Green economy shoots are sprouting

In just two years, the idea of a "green economy", with its links to sustainable development and poverty eradication, has gone from being an interesting idea to being one of the top two issues at the upcoming UN Conference on Sustainable Development, or Rio+20.

Many people may wonder whether the green economy is just pleasing jargon or a genuinely new pathway to a low-carbon, resource-efficient and sustainable 21st century. Is it a fundamental departure from the development models of the past that its advocates proclaim, or just another case of the emperor's new environmental clothes?

Perhaps the answer can be found in some of the extraordinary transitions taking place in electricity and other energy sectors about the world. Many people, for example, scoff at the idea that solar power could be anything but a niche market for enthusiasts or a costly white elephant, over-hyped by environmental do-gooders. In 2002, one private equity fund estimated that annual installations of solar photovoltaic (PV) arrays might reach 1.5 gigawatts (gW) by 2010. In fact, 17.5 gW was installed in 2010, up 130 percent from 2009. And PV installations have been forecast to increase further this year, by perhaps 20.5 gW, taking global capacity to about 50 gW - the equivalent of about 15 nuclear reactors.

All this is not happening only in developed economies like Germany, Spain and the United States, but in countries like Bangladesh, Brazil, China, India, Mexico and Morocco. Indeed, according to an estimate by IMS Market Research, more than 30 countries will be part of this emerging solar revolution by 2015.

None of this has come about by chance. Some countries have moved early to embrace the energy dimension of a green economy, and have introduced the necessary public policies and incentives. Considerable manufacturing capacity has been added, which has halved costs over the past two years. In fact, PV prices are set to halve again this year.

A nuclear power plant can take 10-15 years to build, and a coal-fired power station about five years. Mid-size solar plants of 5-10 negawatts, however, are now taking only about three months to get from the planning stage to construction. With the advent of smart grids and free-market pricing, solar PV seems well positioned to provide solutions that are quick to build and scalable.

The International Energy Agency estimates that, to achieve universal access to electricity by 2030, about $33 billion in additional annual investments in the power sector will be needed. That sounds like a lot of money, especially in the wake of the economic and financial crisis that is still troubling large parts of the world. But new investment just in solar PV was about $89 billion in 2010. Multibillion-dollar investments also flowed into new wind farms, geothermal plants and a host of other renewable-energy technologies.

The green shoots of a green economy are emerging across the power sector, driven by concerns about climate change, air pollution and energy security - as well as by the desire to generate new kinds of competitive, employment-growing industries. They can also be seen in the growth of recycling industries in South Korea, or the way Indonesia is factoring forests into its social and economic planning. The challenge for Rio+20 is to agree on a range of forward-looking policies that can be deployed in part or in whole to accelerate all of this up.

At the UN Environment Program's upcoming Governing Council/Global Ministerial Environment Forum in Nairobi, Kenya, we will launch a landmark contribution to this debate, with the release of A Transition to a Green Economy. The report analyzes how a global investment of 2 percent of global GDP in the green economy could unleash economic growth and positive social outcomes, while keeping humanity's planetary footprint within sustainable boundaries.

In particular, the catalytic choices for 10 sectors - from agriculture, fisheries and forests to transport and buildings - are as relevant to developing as they are to developed countries. And they are equally relevant to State-led and more market-driven economies.

There will always be those who smile skeptically at the mere notion of a green economy and dismiss such far-reaching transitions. It is time to put the numbers on the table and show how advances in solar power alone are starting to prove them wrong.

The author is UN under-secretary general and UN Environment Program (UNEP) executive director. Project Syndicate.

(China Daily 02/19/2011 page5)