A new report by the United Nations Conference on Trade and Development (Unctad) makes the case for what it describes as a ‘Global Green New Deal’, which it says will not only support climate stabilisation, but will also help stimulate economic growth and create jobs.

Speaking in Pretoria as part of the South African leg of the report’s global launch, Unctad economist Dr Diana Barrowclough said the proposal sought to recast US President Franklin Delano Roosevelt’s Depression-era New Deal policy on a global scale so as to “pull up the people and cool down the planet”.

She said climate protection required a massive new wave of investment, which could be a major source of income and employment growth and contribute to a global macroeconomic recovery at a time when the global economy was starting to slow.

The report follows hot on the heels of the UN’s recent Climate Action Summit in New York, where global political, business and youth leaders met to discuss the climate crisis and where several countries made new funding commitments to the Green Climate Fund.

In a statement handed to UN secretary-general António Guterres by International Relations Minister Naledi Pandor, President Cyril Ramaphosa said South Africa’s Integrated Resource Plan for electricity would be finalised soon and would involve an energy mix that included a “significantly increased component of energy from renewable sources”. However, he also indicated that the mix would include traditional generation sources such as coal, natural gas and nuclear energy.

In addition, Ramaphosa announced that South Africa would be enhancing its Nationally Determined Contribution by the end of 2020 to strengthen its climate mitigation ambition by 2030 and move beyond current plans to invest further in renewable energy.

“To this end, a proposed $11-billion Just Transition Transaction is being developed under the auspices of the Eskom Sustainability Task Team. The $11-billion would consist of a blended finance facility and would be the largest climate finance transaction to date, having a significant emissions impact,” Ramaphosa said.

Unctad’s Trade and Development Report 2019 outlines a roadmap which it claims could lead to growth rates in developing economies of between 1% and 1.5% above those generated by current patterns of global demand.

Besides a large rise in public and private investment, the other elements of the roadmap include:

• An end to austerity and initiatives to increase labour’s share of the economy.
• New and progressive taxes to help fund scaled-up public investment to decarbonise energy, transport and agriculture.
• Support for green industrial policies that address new technologies, land use and skills.
• And stronger and dedicated public banks and supportive central banks.

Such an agenda, Barrowclough said, would make economic sense as, besides raising potential growth, it would result in a one percentage point increase in the wage share and a two percentage point rise in the investment share of the global economy.

Unctad estimates that a yearly rise in green investment of 2% of global output, or about $1.7-trillion, will generate a net increase in global employment of some 170-million jobs by 2030. At the same time, such investments would reduce gross carbon dioxide emissions by as much as 32-billion tons by the same date.

Barrowclough also argued that the Global Green New Deal could be financed and help close the prevailing funding gap for investments needed to achieve the Sustainable Development Goals set for poverty reduction, nutrition, health and education under Agenda 2030.

Securing such resources would require greater political will and international cooperation, however, as well as an upscaling of public finance.

“Leveraged international private finance is not anywhere near on track to provide the trillions needed to close the remaining gap. Substantially scaling up public international development finance, including through development assistance and debt relief, should therefore be an urgent priority, if a massive new developing country debt crisis is to be avoided and the 2030 Agenda achieved on time,” Unctad argues.