WTO Public Forum The Neglected Imperative in Trade and Development:

1. WTO Public Forum The Neglected Imperative in Trade and Development: Innovation as a Growth Strategy for the Global South AsadNaqvi 1-3 October 2013

2. Income distribution under the current growth scenario • In 2009, global GDP reached US • $58.22 trillion and yet, almost 80% of • humanity continues to live on less • than US$ 10/day. • The poorest 40 percent of the • world’s population produce only 5 • percent of global income. • All kinds of services provided by • poor people in terms of natural resource management are not being taken into account, and neither is the way in which environmental degradation affects the poor. The threat to the planet, inequality and barriers to growth go hand in hand.

3. Natural Capital: Wealth Creation for the Poor, growth opportunity for Developing Countries Ecosystem services and other non-marketed natural goods account for 47 to 89% of the so-called ‘GDP of the Poor’ Hence need to invest in natural capital as a source of growth and well-being.

4. Building on natural capital assets “…natural capital is essential to wealth creation, accounting for a quarter of wealth creation in the poorest countries, while such a share is only 2% in the world’s richest countries.” Source: World Bank, 2006, Where is the wealth of nations?

5. GE: Growth through Clean Energy 77% of the population in LDCs is without access to electricity; 71% of the population in rural regions rely on biomass burning as the only source of energy. Decentralized forms of energy access are proving more effective to bringing energy to the rural poor. Grameen Shakti Programme in Bangladesh - installed 320,000 SHSs by 2009, in addition to biogas plants and improved cooking stoves, and aims to install over 1 million SHS by 2015 , while also providing the necessary maintenance, thereby generating local employment.

6. Massive potential with energy saving In a country such as Senegal, a 100% replacement of installed incandescent lamps with compact fluorescent lamps at an estimated cost of $ 52 million, could deliver annual energy savings of 73% and cost savings of nearly US$ 30 million

7. Renewable Energy Growing export opportunities for raw materials and components for renewable energy supply (RES) products (e.g. solar panels, wind turbines) – thus, entry into supply chains through trade in intermediate goods is a key opportunity for developing countries (encouraged by government policies, such as feed-in tariffs) Exports of renewable energy:many developing countries have abundant renewable energy resources (potential to export), including solar energy, wind power, geothermal energy, biomass and hydro Potential opportunities for sustainable second-generation biofuels

8. Seizing new trade opportunities 48-68% less emissions and carbon sequestration The global market: 97% of buyers in OECD countries; 80% of producers in Africa, Asia and Latin America 2010: $59 billion > 2015: $105 billion US$ 22.8 mil (2007/8) US$ 6.2 mil (2004/5) US$ 3.7 mil (2003/4) The case of Uganda

9. Carbon Credits • If only all the small farms on the planet employed sustainable practices, they might sequester a total of 2.5 billion tonnes of carbon annually. • Such verifiable carbon sequestration levels could be equivalent to US$49 billion in carbon credits per year, assuming a carbon price of US$20/tonne.

10. Fisheries Demand for certified fish products (such as eco-label products) has been gaining momentum Sustainable procurement policies of large international food firms are likely to further drive demand Processing: developing countries yet to exploit additional gains with product certification: Particular growth areas in the market for frozen organic fish and sustainable aquaculture Tourism: recreational fishing, whale watching, scuba diving, etc.

11. Forests Developing Countries Trade and Export opportunities in the forest industry include: certified timber recycled timber non-timber forest products (NTFPs): food items, pharmaceutical ingredients and cosmetic products, etc. forest tourism Currently, demand outstrips supply

12. Manufacturing Switching to more efficient manufacturing will save energy and resources and thus enable developing countries to produce goods for export at a lower price (increased competitiveness) Potential to generate new business from remanufacturing: paves the way for technology and knowledge transfer, increased employment and exports Eco-labels can provide further opportunities to market sustainably manufactured products, particularly in light of the growing demand in developed countries Energy efficient products include light bulbs and electrical goods

13. Tourism Tourism generates large export revenues for developing countries and is a key driver of growth for the world economy (tourists account for greater than 9% of global GDP, estimated 1 bn. tourists in 2012) small changes towards greening (e.g. more efficient water and energy use) can have large impacts Investment in sustainable tourism generates significant financial returns as tourist choices demonstrate a preference for companies that implement best practices in their environmental management Eco-tourism, which 83% of developing countries rely upon as a major export, is the fastest growing sub-sector of the tourism industry

14. Some multinationals are taking initiative “Growth does not have to cost the earth.”

15. Rabobank Group • The Rabo Sustainable Agriculture Guarantee Fund (SAGF)has been initiated by Rabobank International in response to a call for Public Private Partnerships. • The SAGF aims to enhance the access of selected small- and medium-sized producers of sustainable agricultural products in developing countries to working capital credit (pre-export trade finance) on the basis of commercial and sustainable terms. • The core objective of the SAGF is financial sector deepening, which is defined as ‘increasing access to financial services for those who previously had restricted or no access’.

16. Robeco Asset Management • RobecoSAM believes fervently that the integration of sustainability criteria into traditional financial analysis helps to gain additional insights into companies quality of management and future performance potential. • RobecoSAM continuously promotes the benefits of Sustainability Investing in order to bridge the gap between the sustainability champions in the boardrooms and corporate offices and the investment professionals who are just beginning to recognize that a focus on sustainability creates value.

17. Vertical Gardens and Aquaponics in Gaza • In 2011, 44% of people were classified as food insecure, and in rural areas this figure reached 52%. • Over 80% of Gaza’s inhabitants are dependent on some form of external assistance. • Land available for horticulture is extremely limited in the Gaza Strip. • 97% of the Gaza Strip population are urban or camp dwellers, and therefore do not have access to land. • 119 food insecure female-headed households living in urban areas were given innovative rooftop units connected to a fish tank. • 24 units were installed in educational and community establishments.

18. International cooperation in crucial DCs and LDCs will clearly need external sources of finance to achieve inclusive green growth, through both public funds and private investments. Facilitating access to adapted technologies, Addressing concerns about trade protectionism and ensuring fair and equitable trade norms at bilateral, regional and international levels.

19. Current Green Economy Engagement

20. Partnership for Action on 20

21. The Key Message • Innovations do not work with perverse policies. • There is a need for policy reform! • Strong land tenure, and property rights • Removal of unsustainable subsidies • Increased investment towards sustainable practices Redirecting Capital – supported by enabling conditions – is the key for growing the green and Greening the grown.

22. You cannot solve the problem with the same kind of thinking that created the problem. Albert Einstein Thank You www.unep.org/greeneconomy asad.naqvi@unep.org