carbon energy totaled $57 billion in 2009. HSBC Holdings Plc in 2009 estimated that world governments had allocated about $521 billion over five years in so-called green stimulus spending as they tried to promote more efficient industries in the wake of the financial crisis.

The transition would lead to job losses in industries such as fisheries, and investment will be needed to re-train workers, according to the study. At current levels of global domestic product, the study recommended the following levels of spending:

-- Agriculture: $108 billion a year on measures such as making the soil more fertile and cutting wasted irrigation water.

-- Buildings: $134 billion for emissions-cutting technologies such as insulation and double-glazing.

-- Energy Supply: Over $360 billion on renewables and cutting emissions from existing power plants.

-- Fisheries: $110 billion for measures such as setting up marine protected areas and reducing fleet capacity.

-- Forestry: $15 billion to protect trees.

-- Industry: More than $75 billion to make manufacturing more energy efficient.

-- Tourism: About $135 billion to promote more environmentally-friendly tourism.

-- Transport: More than $190 billion to promote public transportation, cleaner cars, and non-motorized modes of travel such as cycling.

-- Waste: Almost $110 billion to promote recycling and cut methane emissions from landfill sites.

-- Water: $110 billion on improved sanitation and access to clean water for poorer people