Clini: Green Growth is not the Green Washing of the "Brown Economy"

*Corrado Clini

The UN secretary general Ban Ki-Moon, warned in 2011 that the world's current economic
model is an "environmental global suicide pact " that will result in disaster if it isn't reformed.
Climate change is also showing us that the old model is more than obsolete" he told a panel at
the World Economic Forum in Davos. We are already experiencing more frequent extreme
weather events and we should expect more intense storms, floods and heat waves , as well as
increasing global temperatures and rising sea levels. The Intergovernmental Panel on Climate
Change in 2013 underlined that the atmospheric concentrations of carbon dioxide
concentrations have increased by 40% since pre-industrial times, primarily from fossil fuel
emissions, to levels unprecedented in at least the last 800,000 years. In May 2013 CO2 levels
in the atmosphere exceeded 400 parts per million for the first time in several hundred millennia,
closed to 450 ppm, which is the limit to held the average global temperature below 2 degrees
Celsius (°C), and to assure a "safe" climate system. "Continued degradation and erosion of natural environmental capital", according the Oecd Environmental Outlook to 2050 "are
expected to 2050 and beyond, with the risk of irreversible changes that could endanger two
centuries of rising living standards". The impact on the quality of life of our citizens would be
disastrous. Freshwater availability will be further strained in many regions, with 2.3 billion more
people than today projected to be living in river basins experiencing severe water stress.
Furthermore, air pollution concentrations in the cities and the large urban areas, particularly in
Asia, already far exceed World Health Organization safe levels, with deadly consequences: the
global number of premature deaths linked to airborne particulate matter is projected to more
than double to 3.6 million a year, with most deaths occurring in China and India. The lack of
electricity, fresh water and safe food, will increase in the least developed countries, which are
also vulnerable to extreme climate events because of the absence of climate-resilient
infrastructures and services. Nevertheless, global warming and environment are today out of
the political and economic priorities. The global economic crisis have bumped climate change
and pollution to the bottom of the priority list. Policies and measures to address climate change
and to promote sustainable development have been slowed or shelved , both in the developed
countries and in the emerging economies. Environmentally harmful, national and international,
policies to address the financial and economic crisis have been formulated to stabilise, restore
and reform the banking sector; consolidate and reduce the public debt; stimulate the short term
demand in the domestic markets to achieve "business as usual" operating conditions; "secure"
traditional consumption and production patterns , existed in the old fashion "Brown Growth"
economies of the last century. In the timeframe 2009-2012, such policies have made
overcoming both the crisis of debt and of growth more difficult and costly driven a progressive
reduction in the public and private investments in innovative and "low carbon" technologies, and
in "green" infrastructures as well as in the efficient management of natural and energy
resources.
However, both the austerity and the "Brown Growth" policies are not working. The apparent
gains they offer in the short term are not sustainable in the medium-long term, both in terms of
competitiveness and in terms of environmental&social external costs . In the medium term
"Brown" processes and products will not be competitive, in comparison with the new and
innovative technologies in all the sectors already in the markets : in energy, chemicals,
transportation, building, food, water management, waste recycling, communication. The failure
of such policies is widely acknowledged, and the international community is proposing new
ways for achieving a sustainable growth. The conclusions of RIO+20 Word Summit on
sustainable development, "The future we want", "encourage each country to consider the
implementation of green economy policies in the context of sustainable development and
poverty eradication, in a manner that endeavours to drive sustained, inclusive and equitable
economic growth and job creation, particularly for women, youth and the poor." In the Annual
Growth Survey 2012, the European Commission writes that "Fiscal consolidation and financial
repair are needed but are not sufficient in themselves to deliver growth.... An emphasis on
resource efficiency, for example in areas such as energy efficiency and reducing waste, can
improve competitiveness, create new jobs and help our environment". President Obama,
introducing the US Climate action plan, ( June 2013) states : "our scientists will design new
fuels, and our farmers will grow them. Our engineers to devise new sources of energy, our protection. In the next 3 years, China plans to invest 60 billion $/year
in projects to save energy and promote greener power, 80 billion $/year to reduce
environmental pollution, 10 billion dollars/year for restoring water resources. In the same period,
China plans to reduce its carbon emissions per GDP unit by 17%, and general energy
consumption per GDP unit by 16%. It also plans to ex­pand wind and solar power so that
non-fossil fuels account for 11.4% of primary energy use by the close of 2015.
At first glance, there is a global politic agreement that the inclusive green economy is the way
towards achieving sustainable development ad recovering the global economy. But building a
green economy requests long- term investments in technologies and infrastructures for
improving efficiency in the use of natural and energy resources, international rules and financial
mechanisms to shift the energy system towards the "carbon neutral" technologies, and
international cooperation to promote the equitable access to energy and freshwater for all the
populations.
The long-term investments should be guaranteed through a framework of global and stable
regulations aimed at decoupling of raw materials and energy use from economic growth;
recognition of the 'natural capital' and the economic value of the 'ecosystem services' in the
GDP accounting; international standards in energy efficiency and renewable performance.
Those regulations are still significantly lacking at the global level, as well as the context for
facilitating the "green" investments. The challenge is to agree at global level: feasibile global
regulations on the efficient use of natural and energy sources; the accounting of 'natural capital'
and 'ecosystem services' to complement gross domestic product (GDP).
At global level, the investment in renewables was $244 billion in 2012, down 12% from the
previous year's record figure of $279 billion. Meanwhile trillion dollars are in the pipe line of the
investments for new energy infrastructures based on oil, sand oil, natural gas and shale gas,
and coal. The challenge is to set up a global agreed framework to: drive the shifting from fossil
fuels to clean low carbon energies; and recognize a 'carbon price' in all the sectors of the
economy. In 2013 subsidies wich are harmful for climate and environment amounted to about $
600 billion for fossil fuels and $ 27 billion for overfishing and agriculture. According to Oecd:
"Subsidies distort price and resource allocation decisions, altering the amount of goods and
services produced and consumed in an economy. As a result, they are economically wasteful
and environmentally damaging". The phase out of subsidies for fossil-fuels is a key step
towards the innovation in the energy sector and fair competiveness in the global energy market
between the "brown" and the "green" energies. The challenge is to agree at global level: the The challenges are clear and unequivocal, ugent and crucial for the common future. Responses
should be concrete and effective. It seems to me that international community, the
Governments and UN system, are focusing more on designing complex legal structures than on
addressing the real challenges. We don't need the construction of a new international
bureaucracy on environment and climate change. We are running out of time. We have only few
years to design, test and agree the rules and policies necessary to promote a global
"de-carbonized" economy, which will sustain growth and reduce emissions, and to agree
measures to protect and value the "natural capital". Green Growth is not the Green Washing of
the "Brown Economy".


* Former Minister for the Environment of Italy