When It Comes to Building a Green Economy, Time Is Money

If the G-20 invested 2% of GDP in a green economy, 48 million jobs would be created. But inaction by both the public and private sectors threatens the potential of achieving a sustainable future

Speaking to world leaders in Toronto, the UN Secretary Ban Ki-moon called on the G20 to invest more in a green economy in order to achieve the Millennium Development Goals (MDGs).

"The risks—and costs—of inaction on climate change grow each year," said Ban, who urged governments not to rely solely on consumer consumption to get a sluggish economy back on track, and turn the capital investment flows towards three specific high-return investment areas: agriculture, green recovery and health systems.

That was at a G-20 summit—almost two years ago.

2% OF GDP = 48 MILLION JOBS

Now, the International Trade Union Confederation (ITUC) has echoed Ban's call in a report released this month that urges the G20 to invest a minimum 2% of GDP in the green economy, a move that would create 48 million green jobs, according to research by the Millennium Institute, a Washington, DC-based non-partisan non-profit that researches and promotes sustainable development.

The report, "Growing Green and Decent Jobs," asserts that "environmental deterioration and rising social inequality are twin perils of the 21st century" and notes that "he majority of governments are focusing on short-term economic policies, while making little effort to build a healthy society and environment for the long term." (A clear case of capitalist myopia.)

"There is no choice but to transition to a greener economy, where social needs and environmental protection are at the heart of decision making," the report states.

The report explains the Millennium Institute research that forecasts investments of 2% of GDP in the green economy over each of the next five years in 12 countries could create up to 48 million new jobs.

RIO+20 ZERO DRAFT: SHOW US THE MONEY

Certainly, the G-20 has had time since Ban's 2010 message to crunch the numbers, wrangle buy-in and come up with a plan to take to Rio+20, the United Nations Conference on Sustainable Development (UNCSD).

But the so-called "zero draft" document, which will be the negotiating document for the Rio+20 delegates as they hash out how we humans can recontextualize ourselves into the natural systems and resources of planet Earth, while filled with good intentions, has, perhaps unsurprisingly, been bedeviled by the difficulties built in to any international document, especially one that has deep implications for a Western corporatocratic hegemony based on a fossil fuel economy. (And there's also the prickly little fact that an international financial crisis has a way of derailing plans to create a multi-decade roadmap for global sustainability.)

"The Zero Draft touches on many of the right issues," said Victor Anderson, Senior Policy Officer at WWF-UK. "However it is lacking in urgency, ambition, and substance. We need far greater attention given to the problem of how to mobilise the finance needed to invest in the natural world in order to reverse widespread ecosystem decline."

Rio+20 is the "kind of global meeting only happens once a decade," said Oliver Greenfield of the Green Economy Coalition (GEC), a group of NGOs, research institutes, UN organizations and trade unions. "This needs to be as bold, visionary and urgent as the moment demands. This is one step forward. There are three more to go: This plan needs to be financed; have clearer responsibilities; and it needs to have a much more urgent timescale."

PUBLIC WILL, PRIVATE INVESTMENT

Last year, the Green European Foundation, a Brussels-based foundation linked to the European Green Party, released the report Funding the Green New Deal: Building a Green Financial System, which addresses the problem of financing all the new investments needed to foster "a sustainable world for current and future generations."

In the report's foreword, Claude Turmes and Philippe Lamberts, members of the European Parliament and Greens/EFA Coordinators of the Green New Deal Working Group, describe the Green New Deal as "a comprehensive response to the current economic, social and environmental crises" that requires "green investments of close to 1.5 to 2% of EU GDP annually, which could generate as much as 6 million new green jobs."

"By far the largest component of this will be funded by the private sector making commercially profitable investments," they write. "The actual cost to the taxpayer will be relatively small because many of the funds are paid back and the inherent subsidy is small."

Relying on private sector investment to fund the green economy is surely a welcome approach for fiscal conservatives across the world's governments—and for anyone leery of increased public spending, especially considering the fragile state of entitlements. But no matter where the money is coming from, the critical thing is to start making those financial commitments. A recent $20 million impact investment commitment by the Royal Bank of Canada, for example—the first such initiative announced by a major financial institution in Canada—is the kind of news that is music to the ears of the sustainable finance sector (though it is pocket change for a bank that has $750 billion in assets).

But money can be raised. Time, not such much. And we're quickly running out of the latter. And less time means greater financial resources will be needed to switch to a low-carbon economy.

As Ban succinctly put it to the G-20 leaders in Toronto in 2010, "The more we delay, the more we will pay."

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NOTES

UN News Centre. Ban urges G20 leaders to invest in 'green' economy on second day of Toronto summit. June 27, 2010. Accessed April 26, 2012.
International Trade Union Confederation. Growing Green and Decent Jobs. April 2012. Accessed April 26, 2012.
Ibid.
Benson, Emily. Green Economy Coalition gives Rio 2012 text a Grade B. International Institute of Environment and Development. January 13, 2012. Accessed April 26, 2012.
Ibid.
Green European Foundation. Funding the Green New Deal: Building a Green Financial System. May 2011. Accessed April 26, 2012.
Ibid.
Ibid.
Ibid., 1.

image: Three-year-old Henry Shales, visiting from New York, takes a close look at a solar panel on display at the U.S. Department of Energy Solar Decathlon 2011 in Washington, D.C., October 1, 2011. (credit: Stefano Paltera/U.S. Department of Energy Solar Decathlon, Flickr Creative Commons)