GreenGreen GrowthGrowth AA RegionalRegional StrategyStrategy forfor AchievingAchieving SustainableSustainable DevelopmentDevelopment inin AsiaAsia andand thethe PacificPacific

ESDD, UNESCAP UN ESCAP

¾United Nations ¾Economic & Social Commission ¾ Outpost in Asia and the Pacific

ESDD: Environment & SD Div ¾ Integrating Env. into Socio- Economic Development HumansHumans areare LivingLiving farfar BeyondBeyond Planet'sPlanet's MeansMeans • Humans will need 2 planets every year by 2050 on current trends. • "For more than 20 years we have exceeded the earth's ability to support a consumptive lifestyle. This is unsustainable.” • "If everyone lived as America, we would need 5 planets to support us.” • At WWF’ 2006 Living Planet Report Launched in Beijing

(WWF 2006: 10 and 24) EcologicalEcological StatusStatus ofof thethe GlobalGlobal EconomyEconomy

• Deepening Ecological Deficit – Footprint is surpassing Biocapacity MajorMajor CharacteristicsCharacteristics ofof Asia/PacificAsia/Pacific • Rapid economic growth. • Most limited ecological carrying capacity. • High population density, 34% of global GHG emission. • 2/3 world poor in the region. • Need rapid economic growth for poverty alleviation, compatible with environmental sustainability. TIME: ASIA'S ENVIRONMENT: Visions of Green October 9, 2006

• A 2005 United Nations report warned that although one-fifth of Asians still exist on less than $1 a day, "the region is already living beyond its environmental carrying capacity." • But Asia can't wait for the invisible hand to grow a green thumb; The problems are too intractable. Asia's future has to become one of sustainable "green growth." A/P Can not repeat

Grow First, Quantity of Market Efficiency Clean Up Growth Later GreenGreen GrowthGrowth ApproachApproach

• Green Growth – Achieving rapid growth without compromising environmental sustainability • Green Growth: attaining MDG 1 & 7 at the same time. • GREEN GROWTH: focusing on Environmental Sustainability & Ecological Efficiency (EE) • Adopted at the 5th Ministerial Conference on Environment and Development (5th MCED, March 2005, Seoul) UN ESCAP

QualityQuality ofof Eco-efficiency GreenGreen GrowthGrowth GrowthGrowth

Conventional Approach

• Environment VS Economy: Zero Sum Game • Grow First, Clean Up Later: Vicious Cycle • Focusing Pollution control performance, mainly from production side, Env. Protection • How to minimize pollution impact while maximizing quantity of GDP? • Considerable Progress in pollution control as GDP grows. Green Growth Approach

• Economy/Environment: creating win-win synergy, virtuous cycle, positive sum game • Focusing on improving EE of Economic Performance (Both Prod & Cons) • Enhancing Environmental Sustainability by improving ecological quality of GDP • Why GG approach ? Ecological Efficiency

• Internalizing Ecological Costs • Maximizing Resource Efficiency • Minimizing Pollution Impact Ecological Efficiency

• Not Just Environmental Idea • Economic Condition for Growth From Env. Protection towards Environmental Sustainability

• In spite of improving pollution control, as GDP grows, Environmental Sustainability tends to deteriorates. • ESI goes down as GDP grows, while EPI goes up generally: • Pollution Control alone is not enough: Ecological Efficiency of Economic Performance (Prod & Cons) has to be improved ESI/EPIESI/EPI vsvs EcoEco--efficiencyefficiency IndicatorIndicator (EEI)(EEI) • Yale and Columbia (Davos): ESI, EPI • ESI: Argentine(9), Brazil(11), Gabon(12), Congo(39), Indonesia(75) > Korea(122) – measuring env challenge a country is facing Æ country with large carrying capacity tends to end up with high ESI • EPI: high income(Korea42) >low income countries – measuring env performance towards international goals Æ country with high income tends to have high EPI • So far no indicator measuring EE pattern of economic growth • That’s why we Need to develop EEI Paradigm Shift from

• Quantity of GDP to QUALITY of GDP ¾ Ecological Quality ¾ Economic Quality ¾ Social Quality QualityQuality vsvs QuantityQuantity ofof GrowthGrowth

• Current Growth Patterns based only on “Market Efficiency”& Quantity of Growth • “Green Growth”: based on the “Ecological Efficiency” paradigm. • Quality of Growth = Quality of Life = Environmental Sustainability EEEE PatternsPatterns ofof GrowthGrowth

• Pattern of using ecological resources in achieving same level of GDP • Ratio of the ecological footprint divided by GDP Different Patterns of Ecological Quality • Not all Growth has the same Pattern of Growth in terms of Ecological Quality • Japan > Europe > US • Asia & Pacific : Need to adopt ecologically efficient Green Growth “Pattern” • Singapore, Korea: Viet Nam ? Ecological Patterns of Growth (global hectares per capita, 2002)

Ecological Deficit, Bio-capacity, Eco-footprint • Japan - 3.5 (0.8 / 4.3) • UK - 4.0 (1.6 / 5.6) • France - 2.6 (3.0 / 5.6) • US - 4.8 (4.6 / 9.7) • Rep. of Korea - 3.8 (0.6 / 4.4) • China - 0.8 (0.8 / 1.6) • Viet Nam 0.0 (0.8 / 0.8) CO2 Emissions per capita

GNI per capita 1998 1999 2000 2001 2002 2003 2003 United States $ 37,610 19.88 19.81 20.21 19.73 19.65 19.68 Australia $ 21,650 16.91 17.00 17.07 17.49 17.54 17.35

Brunei Darussalam N/A 13.42 12.72 13.11 12.54 12.45 14.75

Chinese Taipei N/A 8.65 8.97 9.65 9.94 10.28 10.85

Russian Federation $ 2,610 9.76 10.07 10.40 10.48 10.43 10.65

Germany $ 25,250 10.57 10.22 10.15 10.34 10.20 10.35

Kazakhstan $ 1,780 7.70 7.03 7.84 9.19 9.57 10.23

Japan $ 34,510 8.70 9.03 9.13 9.03 9.30 9.41 Korea Rep. $ 12,030 7.84 8.51 9.10 9.32 9.22 9.36 United Kingdom $ 28,350 9.12 9.00 8.96 9.18 8.92 9.10 Singapore $ 21,230 10.43 9.65 9.60 9.44 9.20 8.98 New Zealand $ 15,870 7.15 7.56 7.69 8.08 7.94 8.09 Hong Kong, China $ 25,430 6.08 6.45 5.80 5.65 5.43 5.94 World $ 5,500 3.86 3.83 3.87 3.85 3.87 3.99 What is Ecological Efficiency?

• Minimizing Ecological Costs • Ecological Costs = impact of Resource Depletion + Pollution Impact • Thus EE = Resource Efficiency (RE) + Pollution Control (PC) Efficiency Current Paradigm: ME

• Market Efficiency: based on Market Price • Market price < Ecological price • Market Efficiency (ME) < Ecological Efficiency (EE) • Thus closing the gap between ME & EE is critical in improving Ecological Quality of Growth HowHow cancan Asia/PacificAsia/Pacific dodo that?that?

• Paradigm shift: ecological quality of growth • Choosing EE Growth pattern: • By applying “Ecological Efficiency” paradigm to its Economic Development

* Otherwise, A/P can not continue its growth as its ecological carrying capacity is too limited. China

• President Hu Jin Tao : mention Green Growth at the G-8 Summit Meeting held last June in Germany. • Chinese Government: announced 6 measures for Green Growth, May 2006, at the opening of Green Growth Seminar of UN ESCAP, by NDRC, PresidentPresident NazarbayevNazarbayev,, 6363 CommissionCommission Session,Session, MayMay 2007,2007, Astana,Astana, KazakhstanKazakhstan

• “High levels of economic activities increasingly lead to the emergence of problems connected with industrial production”

• “This requires urgent actions in terms of ‘Green Growth’, since environmental stress will limit potential economic growth.” Who should be the driver of EE ?

• Market Efficiency : Market & Price • Ecological Efficiency (EE): No Driver • Government: should be the main driver • ETR (Eco-Tax Reform): could be the major tool in improving Ecological Quality & Pattern of Growth By improving

1. Price-structure: to close Gap between Market and Ecological prices * Invisible Infra of Society (ETR) 2. Infra-structure: to provide eco- efficient physical foundation for economic performance * Visible Infra of Society HowHow toto closeclose thethe gap?gap?

• Ecological efficiency

• Price structure • Infrastructure EE as new paradigm: Is it feasible?

Skeptic View: • Internalizing ecological costs Æ negative impact on competitiveness and growth • EE: applied to individual firm level by WBCSD, not yet applied to economy wide • just environmental idea: can not be used as a new paradigm Ecological Efficiency

• Can we operationalize EE without damaging Economy? • Any Examples ? • Classical Failure of EE: Climate Change Areas to improve EE

• Transport • Infrastructure: energy, water • Demand Side Management * sustainable prod/cons pattern • Climate Change Transport Sector: failure of EE • Poor Public Transport: Rail, Bus, subway • Private Car centered: high congestion Costs • Why ? No Rail to Airport, Congestion Charge, Clean Comfortable Public Buses • EU/Japan: modernize Rail, • Congestion Cost: Korea 4.4%, Japan: 0.79%, US: 0.65%, UK: 1.25%, Bangkok: 6%, need more public transport, need to control private car Reducing traffic congestion costs

• Traffic Congestion : Serious economic, ecological & social (health etc) loss • Solution: Building more road ??? • Need Ecologically efficient Public Transport, Rail Network / Control Private Cars like Japan, Singapore, Europe Investing in EE of Infra

• EE concept Æ to any infra dev & investment • Ecological Costs of long term use of Infra: higher weight in EIA or SEA: Rail vs Highway, new airports & large shopping mall with maximum public transport accessibility • Transport, Energy (Building Insulation), Water Recycling EE Infra: opportunity for EE growth • Investment for Infra of environment (waste water etc), public transport, energy, water, renovating existing infra • New opportunities for EE Growth • EE : should be a criteria for budget allocation for public infra investment * relevant for MPI, Viet Nam How:How: EEEE PatternPattern ofof GrowthGrowth ??

• Growth EE = Prod EE + Cons EE • EE of Prod/Cons Pat has to be changed • Prod: PC easy to target, some progress RE rising resource price pushing • Cons: difficult to change lifestyle PC some progress in waste/recycling RE deteriorate as income goes up SustainableSustainable ConsumptionConsumption andand ProductionProduction

Consumption Production + Env Kuznet Curve

Conventional Pollution Pollution Approach Pollution Dimension

Green Growth Res-efficiency Res-efficiency REEF Approach Res-efficiency China Dimension

EEI As income goes up, EE of • Production Pattern: expected to improve (EKC) • Consumption Pattern: expected to deteriorate. - no empirical evidence of EKC for EE of Consumption. • ETR (Eco-Tax Reform): powerful tool in managing demand by changing price of consumption Demand Side Management: Sustainable Consumption Pattern

• Rising Demand as income increases: challenge for DCs • Urbanization: huge demand in a compact space • How to manage increasing private cars in cities ? * More large cars in many Asian cities than in Japan and Europe Demand side management: Sustainable Consumption Pattern • Government: make consumer to pay their ecological responsibility • Road & water pricing, energy tax, CO2 tax, congestion charge, • How to ensure Consumer Acceptability ? • Dialogue with Civil Society: Consumer Right vs Consumer Responsibility • Political Leadership: London, New Delhi, Singapore Asian Cities

• Fail to provide ecologically efficient infra public transport, poor public transport Æ high congestion costs • Fail to control demand side management control private car, congestion charge, road pricing, water pricing, building insulation • Good Model: Singapore, Japan, Europe, Climate Change (CC)

• greatest and widest-ranging market failure ever seen (Stern Report) • Result of Gap between Market Price and Ecological Price, ME

• improving Ecological Quality of Growth (Production and Consumption) • EE & GG is, in fact, direct response to CC • ESCAP promoting Market Mechanism to provide incentives for climate action * Reforming CDM (removing technical additionality) * Discounting CER (not imposing target) What is the Role of Green Government ? • Adopt EE as new economic policy paradigm • Should provide economic system based on EE • Courageous enough to overcome initial resistance • With a conviction that EE paradigm will leapfrog our economy into ecologically efficient & high quality of life growth pattern in the long run Policies for Green Government

1. By Eco-Tax Reform (internalize env costs) 2. By Integrating “EE” into Infra (Trans, rail, water, energy etc.) investment 3. By strengthening Demand side management (congestion charge etc.) to improve EE of consumption pattern 4. By supporting greening of business Eco-Tax Reform

• Not earmarked env tax • Changing taxbase from INCOME to POLLUTION • Reducing income tax, Increasing pollution tax, total tax revenue same (Revenue Neutrality) • Double Dividend: increasing employment, improving EE, (Germany, Sweden, etc.) • EE applied without additional costs burden Eco-Tax Reform Tax Base: Income Tax Base: Pollution Income Tax

Income Tax

Pollution Tax Pollution Tax • Changing Tax Base Revenue Neutrality

9 Not Increasing Tax Burden 9 Reducing Income Tax 9 Increasing Pollution Tax Double Dividend

• 1 stone 2 birds

• Reducing GHG Emissions • Promoting Growth Eco-Tax Reform

• Basis for Synergy between Climate Action and Growth • Tool for Green Economics Meaning of Green Tax Reform

• Key Message: EE can be applied without additional costs. Revenue Neutrality: • Without increasing tax but by shifting tax base from Income to Pollution • We can change our growth pattern • It is a matter of software of a society • Income regressiveness, competitiveness: can be managed by design of Green Tax. Exploring New Paradigm

• Happiness, Well-being, Quality of Life, - Richard Layard, LSE, “Happiness” • Thailand: “Sufficiency Economy” • China: Harmonious Society, China Development Forum: New Model of Economic Growth, Beijing, 17-19 March 2007. • OECD: How to measure Social Progress? Future of Indicators (beyond GDP, MDG) Spiritual dimension: 4th pillar • Sus Dev: eco, env, soc 3 pillars still mainly materialistic dimension • SD + spiritual value (happiness, well-being etc.) • Searching for new paradigm: GDP not enough • OECD leading international discussion: World Forum on “Statistics, Knowledge and Policy” 27-30 June 2007, Istanbul, “Is Happiness measurable?” conference, Rome, 2-3 April 2007, SCSC == thethe EASTEAST meetsmeets thethe WESTWEST Conventional Western Culture

Material New Asian Possession/ Consumerism Consumption

Happines s = New Western Desire Consumerism

Conventional Asian Culture What could be our New Paradigm?

• USD 20,000 per capita ? • Thailand: “Sufficiency Economy” based on Buddhist Value • Confucius Value: Harmony with Nature, • Ecological Efficiency: one of the new paradigms to link GDP based material value with broader paradigm based on spiritual value Is it only a matter of “Money” ?

• Many argue: if we have enough money, we can clean up and invest for env., so money is the answer. Or internalize env. costs. • Money critical when income is low (EKC) • It is policy concept & paradigm • Huge Traffic congestion costs: Korea > Japan, not money, but system & growth pattern Matter of Vision and Leadership

• Political Vision & Leadership critical to adopt EE as new paradigm for transport, climate change, infra, consumption pattern, tax reform (Ex. Singapore) Æ EE: critical condition for economically competitive, ecologically efficient growth Æ Quality of Life & Well-being, Happiness, Æ But ultimately it takes Courage to change Status Quo UltimateUltimate ChallengeChallenge

¾ Political Leadership with vision and conviction ¾ Public understanding and acceptance PoliticalPolitical DeterminationDetermination andand LeadershipLeadership:: KenKen LivingstoneLivingstone • Environmental issues directly affect various interest groups. • Any trial faces objections from the negatively affected interest groups. Successful traffic congestion charging in the city centre in effect (Feb, 2003).

The early stage of introduction • 80% of citizens objected in a poll • Supposed to have reelection in 2004 After adoption

• Amelioration of traffic, decrease in air pollution, energy saving effect • Reelected in 2004 LeadershipLeadership withwith StrongStrong ConvictionConviction && Vision:Vision: LeeLee KwanKwan YewYew

• Consistent Policy making with strong conviction and vision. Citizens with complaints began to readjust to the life style of a small nation with many people and accept the public transportation system rather than automobiles.

• COE (Certificate of Entitlement) - COE sold at Auction (twice a month) allows car - Development of public transportation lets people use public transportation rather than uncomfortable automobiles. -COE Price Increase : $30,000~40,000 (90s) → $14,000( Recent)

• Singapore vs Seoul Highway Rush Centre of Hour City 75% agree to congestion fee 60% agree to vehicle ownership tax Singapore 60 km/h 25 km/h Seoul 38 km/h 15 km/h ESCAP is focusing on

• Eco-Tax Reform (ETR) • Improving EE of Infrastructure: Urban Infra • Demand Side Management * Sustainable Consumption Pattern • Climate Change: turning climate crisis into economic opportunities • Supporting Green Business: turning EE into business opportunities ESDD/UNESCAPESDD/UNESCAP FocusFocus

• Promote capacity building for application of Green Growth/ EE policy tools • Providing forum for inter-ministerial coordination in integrating Env. Sustainability into Socio-Economic Development • Regional Platform for Environmental Strategic Review of AP: every 5 years MCED (Ministerial Conference on Environment and Development) Green Growth • Is not Green GDP ( GDP – pollution clean up cost) • Improving Ecological Quality & Pattern of Growth Æ Env. Sustainability • By applying Ecological Efficiency (EE) to Prod & Cons • AP Regional Strategy for SD

VisionVision forfor AsiaAsia--PacificPacific GreenGreen Growth:Growth: Environmentally sustainable economic growth for the improved well being of all For more on Green Growth see SOE 2005, Green Growth at a Glance visit our www.greengrowth.org portal and www.unescap.org/esd website