Pinning hopes to the green economy
For two years now the «green economy» has been the subject of international debates. It is expected to help overcome the current economic and climate crisis. The green economy will also be at the heart of the 2012 UN «Rio+20 Summit», which will build on the 1992 Earth Summit. At that time the concept of «sustainable development» found its place in the lexicon of politics and economics. Yet this has had no major impact, as is now being demonstrated by the twofold crisis. Will the «green economy» yield more in the future?
When the financial markets collapsed in 2008, many governments reacted with economic stimulus programmes and bank bailouts. From the very beginning civil society had called for these stimulus programmes to be used as the jumping off point for managing the climate crisis. To achieve a Green New Deal, renewable energies should be promoted, the building stock drastically improved, or public transport systems expanded, for example. That would create new jobs, stabilize demand whilst helping to combat global warming.
Much talk, little action
In the autumn of 2008, the International Labour Organization (ILO) published a study entitled Green Jobs – towards decent work in a sustainable low-carbon world. The study warns that owing to productivity gains and more dying industries, 500 million new jobs would have to be created by 2020. This would be helped by vigorous «greening» of the economy. The requisite political support is lacking, however.
The United Nations Environment Programme (UNEP) took up this theme and, in agreement with the other UN agencies, published an appeal to the G20 to devise economic stimulus measures along the lines of a Green New Deal. And the G20 Summit of April 2009 did indeed posit that the stimulus packages should also «accelerate the transition to a green economy».
Yet the G20 members barely heeded this call. Only South Korea designed its stimulus programme as a green new deal. UNEP calculations are that 80 per cent of its funds went towards green economy measures. China for its part spent one third, whilst the USA or Germany barely surpassed one tenth of their expenditure. Besides, in many instances, «green» measures were combined with others that contribute to global warming – Germany's car-scrapping premium, for example.
Because the concept of a «green new deal» is reminiscent of Roosevelt, Keynes and the creation of the western welfare state, in other words, of what western economic elites and the political mainstream have resisted for the past 30 years, international agencies soon came up with more innocuous terminology. The OECD speaks of «green growth». And in December 2009, the UN General Assembly approved the terms of reference for the Rio+20 Summit, the work of which is to centre on «a green economy in the context of sustainable development and poverty eradication». Next year the OECD will be positioning itself for the Rio+20 Summit with a «Green Growth Strategy».
Industrialized countries lack clear line
Two developments obstructed the productive linking of the economic and climate crises: the failure of the climate negotiations in Copenhagen at the end of 2009, and the debt crisis of western countries. Today, no western government is willing or able to roll out additional economic stimulus packages. The near future will instead be defined by austerity policies. One could still assume in 2008 that moves towards a green economy would be made possible, first by economic stimulus programmes, then mandatory thanks to emission reduction obligations and financing mechanisms under a climate convention. Such is no longer the case today. When western governments now talk about the green economy they do so not knowing how the adjustment is to be tackled and funded.
A dispute that recently erupted between the USA and China illustrates the problem. Since the onset of the crisis, investment in renewable energies in leading western countries has plummeted. To this day US companies in the sector face enormous difficulties in obtaining credits. In contrast, that sector is booming in China. At the 2010 World Economic Forum western industry leaders complained that Chinese industry would become the world market leader and overtake the West in the spheres of renewable energies and green technologies. Yet politicians in the USA are now complaining that China's lead has resulted from unfair competition in that the companies concerned have been systematically subsidized by the state in China. The United Steel Workers union has even called on the Obama Administration to file a case at the World Trade Organization (WTO) to challenge this. Yet this was precisely the idea behind the Green New Deal – using public funds to promote renewable energies and green technologies. «Market forces» alone will not do it.
Anxieties of developing countries
Hopes of a possible fresh start are now pinned to the Rio+20 process. The chances of such a fresh start would be considerably enhanced if the climate conference scheduled for the end of 2011 in South Africa could produce an agreement with some amount of bite.
Two fundamental questions are accompanying the debates on the green economy. First, what is the situation regarding the right to development? And second, how green can growth be?
Developing and emerging countries fear that a global «green economy» regime could be used to cement existing development disparities and hamper their catch-up industrialization. This criticism picks up on the contentious issues in the ongoing climate negotiations. In the view of developing countries, the industrialized ones should make the first decisive moves to transition to low-carbon energy supplies and the corresponding production processes. They should also support developing countries financially and technologically in making their transition. What is more, 1.5 billion people in the poorest countries still have no access to electricity but should obtain such access if poverty reduction is being taken seriously.
Developing countries are moreover wary of «green» protectionism by means of punitive tariffs on products obtained using traditional power generation and production methods. In its climate bill the US Congress had indeed contemplated punitive tariffs on imports from developing countries that were not subject to the same climate regime as the USA. Since the Democrats withdrew the bill and the Republican climate deniers won the mid-term elections, this prospect has disappeared.
The second contentious issue is being raised by civil society groups. Their view is that western governments and economic circles make the erroneous assumption that limitless economic growth can be divorced from the depletion of non-renewable energy sources and raw materials. So far, each efficiency gain in energy and raw material usage has been offset by increased consumption. In addition, the «dematerialization» of western «knowledge-based societies» has only come about because many industries, and indeed the dirtiest of them, have been transferred to developing countries. Hence the current spirited debate in the USA and Western Europe as to how western countries may not only transition to the green economy but also get out of growth.
Fuzzy concepts
One may well wonder how governments understand «green economy». At the centre of South Korea's Green New Deal is the building of another 10 nuclear power plants for example – renewable energies are still being neglected. Resource efficiency is at the forefront of the Swiss Cabinet's declaration of intent regarding the green economy issued in October. If it refers to energy resources, then the motorization of Switzerland, the concomitant energy-intensive urban sprawl and the like can continue at the same level of energy consumption. Alongside the «green economy», Germany, Japan and the USA are pursuing an active policy of securing raw material supplies, in particular the last remaining petroleum and natural gas reserves.
From a developmental standpoint there can be no objection to a fresh start to sustainable development under the «green economy» label. As the first run shows, however, much remains open. What the world does not need is an internationally negotiated rhetorical smokescreen that merely masks the continuation of unsustainable policies and economics that promote global warming, the over-consumption of raw materials, and conflicts in societies and between countries. A few months still remain before the Rio+20 conference in which to avert this.
Peter Niggli, director Alliance Sud
Further reading:
Rio+20 preparations with Calmy-Rey
pn. This summer the UN Secretary-General appointed a High-Level Panel on Global Sustainability charged with formulating a comprehensive policy report by the end of 2011 on the main topic of the Rio+20 Summit. It is comprised of 21 persons from all the continents and co-chaired by the Presidents of Finland and South Africa. Along with Gro Harlem Brundtland, it includes eminent persons who had already substantially influenced the 1992 Rio Summit, as well as newcomers such as Swiss Federal President Micheline Calmy-Rey. The panel is expected to examine a «new development paradigm» and identify avenues towards a low-carbon economy, greater economic stability, reduced poverty and more sustainable consumption and production methods. Special attention should also be paid to the development possibilities open to poor countries in a new green economy. Jörg Frieden (SDC – Swiss Agency for Development and Cooperation) is Calmy-Rey's Sherpa for the work of the panel.
Article published in: Alliance Sud News, no. 66, winter 2010/11
