“Greening” the economy

The world’s environmentalists are concerned about the future of our planet and believe that countries should embark on a new “green course” or conclude a new “green” agreement on the relationship between man and the environment. Ukraine might become the world “champion of the green economy” on the eve of the United Nations Conference on Sustainable Development “Rio Plus 20,” to be held in Rio de Janeiro in 2012, UN Environment Program (UNEP) Portfolio Manager Mahir Aliyev said last Monday at the international conference “Green Economy – Ukraine’s European Choice.”

“Humankind is living today in a world that has gone through three major crises,” says Kyrylo Savin, head of the Heinrich Boell Foundation’s Ukrainian office. “Firstly, there is the economic and financial crisis that began in 2008 and, in my view, is still ongoing. Secondly, there is an ecological crisis that may induce climate changes, including global warming. The third one is a crisis of resources and energy.” The expert believes that the world’s reserves of gas, oil, uranium, and coal are to be exhausted very soon. “Forecasts point to the year 2040 for oil and gas, 2050—2060 for uranium, and 2105 for coal,” he warns. In his opinion, humankind is now standing by the abyss and must respond to these challenges.

According to the conference’s participants, the way out is in the “greening” of the economy, mapping out and implementing large-scale state-sponsored investment programs aimed at a radical overhaul of the world economy’s very foundations. In late 2009 the world’s leading countries did or promised to set aside about two trillion euros to keep markets viable. But only 15 percent of these potential investments can be utilized for “greening” the economy, Savin notes. In the view of scientists, it will take at least 20 percent to reach the minimal goals in this area. And, to save the climate and not to cross the two-degree limit (a higher temperature rise may cause irreversible damage to our planet), one must invest at least 1.3 trillion euros in the “greening” (against today’s 0.34 trillion).

How should the money be used? According to Savin, the “green” investments should be channeled to the four basic sectors of the economy: power generation, transport, construction (which uses 30 to 40 percent of energy and produces almost the same amount of carbon dioxide), and the production of strategic resources, such as metals (steel and aluminum), cement, and paper. Besides, it is advised to invest in up-to-date energy transfer systems (so-called smart systems), the transformation of the transport infrastructure and development of urban public transport, the reclamation and recycling of resources, and the support of existing ecosystems. Investments should be made, first of all, to support revolutionary technologies and innovations in the field of renewable sources of energy and energy efficiency.

Is Ukraine prepared to follow this course? Zoriana Mishchuk, who represented the Institute of Sustainable Development, was not too optimistic: “What we can see today in the context of [the Ukrainian government’s] anti-crisis measures runs counter to the concept of sustainable development. We can see loans being misused, for which the next generations will have to pay dearly; we can see a mounting tax pressure instead of measures to encourage small business and introduce environmentally-friendly technologies, and we can see a travesty of administrative reform carried out overnight without any consultations with the public.” Yet the expert also pointed out some positive signs, such as the development of a civic society in Ukraine. She notes that protest rallies on Independence Square are increasingly assuming an economic and environmental, rather than political, nature. Among the other positive factors are, in her view, Ukraine’s European integration and the growing interest of business in the production of pollution-free items and its overall social responsibility for the “greening” of the economy as a whole.

But is Ukrainian business psychologically prepared for taking the road of a “green economy?” When asked this by The Day, Ildar Gazizullin, an expert at the International Center of Policy Studies, gave an unequivocal and affirmative answer. He believes that Ukraine has enough “natural capital” (forestry and farming) and, given the continuing global reduction of resources, Ukraine’s potential can fetch real money.