1% of World's Wealth Could Fund Global Green New Deal

NAIROBI, Kenya, March 19, 2009 (ENS) - Investing one percent of global wealth, or around $750 billion, into five key sectors from renewable energy to freshwaters would stimulate a Global Green New Deal, advises a policy brief released today by economists and the United Nations. But in a separate assessment today, the International Monetary Fund projects that global economic activity will shrink by one-half to one percent this year.

Issued in advance of the G20 meeting of world leaders in London on April 2, the UN brief says that mobilizing and refocusing the global economy towards investments in clean technologies and natural infrastructure such as forests and soils is the best bet for real growth, combating climate change and triggering an employment boom.

The five recommdned areas of investment are:

Raising the energy efficiency of old and new buildings
Renewable energies - wind, solar, geothermal and biomass
Sustainable transport - hybrid vehicles; high speed rail and bus rapid transit systems
The planet's ecological infrastructure - freshwaters, forests, soils and coral reefs
Sustainable agriculture, including organic production

The report details the multiple economic, environmental and social benefits of investing a significant amount of the $3 trillion worth of stimulus packages being provided by most G-20 industrialized and emerging market economies - including the United States, China, Germany, India, Russia, and Saudi Arabia - in these five areas.

Fast train on the Taiwan high-speed rail line (Photo by Sky-Train)

Achim Steiner, who heads the UN Environment Programme said, "The G20 meeting needs to be a milestone in terms of focusing investments that address the crises of today and those emerging from climate change, natural resource scarcity and lack of decent employment for close to two billion unemployed or underemployed people over the coming decade."

"Take energy use in buildings. It can already be cut by 80 percent in a cost-effective manner using existing technologies. Additional investments in this sector would not only stimulate the recovery of the construction and allied industries but also generate tens of millions of jobs.

"An estimated two million to 3.5 million green jobs could be generated in Europe and the United States alone with an even higher potential in developing countries," he said.

"The large scale stimulus investments planned over the coming months and the next two to four years represent a once-in-a-lifetime opportunity to make a transition to a low carbon, resource efficient society. This opportunity must not be lost," said Steiner.

Pavan Sukhdev, managing director and head of Deutsche Bank’s Global Markets business in India and team leader of the UNEP Green Economy initiative, says, "The sums of money being lined up to stimulate the global economy, unheard of only 12 months ago, will either mortgage the world's future based on a business as usual model or deliver an opportunity to transition to a new and more sustainable path. That courageous choice needs to be made now and accelerated over the coming weeks and months."

"The recommendations for a Global Green New Deal should be discussed over the next few months by world leaders at every major international forum including the G20 Summit; the World Bank/International Monetary Fund Spring Meetings, and the forthcoming Commission on Sustainable Development gathering," said Sukhdev.

But despite the sizeable stimulus packages announced over the past few months, trade volumes have shrunk rapidly, while production and employment data suggest that global activity continues to contract in the first quarter of 2009, the International Monetary Fund says in a new assessment of the global economy.

Global activity is now projected to contract by one-half to one percent in 2009 on an annual average basis - the first such fall in 60 years, the IMF said in the analysis which was provided to the G-20 leaders last month, but made public only today.

Global growth is still forecast to stage a modest recovery next year, the IMF assessment states, "conditional on comprehensive policy steps to stabilize financial conditions, sizeable fiscal support, a gradual improvement in credit conditions, a bottoming of the U.S. housing market, and the cushioning effect from sharply lower oil and other major commodity prices."

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