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UNEP launches blueprint for green economy

(21 Feb 11) The world can move towards a low-carbon, resource efficient economy with higher growth, more jobs and greater social equality if 2% of global GDP is invested in green growth, the UN's environment programme (UNEP) said in a report issued on Monday.

Based on macroeconomic modelling, UNEP's Green Economy Report intends to show that green investment makes sense both economically and environmentally. In this way the aim is similar to the 2006 Stern climate report and the TEEB biodiversity study.

The report presents a detailed plan for investment of $1.3trn per year in greening ten key sectors: agriculture, buildings, energy supply, fisheries, forestry, industry, tourism, transport, waste management and water. Full implementation would cut humanity's global ecological footprint 50% by 2050, it concludes.

The bulk of the money will come from private capital, says UNEP. Governments must create the enabling conditions, by creating strong regulatory frameworks, stopping environmentally harmful subsidies, introducing environmental market instruments, and investing in capacity building and training.

This is the biggest output so far from UNEP's Green Economy Initiative, launched amidst of the financial crisis in 2008. Green growth has become a theme of discussions in many global forums, including the OECD and the G20. In the EU, the 2020 strategy includes commitments to greater resource efficiency.

The UNEP report will feed into next year's global sustainability summit, Rio+20. The green economy is likely to be a major theme – indeed there are signs that it is beginning to rival sustainability as the summit's organising principle.

Much of the money needed for green investment could be generated by eliminating the 1% of global GDP going to environmentally harmful subsidies, UNEP believes. New, innovative financing mechanisms will also be necessary, it says. The report sees hope in the planned Climate Fund and in REDD+ funding schemes.

The report accepts that the transition to a green economy will not be simple, especially in the early stages. Its own modelling concludes that economic growth will be faster under a business-as-usual scenario until 2016. Even more striking, a green investment scenario might not generate net employment gains until 2030.

Follow-up: UNEP green economy report website

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