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Rethinking the economic recovery: a global green new deal

Publication date:
E.B. Barbier
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The document proposes a “Global Green New Deal” emulating Roosevelt’s New Deal (1930) to overcome the current global recession and secure a long-term economic recovery. The main argument is that economic stability and poverty alleviation cannot be achieved without considering and investing in the preservation of environmental resources. The report notes that the current global economic recession has caused a decline in the global per capita income contracts with millions of people consigned to poverty. It argues that current research estimates that by 2030 the global energy demand will increase by 45%. Increasing consumption of fossil fuels will not only worsen energy security but accelerate global climate change and endanger natural resources. It concludes that, GGND is not just about creating a greener world economy. It is about ensuring that the correct mix of economic policies, investments and incentives reduce carbon dependency, protect ecosystems, and alleviate poverty while fostering economic recovery and creating jobs. Reviving the world economy is essential, but measures that focus solely on this objective will not achieve lasting success. Only through the national actions and global cooperation envisioned in a GGND will the world sustain its economic recovery by addressing the imminent challenges posed by climate change, energy insecurity, growing freshwater scarcity, deteriorating ecosystems, and above all, worsening global poverty. The paper gives the following national and international actions that are required for the proposed GGND:

the United States, the European Union and other high income OECD economies should spend over the next two years at least 1 per cent of their GDP on the national actions proposed for reducing carbon dependency
the remaining middle and high income economies of the Group of 20 (G20) should aim, as far as possible, also to spend over the next two years at least 1 per cent of their GDP on the national actions proposed for reducing carbon dependency
developing economies should also implement over the next two years the national actions proposed for reducing carbon dependency and should spend at least 1 per cent of their GDP on national actions proposed for improving clean water and sanitation for the poor
the international community should reach agreement on extending the CDM beyond 2012, preferably as part of a global climate change agreement, and reforming the mechanism to increase the coverage of developing economies, the sectors and technologies, and the overall financing of global GHG emission reductions
the international community should support efforts to improve payment for ecosystem services targeted to the poor as well as efforts to improve governance and shared use of transboundary water resources
bilateral and multilateral aid donors should increase their development assistance over the next few years, and target it to the sectors and actions that comprise the key components of the GGND
the international community should develop and expand innovative financing mechanisms, such as the International Finance Facility, Climate Investment Funds and Global Clean Energy Cooperation, as possible means to fund key components of the GGND.