Speech/article | Published: 2012-05-15
Minister of Inernational Development Heikki Holmås took part at the Norad seminar about the World Bank Report: "Inclusive Green Growth; The Pathway to Sustainable Development" 15 May and had some comments after Marianne Fay's presentation of the report.
Many thanks to Marianne Fay from the World Bank for a very interesting presentation.
Norway welcomes this debate and supports the importance of inclusive green growth. The addition of the term “inclusive” is essential. I have noted that some of those who advocate green growth or green economy pay little attention to the social dimension. If we omit to focus on the social dimension – and on equity– the green growth agenda will outplay itself as “the development paradigm” for the future. An inclusive green growth must promote gender equality, social and intergenerational equity, build on decent work and provide sustainable livelihoods.
Last week I visited Ethiopia and Tanzania. Both countries are experiencing strong growth. In my meetings in Addis Abeba and Dar es Salaam I stressed the importance of inclusive growth. Up until recently the idea of redistribution has not made very much sense on the African continent. In many countries there just has not been very much to share. This is changing and I believe it is paramount for the long term development and stability of these booming African economies that they find sound mechanisms for sharing their growing wealth.
Last week The African Progress Panel presented the report Jobs, Justice and Equity. The report states that so far the growth in Africa has not been inclusive and warns that growing inequality, marginalization and disenfranchisement are threatening Africa's prospects and undermining the foundations of its recent success.
The upcoming UN Conference on Sustainable Development – Rio+20 - has a green agenda. Norway’s ambition for the conference is that it should be a landmark in global sustainable development that provides us with the policy shifts the world needs for a greener future. A key role of Rio+20 should be to make greener political and economic choices more attainable. As the World Bank says in its report, these policies are necessary, efficient and affordable.
I think there is a need to communicate that message even clearer. Countries have to get an understanding that greening their own economies is in their own interest, not something the world wants to push them into doing. And the message should be that this is relevant for countries at all levels of development. My reason for putting emphasis on this is the strong reluctance of (many of) the developing countries to the green economy in the preparations for the Rio conference.
But – the most important point is not whether the term “green economy or green growth” survives the discourse in Rio. What matters are actions taken and results on the ground as results of these actions. Instead of creating a deadlock in the negotiations by discussion what green economy/growht is – and is not – Norway tries to focus on some key measures and areas where the right actions will lead to a greener development:
- A green, inclusive economy will require good governance and supportive policies, new partnerships and incentives - or disincentives (e.g. green taxes) that encourage sustainable choices. Good enabling environments must be created at both the national and the international level. If green growth is affordable, we have to get the incentives right. We need to mobilize resources from all sources, both national and international, both private and public. Private investments will be indispensable. We must therefore focus beyond ODA and public budgets. And innovative financing mechanisms will have to be part of the solution.
- The importance of enabling women to participate fully and equally in the economy cannot be overstated. Empowerment of women is an important catalyst and precondition for change. It is well documented that investments in the human capital of women enhance economic efficiency and improve other development outcomes. In Norway we have made calculations to illustrate the importance of female participation in the work force. If our female participation should be reduced from the current 75 % by 16% to reach the OECD average, the value of the loss of production would correspond to our total oil wealth, including yet to be produced oil and gas.
- Sustainable energy for all. Norway is a strong supporter of the UN Secretary-General’s Sustainable Energy for All- initiative. Sustainable energy is important both to boost economic growth and to curb climate change.
- Putting a price on resources and making the polluter pay is one key to making progress towards a green sustainable economy. Green taxes will not only contribute to less pollution, but will also help financing basic welfare services. Introducing new taxes is of course not something that will make you very popular. Not in Norway, neither anywhere else.
- Early experience in applying results-based financing in REDD+ shows that this approach has the potential to help catalyse broad-based national policy changes. Such changes are necessary to alter the economic logic of development policies that underpin continued destruction of the forests. The application of similar type of incentive structures could be contemplated in other sectors where broad-based national policy changes are necessary.
However, even if the discussion of green economy within the Rio-context seems to be an uphill struggle, we know that many developing countries welcome the green agenda. Two different examples are Mauritius and Ethiopia.
Mauritius – a middle income country that is vulnerable to the impact of climate change - has established a program with three focus areas: renewable energy, energy efficiency and recycling. Ethiopia - a least developed country - has drawn up a green growth strategy with the target of becoming carbon neutral in 2025, with a strong focus on its resouces, land, water and people.
We also know that the demand from low-income countries for the support from UNs Poverty and Environment Initiative(PEI) is very high. In fact so high that PEI has a long waiting list, it does not have the capacity to meet all the requests from partner countries. PEI raises awareness of how investments in environmental sustainability can reduce poverty, improve living conditions and increase opportunities for economic growth. Norway has supported this initiative over several years, as it has proved to be a good model for integrating growth, poverty reduction and natural resource management at country level.
Green approach to growth is especially important in the lowest income countries where expected growth and population rates are relatively higher, and where high dependency on natural resources and agricultural livelihoods accentuate vulnerability.
However, it seems like emerging economies are likely to pilot many of the approaches. Existing analysis and examples are still mostly inspired by the developed world and emerging economies like South Korea, China, Brazil and India.
The concern felt by many developing countries that most examples of successful green growth are from emerging economies where institutional, technological and human capital conditions outrank those of poorer countries needs to be taken seriously. We have to show-case the various instruments and best practices, and how they can be applied to countries at different levels of development.
We have to be able to understand – country by country – which green growth process that can generate access to opportunities and decent employment for the poor and how they can participate in shaping those opportunities. We have to stress that there is no one-size fits all solution, and that the development of green growth policies will have to be adapted to national circumstances. Having more examples of good stories from LDCs would make the salesmanship easier.
What we hear in the Rio -negotiations and in private conversations are that developing countries fear that agreeing to green economy issues will put them in a straight-jacket in forming their future policies, making it more difficult to create the necessary jobs and sustained growth. We hear a lot about the high costs which this will entail, with the accompanying demand for more resources from the international community.
We need to turn this logic around as has been argued in the World Bank report, what we are talking about is how to finance economically profitable investments, it should not be about who pays.
Let me give you an example of how I believe we should think. The CEO of the German company Siemens told me that they looked at the megatrends. They were all pointing in a green direction. The company decided to get rid of all projects that were not directed towards more energy efficient solutions. The result was a greener company and a more profitable company. I believe that this is how we should frame the discussion if we are to convince people – both in developed and developing countries – that a greener future is for everyone. And it has to be equitable and inclusive. Thank you!