When countries convene at this year's United Nations Conference on Sustainable Development, Rio+20, both the venue, Rio de Janeiro in Brazil, and the overall objective of the conference, sustainable development, will be the same as 20 years ago at the United Nations Conference on Environment and Development. However, the environmental and social challenges of the 21st century have markedly changed the background conditions. The impacts of climate change, desertification and the loss of biodivesity are a reality. Resource shortages resulting in water, food and energy insecurity are threatening human well-being. Moreover, these shortages disproportionately affect the poor who are highly dependent on nature's resources. Despite two centuries of unprecedented economic growth, more than 2 billion people live in poverty. A common feature at the heart of these crises is gross misallocation of capital that has led to increased environmental risks, the loss of natural capital and, consequently, loss of livelihoods.
As governments prepare for Rio+20, there is widespread recognition that a green economy can be a catalyst in assisting the implementation of sustainable development and poverty eradication. A United Nations Environment Programme (UNEP) report published in 2011, Towards a Green Economy; Pathways to Sustainable Development and Poverty Eradication, outlines the fact that investing 2% of global GDP in the transition to a green economy would grow the global economy at a higher rate in the medium to long term, while reducing the environmental risks and scarcities inherent in our existing brown economy. These findings demonstrate that economic development and investing in the environment do not have to be a trade off.
A green economy can be thought of as one that is low carbon, resource efficient and socially inclusive. It is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, prevent the loss of biodiversity and ecosystems services, and reduce environmental risks. In a green economy, natural capital is maintained, enhanced and, where necessary, rebuilt as an economic asset and a source of livelihoods and public benefits. For instance, in the Makete District of the United Republic of Tanzania, forest and grassland resources are essential for watershed protection and for agriculture and livestock production. Using smallholder woodland management practices as a strategy for climate change adaptation has created a new stream of income for local communities in the district, while enhancing resilience to climate change.
Indeed, a green economy offers multiple opportunities for developing countries, including least developed countries (LDCs), to increase livelihoods and preserve the natural environment. Our current economic growth model and the associated development approach have failed to reduce poverty and generate employment among poor communities. In some developing countries, up to 90% of GDP is linked to nature or natural capital, such as forests and freshwater.
For example, the results of a valuation exercise for the city of Kampala, Uganda, showed that the nearby Nakivubo Swamp provided an economic value of between US$ 1 million and US$1.75 million a year in waste water purification and nutrient retention services. Researchers concluded that services provided by the swamp created a much cheaper means of treating Kampala's waste water than the expansion and maintenance of new facilities. Yet, natural capital that many poor communities rely on, such as the Nakivubo Swamp, has so far been undervalued.
The transition to a green economy promotes investments in sectors linked to natural capital, such as renewable energy, organic agriculture, forestry, sustainable tourism and enhanced ecosystem services. These can enable developing countries and LDCs as well as the rural poor in middle-income countries to avoid the poverty trap. …