World’s Least Developed Countries Set to Jump Start Transition to a Green Economy

UN Report: Why a Green Economy Matters for the Least Developed CountriesWith their low-carbon profile, rich natural assets and promising policy initiatives, the world’s 48 least developed countries are well-positioned to jump start the transition to a green economy, according to a new UN report released today at the start of the Fourth UN Conference on Least Developed Countries (LDC-IV).

The joint report, issued by the United Nations Environment Programme (UNEP) the United Nations Conference on Trade and Development (UNCTAD) and the UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), points to the economic and human development opportunities of a green economy transition for the world’s least developed countries (LDCs).

While developed and emerging countries face substantial costs of ‘decarbonization,’ as well as costs linked to retiring inefficient fossil fuel-based technologies, the report suggests that LDCs can avoid these hurdles by maintaining and expanding sustainable economic activities they are already utilizing.

For example, low-carbon, labor-intensive agriculture and community-based forestry are sustainable practices that have existed for decades in these countries, and they will be central elements in greening these sectors.

In addition, the report, Why a Green Economy Matters for the Least Developed Countries, finds that new opportunities offered by a green economy will help LDCs meet their Millennium Development Goals.

Structural constraints, including dependence on fragile agriculture, limited access to energy and low economic diversification, which have previously prevented LDCs from significantly reducing poverty and achieving higher rates of development, resulted from investments and policies that undervalued the importance of the economic sectors most relevant to the livelihoods of the poor.

In their foreword to the report, Achim Steiner, United Nations Under-Secretary General and Executive Director of UNEP, Supachai Panitchpakdi, Secretary-General of UNCTAD, and Cheik Sidi Diarra, Under-Secretary-General of the United Nations and High Representative for UN-OHRLLS, stress that “refocusing policies and investments to target sectors and areas including renewable energy, agriculture, forestry, tourism and enhanced ecosystem services can lead to the economic empowerment of low income populations, be more conducive to inclusive growth and jobs and make a significant contribution to achieving the Millennium Development Goals in the poorest countries.”

Governments have a central role to play in putting in place strategies, targeted public expenditures, policy reforms and regulatory changes to promote further investment and initiatives by the private sector and civil society. Already, decision makers in a number of LDCs are taking bold measures that can set the course for this transition to occur.

“LDCs face unprecedented vulnerabilities across a range of challenges. UNEP is committed to assisting them to reduce these risks, while growing their economies and achieving their sustainable development objectives,” said Mr Steiner.  “The shift to a global green economy can put LDCs in an opportune position if the right enabling policies are put in place nationally and internationally -- ones that accelerate their development rather than constraining it, ones that value, invest and re-invest in natural assets and low-carbon industries alongside human well-being and social equity.”

Dr Supachai of UNCTAD added: “There are at least four key elements that need to be addressed for LDCs’ successful transition to a green economy. First, identifying new sources of funding that can be directly applied to transitional efforts; second, creating an enabling environment that is conducive to private investment in green economy markets; third, taking advantage of trade to create global markets for LDCs’ green goods and services exports; and fourth, designing new and effective mechanisms to transfer green technologies to LDCs.”

Numerous examples highlight progress being achieved in a range of economic sectors, from energy to agriculture, through government, private sector and civil society initiatives.

* Despite being an LDC far from its major export markets, Uganda more than quadrupled its exports of organic agricultural products between 2003 and 2008, tapping into a global market of US$ 60 billion. Farm gate prices of organic pineapple, ginger and vanilla were 300%, 185%, and 150% higher, respectively, than conventional products in 2006, making sustainable forms of production highly profitable for producers and local communities.

* Nepal’s approach to Community Forest Management continues to generate employment and income from the sustainable harvesting of timber and non-timber forest products. Sustainable forest management approaches in the country have contributed to reversing a trend of decline in forest cover of 1.9% per year during the 1990s, into an annual increase of 1.35% over the period 2000 to 2005.

* In Laos, the National Ecotourism Strategy Action Plan, based on the sustainable use of the natural and cultural resources and the delivery of measurable socio-economic benefits to local communities, has turned ecotourism into a thriving economic activity accounting for about half of total tourism revenue. Overall, the number of international arrivals in Laos has jumped from 1 million in 2005 to over 2 million in 2009.

* In Mali, farmers supported through field training have significantly reduced the use of  imported pesticides and at the same time expanded the use of organic fertilizers and improved soil amendments. This resulted in increased production while reducing input costs.

* Bringing electricity to the rural poor is one of the most important contributions that a green economy can make to LDC economies, says the report. Lack of modern electricity infrastructure in rural regions and access to the development options that electricity opens are persistentimpediments to economic development in LDCs where 77% of the population is without access to electricity. Most affected are the 71% of the population of LDCs that live in rural regions, who rely on biomass burning as the only source of energy.

* The successful Grameen Shakti Programme in Bangladesh highlights the importance of clean energy solutions and suitable approaches to financing their adoption by low income communities. Grameen Shakti (or Grameen Energy in English) provides soft credits through innovative financial packages to make solar home systems (SHSs) available and affordable to rural populations. By the end of 2009, more than 320,000 SHSs had been installed under the program, in addition to biogas plants and improved cooking stoves. Grameen Shakti aims to have installed over 1 million SHSs by 2015.

* The potential for energy and resource efficiency is large in LDCs, with important gains possible through energy saving.  In Senegal, a net energy importer, a 100% replacement of installed incandescent lamps with compact fluorescent lamps (CFLs) at an estimated cost of US$ 52 million, would lead to energy savings of 73% and cost savings of nearly US$ 30 million per year.

Opportunities to leapfrog are being seized where they exist.  For example, in the aluminum sector, aluminum smelters in Africa are among the most energy-efficient in the world mainly because new production facilities employ the latest smelting technologies.

Despite their limited contribution to the problem of climate change, LDCs are among the most vulnerable countries to the effects of climate change, making it critical for the international community to scale up international cooperation in support of adaptation to climate change. Of particular importance is the Least Developed Countries Fund (LDCF), created to address the climate change adaptation needs of the LDCs.

A supportive international policy framework that responds to specific challenges facing the poorest countries will be critical in ensuring LDCs’ successful transition to a green economy.  International sources of financing to support clean technology adoption and trade-related capacity building in green sectors are urgently needed.

“Through concerted national and international action, realizing a green economy could make a valuable contribution to enhanced economic diversification, inclusive growth, poverty reduction and achievement of the Millennium Development Goals in LDCs,” said Mr Diarra of UN-OHRLLS.  “The outcomes of the Fourth United Nations Conference on the Least Developed Countries can provide a critical foundation and action points in this direction.”

Notes:

The report, "Why a Green Economy Matters for the Least Develop Countries," can be downloaded here:

http://www.unctad.org/en/docs/unep_unctad_un-ohrlls_en.pdf

Since 1971, the United Nations has denominated "Least Developed Countries" (LDCs) as a category of States that are deemed highly disadvantaged, exhibiting the lowest indicators of socioeconomic development, combined with the lowest Human Development Index ratings.

Currently, the list includes 48 countries:  33 in Africa, 14 in Asia and the Pacific, and one in Latin America. For more information, see:

http://www.unohrlls.org/en/ldc/25/

This article is from a joint UNEP-UNCTAD-OHRLLS news release of 9 May 2011