UNCTAD - Clean growth possible with the existing technologies

Geneva, 8 February 2010 - The stress of the global financial crisis -- as well as concerns about climate change and food prices -- should be used by developing countries to shift towards "clean" growth, a new UNCTAD report recommends.  It says such progress is possible and affordable with existing technology, based on the right strategy and incentives.

UNCTAD's Trade and Environment Review 2009/2010 [1] (TER 09/10), released today, contends that while conventional wisdom holds that economic crises are times for belt-tightening and cost-cutting, the opposite is true in the current case.  The urgency of the crisis gives governments of the world's poorer nations the chance to re-direct resources to economic growth that is more economically efficient, better for the environment, more socially equitable, and more promising over the long term.

The TER 09/10 singles out three clean growth "poles" (i.e. enhancing energy/material/resource efficiency; mainstreaming sustainable agriculture; and harnessing renewable energy for sustainable rural development) that can effectively "magnetize" key parts of the economy of these developing countries and thus lead to relatively quick clean growth impulses that, in the short and medium term, have negative costs and short payback periods. In this regard, the TER 09/10 counters the myth that currently only a limited number of low-cost mitigation opportunities exist, and that more effective mitigation could be achieved only with new technologies.

Macro-economic costs are not the greatest barrier to taking advantage of the opportunities for clean growth, the TER says. Rather, it is the lack of appropriate policies, regulations, and institutional structures to support the shift towards clean growth. The key policy challenge is to leverage through better incentives for private investment and to initiate cumulative technological changes in "clean" growth, thereby supporting economic diversification and creating dynamic job and income opportunities.

Against this background, the TER 09/10 highlights the importance of far more pro-active government roles and the more pronounced use of industrial policies, reversing the trend of government passivity advocated under neoliberal growth policies. Such a shift to active industrial policies may require greater "policy space" than is available under current rules of the multilateral trading system, the report says.

[1] More information of the Trade and Environment Review 2009/2010 can be found at: http://www.unctad.org/Templates/WebFlyer.asp?intItemID=5304&lang=1