Croatia - Sustainability, Equity and the Green Economy

Sustainability, equity, and the green economy: Implications

for Croatia

Ben SlaySenior economist

UNDP Bureau for Europe and CIS

Empowered lives.

Resilient nations.

UNDP Human Development Report 2011

“Three birds with one stone”

Rio+20

Key messages: Global• World has made major progress in past two decades . . .• . . . But this progress is increasingly threatened by

unsustainable environment policies and practices– Key manifestation: failing ecosystem services– Key causes:

• Over-exploitation of common property resources• Population growth• Consumerist aspirations of global middle class

• Environmental sustainability and equity are closely linked– Sustainability is about inter-generational equity . . .

• . . . But what about intra-generational equity?• More equal societies have better development indicators

– “Double burden”: Many of the world’s poor bear environmental risks as well as income poverty,

• These issues will be taken up at UNCSD in Rio (June 2012)

Sustainable development and the green economy

• 1992 Rio earth summit popularized “three pillar” model

• Is green growth the intersection of:– Economic and environmental

pillars?– All three pillars?

• Developing countries are suspicious of the green economy because it may leave out the social pillar

• Are green growth, inclusive growth different?

The three “pillars” of sustainable human development

Economic: Issue of traditional growth based on high

use of energy

energy pricing, regulation, direct government activities

EnvironmentalBiodiversity, water, food, energy,

climate change impact

SocialInclusion, access to resources, green jobs, health, education –

good governance

Solutions that are compatible across all three strands

Key messages: Regional• New EU member states,

Western Balkans, former Soviet republics compare well with other regions . . .

• . . . But there are causes for concern as well:– Relatively high levels of

energy inefficiency

• Good examples: energy efficiency in Croatia – Highlighted in Development

and Transition

• Concrete examples of how UNDP can help

Possible consequences of environmental unsustainability

Human development index: Per-capita GNI, life

expectancy, years of education

The world is warming

Sea levels: Rising

Natural disasters: Average annual number has doubled in last 25 years

Greatest impact born by low HDI countries

• Greatest forest cover losses (11% since 1990)

• Poorest households, countries can not afford to reforest

Precipitation patterns changing

Avg. value, 1951 - 1980

Avg. value, 2000s

“Double burden” of income poverty, poor access to resources

Modern cooking fuels

Sanitation Water

90%

80%

35%

Poor households are likely to:

• cook with wood, dung• not have access to improved water, sanitation services

Multiple deprivations:

• 80% of poor households experience two or more deprivations • 29% face all three

Particular burden on women

Form of deprivation

How much finance is needed?

• For climate change mitigation, adaptation:– Estimates are uncertain . . .– . . . Ranging from $500 billion to $2 trillion,

annually

• For water and sanitation: $60 billion annually

• Most of this must come from private sector . . .– . . . But how effective are carbon markets?

Public finance and climate change

• ODA needed to:– Leverage carbon markets– Promote market deepening by reducing:

• Risks• Transactions costs

• Financial transactions tax?– EU has pledged to introduce

this in 2012 . . . – . . . But not necessarily for

development, or carbon finance

How much finance is coming?

Source: The Economist (5 November 2011)

• Copenhagen summit (2009): “Green climate fund”

• Developed countries are to provide $100 billion annually in climate finance for developing countries by 2020

• “New, additional monies”• 2010: $97 billion in carbon finance flows

• $93 billion—mitigation• Private sector: $55 billion• ODA:

• $39 billion—mostly via development banks . . .

• . . . Most not “new and additional”

• Carbon markets: “only” provided $2.3 billion

Rio + 20—Issues

• Financing the transition to low-carbon growth?• MDGs after 2015?

• Sustainable development goals?

• Reform of global environmental governance?

• Binding emissions targets?

Regional dimension: High/very high HDI levels

OECD countries (2004 new EU member states), Croatia

Russia, other Former Soviet republics, Southeast Europe

Moldova, Central Asia (except Kazakhstan)

Human development index: Per-capita GNI, life

expectancy, years of education

Forest cover is returning

Asia, Pacific Europe, Central Asia

Arab states Latin America, Caribbean

Sub-Sahara Africa

2%

1%

-8%

-10%

-12%

Change in square kilometres of forest

coverage, 1990-2010

Greenhouse gases—many transition economies still outliers

Ukraine Kazakhstan China Russia Global Finland Germany Norway Sweden

1.71.6 1.6

1.0

0.5

0.2 0.20.1 0.1

Tons of CO2 equivalent emitted per $1 of GDP (2008)

UNFCCC, IMF data; UNDP calculations.

But: many European transition economies beat the global average

Global Slovakia Croatia Armenia Lithuania Albania Latvia

0.5

0.4

0.3 0.30.3 0.3

0.2

Tons of CO2 equivalent emitted per $1 of GDP (2008)

UNFCCC, IMF data; UNDP calculations.

Carbon finance: Not coming

Joint implementation projects approved*

Europe and Central AsiaRest of the world

400

Clean development mechanism projects ap-

proved*

Europe and Central AsiaRest of the world

212

John O’Brien, “Carbon finance: Opportunities and reality”, Development and Transition

*As of 31 August 2011

Carbon finance: What is to be done?

• Reduce high transactions costs for projects, by:– Accelerating project

approval– Increasing project size– “Bundling”

• Capacity development for:– Designated national

authorities– Private companies in:

• Energy efficiency• Renewables

– Project beneficiaries

UNDP can help—Croatia

• UNDP, Global Environmental Facility programme on public-sector energy efficiency

• Results (2006-2010):– Energy systems in 5900 public buildings refitted– Energy audits conducted in 1346 public buildings– $18 million in initial annual public-sector energy savings– Annual CO2 emissions reduced by 63,000 tons– “Energy charter” signed by all 127 municipalities– 17 new companies, 150 energy efficiency expert jobs

created– $4 million in UNDP-GEF funding leveraged $30 million in

additional investment Louisa Vinton, “Going green with Gašpar”, Development and Transition

• UNDP’s regional research bulletin, for Europe and Central Asia

• Provides UN, independent views on development, transition, policy, programming

• Disseminates lessons of successful UN projects

• Distributed to:– All UNDP staff in Europe,

Central Asia region– 3000 external subscribers

www.developmentandtransition.net

Food for thought

• EU accession “20/20/20” policy:– Reduce primary energy use by 20%– Reduce greenhouse gas emissions by 20% – Increase share of renewables in energy mix to 20% – By 2020

• EU countries that are furthest along in this respect have:– Energy prices high enough to encourage renewables – Feed-in tariff regimes that work