Why account for environmental change 10/11/2013 ? Hitomi Rankine

10/11/2013
Why account for environmental change ?
Hitomi Rankine
Environment and Development Division
Economic and Social Commission
f Asia and
for
d the
h Pacific
f
Valuing and Accounting for the Environment
in the Asia region
8-10 October Bangkok
Economic and Social Commission for
Asia and the Pacific



UN Regional Commission
Promoting Green Growth since 2005
Green growth as A-P strategy for Sustainable development
- 5th Ministerial Conference on Environment and
Development (2005)
1
10/11/2013
Asia-Pacific development context
Unmett needs,
U
d persistent
i t t poverty
t
Rising inequality
Converging crises food, fuel, climate & resource
Increasing risks - Natural
disaster, climate change, economic

Asia-Pacific development context
Human Capital
Exploiting
Natural Capital
social exclusion
Low labor productivity
Widening income gaps
High resource intensity
Rising environmental pressure
A vicious “growth” cycle
Low economic
Dynamism/ resilience
High economic vulnerability
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10/11/2013
Asia-Pacific development context

Survey 2012)
FAO food price index and Brent crude oil price, January 2004 to December 2010
300
$150
Crude
oil
250
200
150
$125
$100
$75
Food
100
$50
Recent
trends
50
0
USD / Barrel

The food-fuel crisis in 2008
exposed the vulnerability of
Asian economies to resource
price volatility
Food prices increased 40%
over the past year and will
increase 30% in next 10 years
(OECD, FAO)
volatile and high commodity
prices are likely
p
y to become
the “new normal” (ESCAP
Index ((2002-04 = 100)

$25
$0
2004
2005
2006
2007
2008
2009
2010
2011
Why account for environmental
change ?
More realistic economic strategies …
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10/11/2013
Unsustainable resource use


Asia-Pacific uses > 3 x
resources to produce $1
of GDP, compared to
th restt off th
the
the world
ld
100-year global
resource price trend
reversing in last 10
years with AP region
leading (McKinsey &
C
Company,
2011)
Domestic material consumption intensity
Asia-Pacific
Rest of world
Source: CSIRO and UNEP Asia Pacific Material Flows database - www.csiro.au/AsiaPacificMaterialFlows
Unsustainable resource use
Average Annual Growth Rate of material use
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10/11/2013
Intensity of material use (per GDP) – Mekong
region countries
2008
1990
Mongolia
Papua N. G.
Nepal
China
India
Lao PDR
Viet Nam
Pakistan
Fiji
Kazakhstan
Thailand
Bangladesh
Indonesia
Philippines
Turkmenistan
Kyrgyzstan
Malaysia
Sri Lanka
Uzbekistan
Australia
R. of Korea
Tajikistan
Singapore
N. Zealand
Japan
Mongolia
Kyrgyzstan
G
Papua N. G.
Lao PDR
Viet Nam
Uzbekistan
Tajikistan
Kazakhstan
Nepal
China
Turkmenist
Pakistan
India
Cambodia
Indonesia
Bangladesh
Sri Lanka
Fiji
Philippines
Malaysia
Thailand
Australia
N. Zealand
R. of Korea
Singapore
Japan
0
10
20
30
40
50
0
10
20
30
40
ESCAP’s role - Expanding awareness & data access
www.csiro/AsiaPacificMaterialFlows
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10/11/2013
ESCAP eco-efficiency indicator project



2007- 2009
Defined flexible EEI framework
Pilot applications in Viet Nam (Central
Institute for Economic Management) &
Cambodia (MoE)
EEI Viet Nam pilot – water intensities
Why account for environmental
change ?
Better policy & decision-making tools …
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10/11/2013
Developing a new integrated economic
modeling platform …
ESCAP/CSIRO/Univ. of Sydney study tour, September 2013, Canberra
Linking climate change, resource use, land
use and economic activity..
use,
activity
Can we really use this at the national level ?
- Yes .. but we need environmental satellite accounts
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10/11/2013
Why account for environmental
change ?
For a better understanding of the
quality of our growth
Green Growth
Strategy to cope with resource and climate crisis
• Conventional growth paradigm
based on cheap labor and
resources
• Focuses on quantity of growth, not
quality
• Low productivity of labor & very
resource and pollution intensive
• Leads to social exclusion and
environmental unsustainability
Brown Growth
(exploit)
Green Growth
(invest)
• Investment in human (labor) and
natural (resources) capital
• Improvement of labor productivity
and resource efficiency
• Improves quality of growth: higher
productivity and resource efficiency
Virtuous cycle/
Quality of Growth
Vicious cycle /
Quantity of Growth
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10/11/2013
Virtuous cycle/Quality of Growth
Human Capital
High labor productivity
Social inclusion
Closing
g income gaps
g p
Natural Capital
High resource efficiency
Low resource intensity
Lower environmental pressures
Investing
High economic
Dynamism/ resilience
Low economic vulnerability
A possible framework for assessing quality of
growth (work in progress)
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Assessing quality of growth indicators
(work in progress)
Why account for environmental
change ?
To support a shift to investment in
natural capital “goods”
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10/11/2013
Environmental tax/fiscal reform : shifting tax base from
income/labor to resource consumption/pollution 
Double Dividend

Powerful tool for GG/GE and sustainable development
p
•
•
Double Dividend of improving ecological efficiency and increasing
Employment and Growth simultaneously (GE) is possible.
Provides opportunities for financing “Goods” – revenue recycling into
socially and environmentally desirable investments
Taxing the “Bads”
not the “Goods”
REVENUE NEUTRALITY Low Carbon
Green Growth Road Map for Asia and the Pacific • Main guide
• Summary for policymakers
• 63 fact sheets
• 51 case studies
• 8 policy papers
http://www.unescap.org/esd/environment/lcgg/
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Online e-learning facility
New Learning Management System on-line
www.greengrowth-elearning.org/lms
Environmental tax/fiscal reform : shifting tax base from
income/labor to resource consumption/pollution 
Double Dividend

Powerful tool for GG/GE and sustainable development
•
•
Double Dividend of improving
p
g ecological
g
efficiencyy and increasing
g
Employment and Growth simultaneously (GE) is possible.
Provides opportunities for financing “Goods” – revenue recycling into
socially and environmentally desirable investments
- Taxing the “Bads”
not the “Goods”
- Shifting investments
to natural & human
capital
REVENUE NEUTRALITY 12
10/11/2013
Shifting investment patterns expanding the investor base
CO2 sequestration
Soil erosion control
Aquifer recharge
Water flow regulation
Water quality
Biodiversityy support
pp
Scenic/landscape beauty
Flood mitigation
Coastal protection
•Global economies/
societies
•Hydropower util.
•Water util.
•Beverage co.
•H2O users
•Agro-industry
•Ecotourism
Agro-industry
•Agro-industry
•Rural communities
•Vulnerable
Settlements
•Private sector
Expanding the investor base (forests)
Traditional
management
for timber
production



Private sector
(plantations)
L l
Local
governments
Local
communities
Management for
service provision










Ecotourism operators
Local governments
Water utilities
Hydropower companies
Water users
Energy users
Beverage producers
Agro-industries
Local communities
Farmers
How much
should we
invest?
Why should
we pay ?
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10/11/2013
Thank you
y
14