Statement at the Ad-Hoc Expert Meeting on a Green Economy: Trade and Sustainable Development Implications

Statement by Mr. Sha Zukang, Under-Secretary-General for Economic and Social Affairs

Mr. Chairman,
Excellencies,
Ladies and Gentlemen,

It is a pleasure to be here with you in Geneva. I would like to thank my good friend, Dr. Supachai, for inviting me to participate in this important meeting on the trade aspects of a green economy. As you may know, “a green economy in the context of sustainable development and poverty eradication” is one of two themes for consideration at the United Nations Conference on Sustainable Development, or Rio+20, – the other being the “institutional framework for sustainable development”.

Like our meeting last month in Seoul, this meeting should make an important contribution to elaborating the concept of a green economy in the preparations for Rio+20.

As the Conference Secretary-General, I listened very closely to the discussions during the first preparatory committee meeting last May. I heard strong expressions of interest in learning more about a green economy and how it can contribute to sustainable development and poverty eradication.

I also heard a number of requests for clarification and elaboration. Among the key questions raised by Member States was: what are the trade implications of a green economy? I shall listen carefully to what the experts assembled here have to say about this important question. It is appropriate that this meeting is hosted by UNCTAD, with its impressive expertise on trade and development issues.

Indeed, one of your colleagues worked with us for some time, leading the team preparing our 2009 flagship World Economic and Social Survey on “Promoting Development, Saving the Planet”, which had a good deal to say about how trade can and ought to contribute to sustainable development.

Ladies and Gentlemen:

Let me offer a few thoughts of my own on a green economy, its relationship to sustainable development and poverty eradication, and how these in turn relate to trade.

First, let me step back and take a quick retrospective look at the journey that has taken us here today.

In Stockholm in 1972, the United Nations shone a spotlight on the state of the global environment. It raised the alarm about the human impact on the environment.

The follow-up to the Conference was timely, with many governments establishing a ministry of environment. The UN responded by setting up UNEP. Despite significant progress, the world economy remained heavily dependent on high consumptions of resources and high emissions and wastes, with worsening degradation of the environment and poverty.

In Rio in 1992, the UN Conference on Environment and Development (UNCED, or the Earth Summit) adopted the Rio Principles and Agenda 21. Sustainable development, with its three pillars and emphasis on integrated and balanced approach, has since provided an overarching policy framework for tackling development challenges.

Today, Rio continues to be regarded as perhaps the most historic UN conference, with the Rio Principles continuing to guide intergovernmental decision-making and Agenda 21 as inspirational as in 1992.

But implementation remained a challenge. In Johannesburg in 2002, the World Summit on Sustainable Development focused on implementation and a reaffirmation of the three pillars of sustainable development.

The challenge of implementation remains as daunting today, in the aftermath of the financial, food, and fuel crises and climate change.

In this setting, the General Assembly has decided to convene the UN Conference on Sustainable Development in 2012, 20 years after the Rio, to focus on a green economy in the context of sustainable development and poverty eradication and the institutional framework for sustainable development. Member States have identified the two themes as critical for accelerating implementation, through harmonizing the relations between growth and environment and through building up institutions for advancing implementation.

In that sense, a green economy is seen as holding the key to faster implementation of sustainable development. A green economy provides the missing entry point to accelerated progress, It offers new avenues and opportunities for pursuing the integration of the social, economic and environmental pillars of sustainable development.

Furthermore, the green economy involves more than a low carbon economy, though the two are clearly related. As green economy instruments creates opportunities for advancing sustainable development, so do low-carbon solutions contribute to building a green economy. But the green economy approaches must be broader than those focused only on reducing carbon emissions. The green economy serves as a lever that can leverage actions in a broad spectrum of economic sectors, generating momentum for economic transformation and increased incentives for a real paradigm shift characterized by low inputs, low emissions, low wastes, higher efficiency in resource uses and better product designs,.

Finally, green economy approaches need to support sustainable growth if they are to advance development goals and eradicate poverty. Investments in green economic sectors need to be productive investments, creating decent jobs which offer paths to skill and knowledge development, capacity building and enhanced technological cooperation.

A good example of such productive investments relates to the response of some countries to the global financial and economic crisis. In China and the Republic of Korea, for example, stimulus packages were crafted to increase aggregate demand and employment and to boost “green” investment. This took the form – among other things – of infrastructure improvements in rail and other public transport systems, smart power grids and energy efficiency improvements in buildings.

I commend these initiatives. They represent true progress in the mindset of policy makers. What is notable about these countries is the far-sightedness of policy makers, looking beyond the crisis to shift development paths towards sustainability. As they say, the proof of the pudding is in the eating, and these countries have emerged faster than almost anyone else from the crisis and now are enjoying robust – and, one would expect, sustainable – growth. Korea even calls it “green growth”. The investments are paying off in the short run but will also pay off in the long run. The experience of China and Korea is testimony to the potential of the green economy. It is more of an opportunity than a challenge.

But I must hasten to add that there is no such a thing as a Chinese model or a Korean model in green economy. The achievements of these two countries offer lessons learned and can stimulate discussions on green growth and green economy. Each country will need to formulate and implement its own green economy strategy based on its own national circumstances.

Turning to the trade aspects, we know how important trade growth has been to global economic growth over the past few decades, and we know how important it is to some of the most dynamic economies in the world today. Trade has contributed, among other causes, to the most massive assault on poverty in human history.

Trade is what greases the wheels of the global economy. Not only does it raise welfare of both producers and consumers – through higher wages and lower prices – but it also facilitates the transfer of technology. Much technology crosses borders embodied in machinery, in wind turbines, in solar panels. Without trade, these technologies would be much more expensive than they are. They would also be much less accessible.

The question we ask ourselves today is how to ensure that trade greases the wheels of a green economy. Right now, one concern seems to be that a green economy will not become sand clogging the channels of trade. An open multilateral trade regime with enhanced market access for developing countries is crucial both for accelerating their development and for ensuring the sustainability of that development.

Beyond the economic and social development benefits of an inclusive and open international

trade system, trade is also – together with investment – a vital channel of green technology flows between countries.

And the costs of those technologies are being driven down, in no small measure by large-scale production for a global market (as for example with solar photovoltaic panels and wind turbines). Trade offers benefits to the suppliers of green technologies in a larger market and to buyers in lower prices.

But concerns over a green economy transition remain, as it will mean structural changes in economies, in the same way that the process of economic development involves structural changes. Developing economies move from agricultural dependence towards a growing industrial orientation before services become the predominant sector at high levels of development. Some sectors grow, others shrink; jobs are created, jobs are destroyed; but incomes and living standards rise sustainably with overall productivity.

In the same way, a green economy transition will involve changes. The important thing is that those changes promote economic diversification and yield sustainable improvements in well-being for all, now as well as in the future,

Concerns have been voiced in various quarters that a green economy transition could become justification for interference with the rules of international trade, or ‘green protectionism’. The concern is that if some countries move ahead of others with green economy policies, this may erode competitiveness in some sectors which will then seek protection. This is not a new issue. It has long been a staple of trade and sustainable development debates.

What is clear is that an open and fair multilateral trade system is an integral part of an international sustainable development architecture. Discussions of how to promote a green economy need to start from that premise.

Only by addressing the concerns of all countries, developing countries in particular, can Rio+20 succeed in reaching agreement and producing shared and actionable outcomes.

This meeting in Geneva is an important opportunity to explore new ideas and successful practices that can inform the preparations for Rio+20. The United Nations counts on input from all of you – from the scientific, business and academic communities – in order to make the Rio+20 conference a success. The Earth Summit in 1992 first identified the linkages between trade, environment and development. Let’s now, with our 20 years of experience, assess how trade can support the transition to green economies.

I thank you for your participation at this meeting. Through your presence here, your feedback and your exchange of best practices in trade, you are helping the United Nations chart a clear path for the international community on a green economy in the context of sustainable development and poverty eradication. May you leave with new ideas, strategies and most of all, inspiration, for aligning government and business practices with the needs of our environment, and most importantly the needs of the poor and vulnerable in our societies.

Thank you.

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