Promoting global governance, facilitating access to financing and enhancing trade incentives are the three priority areas for actions by the international community in support of a Global Green New Deal. Without these actions, the effectiveness of the GGND may be severely constrained.

The GGND strategy outlined in this book recommends an expanded global policy role for the twenty rich and emerging economies that comprise the G20 forum. This recommendation is consistent with the strategy outlined in part II, that the G20 economies should spend at least 1 percent of their GDP over the next several years on reducing carbon dependency, including improving the sustainability of transport. The total amount spent would amount to about one-quarter of the nearly US$3 trillion in G20 stimulus investments to date (see box 1.1). If the G20 economies coordinated the timing and implementation of these investments globally, the overall impact on moving the world economy to a low-carbon recovery path would be boosted. Another way in which concerted policy action by the G20 could signal its commitment to greening the global economic recovery would be if the G20 also instigated pricing and regulatory reforms for reducing carbon dependency, including the removal of perverse subsidies and other distortions in energy, transport and similar markets. In addition, all G20 economies should agree to adopt carbon pricing policies, such as cap-and-trade or carbon taxes, to assist the transition of their economies to a low-carbon growth path.

As noted throughout this book, any Global Green New Deal should have three principal purposes:

• reviving the world economy, creating employment opportunities and protecting vulnerable groups;

• reducing carbon dependency, ecosystem degradation and water scarcity; and

• furthering the Millennium Development Goal of ending extreme world poverty by 2025.

To achieve these multiple objectives, a comprehensive range of national and international actions were proposed in parts II and III, which have been summarized in the previous chapter.

Fulfilling these recommendations will require a range of further initiatives, including commitments to increased public investments, new pricing policies, improving regulations, more aid disbursements and other policy changes. The need for such sweeping policy commitments inevitably raises questions about whether a Global Green New Deal will succeed.

In particular, three concerns have been expressed about the additional green fiscal stimulus measures and other public spending advocated by the GGND.

• What is the evidence that the investments in the “green” economic sectors advocated by the GGND will create more employment and profits compared to conventional fiscal stimulus spending?

• If the green sector investments are so economically advantageous, why is the private sector not making the necessary investments already?

• Would additional green stimulus add to the unease about government debt and its inflationary consequences, as well as the problem of structural imbalances in the world economy?

A critical component of the Global Green New Deal is the necessity of reducing the carbon dependency of the world economy.

As indicated in box 2.1, although the greenhouse gas intensity of the world economy may have declined from 1990 to 2005, overall global emissions have risen. They are projected to rise even further over the next twenty-five years, with fossil fuel energy use continuing as global populations increase, the world economy grows and poorer economies develop. Thus, reviving economic growth in today's carbon-dependent world economy will simply contribute to both the rising demand for and combustion of fossil fuels and increased GHG emissions.

In 2005 the top ten emitters of GHGs were either rich economies (e.g. the United States, the European Union, Japan and Canada) or large emerging market economies (e.g. China, Russia, India, Brazil, Mexico and Indonesia). Together, the top emitters accounted for over 70 percent of the world's total GHGs (see box 2.1). By 2030, however, this situation is likely to have changed. Emissions from energy sources alone will more than double for the developing world, increase by nearly 30 percent in transition economies and rise by 17 percent in the OECD. By 2030 developing economies will account for more than a half of the world's GHG emissions from energy use, and China's share could be close to a third. Other large emerging market economies, such as India and Russia, will also continue to contribute significantly to global emissions.

Improving global governance is crucial for meeting the financial, trade and policy coordination challenges to implementing the Global Green New Deal. The key question is whether there is an appropriate global policy forum that can provide the leadership necessary to overcome these global challenges and facilitate the GGND over the next several years.

To date, the most likely global policy forum for promoting urgent international action on the GGND is the G20 forum of the world's twenty largest rich and emerging economies, although all international fora, and especially the UN system, have a role to play in promoting, developing and enhancing the GGND.

There are several reasons why the G20 constitutes the appropriate environment for coordinating and innovating international policy in support of the GGND. First, the G20 has emerged as the global forum for coordinating policy action during the immediate economic crisis. The G20 is therefore well placed to consider the proposed GGND actions as part of its response to the current crisis. The indications from the Washington and London summits of the G20 are that it has the capacity to take on this role.

For example, some experts on global governance have already recommended that it do so: “The communiqué of the November 15, 2008 Summit locked in the next G20 summit and hence ordained a sequel that appears to have enshrined the G20 as the new format to address the current global financial and economic crisis over the coming months and perhaps years… [W]e strongly believe that it is best for the new US administration to focus its attention on making the G20 summit format work, in terms of its ability to address the immediate crisis, and in terms of subsequently dealing with other pressing problems, such as global warming and global poverty.”

Most of this book has been concerned with articulating a vision for the present world economic recovery from the worst global recession since the Great Depression of the 1930s. The premise of this vision is that the right mix of policy actions can stimulate recovery and at the same time improve the sustainability of the world economy. If these actions are adopted, over the next few years they will create millions of jobs, improve the livelihoods of the world's poor and channel investments into dynamic economic sectors. Such a timely mix of policies can be referred to collectively as a Global Green New Deal.

The previous chapters have aimed to show how a GGND is critical to the lasting success of a world economic recovery. Reviving growth, ensuring financial stability and creating jobs should be essential objectives, but unless new policy initiatives also address other global challenges, such as reducing carbon dependency, protecting ecosystems and water resources and alleviating poverty, their impact on averting future crises will be short-lived. Without such progress, restarting the world economy today will do little to address the imminent threats posed by climate change, energy insecurity, growing freshwater scarcity, deteriorating ecosystems and, above all, worsening global poverty. Rather, it is necessary to reduce carbon dependency and ecological scarcity not just because of environmental concerns but because this is the correct and only way to revitalize the economy on a genuinely sustainable basis.

The policy debate over developing a “blueprint” for greening modern economies has been with us for some time. The multiple global crises of the past couple of years have brought renewed attention on the possible convergence between green economy initiatives and short-term solutions to resolving these crises.

The food crisis of the past several years spurred the United Nations in 2008 to assemble a High-Level Task Force (HLTF) to recommend international policies to ameliorate the crisis. The HLTF formulated a comprehensive plan of coordinated actions at the national and global levels, with short-, medium- and long-term objectives to boost agricultural production, trade and sustainability. The HLTF plan also called on donor countries to double financing for food assistance, other types of nutritional support and safety net programs, and for an increase in the percentage of aid to be invested in food and agricultural development from the current 3 percent of overseas development assistance to 10 percent within five years.

In response to the growing concerns over climate change and fossil fuel dependency, policy think tanks in the United States have been urging the new US administration of President Barack Obama to consider specific measures to ensure the development of a “low-carbon” economy. In its 2008 yearbook, the United Nations Environment Programme documented the growing numbers of companies worldwide instigating environmental policies and investors pumping billions of dollars into cleaner and renewable energies. A “Green New Deal” was proposed for the United Kingdom as early as July 2008.

On December 2 and 3, 2008, the United Nations Environment Programme (UNEP) convened a consultative meeting of policy experts in Geneva, under the auspices of its Green Economy Initiative (GEI), to outline possible proposals for a “Global Green New Deal.” To participants in that meeting, the need for such a comprehensive global strategy was self-evident: the world was confronted with multiple crises – fuel, food and financial. By December 2008 it was already apparent that the result of these crises would be one of the worst global economic recessions since the Great Depression of the 1930s. The multiple crises threatening the world economy therefore demanded the same kind of initiative that had been shown by the New Deal of US president Franklin D. Roosevelt in the 1930s, but at the global scale and embracing a wider vision. Such a vision would require finding the right mix of policy actions to help stimulate recovery and create jobs while also improving the sustainability of the world economy, enhancing the livelihoods of the world's poor and channeling investments into dynamic economic sectors and at the same time lessening carbon dependency and environmental degradation. The phrase “Global Green New Deal” (GGND) refers to such a timely combination of policies.

The current financial and economic crisis is having a significant impact on trade volumes and revenue, because of falling global demand and a tightening of trade financing. The slowing of global trade is particularly daunting for those countries that depend on export-led growth. Low-income economies, and particularly those resource-dependent economies with a high share of primary products to total exports, will feel the consequence of the crisis more significantly through trade channels.

Although trade is projected to decline as the global economic downturn worsens, and will recover slowly with the world economy, it is less clear what role trade policy can play in either addressing the immediate crisis or in supporting the implementation of the Global Green New Deal. As trade was not the underlying cause of the current economic crisis, it is doubtful that changes in trade policy, at least in the short term, will be able to reverse the current economic climate. Despite this caveat, one clear opportunity may be to focus on new trade financing and trade facilitation financing packages in order to promote the initiatives outlined in the GGND. There is also a strong argument for ensuring that trade policies “do no harm” in the short term through the adoption of protectionist measures. Finally, trade policy will have a critical role over the medium term in promoting some of the key components of the GGND.

A year ago, in October 2008, a beleaguered world that had just been through a spate of shocks and crises – in food, fuel and finance – now found itself in the grip of a global recession the likes of which it had not seen since the 1930s. G20 governments were willing to commit significant fiscal stimulus packages – estimated at more than US$2.5 trillion – towards economic recovery. The question begged to be asked: would the post-recovery economy be sustainable, or would it be prone to the very risks and weaknesses that had led to this latest recession?

To answer this question, and to address the closely related and unsolved challenges of excessive carbon dependency, increasing ecological scarcities and persistent poverty, the United Nations Environment Programme (UNEP) decided to launch, in October 2008, an urgent inquiry into how a “green economy” model could be seeded at this critical time in order to stimulate a sustainable recovery. Named after the original “New Deal” of US president Franklin D. Roosevelt, this inquiry and its recommendations were dubbed a “Global Green New Deal” (or “GGND”), because they were “global” in scope (as befits the challenge of the current recession) and “green” in their principles for a sustainable post-crisis economy. Professor Edward Barbier was nominated to prepare a defining study and recommendation, to be taken to the UNEP General Council in early 2009, to the G8 and G20 meetings soon afterwards and to other fora.

The major components proposed in the previous three chapters for the Global Green New Deal have been shaped by the four main crises that have afflicted the world in recent years: the current global recession, the fuel and food crises of the past several years, and the emerging water crisis. The GGND must also consider actions today that can address urgently the impending problems of global climate change, ecological degradation and extreme poverty.

Part II has been concerned with actions by national governments under a Global Green New Deal. These actions have focused on measures in two principal areas (reducing carbon dependency and ecological scarcity) and policies, investments and reforms that current evidence suggests that governments can enact fairly swiftly – i.e. in the next several years.

This chapter concludes part II by summarizing the main national actions that are essential for the success of the proposed GGND. Already one major economy has proposed public investments that accord with these proposals. In January 2009 South Korea announced a Green New Deal plan that adopts many of the national actions proposed for reducing carbon dependency and ecological scarcity. The plan involves spending US$36 billion over three years to create nearly a million jobs. The final section of this chapter describes the South Korean Green New Deal in more detail.

PROPOSED NATIONAL ACTIONS

As emphasized in part I, to be truly global, a GGND strategy must encompass the widespread adoption by national governments of fiscal measures and other policies in the short term that will expedite economic recovery and create jobs while being consistent with the medium-term objectives of reducing carbon dependence, environmental deterioration and extreme world poverty.

Mainstreaming climate change

The development and development aid issue has long been a matter for North–South struggles, unceasing demands and unkept promises. The climate change regime is the latest forum for North–South stress, where old grievances like colonialism and new ones like neo-imperialism merge in a complex pot of interdependence and yet distrust. Interdependence, because the climate change problem cannot be addressed by individual nations alone, distrust because the rules for sharing responsibility for causing the problem and solving it are vague. However, global dynamics and politics are changing rapidly. As the spheres of influence of countries change, as development processes alter rapidly, the global community may be entering an era of unforeseeable economic and political change with unpredictable consequences.

Against this background, the literature on and governance over six decades of official development cooperation and two decades of climate cooperation have been examined with a view to determining whether these two forms of cooperation can learn from each other and whether climate change cooperation should be incorporated into development cooperation. This concluding chapter synthesizes the arguments made in the previous chapters in a final integrated analysis. It may be relevant to state upfront that this chapter differentiates between mainstreaming climate change into development and mainstreaming climate change into development cooperation.

Introduction

Given that 80% of development cooperation resources are managed at European Union (EU) Member State level, this chapter moves from an analysis of the policy processes at EU level to the processes within individual countries. It examines the extent to which climate change adaptation and mitigation are incorporated into development cooperation policies and practices in selected EU Member States, with a view to identifying relevant best practices.

The EU's 27 Member States are not all equally active in aid provision (see Chapter 10), and not all Member States are members of the OECD DAC (see Chapter 4). Furthermore, environmental awareness in the Member States differs, implying differing degrees of commitment to environmental issues in general and in aid strategies. This chapter examines the aid policies and practices in Denmark, France, Germany, the Netherlands and the UK, thereby including some of the largest EU donors in absolute and relative terms (the UK and Germany), countries that are considered leaders (Denmark and the Netherlands) and laggards (France, Germany) in terms of aid quality (e.g. Concord, 2009) and countries that spend a large proportion of their aid on environmental and climate-change-related activities (Teixeira Santos and de Lopez, 2007: 9). This choice implies a bias in favour of countries that provide green aid, but provides good early experiences on how climate change is being incorporated into aid policies (cf. OECD, 2009b).

Climate change is not merely a serious and urgent environmental issue, it also has serious adverse developmental impacts. UN Secretary General Ban Ki-moon labelled it ‘a defining issue of our era’. Human activities have contributed significantly to climate change, and still do: much scientific evidence suggests that the changes taking place may be far more rapid and dangerous than is reflected in the latest (2007) IPCC assessment.

While climate change results from activities all over the globe, actual contributions to it have been, and are, rather unevenly spread, with most contributions coming from the industrialized economies. There is little correlation between causing climate change and being exposed to its consequences: it seems clear now that the worst impacts will fall on developing countries. Climate change is likely to undermine the sustainability of livelihoods as well as resource bases for development.

One response to climate change is to cope with its impacts and suffer from the associated damages. Another one is to alter behaviour, institutions, structures and even development paths in such a way as to reduce and curb damage (‘adaptation’). A more fundamental response would be for the world economy to reduce its emissions of greenhouse gases and alter its patterns of land use in such a way as to prevent and curb warming itself, and to enhance sinks for greenhouse gases (‘mitigation’). There is a need to consider the links and feedbacks between climate change (and policies to address it) and development.