Towards a Green Economy

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Towards a Green Economy

• Pavan Sukhdev
• Project Leader, Green Economy Initiative, UNEP
• Study Leader, TEEB

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• The Three Canaries in the Mine
• After the canaries. ?

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Four questions

• Can more liquidity and even more credit solve a
  credit crisis ?
• Can more production solve an energy and
  resources crisis ?
• Can the global economic system manage to recover
  with just a re-boot ?
• Can Capitalism survive the next 200 years whilst
  ignoring Natural Capital ?

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have One Answer

• No

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Two More Questions .

• What part of No dont we understand ?
• Can the thinking that created the problem
  actually solve the problem ?

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EXAMPLE Applying Old Thinking to New Opportunity

• Five years ago, Solar energy was considered a
  commercially feasible alternative only if crude
  prices more than doubled, to 60-70 / barrel
• In 2008, at 100 crude, the tar sands of
  Alberta become an investment focus for Energy
  companies
• Solar PV continued to attract more kudos, more
  VC. But still hasnt scaled....

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• Moral of story Green Economy is easier said
  than done

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North American Cleantech Venture Capital Deals by
Quarter and as a percentage of total VC (by
amount), 1999 2007
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Tackling perverse subsidies
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Example Humanitys Exposure to The Loss of
Global Fisheries

• Open Access Perverse Subsidies are key drivers
  of the loss of fisheries
• Half of wild marine fisheries are fully
  exploited, with a further quarter already
  over-exploited
• at risk 80-100 billion income from the
  sector
• at risk est. 27 million jobs
• but most important of all..

We are fishing down the food web to ever smaller
species
at risk Health over a billion rely on fish as
their main or sole source of animal protein,
especially in developing countries.
Source Ben ten Brink (MNP) presentation at the
Workshop The Economics of the Global Loss of
Biological Diversity 5-6 March 2008, Brussels,
Belgium. Original source Pauly
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Demonstrating the role of Ecological
Infrastructure in economic development
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New Sector of the Economy ??

• Balmford et al, 2002, Economic Reasons for
  Conserving Wild Nature, Science 297, estimates
  Protected Areas could produce goods and services
  valued at between 4,400 billion - 5,200
  billion per annum
• Natural Capital Present Value (PV) of a
  constant service annuity of 5,000 billion per
  annum, discounted _at_ 4 per annum
• Estimate of the number employed directly in the
  maintenance, protection, and oversight of
  Protected Areas globally
• Global Business Sector estimates from Global
  Markets Centre (GMC), Deutsche Bank

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TEEB Paying for Nature Works !

• Panama Canal Afforestation by Shippers
  Insurers
• Costa Rica - Payments for Environmental
  Services
• Guyana private equity fund buys ecological
  services options
• just a selection of the many examples we
  encountered

Source TEEB, Interim Report, May 2008
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ECUADORS Conservation Proposal Yasuni
Preserved, Oil stays in ground ?
Yasuni National Park the most
biodiverse wilderness on Earth
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D1 Challenge (contd) ECUADORYASUNI National
Park / ITT Oilfield Proposal

• Ecuador commits not to exploit 20 of its proven
  oil reserves (846 million barrels), (ITT oil
  fields, within the Yasuní National Park.
• Ecuadors Opportunity Cost ( _at_ US 75 WTI) is
  an NPV of US11.6 billion.
• Worlds CO2 Storage 407 million Mt CO2 _at_
  market (EU-ETS), US28.85/ Mt, US11.7 billion.
• Note Social Cost of CO2 far exceeds market
  price
• ECUADOR seeks investors now .
• ECUADOR shows a way Does the World have the will
  ?

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Space-warp Ahead !!
Natural Capital
Human Social Capital

• GDP Growth

Financial Physical Capital

• Can we navigate a complex,
• three-dimensional, economic space..

with a simple economic compass ?

• Can we keep making profit .while destroying
  scarce Natural Capital ?

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Green Economy A new engine for Growth ?
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• Thank You !