Green Economy is beginning to emerge, says UN

Awareness of the dangers and opportunities of climate change is beginning to change the mind-sets, policies and actions of corporate heads, financiers and entrepreneurs as well as leaders of organised labour, governments and the United Nations itself, UNEP says. Increasingly, combating climate change is being seen as a path to a new kind of prosperity, and not as a brake on profits or employment.

The emerging green economy is also driving invention, innovation and the imagination of engineers on a scale perhaps not witnessed since the industrial revolution of more than two centuries ago. This includes novel 'geo-engineering� projects such as giant carbon dioxide (C02) collectors that absorb greenhouse gases from the air rather like trees do during photosynthesis.

�Based on technology used in fish tank filters and developed by scientists from Colombia University�s Earth Institute, this method called �air capture��can collect the C02 at the location of the ideal geological deposits for storage,� says the Year Book.

Carbon disposal

Meanwhile scientists in Iceland and elsewhere are looking at injecting C02 into that country�s abundant basalt rocks where it is claimed the pollutant reacts to form inert limestone. Similar �sequestration rocks� exist in geological formations across much of the world and may provide a safe and long term disposal option for the main greenhouse gas emissions.

Elsewhere, scientists are helping to unravel both the uncertainties and the opportunities posed by the enormous quantities of methane trapped in the sea bed and in arctic permafrost.

As a greenhouse gas methane is 25 times more potent than CO2 so the possibility of dramatic increases in methane emissions from these deposits is a global warming �wildcard� � a growing source of concern.

At the same time methane hydrates are a potentially large stockpile of clean-burning fuel, if ways can be found of mining them safely and economically.

Big hurdles

Despite a great deal of activity and action, formidable challenges remain if all these fledgling transformations are to be sustained and embedded in the global economy over the coming years and decades.

Barriers include subsidies that favour fossil fuels over cleaner energies; tariff and trade regimes that make cleaner technologies more expensive and the risk-averse lending patterns of banks and other financial institutions when it comes to solar and wind power loans for poorer communities, the new report says.

The Year Book�s findings were presented today at the opening of the largest gathering of environment ministers since the climate convention meeting in Indonesia late last year which gave birth to the Bali Road Map.

The Road Map is the climate negotiation agreement scheduled to be completed by the climate convention meeting in Copenhagen in 2009 in order to deliver a post 2012 climate regime.

UNEP Executive Director, Achim Steiner, said: �Hundreds of billions of dollars are now flowing into renewable and clean energy technologies and trillions more dollars are waiting in the wings..."

But, he added, �Formidable hurdles remain as to whether these funds will ultimately seek out new, climate-friendly investments for the future or whether they will seek the lowest common denominator by flowing into the polluting technologies of the past.�

�However I am optimistic that we can shift gears to a Green Economy. If humans can go to the Moon; submarines sent under the Arctic; liver and heart transplants perfected; the mysteries of the human genome deciphered and tiny nano-machines designed then managing a transition to a low carbon society must be within humanity�s grasp and intellect.�

Key Findings

• The Investor Network on Climate Change, launched in November 2003, now has some 50 institutional investors with assets of over $3 trillion.
  

• The Principles for Responsible Investment, jointly facilitated by UNEP�s Finance Initiative and the UN Global Compact in 2006, now has 275 institutions with $13 trillion of assets.
  

• A survey of companies in six sectors � ranging from mining and energy to food and media � indicates that those with pioneering environmental, social and governance strategies are out-performing the general stock market by 25 per cent.
  

• Cutting greenhouse gas emissions and boosting energy efficiency ranked number one among 54 per cent of those questioned followed by recycling, 52 per cent and waste reduction, 27 per cent.
  

• Some of the world's most carbon-intensive industries are leading the way in publicly disclosing their carbon footprint under an eight year-old initiative called the Carbon Disclosure Project. Close to 80 per cent of the Financial Times 500 corporations are disclosing their carbon performance. And over three-quarters of these are also reducing their greenhouse gas emissions - up from nearly half the year before.
  

• Among those most effectively reducing their emissions are electric power companies in North America; international automobile manufacturers and metals and mining companies. But other sectors appear to be either treading water or seeing emissions continue to rise including oil and gas and chemicals.
  

• The Clean Development Mechanism (CDM), which allows industrialised countries to offset some of their domestic emissions via cleaner and renewable energy schemes alongside afforestation and reforestation projects in developing countries, has been widely used. As of November 2007, over 850 projects had been registered in nearly 50 countries worth just over $1 billion. A further $1.4 billion are in the pipeline and the CDM could, if fully exploited eventually trigger investment flows for some $100 billion from North to South.

Action needed

Policy recommendations include:

• Action to remove fossil fuel subsidies. This could reduce C02 emissions by five to six per cent annually. Currently, fossil fuel subsidies amount up to $200 billion a year versus support for low-carbon technologies of an estimated $33 billion annually.
  

• In order to stabilise C02 at no more than 550 parts per million, support for innovation needs to rise from just over $30 billion to $90 billion by 2015 and to $160 billion by 2025,some experts believe.
  

• Global targets for improvemetns in energy need to increaase to 2.5 per cent annually. These should be supported by stronger energy- saving building codes for new and existing structures and penalties or disincentives for builders to choose the cheapest, least energy efficient designs and materials.
  

• Utility pricing that favours energy efficiency should be adopted to promote combined heat and power and improves energy savings in existing power plants and electricity transmission infrastructure.
  

• Policies that increase the uptake of renewables may include laws that guarantee a fixed price for each unit of renewable electricity generated; regulations that boost access to the Grid and incentives for second generation biofuels.

The UNEP Year Book 2008 can be found at www.unep.org/publications

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