Saturday, July 21, 2012

RIO +20: The gradual establishment of a “green economy” through what should be a second Asia Pacific industrial revolution is a key priority


RIO+20 summit showed that developing countries in South Asia were very cautious on the Green economy model

Some developing countries, particularly in South Asia, are fearful that environmental and economic issues are to take precedence over social, poverty and equity issues. They ask that developed countries refrain from practicing protectionism under the pretext of pursuing a green economy agenda. 
They fear that a few powerful countries write the rules of global trade, finance, and environmental action harming the environment and people in the South. They think that further privatization, commoditization and financialization of nature and its ecosystem functions, could  lead to further concentration of control, land-grabs, bio-piracy, displacement and marginalization of communities most dependent on access to these resources, and loss of cultural identities."The southern voices are getting marginalized," Mohan Munasinghe, chairman of the Sri Lanka-based think-tank, Munasinghe Institute for Development, told the NGO SciDev.Net. But our world today is locked in social, political, economic, and environmental crises as the huge increase of food and commodity prices due to extraction pressure put on the environment showed prior the 2008 crisis.

Are China environmental commitments as expressed during the RIO+20 summit really serious?

China had boasted its solemn commitments to its own people and the international community at large:

  • In the past six years, China’s energy consumption per unit of GDP was cut down by 21%, equivalent to 1.6 billion tons of CO2, and the total discharge of main pollutants dropped by around 15%
  • Reforestation has increased its forest by 620,000 square kilometers, which was the largest increase in the world.
  • In future China will strive to meet the obligatory targets set for the year 2015, namely:
    • To lower CO2 emissions and energy consumption per unit of GDP by 17% and 16% respectively,
    • To raise the proportion of non-fossil fuels to 11.4%
    •  To cut total discharge of main pollutants by 8% to 10% all from the 2010 levels.

But are these achievements really true?  Five researchers have compared figures released between 1997 and 2010 by the Beijing National Statistics Bureau of the 30 provinces emission inventories (see Figure 1).

Figure 1

No real surprise, the numbers do not match. Published in Nature Climate Change (NCC), the results of the analysis show a difference of 1.4 billion tons of CO2 by 2010. The figure is equivalent to Japan’s annual CO2 emissions, the world’s fourth largest emitter, with 5% of the global total! The Middle Kingdom count of carbon is wrong by 18%. We understand better under these circumstances, the reluctance of Beijing to see progress in negotiations on international control of releases of greenhouse gases.

Chinese authorities claim, in fact, that national emissions rose by just over 7% per year between 1997 and 2010. In reality, says NCC, that growth rate would be closer to 9% per annum.

Figure 2

In 2011 China (see Figure 2) is the biggest CO2 emitter in the world around 9.7 billion tons CO2 more than US (5.42 billion tons) and EU (3.79 billion tons) together (From PBL 2012 Report- Trends in Global CO2 Emissions).

Figure 3

Among the biggest head count CO2 emitters (see Figure 3) are US: (17.3 ton CO2 per capita), Saudi Arabia (16.5 ton CO2) and Canada (16.2 ton CO2) but Asian Pacific countries are now the fastest growing source of Carbon emissions. Among the top 10 head count CO2 emitters in 2011 there are now four Asian Pacific countries: Australia, South Korea, Taiwan and China, which have now the same emission level than European Union.

The concept of green growth is a condition to overcome increasingly resource constraints, environmental risks and uncertainties that threaten stability and prosperity of the Asian Pacific region

This is shown in the last  ESCAP-ADB-UNEP 2012 report on Green Growth, Resources, and Resilience in Asia and the Pacific prepared for the RIO+20 summit. This study demonstrates that a green growth is the only available path in the future!

The region as a whole is still on track for achieving the first Millennium Development Goal – halving, between 1990 and 2015, the proportion of people below the poverty line – but hard-won gains in reducing poverty and improving people’s lives are now in danger of being reversed in some countries.
 Poor communities in both rural and urban settings are the most vulnerable to the negative impacts of climate change, with those in small island developing states facing perhaps the most immediate challenges. Bangladesh which is one of the poorest countries could be one of the first plagued by rising sea levels due to global warming with climate refugees while its footprint is one of the world’s smallest.

In Asian Pacific region as in other emerging countries economical and environment achievements are inextricably entangled:

  • Food Supply: There are growing concerns about both the adequation and stability of food supply, particularly in light of the continuing food price rises. Food supply is being affected by a number of factors, including low crop yields, rising input costs, competing demands for freshwater, loss of farm land for housing and industry and neglect of investment. Climate-related extreme weather events are compounding these challenges. In addition, the competition for land and changing market forces mean that production of non-food crops is expanding faster than production of food crops, including in South Asia and East Asia, where hunger and undernourishment challenges persist or are growing. Wealthier countries with limited agricultural land have sought to secure access to land for agricultural production in other countries.

  • Water: Seasonal shortfalls in the availability of water are another present and growing crisis in many parts of Asia and the Pacific. While the region has the world’s largest share of renewable freshwater resources, on a per capita basis, it has the lowest availability of water. Complex, evolving, and interrelated water security challenges include competing demands for water, including for agriculture, energy, industry, and domestic use; declining water quality; and vulnerability to climate and ecosystem changes. Seasonal water shortages have become more severe in certain parts of the region as now in the Klang Valley Malaysian area.

  • Energy: As energy demands mount, countries in the region will become increasingly vulnerable to price shocks, especially those that import energy and have high energy intensity (i.e., energy consumed per unit of gross domestic product). Vulnerabilities linked to energy import dependence, aggravated by the volatility of energy prices, will continue to have far-reaching implications for the financial ability of countries to meet their energy demands. A number of countries, especially those in South Asia, face these challenges as they also attempt to greatly increase energy access for their populations. This vulnerability is illustrated by the race for oil resources between China and some ASEAN states and the rising tensions resulting from China ascertaining strategy in the South China Sea. We also see that the problems of energy prices and state subsidies in the region block any important actions of energy conservation or renewable energy development

  • Biocapacity is declining: Ecosystem goods and services provided by natural capital are also in decline due to poor natural resource management decisions, growing human populations and increased per capita consumption. As of 2008, the Asian and Pacific region had the highest number of threatened species; while net gains in forest cover for the region overall hide continuing conversion of primary forested lands, which has accelerated in several countries.

  • Carbon and others Greenhouse gas (GHG) emissions: Although the majority of the historical build-up of atmospheric greenhouse gas (GHG) emissions is the result of emissions from developed countries, Asian developing countries account for the fastest growing source of new emissions. In 2005 Asian Pacific emitted around 11 billion tons of CO2 or 38 per cent of worldwide CO2 emissions. The figure above relative to China shows a steep increase during 2005-2010.

As of 2005, the Asian and Pacific region required three times the input of resources as the rest of the world to produce one unit of GDP

Why such a big domestic material consumption (DMC) input in the GDP? Mostly because the development model of the region is basically export oriented, and also because of the huge investment made in production capacity, infrastructure and housing.
Between 1998 and 2008 (see Figure 4), Asian and Pacific consumption of four main types of materials – biomass, fossil fuels, metal ores/industrial minerals and construction minerals – grew by 45 per cent, from 48.7 billion tons to around 69.4 billion tons. Since 2005, the region has accounted for well over half of global material use, overtaking all other regions combined.
Ominously, DMC input in the Asia Pacific GDP increased from 2000 to 2008, reversing previous trends. The main reason for this reversal is that economic activity in the region is shifting away from relatively more efficient centers, such as Japan, to relatively more resource-intensive centers, such as China. The enormity of this shift has been enough to affect regional and global efficiency trends. If these trends continue, extractive pressures on the environment will increase even faster than the rapid rates of economic growth.

Figure 4

East and North-East Asian countries (China, Korea, Japan, Mongolia..) economically diverse and dynamic but resource constrained are importing increasing quantities of resources per capita to satisfy their growing rate of material consumption. South-East (Brunei, Cambodia, Indonesia, Malaysia, Singapore..) and South and South-West Asian countries (Afghanistan, India, Iran…) , regions with high poverty rates and low per capita access to resources, have physical trade balances that are also increasing – signaling increasing reliance on imports.

Based on modeling conducted if these current trends continue, the Asian Pacific region will consume at least 80 billion tons of materials and 700 exajoules of energy per year and CO2 emissions are likely to more than triple by 2050.

Sustainable growth can only happen through a second industrial revolution characterized by systems innovation, high resource use efficiency, and a greatly reduced reliance on hydrocarbons

Such strategies can help build a “green economy,” characterized by substantially increased investments in economic activities that build on and enhance the earth’s natural capital, while reducing ecological scarcities and environmental risks – activities such as renewable energy, low carbon transport, energy- and water-efficient buildings, sustainable agriculture and forest management and sustainable fisheries.

Addressing the “time gap” between short-term costs and long term benefits of green investments will require collaborative action between governments and the private sector to overcome the present financial barriers and risks that restrict capital flows into green sectors, thereby leading to increased investment.

To help provide this momentum, eco-tax reform offers a key cross-cutting, integrative policy tool that can help to secure a “double-dividend” for both the economy and the environment by emphasizing a shift from taxing the “goods” (for example labour) to taxing the “bads” (resource use and pollution).

Two examples of changing price signal are particularly important in Asia Pacific region for addressing the necessary Green growth implementation:

  • Subsidy reform on fuel prices and poverty reduction in Indonesia: the removal of subsidy on the costs of energy in emerging countries is a prerequisite for the development of renewable energy. While subsidies are politically attractive, they can discourage conservation and efficiency improvements and do not always benefit lower income group. In Indonesia an estimated 40 per cent of the high income households benefitted from 70 per cent of the fuel subsidies, while 40% of the poorest only benefitted from 15 per cent. Energy subsidy reductions were coupled with cash transfers to low-income households to mitigate the impacts of the resulting higher energy prices. The need for subsidy reform is becoming widely acknowledged, with the G-20 agreeing in September 2009 to gradually phase out fossil fuel subsidies.

  • Water prices set at a level to recover the full costs of producing and supplying fresh water, as well as to reflect the higher incremental cost of additional supplies as has been done in Singapore. Having water tariffs that reflect the true cost of water production, supply and treatment free up other funds for research and development to identify innovative and more efficient ways of treating and distributing water, and to construct new water supply sources to meet future demand. Other enabling conditions are high level of government effectiveness, strong political will and effective legal and regulatory framework