A Global Green New Deal for Sustainable Development

8/13/2019 A Global Green New Deal for Sustainable Development

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COMMENTARY

Economic & PoliticalWeekly EPW August 24, 2013 vol xlvIiI no 34 17

A Global Green New Deal forSustainable Development

Jomo Kwame Sundaram

The protracted global economic

slowdown and the deep ecological

crisis that the world finds itself in

both call for a Global Green New

Deal, similar to the New Deal of

the United States that tackled

the Great Depression. The

21st century New Deal must

include developing countries and

has to be economically, socially

and ecologically sustainable.

Almost eight decades ago, in the

midst of the Great Depression,

the newly elected United States

(US) Government of Franklin Delano

Roosevelt introduced the New Deal. The

New Deal consisted of a number of mu-

tually supporting initiatives of which the

most prominent were:

A public works programme financedby deficit financing.

A new social contract to achieve greatersecurity and rising living standards for

working families programme, including

the USsocial security system, and

Regulation of financial markets to protectthe assets of citizens and channel financial

resources into productive investment.

The Citizens Conservation Corps

created two mill ion jobs for a USpopula-

tion then of 125 million, equivalent to

over five million for the current popula-

tion exceeding 300 million. The New

Deal effectively used the fiscal stimulusfor recovery, employment, development

as well as environment goals. Not only

did it help ensure USeconomic recovery,

it successfully addressed unsustainable

agricultural practices that had caused

widespread ecological, social and eco-

nomic crisis in the Midwest, and helped

usher in a new era of economic growth

and expanding prosperity, especially in

the relatively poorer regions.The best known public works pro-

gramme is the Tennessee Valley Authority

(TVA), which pioneered an integrated

regional development programme in an

underdeveloped region of the country,

and laid the infrastructural foundation

for energy provision as well as sustained

industrial and agricultural growth in the

region. Thus, the New Deal restored the

ecological health of the USMidwest while

addressing social security, food security

and conservation objectives.

Today, we are in the midst of another

protracted economic slowdown, compara-

ble to the Great Depression. This crisis also

needs a New Deal, but one which is both

global and sustainable. First, it has to be

international and must include developing

countries. The current system and crises

are global in nature, necessitating a similar

response to be adequate to the challenge.

Second, it has to be sustainable, eco-

nomically, socially and ecologically. We arein the midst of a profound environmental

crisis, with global warming increasingly

Jomo Kwame Sundaram ([email protected]

)is at the UN Food and Agriculture Organisation,

Rome.


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recognised as the greatest threat. While

most attention is focused on climate

change, the sustainability of economic

development is also threatened by air and

water pollution, and the degradation of

natural resources, the loss of forests and

biodiversity, as well as sociopolitical in-

stability due to growing inequality, glo-bally and nationally. Therefore the New

Deal should direct public works pro-

grammes to move countries to a different

developmental pathway, one that protects

the natural resource base equitably in

the spirit of Rio, both in 1992 as in 2012.

What Would a Global

Green New Deal Look Like?

Simply stated, it would have ingredients

similar to the original New Deal, namely

public works programmes, support for

social protection, and measures to en-

courage productive investments for out-

put and job recovery.

Developing countries are particularly

adversely affected by the systemic biases

of the global financial system. At lower

levels of development, they are less resil-

ient and more vulnerable to fluctuations

in world markets. With fewer resources,

they are often forced to pursue pro-

cyclical macroeconomic policies, caus-ing greater economic instability and

undermining long-term growth.

The Global Green New Deal (GGND)

should be part of the broader counter-

cyclical response to the crisis with three

main elements. First, national stimulus

packages in developed and developing

countries that aim to revive and build

green national economies. Second, inter-

national policy coordination to ensure

that developed countries stimulus pack-

ages are not only effective in creating jobs

in the North but also generate strong deve-

lopmental impacts in developing countries

through collaborative initiatives bet-

ween the governments of rich and poor

countries. Third, financial support to de-

veloping countries to counter the global

economic slowdown.

Resources would also be needed to

strengthen social protection systems. This

will be critical to protect billions of people

in developing countries directly affectedby rising unemployment, higher food

prices, declining export earnings and other

consequences of the crisis from falling

deeper into hunger, poverty and food in-

security. This required fiscal response

provides an opportunity to make long-

term investments to reduce food insecuri-

ty and to address climate change. Given

the multiple environmental challenges

faced by the world today, we need to pro-mote investments that put the global

economy on a more sustainable pathway.

After half a decade of economic con-

traction and stagnation with even devel-

oping countries slowing down in recent

years, it is urgent for all countries to

prioritise economic recovery measures,

and not to hope for recovery at the ex-

pense of others. These stimulus packages

also provide the opportunity to lay the

foundation for new sustainable growth.

Given the unmet needs for infrastruc-

ture, additional investments in such sectors

will contribute to growth. Such investments

must be especially targeted at poor and

vulnerable groups and regions. In other

words, the investment should lead to the

revival of growth that is both ecologi-

cally sustainable and socially inclusive.

Support for food security and agricul-

tural productivity could be an important

feature of national stimulus packages in

developing countries, many of which arestill highly dependent on agriculture.

Reinvigorating agricultural research and

development as well as extension services

will be key. Special attention will be needed

for investments that promote climate smart

and ecologically sustainable agriculture.

There are many examples of socially

useful public works activities in develop-

ing countries, but priorities must be made,

considering national conditions. Con-

straints to economic recovery and sus-

tainable development should be prioritised

in most circumstances. Projects could

improve water storage and drainage,

contributing to agricultural productivity

as well as climate adaptation, e g in many

developing countries, simple storage dams,

digging of wells and basic flood barriers/

levees could be constructed, and existing

drainage and canal networks rehabilitated.

Public works programmes could target

the construction of basic sanitation in-

frastructure as well as the regenerationof wetland ecosystems that act as filters

for water courses.

After a half century of decline, except

in the mid-1970s, real agricultural com-

modity prices have been rising since

around the turn of the century. The recent

price trend reflects yield growth slowing

in recent years, while demand has contin-

ued to grow rapidly. Rising incomes have

increased food demand for humans andanimal husbandry, while demand for

feedstock for biofuels production has ex-

panded rapidly in the last decade.

Prices have also become increasingly

volatile, with successively higher peaks

in 2007-08, 2010-11 and now mid-2012.

Recent food price volatility has some of its

origins in climate change-related weather

shocks in key exporting countries. Prices

have risen due to the closer linkages

between agricultural and energy markets

with official promotion of first genera-

tion biofuels. Financialisation, linking

commodity derivatives markets with the

prices of other financial assets, has also

worsened price volatility.

Policy Coordination, Collaborative

Programmes and Initiatives

Another component of the GGNDwould

be collaborative initiatives of govern-

ments of rich and poor countries simulta-

neously to create jobs in developed coun-tries while generating strong develop-

mental impacts in developing countries.

Such initiatives could be pursued, in part,

by using the resources mobilised by devel-

oped countries stimulus packages. But

over the longer term, the reforms of the

international financial and multilateral

trading systems will need to support the

investments required to promote sustain-

able development, e g, to promote the

shift to low carbon economies in both rich

and poor countries alike.

There are several areas in which

investment in developing countries

could not only promote national devel-

opment in those countries, but also pro-

tect global public goods (such as forests

or other environmental resources, or the

global climate system by mitigating green-

house gas emissions) and lead to increased

aggregate demand in rich countries,

thereby enhancing employment levels in

the latter group. Initiatives with long-termhorizons should be designed to allow for a

smooth transition, with nationally-owned


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and implemented initiatives and program-

mes. Some examples of such pro-

grammes would include: (i) investments

in public transport in developing coun-

tries, (ii) a global feed-in-tariff regime to

cross-subsidise and promote renewable

energy, (iii) energy efficiency, (iv) building

the global IThighway, (v) human skillstransfer programme and reverse outsourc-

ing utilising the new ICTto provide expert

services in critical areas from developed

to developing countries, (vi) multilateral

response to disasters, and (vii) multi-

lateral response to food insecurity.

Addressing Food Insecurity

After three food price increases in five

years, food insecurity is now recognised

as a serious threat. Higher and more

volatile food prices threaten the nutrition

of billions of people. The FAOs food price

index is now at its highest level, higher

than in June 2008 when the food price

spike sparked violent protests in many

countries. There have also been signi-

ficant drops in official development as-

sistance for agricultural development in

developing countries for decades. Mean-

while, rich countries have conti nued

to subsidise and protect their farmers,

undermining food production in deve-

loping countries.Food security should be treated as a

global public good since the political and

social consequences of food insecurity

will have global ramifications. Hence,

there should be a multilateral response

to ensure food security. The green revo-

lution of the 1960s and 1970s with con-

siderable government and international

not-for-profit support had led to much

increased crop yields and food production,

reducing hunger, starvation and poverty.

However, the efforts in wheat, corn and

rice were not extended to other crops,

especially those associated with water-

stressed agriculture in arid areas, e g in

Sub-Saharan Africa. We need a second

generation green revolution to promote

sustainable, including climate smart agri-

culture, especially for other food crops.

Public investments with international

assistance must provide the incentives and

other support needed to promote the need-

ed investments on an accelerated basis.

To be sure, many other complementaryinterventions are urgently needed. Food

security cannot be achieved without

much better social protection. But sus-

tainable social protection requires major

improvements in public finances. While

revenue generation requires greater na-

tional incomes, tax collection can still be

greatly enhanced through improved inter-

national cooperation on tax and other

international financial matters. Clearly,

the agenda for a GGNDrequires not only

bold new national developmental initia-

tives, but also far better and more equi-

table multilateral cooperation offered

by a strong revival of the inclusive multi-

lateral or United Nations system.

Documents

A Global Green New Deal for Sustainable Development