x Abu Dhabi, UAETuesday 23 January 2018

Eco-money: UN aims to keep green efforts on pace with growth

Not only has the world's population grown from about 5.5 billion to 7 billion, but it has become far more urbanised.

Green investors should already be planning long-term strategies to dovetail with the biggest global environmental summit in 20 years, which is scheduled to take place in Rio de Janeiro in June next year.

The original Rio Earth Summit was in 1992 and the coming Rio+20, as it known, is being seen as a chance to renew political commitment for sustainability and the greening of the world's economies at a time when global investment in renewable energy is mushrooming.

In preparation for June, the UN has published an ecological progress report, Keeping Track of Our Changing Environment, detailing the advances made since the first Rio summit.

The UN believes that, in certain key areas, the global environmental challenge has grown significantly over the past 20 years.

Not only has the world's population grown from about 5.5 billion to 7 billion, but the world's population has become far more urbanised.

In 1992, about 2.4 billion of the Earth's inhabitants lived in cities. But by 2009, that number had risen 45 per cent to about 3.5 billion. This means that almost 200,000 people a day become new city dwellers. The UN calculates that the additional number of city dwellers created since 1992 represents the rough equivalent of the population of Paris times 110.

The UN also measures population growth in terms of what it calls "megacities", high-density metropolises with 10 million inhabitants or more. Their number more than doubled from 10 in 1992 to 21 in 2010, effectively adding one new megacity each month. The world's largest megacity is Tokyo, with a population of almost 37 million.

"This unprecedented urban growth, projected to continue [although at a decreasing rate] in the coming decades, will require special attention in order to make life in cities more socially, economically and environmentally sustainable," the UN says.

The UN reports that the increased urbanisation of humanity over the past two decades has come with a high environmental cost. "The economic growth of recent decades has been accomplished mainly through drawing down natural resources without allowing stocks to regenerate and through allowing widespread eco-system degradation and loss."

More than half of the world's population now lives in urban areas, accounting for 75 per cent of global energy consumption and 80 per cent of global carbon emissions.

The volume of plastics produced globally grew from 116 million tonnes in 1992 to 264 million tonnes by 2010, representing an annual growth of roughly 15 per cent.

According to the UN, about 50 per cent of plastic is used for single-use disposable applications, such as packaging, agricultural films and disposable consumer items. Disturbingly, plastics debris in the ocean has become particularly notorious in recent years.

"Concentrated along shorelines or in huge, swirling open-sea gyres, such material threatens the lives of many marine organisms, especially seabirds and small mammals," the UN says.

But the world is becoming more efficient at disposing of materials. Although energy and material use continues to grow, there has also been a simultaneous drop in emissions energy and material use per unit of output.

"Resource extraction per capita has been stable or increasing only slightly. What economies worldwide need is absolute decoupling of the environmental pressure associated with resource consumption from economic growth. This will be easier to achieve to the extent that resource use itself becomes more efficient," the UN adds.

According to the report, one policy option available is the widespread introduction of eco-taxes, which put a price on the full costs of resource extraction and pollution, including carbon-dioxide emissions, polluting the environment through the use of chemicals, deforestation and over fishing. It is hoped that such incentives will stimulate green investment.

The UN reports that there has been a "take-off" in solar energy, with a 30,000 per cent increase globally since 1992 and a 6,000 per cent increase in wind technology. But the UN adds that this growth started from a low base and that the share of technologies that harvest energy from the sun, wind and water is less than 3 per cent, while solar and wind power alone account for just 0.3 per cent. The report, however, is suspicious of the use of biofuels made from corn, sugar cane, palm or rapeseed oil as renewable energy sources because of direct environmental and social impacts from land clearing and conversion.

However, the UN believes that the green-energy sector is a rapidly growing business that now offers considerable investment opportunity.

"Global investment in renewable power and fuels set a new record in 2010 and the margin over totals for previous years was wide," says the UN. "Investment totalled US$211,000 million [Dh775 billion] in 2010, up 32 per cent from $160,000 million in 2009, and nearly five-and-a-half times the 2004 figure. For the first time, new investment in utility-scale renewable energy projects and companies in developing countries surpassed that of developed economies."

Long-term investment areas post next June are, therefore, likely to include solar energy and waste-reduction projects, particularly in developing regions such as the Middle East.