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Janez Potočnik

European Commissioner for Environment

Towards the Green Economy

26th UNEP Governing Council – Global Ministerial Environment Forum

Nairobi (Kenya), 22 February 2011

Ladies and Gentlemen,

The biggest challenge we are facing this century is essentially this: how can we live and prosper together on this planet – within the constraints of what one earth can provide? How, by the year 2050, do we ensure continued economic growth, eradicate poverty and feed 9 billion people without continuing and exacerbating current patterns of environmental degradation and resource depletion? We all know that business as usual is not an option. But how do we move away from our usual business – and how do we do it quickly enough?

In trying to provide some answers, I think we need to ask ourselves some questions too:

  • What insights can we get from the green economy concept and what is its potential?

  • How do we get a critical mass of countries around the world engaged, regardless of their stages of economic development?

  • And – finally – how can Rio+20 Conference in 2012 move the green economy agenda forward?

I would also like to inform you what is the European Union doing to put the green economy concept into practice.

Our global challenges

Let me first say a few words about the world as I see it today – almost twenty years after the Rio Summit in 1992.

Over the past two decades we have witnessed positive trends. People earn more, have better access to education, healthcare and drinking water.

Many of these positive developments have taken place in the fast growing, emerging economies. Since 1992, their share in the global economy has increased significantly, along with their influence in regional and global decision-making processes. The past twenty years have seen nothing less than the gradual emergence of a new world order, with a new division of roles and responsibilities.

But these positive developments cannot mask the considerable challenges that remain. Around 1.4 billion people still live in extreme poverty and one sixth of the world’s population is undernourished. Progress towards achieving the Millennium Development Goals is uneven, both geographically and in terms of policy sectors, with some of those goals clearly off-track.

Many environmental problems have not been solved and some are worse than before. Resource depletion and environmental degradation remain unsustainably high. CO2 levels in the atmosphere are at levels not seen for millions of years.

Added to this, consider that future socio-economic trends and population growth will not make things easier. What normally happens is that economic growth lifts people out of poverty. But, unfortunately, in a business as usual scenario this will at the same time put further pressures on natural resources and the environment.

Key features of a green economy strategy

Is a "green economy" or "green growth" the answer? What can it offer us as policy makers?

The concepts certainly have momentum. This is clear not only from UNEP’s work and the agenda for the Rio+20 Summit, but also from the OECD's forthcoming Green Growth Strategy and the initiatives taken in many individual countries around the world. Also, the G8 and the G20 have expressed their support for concrete elements of the green economy agenda.

While these various efforts may differ somewhat in emphasis, I want to highlight what I see as key common features that would make a successful green economy approach.

  • First of all – and I am sure I am not the first one to make this point – a green economy strategy does not replace the broader sustainable development objective. It is – as the title of UNEP's Green Economy synthesis document reflects – one of the ways to achieve it. One of the strategies, alongside others – but an important one, given its scope and ambition.

  • Second, a green economy strategy can – and must – deliver growth and jobs, and help to eradicate poverty. It should reconcile economic growth and environment, not push them in opposite directions. Economic growth will come about in different ways: through investment and innovation; through more efficient use of natural and financial resources; and by preventing damage to the environment and human health. However, while a focus on growth and jobs is necessary and legitimate, there are no quick fixes. The fundamental changes and the related benefits we want will take time to materialize…and it means actively identifying and addressing transitional problems.

  • Third, a green economy strategy can only succeed if it puts the management of natural capital at the centre. This will mean, as just one example, looking at how we value natural assets and account for their use. The project on The Economics of Ecosystems and Biodiversity - TEEB - which Pavan Sukhdev has been leading and which the European Commission has supported from the outset - is bringing this debate "onto the radar" of economics and finance ministries. TEEB has shown us the importance of identifying and valuing the market prices of ecosystem services and biodiversity, if we don't want them to be lost. Businesses and individuals stand to lose if we don't start thinking in this way, with the poorest likely to suffer most.

  • Fourth, while green economy strategies have an obvious environmental dimension, their design and implementation can and should not be the sole responsibility of the environmental community. The message here for environment policy is that we need to move from protecting the environment from business to using business to protect the environment. Active engagement from a broad range of sectors will be needed to realise a green economy, both within governments, where in particular finance ministries will have a key role to play, and of course in the private sector. But also consumers will need to be empowered to consume in a resource efficient way. Only that will drive continuous innovation and ensure that efficiency gains are not lost.

  • Finally, there is no "one-size-fits-all" model. Strategies have to be designed nationally and regionally, taking account of the specific circumstances and situation of each individual country. But there are quite obviously common ingredients, and countries will benefit from exchanging experiences and good practices. And, of course, there is scope for international initiatives and cooperation.

The EU's policy on resource efficiency

Does the European Union have a green economy strategy?

We are working on it. Last year, the EU launched its socio-economic agenda for the next 10 years, the Europe 2020 Strategy for smart, sustainable and inclusive growth. Promoting a greener, more resource-efficient and low-carbon economy is an integral part of this agenda.

The EU 2020 Strategy highlights several policy measures to achieve this. These include: stepping up the use of market-based instruments; phasing out environmentally harmful subsidies; and shifting the tax burden from labour to energy and environmental taxes. The Strategy also reconfirms the EU’s commitments to mitigate climate change and promote innovation and skills.

Among the seven specific "flagship initiatives" that make up the Europe 2020 Strategy is one called "Resource Efficient Europe". Its aim is to use all types of resources in a more efficient way and to decouple their use from economic growth.

I should stress here that we see resources in the broadest sense, ranging from raw materials such as fuels, minerals and metals, to food, soil, water, air, biomass and ecosystems and waste.

Seen in this light, resource efficiency becomes a common denominator for developing our sectoral policies including those on climate change, energy, transport, industry, agriculture, fisheries, biodiversity and regional development.

Opportunities for countries at different stages of development

Ladies and Gentlemen,

I know that some people think that the "green economy" concept could constrain growth in developing countries.

I take these concerns seriously. But I do firmly believe – as is also strongly argued in UNEP’s Green Economy Synthesis document – that a green economy is relevant for and offers opportunities to all countries, irrespective of their level of development and the structure of their economies.

And I would say it is relevant in particular for the children of all countries, for whom 2050 is not as far away as it seems to most of us here.

By turning good stewardship of natural resources such as water, forests and soils, into a good business, a green economy holds the promise of underpinning the livelihoods of millions of people, thus contributing to poverty eradication.

What's more, by making the right choices early, countries at the earlier stages of development can "leapfrog" in terms of production and consumption patterns and avoid being locked into unsustainable practices, for instance in terms of infrastructure for energy and transport.

Efficient use of resources is not only a question of environmental sustainability. Given that everyone will be confronted with the growing scarcity of natural and other resources, resource efficiency will become a central factor, if not the central factor, of the future competitiveness of all economies in the world. At the same time, it can be a new source of economic growth, enhancing innovation in promoting more sustainable forms of production and consumption.

Emerging success stories around the world strengthen my conviction that green economy thinking is the right choice in all countries. There are many examples, ranging from China's forthcoming next five-year plan, to the efforts by Kenya to build up its renewable energy sector, Uganda's determination to move to an organic farming system, and Ecuador's and Costa Rica's operational systems of eco-services payments.

Of course, none of this means that the road towards a green economy will be straightforward. However, we won't get far if we overstate the challenges and obstacles. Positive thinking is a pre-condition. Where concerns and obstacles are real they can and must be addressed, both at national level and by working together internationally.

Access to the financial resources needed for investment in a green economy is arguably one of the major challenges we face. As the UNEP Green Economy Synthesis document makes clear, we need to look for ways of enhancing access to public, private and public-private finance and explore innovative means to increase investments.

In developing countries, the role that future Official Development Assistance can play in the transformation towards a green economy merits further reflection.

Rio+20: an opportunity not to be missed

Ladies and Gentlemen, I am coming to a close.

The UN Conference on Sustainable Development next year (Rio+20) is the window of opportunity to accelerate progress towards a green economy, alongside other topics. Discussions on what concrete results the Summit can and should deliver are now intensifying.

One important achievement would be for the Summit to give broad endorsement to the green economy as an effective response to the environmental and development challenges that we face in this 21st century – which I like to call the "century of fragility".

The rise or fall of this fragile century will depend very much on two key concepts of sustainability and governance. Our responsibility is increasing, both at global level and at individual level, including that of the European Union.

What would I like to see coming out of Rio+20? An endorsement at the highest political level of a framework in which all policies that are crucial for resources are developed coherently. And in a way that transforms the global economy in a sustainable growth model. A growth model that ensures quality of life for the highest number of people within the planet's ecological limits.

All countries should be encouraged to develop their own green economy strategies within a common reference framework that is shared at global level.

Other questions I am sure we will discuss over the next days and months include whether and how the Summit should address particular sectors – like agriculture, energy, water – specific types of environmental policy instruments as well as indicators to measure progress.

In the EU we have started to develop more specific positions on all these questions and we are open to all constructive ideas and suggestions.

In this light I do look forward to our discussions this week.

Thank you for your attention.

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