This month: reflections from PAGE@ HLPF 2021. How can governments grasp the opportunity to turn economic recovery into long-term, sustainable economic transformation - while also advancing on the SDGs? (The answer: a mix of finance, private sector incentives, citizen engagement, and partnerships). In Episode 8, we compile the best parts from PAGE's flagship event at the UN High-Level Political Forum. Featuring Guy Ryder (International Labour Organization), Inger Andersen (United Nations Environment Programme), Rita Schwarzelühr-Sutter (Federal Ministry for the Environment, Germany), H. E. Elizabeth Thompson (Government of Barbados), Dr. Febrio Nathan Kacaribu (Ministry of Finance, Indonesia), and Melati Wijsen (Youth Climate Activist).
Part 1: Challenges [1:48]
Part 2: Financing the Recovery [3:38]
Part 3: How to Incentivize the Private Sector [6:58]
Part 4: Building a Green Society [9:48]
Part 5: Acting as One [14:43]
[Inger Andersen] And we're speaking about the green economy, but maybe we should also broaden it because the economy is something we sometimes think about on the fringes. We should talk about the green society.
[Colm Hastings] Welcome to The Green Renaissance. A podcast series from the Partnership for Action on Green Economy, that aims to unpack the green recovery debate. This month, reflections from PAGE’s flagship event at the UN High-Level Political Forum.
[H. E. Elizabeth Thompson] Climate change still remains the most significant threat to us. And unless we address the issue of climate change in Small Island Developing States, then we are not going to get to green economies.
[Colm Hastings] With leaders from both the United Nations and national governments, we discuss the practical realities of linking COVID-19 recovery with long-term sustainability.
[Dr. Febrio Nathan Kacaribu] For example like Indonesia, we have over 70% of our electricity generated by coal. And how do we transition out from that? This is a very practical, very reality check kind of question.
[Colm Hastings] Subscribe wherever you get your podcasts. I’m Colm Hastings, and this is The Green Renaissance.
[Colm Hastings] PAGE’s event at the High-Level Political Forum – “Green Recoveries for a Jobs-Rich Future” – was held back in July, and featured five panelists: Guy Rider, Director-General of the ILO; Inger Andersen, Executive Director of UNEP; Rita Schwarzelühr-Sutter, Parliamentary State Secretary at the German Federal Ministry for the Environment; Her Excellency Elizabeth Thompson, Ambassador for Climate Change, Small Island Developing States and the Law of the Sea within the Government of Barbados; and finally Dr. Febrio Nathan Kacaribu, Head of the Fiscal Policy Agency in the Indonesian Ministry of Finance.
Over the next 15 or so minutes, we’ll hear from them on how finance, private sector incentives, citizen engagement, and partnerships can help governments grasp the opportunity to turn economic recovery into long-term, sustainable transformation. First, they set the scene by outlining some of the main challenges facing both our planet, as well as their own countries.
[Guy Rider] Let's take account of our current circumstances. We are still in the midst, I want to say exiting, but still in the midst of the worst economic and social world of work crisis that we've known in, in two or three generations. It's been horribly costly for people's jobs, their security, their livelihoods. And at the same time, we are faced with this extraordinary climate crisis. We're seeing dramatic weather events, even as we talk. So I think we have to understand both the scale and the urgency of the question that we're trying to, to relate to.
[Inger Andersen] The risk to nature and the risk to us, the human beings, is actually one of the same, right? We have these systemic risks to business, we heard that. And we understand now that half of the world's GDP depends on - nature. Nature services, the rain that falls, the winds that blow, the seasons that they are, the pollination that is, the climate that should be, and so on. So we cannot pull or saw over the branch on which we are sitting and assume that we will still be sitting, we will be falling down. And that's why we need to understand these unsustainable patterns.
[Rita Schwarzelühr-Sutter] Decarbonization of our economies and adopting a more active approach to biodiversity conservation are core tasks facing governments and societies around the world. And this requires decisive action by the government as a whole, not just by the environment ministries.
[H. E. Elizabeth Thompson] For Small Island Developing States, climate change still remains the most significant threat to us. And unless we address the issue of climate change in Small Island Developing States, then we are not going to get to green economies and green societies.
[Colm Hastings] So now that we’re up to speed on the specific risks and challenges that we are facing, the question becomes how do we go about addressing these? And as it often does, the answer starts with finance. So where is it needed, and most importantly where is it going to come from? Are governments solely and completely responsible for financing our recovery?
[Guy Rider] In the end, the financing aspect of all of this is the sine qua non of going forwards. And, you know, at a time when there are many competing demands on finances, be it for vaccines, be it for social protection, be it for education, and at a time when indebtedness is very high, we really have to carve out the financial means to live up to our ambitions. And that has to be done by a combination of public commitment of financing, and then we have to deliver the private sector to this agenda.
[Inger Andersen] And so, what kind of financing could we drive? Well, the first thing that we probably, unfortunately should conclude is that with these massive amount of monies - trillions of dollars, 13 to 15 trillion so far and counting - that we've taken out of the public budgets, borrowed, I should say, and put into the economy, which was a fine thing, but we have not put that into green recovery.
So what we need to think about, and this is a message for government as well as for industry and as well as for us as consumers, aligning that economic recovery that we're in the middle of, trying to et cetera, aiming for - and I greet you from Nairobi where we are not even 2% vaccinated, so vaccine equity will have to be part and parcel of our conversation - we have to align the economy, economic recovery with Paris, with the SDGs, with Kunming COP 15, invest much smarter, because when we make those investments, we're investing in the future.
[Rita Schwarzelühr-Sutter] It's clear to us that the economic stimulus measures must address the current economic crisis, and at the same time, prepare us to meet the challenges of the future.
[Dr. Febrio Nathan Kacaribu] I would like to add one more word to this. The transition does not only have to be just, but also it has to be affordable. I think a lot of developing countries are going to be looking at this in a very practical way. When you are trying to be practical, that means that you are looking at your options. Clearly when, since I'm from the government, I'm looking at my fiscal tools, and also looking at beyond fiscal tools, how the private sector would be joining in terms of achieving this target. From the revenue side, we look at our tax tools, how our tax system actually facilitates and supports green projects.
On the spending side, we look at, we started something we call Climate Budget Tagging. So we are looking at our own spending for years, and then we see that about 34% of this climate mitigation financing need, in Indonesia, can be supported by our own budget. That means that the rest - about 66% - should come from the private sector. So that's how we come up with the calculation and then looking at the potential for the private sector to join in. When we say private sector, it is not only domestic, but also especially the global financial market as well.
[Colm Hastings] So the recovery will need to be financed through a mix of public and private investment. But businesses and industry are not typically renowned for making acts of benevolence – so how do we actively stimulate them to invest green?
[Rita Schwarzelühr-Sutter] This is a central question for us. Fortunately, most industry representatives in Germany have long since realized that sustainable products will be in high demand in the future. And I want to talk about, because we have to look to the economy also. So one of our goals is to work with the businesses to make energy intensive industries, such as steel, cement or chemicals, ready for a green future free of carbon emissions. And they do that not because they want only to do that, because we will have to give some incentives. Companies must be able to blend reliably. At the same time, they must not be put at an unfair competitive disadvantage.
[Dr. Febrio Nathan Kacaribu] You are going to be talking about electorates. You are going to be looking at your demographics. Now as a country like Indonesia, we are a young country. So demographically, we have this fraction. And that's good news for us. But we still know that the industries, are not really millennial's industry. So we need to connect between the younger generation, with the existing industries that are working right now.
But in reality though, clearly every country will have different situations at the moment. For example, like Indonesia, we have over 70% of our electricity generated by coal. And how do we transition out from that? This is a very practical, very reality check kind of question. And we have to talk to the industry as well because the cost is going to be distributed. And how are we going to distribute that extra cost? And how do we pick the winner? So these are all political decisions, and it has to be made together as a country.
[Rita Schwarzelühr-Sutter] It is clear that successful transformation is the only way to create viable jobs for the future. And policy makers can alleviate fears and drive the green structural transformation by pushing for and backing a transformation agenda. That's very important because it's not only the economy and the CEOs; all the workers want to know what is my future and which perspectives will I have. So we think at both sides, we want to create jobs and we want to support that industry invests in green investments,
[Guy Rider] But we've seen some examples when it hasn't worked very well. Because when well-intentioned fiscal measures have been taken, to improve the environmental side of things, if you don't pay attention to the social consequences and the social consequences are negative, you get a backlash from that.
[Colm Hastings] So as we’ve heard in previous episodes as well, a green recovery is unlikely to succeed without widescale public support. So how do we build society into our discussions? How do we ensure that a green economy transition is wanted and supported by all?
[Guy Rider] We do need in the recovery process to be deliberately investing in the creation of decent work, in those areas which hold out promise for job creation in the future. We need to invest in the skills, and also social protection, that help people to move from where they are today, to where they need to be in a climate neutral economic future. And lastly, I think it's the institutions. You know, we have to involve people. At the ILO we believe greatly in dialogue, involving the actors, the people affected. They have to have ownership of these issues.
[H. E. Elizabeth Thompson] Clearly one has to work with citizen engagement and community engagement, to get them on board with new practices and new behaviors, and to understand the role that individuals and communities will play in the transition process.
[Inger Andersen] And we're speaking about the green economy, but maybe we should also broaden it because the economy is something we sometimes think about on the fringes. We should talk about the green society. We should understand that that future that we reach for, has to be for everyone. And that means we need to understand that the laws and the justice, those we are leaving behind, be it those who are discriminated against, be it minorities, be it gender-based dimensions, be it the young, the unborn, the next generation, what are their rights?
So how can we make sure that at the same time we are pro-growth, pro-poverty reduction in our work. And how do we in green economy take that, and fold that into the broader society. So it's not just the economy thing on the fringes, but it's the whole societal thing. Because it's only then, when we do that, that we will get at poverty, that we will get at vulnerability, and that we will get at long-term sustainability.
[H. E. Elizabeth Thompson] When I was Minister of Environment, and we were phasing out globally, the equipment like air conditioning units, refrigerators, and so on, which used Chlorofluorocarbons, one of the tools that we used, and one of the things that we did, was to identify all technicians in the country and say to them, look - we are going to make this transition to refrigerated units, AC units, that have no fluorocarbons. If you want to earn, then you're going to have to be trained in the new technologies. We're going to run training programs for you. If you are or have been working informally, and you're not paying taxes, we're not going to make that our business at this stage. You come in and be trained, so that you know where the jobs are, how to get the jobs, and that you can service the equipment that will be coming into the country.
And we are attempting to do a similar thing now. If you're going to transition to electric buses, electric vehicles, then you need to train people to repair - and you can train women, you can train youth. Because they're the ones who have been the most affected by COVID. They're usually the majority of the poor. They're usually the majority of the underemployed and the unemployed. And therefore they're the ones who need the training in order to become employed, as the economy transitions, and as the world transitions.
[Colm Hastings] Before we get to the final part of our discussions, the PAGE event also featured a speech from Melati Wisjen – a climate activist from Indonesia who, together with her sister, led a successful campaign to ban plastic bags, straws and Styrofoam on her home island of Bali. So what does she think holds the key to a green recovery?
[Melati Wijsen] We're living in uncertain times. But if there's one thing that we know for sure, it is that change is already here. Something that stood out to me while I was reading through the connection of economic policy with science and green recoveries for a job-rich future, was actually the fact that more than half of the world's GDP depends on nature. And yet we take nature for granted. Nature is for free, and it doesn't have a price tag.
So we've always valued profit over planet. This has to stop. Now, how do we reach that? Aside from the smart policies being implemented, and the investments that we need, I believe that we also need to focus on education. To ensure that we are leaving no one behind, and remembering that change starts in the classroom. When we empower our generation, we can help accelerating change. Remember change is already here, and it starts with you. And it starts today.
[Colm Hastings] So alongside investing in education, to finish what other concrete steps are needed to achieve a green recovery moving forwards? What can we do – as governments, businesses, and society – to grasp the opportunity to achieve long-term resilience for people and planet?
[Guy Rider] Particularly in the light of the pandemic, what we need now, clearly are comprehensive concerted policies which somehow bring together economic and social, environmental, humanitarian, and health policy action. Now, we need to look on a big scale, and with appropriate wits at the types of issues that we have to deal with. If we try to compartmentalize the challenges, we're going to get it wrong, we won't get there.
[Rita Schwarzelühr-Sutter] The partnership approach is particularly important to me because a task this complex can only be managed in a strong team. Everyone contributes their expertise and together we overcome fragmented, silo approaches. We no longer have time to keep reinventing the wheel. We need to join forces and share best practices.
[H. E. Elizabeth Thompson] Barbados has established what we think is a sustainable model that can be used for all Small Island Developing States. And we're calling it a Roof-to-Reef Program. Why? Every drop of water hits your roof, and from your roof it is on a journey to the sea. And if you consider how that is going to go through the agricultural sector, where it is going to end up in terms of your waste management sector, how it is going to affect livelihoods and quality of life?
And therefore, we are in the hurricane season now - Barbados has already been hit by a Category One hurricane - how do you develop building homes to resist a Category Four hurricane? So you start with your roofs, and then you move through all your various sectors until you end up on your reef, where you protect your reef structure for two reasons. First of all, it's important for the economy. It's important for livelihoods. It's important for ecosystems, and it is an important environmental base and protection.
[Dr. Febrio Nathan Kacaribu] We cannot recover by ourselves. No one single country can recover from this pandemic all by themselves. The same thing can be thought about green. Nobody can do this single-handedly by themselves. It has to be a one world solution.
[Inger Andersen] And we, as voters have a say. Because we put these decision-makers in business. And so as I always say, you know, environment doesn't know politics, it knows the right environmentally-sound policies. And so taking the environment and therefore also taking the next generation, with you into the voting booth, is not a left or right issue, it's a future intergenerational justice issue.
[Colm Hastings] You’ve been listening to The Green Renaissance. Subscribe wherever you get your podcasts to receive new episodes each month, and please give us a rating if you’ve liked the series so far. If you’ve enjoyed some of the discussions in today’s podcast and want to listen to the event in full, head over to the PAGE website at www.un-page.org. Thanks as always for listening, and see you next time.