http://www.un.org.ua/files/trends_rpt2006

CHANGE

CLIMATE

& AIR POLLUTION

ATMOSPHERE

DEVELOPMENT

INDUSTRIAL

FOR SUSTAINABLE DEVELOPMENT

ENERGY

TRENDS IN SUSTAINABLE DEVELOPMENT

Department of Economic and Social Affairs Division for Sustainable Development

TRENDS IN SUSTAINABLE DEVELOPMENT

United Nations New York, 2006

DESA The Department of Economic and Social Affairs of the United Nations Secretariat is a vital interface between global policies in the economic, social and environmental spheres and national action. The Department works in three main interlinked areas: (i) it compiles, generates and analyses a wide range of economic, social and environmental data and information on which Member States of the United Nations draw to review common problems and to take stock of policy options; (ii) it facilitates the negotiations of Member States in many intergovernmental bodies on joint courses of action to address ongoing or emerging global challenges; and (iii) it advises interested Governments on the ways and means of translating policy frameworks developed in United Nations conferences and summits into programmes at the country level and, through technical assistance, helps build national capacities.

Note The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country or territory or of its authorities, or concerning the delimitations of its frontiers.

The term “country� as used in the text of the present report also refers, as appropriate, to territories or areas.

The designations of country groups in the text and the tables are intended solely for statistical or analytical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process.

Mention of the names of firms and commercial products does not imply the endorsement of the United Nations.

Symbols of the United Nations documents are composed of capital letters combined with figures.

United Nations publication Sales No. E.06.II.A.1 ISBN 92-1-104559-2 Copyright Š United Nations, 2006 All rights reserved Printed in United Nations, New York

FOREWORD

Since the United Nations Conference on Environment and Development in 1992 and the subsequent World Summit on Sustainable Development in 2002, significant efforts have been made in pursuit of sustainable development. At the political level sustainable development has grown from being a movement mostly focusing on environmental concerns to a widely recognized framework utilized by individuals, governments, corporations and civil society that attempts to balance economic, social, environmental and generational concerns in decision-making and actions at all levels. At the September 2005 World Summit, the UN General Assembly reiterated that “sustainable development is a key element of the overarching framework for United Nations activities, in particular for achieving the internationally agreed development goals�, including those contained in the Millennium Declaration and the Johannesburg Plan of Implementation (A/RES/59/227).

This report highlights key developments and recent trends in the areas of Energy for Sustainable Development, Industrial Development, Atmosphere/Air Pollution and Climate Change — the four interrelated topics being considered by the Commission on Sustainable Development at its 14th and 15th sessions (2006-07). It notes progress in a number of areas while, at the same time, acknowledging that in other areas significant work is still needed to advance implementation of intergovernmentally agreed goals and targets.

Department of Economic and Social Affairs Division for Sustainable Development April 2006

iii

CONTENTS

PAGE

FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ENERGY FOR SUSTAINABLE DEVELOPMENT . . . . . . . . . . . 2 INDUSTRIAL DEVELOPMENT. . . . . . . . . . . . . . . . . . . . . . 8

iv

ATMOSPHERE & AIR POLLUTION . . . . . . . . . . . . . . . .

14

CLIMATE CHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18

END NOTES & SOURCES FOR GRAPHICS . . . . . . . . . . . . . . . . . . .

25

Global Trends: Growth in Economy, Energy & Emissions

in Economic Activity, Energy, Electricity Use, and Emissions

Electricity production GDP Industrial value added

300

Energy use Carbon Dioxide emissions

• Energy consumption has generally grown more slowly than economic activity as energy efficiency has improved and economies have shifted to less energy-intensive industries and services.

250

• Electricity use has outpaced GDP growth, particularly in developing countries, as access to electricity and the use of appliances have grown with rising living standards.

150

• Energy efficiency combined with increased use of natural gas — and to a lesser extent nuclear and renewable energy — have helped keep the growth in CO2 emissions slightly lower than the growth in energy consumption.1 Energy Use per Capita & GDP per Capita 8000

1980 1990

7000

35000 30000 25000

5000 20000 4000 15000 3000 10000

2000

5000

1000

0

0 United States

Japan

European Europe & Monetary Central Union Asia EIT

Middle East & North Africa

Latin Dev'g East SubAmerica & Asia & Saharan Caribbean Pacific Africa

South Asia

Note: Europe & Central Asia EIT (Economies in Transition) excludes EU accession countries.

Source: World Bank, World Development Indicators 2005.

Current International $

Kg of Oil Equivalent

GDP per Capita 2002 ($PPP)

Population Sulfur Dioxide emissions

200

100 50

Note: Index: 1971=100 Source: UNDESA-DSD, based on data from World Bank, World Development Indicators 2005, and Stern, D., 2005.

• Globally, per capita CO2 emissions remained roughly constant, as emissions grew at about the same rate as population.2

2002

6000

1

350

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

INTRODUCTION

GLOBAL TRENDS

• Since the early 1970s, particularly in developed countries, major investments in technologies to control SO2 emissions, combined with greater use of low-sulphur fuels, have contributed to reducing SO2 emissions. 3 In developing countries, per capita energy consumption is between one-third and one-fifteenth what it is in developed countries. While per capita energy consumption is correlated with per capita income, Europe and Japan are considerably less energy intensive for their income levels than is the USA. Among developing countries, South Asia’s lower per capita energy consumption than sub-Saharan Africa’s, despite slightly higher per capita income, results in part from a lesser reliance on inefficient biomass fuels.

Energy use is closely linked with economic development, poverty reduction and the provision of vital services. Yet, energy production, distribution and consumption can have adverse effects on the local, regional and global environment. Efforts are underway across the globe to improve access to modern energy services, increase energy efficiency, reduce air pollution and shift to cleaner energy sources.

Access to energy is steadily improving

Liquefied Petroleum Gas: Residential Use

Over the past fifteen years, progress has been made in electrification in all developing regions. However, electrification rates in South Asia and subSaharan Africa remain a half to a quarter of those in the rest of the world.

100

1990 80

40

Kg per capita 2002

Electrification in Developing Regions

2003

30

20

10 60

0 Sub-Saharan Africa

Source: IEA, 2002 & 2005.

South Asia

Dev’g East & South-East Asia

Middle East

Latin America

North Africa

Pakistan

Ghana

Vietnam

Honduras

Cote d'Ivoire

India

Sri Lanka

Cuba

China

Costa Rica

South Africa

Colombia

Guatemala

Peru

Senegal

Gabon

Thailand

Malaysia

Brazil

Tunisia

Egypt

El Salvador

20

Bolivia

40

Algeria

0 Ecuador

% of Households

ENERGY FOR SUSTAINABLE DEVELOPMENT 2

ENERGY FOR SUSTAINABLE DEVELOPMENT

Source: UN, Energy Balances & Electricy Profiles, 2002; UN Demographic Yearbook, 2002; Unpublished data from the World LP Gas Association.

Liquefied petroleum gas distribution networks and household consumption are growing steadily, in some cases replacing traditional biomass, with environmental, social and economic benefits. The switch to modern household energy sources can be of particular benefit to women and girls — in terms of health, schooling, and productive employment.

The world is gradually shifting to cleaner forms of energy, but biomass is still widely used in the household sector of some developing regions

World Total Primary Energy Supply by Source 1985 (7703 Mtoe*)

2003 (10723 Mtoe*) Nuclear Energy 6.5%

Nuclear Energy 5.1%

More than 2.4 billion people still rely on traditional biomass, including wood, agricultural residues and animal dung, for cooking and heating, with severe health impacts due to indoor air pollution. Biomass remains the main source of energy in sub-Saharan Africa. South Asia has seen a steep drop in the biomass share of energy since 1980, as has East Asia, as economic growth has enabled people to shift to cleaner and more convenient forms of energy.

Natural Gas 18.4%

Oil 36.4%

Traditional Biomass 9.5%

Natural Gas 21.2% Biomass 11.3%

Coal 26.4%

Hydro 2.2% Other 0.3%

Oil 34.4%

Modern Renewables 4.1%

Hydro 2.2%

Coal 24.4% Modern Biomass 1.4% Geothermal 0.4% Wind 0.06%

Source: IEA, 2002 & 2005.

Biomass as a Share of Total Primary Energy Supply

*Mtoe is million tonnes of oil equivalent

Solar 0.05%

Fossil fuels dominate energy supplies

Fossil fuels are expected to continue to dominate energy supplies for the next few decades at least. Oil remains the single most important fuel, amounting to 35% of total primary energy supply, with the largest share of the increase in oil use coming from the transport sector. From 1971 to 2003, global oil consumption in transport increased four times faster than consumption in industry. 4 Use of natural gas, which is cleaner and less carbon intensive than oil or coal, is growing faster than other fossil fuels, driven mainly by power generation where technological innovation, economics and regulatory changes have resulted in gas becoming the preferred fuel, at least until recent price hikes.

10 %

30 %

65 %

10 0%

Source: World Bank, World Development Indicators, 2005.

3

No Data

Renewables other than hydro and biomass, including geothermal, solar and wind energy, are growing faster than any other energy source, but still account for only a tiny fraction of global energy supply.

Oil is the most highly traded commodity, as it is essential to all modern economies yet commercially recoverable reserves are found in relatively few countries. Reliance on oil imports is growing rapidly in some major economies: e.g., in China, as recently as 2000 net imports accounted for 30% of consumption, while in 2004 they accounted for half; in the United States, from 1991 to 2004, net oil imports went from 40% to 59% of domestic consumption.

Refiner Acquisition Cost of Imported Crude Oil (IRAC)

90

Refiner Acquisition Cost of Imported Crude Oil (IRAC) CPI-U adjusted

80

Natural Gas Wellhead Price (Dollars per Thousand Cubic Feet)

10

Dollars per Barrel (Oil)

70

8

60 6

50 Oil price (constant)

40 4 30 Oil price (current)

20

2

Gas price (current)

10 0 2005

2000

1995

1990

1985

1980

1976

0

Note: Real oil price in constant 2005 US$: US Bureau of Labor Statistics seasonally adjusted urban consumer price index (CPI-U) is used.

Source: New York Mercantile Exchange (NYMEX); www.bls.gov

Crude Oil Consumption & Net Imports, 2004

Crude Oil Production & Net Exports, 2004

20.7

Net Imports

14

Net Exports

14 12

12

Million Barrels per Day

Energy integration through trade is a growing trend

12

100

Million Barrels per Day

ENERGY FOR SUSTAINABLE DEVELOPMENT

International gas prices have risen in late 2005 and early 2006 to the highest levels in history. Oil prices are at record highs in current dollars, but below the peak of the early 1980s when adjusted for inflation.

These high prices are promoting energy conservation and efficiency efforts and making alternative energy sources, such as renewable energy, more competitive.

However, the possibility of continuing price increases is raising concerns over adverse global economic impacts. Energy price volatility poses problems for sustainable development in both exporting and importing countries.

Crude Oil & Natural Gas Prices

Dollars per Thousand Cubic Feet (Gas)

4

Higher energy prices are promoting energy efficiency but also causing concerns

10 8 6 4

10 8 6 4 2

2

0

0 United States

Source: EIA, 2004.

Japan

China

Germany

France

India

Saudi Arabia

Source: EIA, 2004.

Russia

Norway

Iran

Venezuela

UAE

Nigeria

Cross-border gas trade has been growing rapidly, especially LNG trade

Rapid growth of natural gas networks across national boundaries, particularly in Europe but also in Latin America and North Africa, is putting pressure on legal, regulatory and policy frameworks that have not kept pace.5a From 1980 to 2003, world natural gas imports have risen by 6.2% a year, on average, increasing as a share of gas consumption from 13% to 29%.5b Over the past decade, global liquefied natural gas (LNG) imports have been growing by 10 billion cubic metres per year — an average annual increase of 7.2%.

Electricity grid interconnections enhance energy security

Electricity trade among countries is also growing, particularly in Europe, enhancing security of supply and increasing competition among suppliers. For a few countries (e.g. Paraguay, Mozambique, and Lithuania), exports represent a very sizeable proportion of total electricity generation.6a In southern Africa, a power pool with 12 interconnected countries has been operating successfully for the past decade. Although electricity trade within the pool is relatively small, it is growing at over 20% per year. 6b Electricity Imports

World Natural Gas Supply

600

Asia & Oceania Imports

2500000

1500000 1000000 500000 0

500

Africa

400

Middle East

Consumption

2000000

Billion kWh

Million Cubic Metres

3000000

1975

1980

1985

1990

1995

2000

2001

2002

2003

300

Eastern Europe & Former U.S.S.R.

200

Western Europe

100

Latin America

0

North America 2003

2000

1995

1990

1985

1980

Source: IEA, Natural Gas Information 2004 Online Database.

Energy Consumption per Tonne of Steel Source: IEA, 2004.

Tonnes of Oil Equivalent

1.5

1980

1.2

1990

Energy efficiency in industry is improving

2002

A wide variety of energy efficiency policies and programmes have been implemented in many countries to increase productivity while reducing energy consumption. Many of these measures were initiated between 1973 and 1986 in response to energy price increases and have achieved substantial gains, as illustrated by the steel sector, where process improvements have played an important role. The recent increase in fuel prices is promoting further investments in energy efficiency, which will increase productivity in the future. 7

0.9 0.6 0.3 0.0 CIS

5

Latin America

North America

Western Europe

South Asia

Source: World Energy Council, based on data from ISII and ENERDATA.

China

Japan

ENERGY FOR SUSTAINABLE DEVELOPMENT

Energy consumption is a main source of urban air pollution

Indoor air pollution is a major cause of mortality in Africa and Asia, while outdoor air pollution is damaging health in cities worldwide.

Urban air pollution has its source mainly in industry and transport. Lack of emissions control technologies in industry, power generation, district heating and transport vehicles is a main reason for much of the observed air pollution in cities. Rapid growth in motor vehicle traffic has compounded the challenge of controlling air pollution in many metropolises.

Urban Air Pollution

Lack of modern energy services contributes to ill health and early death

Reliance on traditional fuels for cooking and heating in poorly vented conditions has serious health impacts on women and children in developing countries. Almost 2 million children die each year from respiratory infections caused in part by such indoor air pollution, with countries in Africa and Asia suffering the most. Indoor air pollution has a bigger health impact than urban air pollution by a large margin. 8

Proportion of DALYs attributable to selected risk factor

Indoor Smoke from Solid Fuels <0.5%

0.9%

1.9%

3.9%

7.9%

15.9%

16%+

No Data

Source: WHO, World Health Report, 2002.

Note: Disability Adjusted Life Years (DALYs) is a measure of disease burden which incorporates both mortality and morbidity.

Proportion of DALYs attributable to selected risk factor

6

<0.5%

0.9%

Source: WHO, World Health Report, 2002.

1.9%

3.9%

7.9%

15.9%

16%+

No Data

Transport Policies to Enhance Energy Efficiency & Reduce Air Pollution Note: Key country and regional examples of particular measures are highlighted in orange and yellow in the maps.

Clean Fuels & Vehicles:

Integrated Urban Road Pricing:

Vehicle fleets in many cities around the world are converting to compressed natural gas (CNG). This is substantially reducing air pollution in Asian cities as 3-wheelers are converted. Ethanol is also being blended with gasoline to reduce pollution and dependence on oil. On the vehicle side, governments are adopting more rigorous vehicle standards, such as EURO3 and EURO4, particularly in the major cities of Asia. Cities are also phasing out 2-stroke engines, which are highly polluting. 9a

Singapore has long had a road pricing scheme with tolls for those entering the city center. This has now been fully automated and the tolls are variable with the time of day and day of week, to reflect congestion. A similar system has been established in London and the EU has launched a European Transport Pricing Initiative involving eight other cities.9 b

Bus Rapid Transit Systems: A new paradigm in urban mass transit is being developed in a number of cities, particularly in Latin America and Asia, which shows promise for revolutionizing bus systems around the world. BRT systems get buses out of traffic, increase their average speeds, improve their reliability and convenience, increase system capacities and attract high ridership levels, thus increasing the profitability of systems. They are much less expensive and represent a significantly more efficient use of capital than construction of rail-based metros and, can be implemented in a fraction of the time.

Intelligent Transport Systems (ITS): ITS encompass a broad range of communicationsbased information, control and electronics technologies to help monitor and enhance system wide performance, reduce congestion, provide alternate routes to travelers and enhance productivity. 9c

7

Pedestrian & bicycle facilities: As cities change their vision of future development toward a more peoplecentered approach, they are building more infrastructure dedicated to pedestrians and bicycles as a means of encouraging a safer and healthier environment.

INDUSTRIAL DEVELOPMENT

INDUSTRIAL

DEVELOPMENT

Sustained industrial development has been a major contributor to economic growth and poverty reduction over the past half century, notably in Asia. Industrializing countries have benefited from liberalization of markets for industrial goods, improvements in telecommunications, and reduced transportation costs. Not all countries have shared in those benefits, however: limited supplies of human capital, poor infrastructure, weak government institutions and unfavorable investment climates have been key constraints.10

Trade as a Share of GDP East Asia & Pacific High Income OECD Latin America & Caribbean Europe & Central Asia

100%

South Asia Middle East & North Africa Sub-Saharan Africa

80%

Integration of the world economy through expanding trade, investment and technology flows continues, though unevenly

60%

40%

Source: World Development Indicators Online Database.

2004

2002

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

1978

1976

0%

1974

20%

8

The developed countries remain the worldâ&#x20AC;&#x2122;s largest industrial producers, but the centre of gravity has begun to shift towards the developing world.

International trade (exports plus imports) increased from about 35% of global GDP in 1974 to almost 50% in 2002, with increases in almost all regions. In East Asia, the increase was four-fold, surpassing the share in high-income OECD countries, as well as in export commodity dependent regions such as the Middle East and sub-Saharan Africa. At the same time, production has become more widespread geographically and more integrated through international production chains. Increasing trade has also been driven by increased foreign direct investment, particularly towards developing countries.11

Increasing trade in manufactures has supported industrialization and economic growth in a number of developing countries.

East and South-East Asia has experienced the fastest rate of industrialization

With the collapse of state industries in countries with economies in transition, those countries have been overtaken by Latin America in terms of manufacturing value added (MVA) per capita since 1990. East and South-East Asia has more than doubled MVA per capita, and if China is excluded, the region’s MVA per capita now exceeds by far Latin America’s. South Asia has also achieved a marked increase, but from a much lower initial level. Meanwhile, sub-Saharan Africa has seen an industrial decline, as measured by MVA per capita.

Developing countries — especially in Asia — account for a growing share of global manufactured exports

Regional Manufacturing Value Added per Capita

Industrialized countries still account for over two-thirds of world manufactured exports, but developing countries’ share has increased steadily. Since 1980, East Asia has shown the largest gains, followed by Latin America and the Caribbean — but only as a result of the sharp growth in Mexico’s exports as NAFTA came into force. South Asia exhibits the second largest proportional increase, although from a very low base. 12

(1995 US$, Population-Weighted Averages) Least Developed Countries

1990 2002

South Asia Sub-Saharan Africa Middle East and North Africa East and South-East Asia

Regional Share of Manufactured Exports

Transition Economies 82%

Latin America and the Caribbean East and South-East Asia, excluding China

Industrialized countries East Asia Latin America and the Caribbean Transition economies Middle East and North Africa South Asia Sub-Saharan Africa

18%

1980 0

200

400

600

800

1000

1200

80%

20%

Source: UNIDO, 2005.

1990

69%

31%

2000

0

1000

2000

3000

(Billions, Current US$)

9

Source: UNIDO, 2004.

4000

5000

The composition of global exports is shifting towards higher technology content. Since the early 1990s, developing and transition economies have increased their export market shares most in information and communications technology (ICT) products, and developing countries competitive in those products have generally enjoyed the fastest manufacturing sector growth. High-technology exports are thought to offer the greatest learning opportunities, contributing to strong productivity growth.

The slower growth of low-technology and natural-resource-based exports partly reflects the continuing market protection of labour-intensive sectors like textiles and clothing in developed countries, and partly the high Most Favoured Nation tariffs and increasingly stringent non-tariff barriers in the agrifood sector. 13 In absolute terms, however, exports of low-tech manufactures are still important for many developing and transition economies.

Exports of Manufactures by Technology Content: Average Annual Growth Rates, 1995-2003 (Nominal Values)

Small countries exporting clothing and textiles face major challenges

The expansion of export-oriented labour-intensive textile and garment industries in countries like Bangladesh, Cambodia and Mauritius has made an important contribution to pro-poor industrial development.

The clothing and textile sector employs workers with relatively low educational attainment, as well as a high proportion of women, which can contribute to greater gender equity.

However, smaller clothing exporting countries that developed their industries under the pre-2005 quota regime for textiles and clothing are facing the challenge of adjusting to competition from large, low-cost producers such as China and India. This will pose particular challenges for small countries relying heavily on clothing exports and distant from major markets, such as Lesotho, Madagascar, Mauritius and Tajikistan, to name a few. 14

Clothing & Textiles as a Share of Total Exports & Manufacturing Employment 80

Employment in Clothing as a % of Manufacturing Employment, 1996-2005

70 15

Developing & Transition Countries Developed Countries

12

Percentage

INDUSTRIAL DEVELOPMENT

The shares of high- and medium-technology production and export have risen rapidly in recent years, particularly in developing countries

Clothing & Textiles as a % of Total Exports, 2003

60 50 40

9

30 6 20 3

10 0

0 ICT

Other High Technology

Medium Technology

Low Technology

Natural Resouce-based

Note: The technology categories are as per UNIDO, 2005 Industrial Development Report.

Source: UNDESA-DSD, based on COMTRADE data.

10

s

tiu

uri

Ma

n Ba

de gla

sh

*

d Ma

ag

as

ca

r* Pa

kis

tan

*

* Employment=textiles and clothing Source: ILO, 2005.

Ca

mb

od

ia Sri

a

nk

La

Ro

ma

nia

la

ma

ata

Gu

Ch

ina

* Mo

roc

co

rk Tu

ey

Industrial development can follow different patterns Structure of Industrial Value-Added in Malaysia, 1975-2000

Mauritius has succeeded in transforming itself from a poor sugar exporter into a stronger, more diversified economy through production and export of clothing and textiles, as well as tourism. Supportive policies included establishment of an export processing zone, which allowed duty-free import of inputs for export production.

100%

Other manufactured products Machinery, transport, professional and scientific equipment

80%

Iron and steel and other non-ferrous metals 60%

Pottery and china, glass and other non-metallic mineral products

40%

Chemicals, petroleum, rubber and plastic products

20%

Paper and products Wood products and furniture

Structure of Industrial Value-Added in Mauritius, 1975-1998 1999 2000

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

Textiles, apparel, leather products 1977

100%

1975

0% Other manufactured products Machinery, transport, professional and scientific equipment

80%

Food, beverages and tobacco

Source: UNIDO INDSTAT3, ISIC Rev.2.

Iron and steel and other non-ferrous metals 60%

Pottery and china, glass and other non-metallic mineral products

40%

Chemicals, petroleum, rubber and plastic products Paper and products

20%

Wood products and furniture 1998

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

Textiles, apparel, leather products 1975

0%

Malaysia, once a commodity-based economy, has diversified to become a leading producer and exporter of manufactured goods, especially electrical and electronic equipment, even as it remains a major world supplier of agro-industrial products based on palm oil and rubber. 16

Food, beverages and tobacco

Source: UNIDO INDSTAT3, ISIC Rev.2.

Structure of Industrial Value-Added in China, 1980-2001

In Chile, the development of agro-industrial clusters, such as salmon farming, wine and fresh fruit, shows that natural-resource-based growth can also be sustainable if focused on high value products. The promotion of public-private partnerships was instrumental in providing research and technology extension services in new activities that later proved to be very profitable. 15

100%

Other manufactured products Machinery, transport, professional and scientific equipment

80%

Iron and steel and other non-ferrous metals 60%

Pottery and china, glass and other non-metallic mineral products

40%

Chemicals, petroleum, rubber and plastic products

20%

Paper and products

2000 2001

1998

1996

1994

1992

1990

1988

1986

1984

1982

Structure of Industrial Value-Added in Chile, 1975-2000

1980

Wood products and furniture 0%

Textiles, apparel, leather products Food, beverages and tobacco

Source: UNIDO INDSTAT3, ISIC Rev.2.

100%

Other manufactured products Machinery, transport, professional and scientific equipment

80%

Iron and steel and other non-ferrous metals 60%

Pottery and china, glass and other non-metallic mineral products

40%

Chemicals, petroleum, rubber and plastic products

20%

Paper and products Wood products and furniture

Source: UNIDO INDSTAT3, ISIC Rev.2.

11

1999 2000

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

Textiles, apparel, leather products 1975

0%

Food, beverages and tobacco

In China, rapid economic growth has built on production and export of a range of manufactured products. Productivity increases based on learning from technologically advanced foreign firms have also been significant drivers. 17

Administrative Costs to Start a Business

Number of ISO Certificates

INDUSTRIAL DEVELOPMENT

Governments provide the regulatory framework within which entrepreneurs operate. While regulation is necessary to protect workers, consumers and the environment, small and medium enterprises (SMEs) are especially handicapped by excessive regulation as they have few human and other resources for compliance. Since SMEs tend to be more labour-intensive, onerous regulation can also impede job creation. Many low-income countries are among those in which it is costliest to start and run a business. 18

Participation in CSR Initiatives ISO 14001 Global Compact Participation GRI Reporting

100000 80000

3000 2500 2000

60000 1500 40000 1000 20000 0

500 1998

1999

2000

2001

2002

2003

0

Source: UNDESA-DSD based on unpublished information from the UN Global Compact, and the Global Reporting Initiative; ISO Survey 2004.

Regional Share of ISO 14001 Certifications, 2004

(as % of GNI per capita)

South and East Asia (excluding Japan) 18% North America 7.5 %

Japan 21.6 %

Africa and West Asia 3.3 % Europe 43.9 %

Central and South America 3.3 % Australia and New Zealand 2.3 %

Source: ISO Survey of Certifications 2004.

Top 50 Companies Membership Status Top 50 Companies from Europe

Source: World Bank, 2005.

1-10

11-20

21-80

81+

No Data

Top 50 Companies from United States

GRI Global Compact Either GRI or Global Compact

Top 50 Companies from Developing Countries

12

2004

Company Participation & Reports

A supportive environment for entrepreneurs can encourage industrial development

Corporate Social Responsibility is a growing movement in response to public pressure Corporate Social Responsibility (CSR) refers to business activities guided by codes of conduct that exceed legal and ethical standards relating to labour conditions and environmental impacts. The globalization of production networks means that corporations increasingly source their products and services from overseas, making it more difficult to regulate corporate activities through a single countryâ&#x20AC;&#x2122;s national legal and regulatory mechanisms. CSR has been demanded by various stakeholders as one response to this challenge.

0

20

40

60

80

100

Percentage Reporting Membership

Source: UNDESA-DSD based on UNCTAD 2005, the Global Compact and the GRI.

Major international CSR initiatives include systems of general norms such as the UN Secretary-Generalâ&#x20AC;&#x2122;s Global Compact and the OECD Guidelines for Multinational Enterprises, process standards such as the ISO 14001 standard for environmental management systems of the International Organization for Standardization (ISO), and reporting guidelines such as those of the Global Reporting Initiative (GRI). In 2008, ISO plans to release the ISO 26000 guidance standard on social responsibility, which is currently under negotiation.

Examples of Corporate Social Responsibility Legislation

Canada: Banks and financial institutions with over $1 billion in equity must produce public accountability statements regarding their contribution to the Canadian economy and society.

United Kingdom: The government requires pension funds to disclose how they take into account social, environmental and ethical factors in their investment decisions.

Netherlands: The government has incorporated the OECD Multinational Enterprise Guidelines into official support programmes for export, overseas investment promotion and international cooperation.

Brazil: Companies that voluntarily undertake corporate governance practices and disclosure beyond what is mandated receive a special listing on the SĂŁo Paulo stock exchange.

Ghana: Regulations have been introduced stipulating that companies tendering for timber cutting permits will be evaluated in terms of their respect for the social and environmental values of local residents. Logging companies are required to secure a â&#x20AC;&#x153;social responsibility agreementâ&#x20AC;? with the customary owners of the land.

13

Public demand for better working conditions and environmental responsibility in global production systems is influencing government policy.

France: The government has stipulated that publicly traded companies should include auditable information on social and environmental performance in their annual reports.

Nigeria: Oil and gas companies are required to contribute 3% of their annual revenue to the Niger Delta Development Commission.

Kenya: The government established a council to improve environmental and labour standards in the flower industry. Growers must be certified in bi-annual audits.

ATMOSPHERE & AIR POLLUTION 14

ATMOSPHERE & AIR POLLUTION Developed countries’ efforts to address air pollution beginning in the 1970s have resulted in the substantial reduction of serious pollutants. Due to knowledge of the impacts of air pollution and the availability of pollution control technologies, developing countries are “turning the corner” on air pollution sooner. Nonetheless, the quality of air in many cities in developing countries is far below WHO recommendations.

Despite some improvement, in many Asian cities air pollution levels are an order of magnitude higher than in major developed country cities.

Particulate air pollution has been reduced worldwide but remains high in large cities in developing countries

The main human sources of particulate matter are power plants, industry, vehicles, household cooking and heating fuels, construction and waste incinerators. Particularly high concentrations of suspended particulates are found in countries relying on coal for energy, notably in Asia.

High levels of airborne particulates cause respiratory diseases, as well as inhibiting plant growth and requiring costly filtration equipment in certain high-tech manufacturing industries.19 The WHO does not set guideline values for particulates because there is no evident threshold below which there are no adverse health effects. Long-term exposure to particulates appears to be associated with a reduction of life expectancy of up to 2 years and higher prevalence of bronchitis and reduced lung function in children.20 Since about 1970 in developed countries, and more recently in developing countries, particulate air pollution has been reduced by particulate control systems on power plants and industrial facilities, use of cleaner fuels such as natural gas, and requirements for catalytic converters on vehicles. Nonetheless, particulate concentrations are still very high in large cities in developing countries whose economies are growing yet are still in the process of introducing pollution control measures. 21

Particulate Matter (Micrograms per m3) 1999

¬

¬

¬

¬ ¬¬

¬

¬ ¬ ¬ ¬ ¬¬ ¬¬¬ ¬¬ ¬ ¬ ¬ ¬¬ ¬ ¬¬ ¬¬ ¬¬ ¬ ¬ ¬¬

¬¬¬¬¬¬ ¬ ¬¬

¬

¬¬ ¬

¬

¬

¬ ¬ ¬¬ ¬¬¬ ¬ ¬¬ ¬ ¬ ¬¬¬ ¬ ¬ ¬ ¬ ¬¬ ¬ ¬ ¬¬ ¬¬ ¬ ¬ ¬¬ ¬¬¬¬¬¬ ¬¬¬¬¬ ¬¬¬¬¬¬ ¬ ¬¬ ¬¬¬ ¬¬¬¬¬ ¬¬¬ ¬ ¬ ¬¬¬¬ ¬ ¬¬

¬

¬¬

¬ ¬ ¬¬

¬

¬

¬

¬

¬

0-25

51-100

26-50

101-200

¬

Note: Particulates refers to PM10.

Source: World Bank, World Development Indicators 2005, and World Bank Air Pollution in World Cities database.

Sulphur Dioxide Pollution

Particulate Air Pollution

1000

Delhi 96 87 Kolkata Guangzhou Beijing Bangkok 99 70 03 95 91 92 Shanghai 91 92 95 95 81 90 100 Mumbai Seoul 96 03 76 99 Manila 70 Jakarta 90 Santiago 98 87 04 96 00

Nairobi 78

95 04 04 Mexico City 99

10

95

98

Tokyo 74

94

New York 92 86

London

SO2 Concentration (μg/m3)

Suspended Particulate Matter (μg/m3)

1000

Los Angeles 99 04 99

90

91 Beijing 100

10

91 94 Guangzhou 91 92 Kolkata 91 97 Mumbai 03 96 87 03 Delhi 03

Mexico City 99 Shanghai 90 99 Cape Town

70 London

93 Seoul

97 92

03

94

80

98

96 Santiago 03

98

New York 98 04

02

99 94

02

98

Los Angeles 00 04

1 100

1,000

10,000

100,000

1 100

1,000

Note: Logarithmic scale; Numbers at ends of lines indicate years of measurements: e.g. 95 = 1995; PM10 data for London, Mexico City and Santiago.

Source: City specific sources are noted in the Sources for Graphics.

Global SO2 emissions have decreased, but concentrations remain above the WHO threshold in many cities in developing countries

Sulfur dioxide (SO2) emissions result from the combustion of sulphur-containing coal and oil for power generation, industry, motor vehicles and domestic cooking and heating. SO2 causes respiratory illness as well as acid rain that affects natural ecosystems and buildings. Since the 1970s, developed countries have reduced emissions from power plants and industrial boilers, introduced catalytic converters to reduce SO2 emissions from motor vehicles, and reduced sulphur in motor vehicle fuel. As a result, cities such as London and Los Angeles, once heavily polluted, now show concentrations well below the WHO recommended threshold.22 In Eastern Europe, economic restructuring following the end of central planning resulted in the closing of many energy-inefficient and polluting facilities and the introduction of stricter environmental standards and cleaner technologies, particularly in new members of the EU.23

100,000

10,000

GDP per capita (2000$)

GDP per capita (2000$)

15

65 Tokyo

Note: Logarithmic scale; Numbers at ends of lines indicate years of measurements: e.g. 95 = 1995.

Source: City specific sources are noted in the Sources for Graphics.

Sulphur Dioxide (Micrograms per m3) 1995-2001

¬

¬ ¬

¬

¬ ¬ ¬¬¬ ¬ ¬ ¬¬ ¬ ¬¬ ¬ ¬¬ ¬ ¬ ¬ ¬

¬

¬

¬

¬

¬¬ ¬ ¬¬

¬¬ ¬¬¬ ¬ ¬ ¬¬¬¬ ¬¬ ¬¬ ¬

¬¬

¬¬

¬¬

¬

¬

Note: WHO Guideline Value=50μg/m3.

Source: World Bank, World Development Indicators 2005.

¬

0-25

51-100

26-50

101-200

¬

201-450

¬

Regional Sulphur Emissions

Eastern Europe

20000

North America Western Europe

GgS

15000

Concerted global action guided by a multilateral agreement has been highly effective in phasing out CFCs 10000

Asia

5000

South America

Africa

Middle East Oceania 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Source: Stern, D. 2005.

Consumption of Ozone Depleting CFCs 350

Russian Federation Central & Eastern Europe China Other developed countries

United States Western Europe Japan Other developing countries

300 250 200

Phase out date for industrialized countries (Phase out date for developing countries is 2010)

150 100 50 0 1986

16

Global action in phasing out CFCs and leaded gasoline is protecting the ozone layer and reducing airborne lead pollution.

25000

Thousands of ODP Tonnes

ATMOSPHERE & AIR POLLUTION

In Asia SO2 emissions have increased steadily since the mid 1970s due to the combustion of coal and high-sulphur oil that is fueling the rapid growth of emerging economies; 24 it is too early to know whether the apparent recent downturn in emissions will be sustained.

1988

1990

1992

Note: ODP is Ozone depleting potential.

Source: UNEP Ozone Secretariat.

1994

1996

1998

2000

2003

Since 1985, when depletion of the stratospheric ozone layer that protects the Earth from damaging ultraviolet radiation was recognized as an important problem, efforts have been made to reduce and eliminate the use of chlorofluorocarbons (CFCs) and other ozone depleting substances (ODS). The Montreal Protocol on Substances that Deplete the Ozone Layer, adopted in 1987 and strengthened in a number of subsequent amendments, called for the phase-out of the use of CFCs in developed countries by 1996 and in developing countries by 2010. A Multilateral Fund was established in 1990 to assist developing countries in phasing out ODS with the Global Environment Facility supporting phase-out in the economies in transition.

By 2003, developed countries had reduced consumption of CFCs by over 99% and developing countries by more than 50%. Taking into account the long delay between surface emission and diffusion of CFCs into the upper atmosphere and their long residence time in the stratosphere, the CFC concentration in the stratospheric ozone layer is expected to decline to pre-1980 levels in the middle of this century. 25 However, some challenges remain. Some of the chemicals replacing CFCs are also ozone depleting substances although less damaging than CFCs, and there are difficulties in replacing the ODS methyl bromide.

Airborne lead is declining in all regions as leaded gasoline is phased out

The switch to unleaded gasoline has sharply reduced blood lead levels

Airborne lead pollution increased over much of the 20th century with increasing motorization and the use of leaded fuel. Lead additives were used from the 1930s until the 1970s, when the recognition of serious health effects, especially in children, eventually led to a ban in many countries. The phase-out of lead in gasoline also allowed the introduction of catalytic converters, the most cost-effective method of reducing harmful exhaust emissions. As a result of the phase-out of leaded gasoline, there have been substantial drops in concentrations of lead in the air and in the human body. 26

The costs of leaded gasoline phase out are modest and the health benefits substantial. The political commitment of government is a key factor along with industry cooperation, and the recent action by sub-Saharan African governments to eliminate lead from gasoline as of 1 January 2006 is noteworthy. All high-income countries have now phased out leaded gasoline, as have most countries in Latin America.

However, in Asia-Pacific, Eastern Europe and the Middle East, a number of countries still sell leaded gasoline as well as unleaded. In Eastern Europe, most countries have recently banned leaded gasoline or will do so in 2006.27, 28

Leaded Gasoline Phase-out Mid 1990s

No Data

Leaded

Unleaded

Leaded/Unleaded

Level of Lead Concentration in Gasoline and in Blood 0.9 0.8 Cape Town, South Africa Barcelona, Spain

0.7

Caracas, Venezuela

0.6

Turin, Italy

0.5 Belgium

United Kingdom Athens, Greece

Mexico City, Mexico

Source: Lovei, M., 1998.

2005

Leaded

Unleaded

Landskrona, Sweden United States

0.4

Helsinki, Finland

0.3 0.2

Switzerland

0.1

Leaded/Unleaded 20

15

10

Ontario, Canada 5

0

Average Concentration of Lead in Gasoline (g/L)

Christchurch, New Zealand

0

Average Concentration of Lead in Blood (Îźg/dL) Note: Time periods as follows â&#x20AC;&#x201D; Athens: 1982-1993; Barcelona: 1984-1994; Cape Town: 1984-1990; Caracas: 1986-1991; Christchurch: 1978-1981 to 1994; Helsinki: 1983-1996; Landskrona: 1978-1994; Mexico City: 1988-1993; Ontario: 1984-1992; Switzerland: 1984-1985 to 1992-1993; Turin: 1980-1993; United Kingdom: 1979-1995; United States: 1976 to 1988-1991.

Source: Thomas, V., et al. 1999.

17

Source: UNEP.

Note: In some instance, a country may be declared unleaded (as leaded gasoline is no longer produced) although the remaining stocks of leaded gasoline are still being sold. This is currently the case of some African countries. In addition, some countries with a very small percentage of leaded fuel in the market declare themselves unleaded and are labeled as such.

CHANGE

The Intergovernmental Panel on Climate Change (IPCC) projects that, due to the accumulation of carbon dioxide in the atmosphere, global mean temperatures could increase by between 1.4 and 5.8 degrees Celsius by 2100. The IPCC states that there is compelling evidence that most warming observed in the last 50 years can be attributed to human activity.29

GHG emissions from Annex-I countries decline but largely due to lower emissions from economies in transition

Aggregate greenhouse gas (GHG) emissions for Annex I Parties declined by 5.9% over the period 1990–2003. Total emissions for the 14 Parties with economies in transition (EIT Parties) have decreased by almost 40%, although most of these Parties reported that CO2 emissions increased from 2000 to 2003. Emissions from other Annex I Parties as a group increased by 9.2%.

“One of the greatest environmental and development challenges in the twenty-first century will be that of controlling and coping with climate change.”

18

—Kofi Annan, “In Larger Freedom”, 2005

Changes in GHG Emissions (without LULUCF) from Annex I, EIT & Non-EIT Parties

10

Non-EIT Annex I EIT

9.2%

0

Change Compared to 1990 level (%)

CLIMATE CHANGE

CLIMATE

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

-5.9% -10

-20

-30

-40

-50

Note: LULUCF: land use, land use change and forests; EIT: economies in transition.

Source: UNFCCC, 2005.

-39.6%

Many countries are using innovative policy instruments to reduce GHG emissions in cost-effective ways.

While many countries have made significant progress towards reaching their Kyoto goals, others have far to go

Several non-EIT Annex I Parties, notably in the EU, had individually achieved or exceeded their Kyoto commitments as of 2003. On the other hand, several countries have emissions well above their Kyoto commitments. Of the EU-15, only four countries — France, Greece, Sweden and the UK — have thus far reached their EU target, while Germany is close. 30 Change in GHG with LULUCF (%), 1990-2003 Lithuania -77.5 Latvia -66.4 Estonia -65.9

Kyoto target -8 Belarus* -50.5 Ukraine -49.9 Russian Federation -48.1

Kyoto target -6 Kyoto target 0

Poland -39.7 Bulgaria -33.6 Slovakia -32.7 Romania -25.6 Czech Republic -25.4 Croatia -24 Germany -19.2 Luxemburg -16.3 Iceland -14.3 United Kingdom -13.5 Norway -7.8 France -5.7 Sweden -5.5 Hungary -5.4 Switzerland -1.4

Kyoto target +1 Kyoto target +10 Annex 1 but NOT party to Kyoto Protocol

Belgium 1.1 Netherlands 1.4 Denmark 4.8 Australia 4.9 Lichtenstein 5.3 Slovenia 6.9 Italy 8.3 Austria 13.3 USA 20.3 Japan 21.4 Greece 24.4 Ireland 24.7 New Zealand 30.7 Spain 31.8 Portugal 34.8 Monaco 37.8 Finland 42.2 Canada 57.5

-96

-88

-80

-72

-64

-56

-48

-40

-32

-24

-16

-8

0

8

16

24

32

40

48

56

64

*Belarus’ Kyoto target is -5% Note: The colours in the legend represent a country's Kyoto Protocol target, while the numbers beside each country indicate the reported % change in greenhouse gas emissions with LULUCF from 1990 to 2003. Hence for example, Lithuania, which has a Kyoto target of -8%, has as of 2003 more than met the target at -77.5%.

LULUCF: land use, land use change and forests; EIT: economies in transition.

Source: UNDESA-DSD based on UNFCCC, 2005.

19

72

CLIMATE CHANGE

GHG emissions from transport grow fastest of any sectoral emissions

The contribution of the energy sector (including transport) to GHG emissions from Annex-I Parties remained roughly steady between 1990 and 2003, with the share in 2003 standing at 84%. Within that total, however, transport emissions — including from international aviation — have increased substantially (21 and 50%, respectively). Of the three major developed economies — EU, Japan and USA — the first saw the biggest percentage increase in transport emissions, combined with a steep drop in industrial emissions. Agriculture, industrial processes and waste management all saw their shares of overall emissions decline over the period but their rates of decline have slowed. 31

GHG emissions from North America and developing Asia grow rapidly

Strong economic growth has more than offset any GHG mitigation measures in the United States and Canada, resulting in increased levels of GHG emissions in North America. Meanwhile, rapid growth in the emerging economies of Asia, powered in large measure by coal combustion, has resulted in a tripling of emissions compared to 1980. For some developing countries with large forested areas and high deforestation rates, land-use change represents a much larger net contributor to GHG emissions than energy and industrial processes. 32

Regional Carbon Dioxide Emissions North America Europe Former USSR

Changes in GHG Emissions 1990-2003

25

Developing Asia OECD Pacific Latin America and the Caribbean

Africa Middle East

7000

20

6000

15

% Change

5 0 EU

Japan

USA

Energy without Transport Transport

Source: UNFCCC, 2005.

3000

1000

-10

-20

4000

2000

-5

-15

Million tonnes of CO2

5000 10

0 1980

1990

1995

2000

2003

Industry Note: CO2 emissions are from fuel combustion; OECD Pacific includes Japan, Republic of Korea, Australia & New Zealand.

Source: IEA 2005.

20

1985

Economic growth in the large emerging economies of Asia has been significantly faster than growth in CO2 emissions

Per capita CO2 Emissions, Population & Total Emissions, 2003

China and India have thus seen the emissions intensity of their economies fall. In many countries with economies in transition, the decline in CO2 emissions has been the result of economic decline.

The Latin American and Caribbean region stands out for the combination of slow economic growth and relatively high emissions growth.

CO2 Tonnes per Capita

Some high-income countries as well as some middle-income ones have seen their CO2 emissions rise more rapidly than economic output.

USA Australia-Korea-New Zealand Russia Japan

25

20

EU-15 New Accession Countries

15

Canada-Mexico Middle East 10 Other Former Soviet Union Non-OECD Europe

5

Latin America and the Caribbean

China

GDP Growth & CO2 Emissions Growth 1990-2003

Other Asia

India

Africa

0 0 Other Asia

100

1000

2000

3000

4000

5000

6000

Population (Millions)

Middle East India

80

Source: UNDESA-DSD, based on IEA 2005.

China

Latin America & the Caribbean

Change in CO2 Emissions (%)

60 40

Japan

20 0 -50 -20 Russia

-40

Australia-Korea-New Zealand

Per capita CO2 emissions vary enormously across countries and regions

Canada-Mexico Africa

World USA EU-15

0

50

100

New Accession Countries Non-OECD Europe

Other Former USSR

-60 -80

Note: Along the dotted line, the % Change in GDP= % Change in CO2.

Source: UNDESA-DSD, based on IEA, 2005.

21

150

200

Change in GDP (%)

High per capita CO2 emissions in the United States — twenty-seven times those of sub-Saharan Africa — mean that, even with a population roughly a fourth of China’s and a third of India’s, it is the world’s largest emitter. In China, the combination of a large population and rapid growth of CO2 emissions in recent years has brought total emissions almost on a par with those of the EU-15. Meanwhile, sub-Saharan Africa’s total emissions are roughly on a par with those of Canada and Mexico combined.33

CLIMATE CHANGE

GEF climate change mitigation projects are making an impact

Over 120 full-scale climate change mitigation projects have been approved by the Global Environment Facility (GEF) since 1991, with GHG reduction goals identified for most. These projects largely aim to abate CO2 emissions from the energy sector. Estimates are that the GEF climate change portfolio will result in a global environmental benefit of over 1.2 billion tonnes of CO2 avoided. While the majority of projects funded address renewable energy, the largest impact by far is attributable to energy efficiency projects.

Estimated CO2 Mitigation Results from GEF Climate Change Projects, 1992-2005

Energy Efficiency 76%, 924 Mt

Other Energy 9%, 107 Mt

Renewable Energy 15%, 179 Mt

With the entry into force of the Kyoto Protocol in February 2005, the Clean Development Mechanism (CDM) was launched

The CDM allows industrialised countries or their companies to earn emissions credits for investments in emissions-reducing projects located in developing countries, while developing countries acquire technology, capital and clean energy. As of March 2006, 135 CDM projects had been registered while more than 500 were in the pipeline. The first group of registered projects principally addresses power generation through renewable energy sources (mostly biomass and run-of-river hydro, and increasingly wind), methane gas recovery and HFC and N2O emissions reduction, but the scope for CDM projects is broad. 34 Geographically, Latin America registers the largest number of CDM projects (60%), followed by Asia-Pacific (34%). In terms of certified emission reductions from those projects, four countries account for over 85%. Three are large countries, so some concentration there is to be expected. The very small fraction of projects in Africa remains a concern.

Source: GEF Project Database.

Registered CDM Projects by Focal Area & by Country/Region: Expected Annual Average CERs, 2008-2012 Renewables 19% HFC & N20 Reduction 52%

Energy Efficiency* 4% Fuel Switch 1% CH4 Reduction and Cement 24%

Other 13.15%

China 16.29%

India 19.33%

* Inter alia, energy efficiency includes conversion from single cycle to combined cycle power generation.

Note: Distribution by the estimated number of certified emission reductions, 2008-2012.

22

Republic of Korea 26.79%

Sources: (Left chart) URC & UNEP, November 2005. (Right chart) UNFCCC March 2006.

Brazil 24.44%

Climate Change Programs Around the World UKâ&#x20AC;&#x2122;s Climate Change Levy is an energy tax applied to industry, commerce, agriculture and the public sector. Companies meeting their agreed-upon targets benefit from an 80% discount on the Levy. The Levy is part of the Climate Change Program (2000) which aims to meet the domestic goal of a 20% reduction in CO2 emissions by 2010, as well as Kyoto Protocol commitments.35

2005 Climate Change Plan for Canada: Legislation is being created that sets mandatory targets for the 700 Large Final Emitters, which are responsible for half of total domestic GHG emissions. Options for compliance include investing in in-house reductions or domestic offset credits and purchasing certified international credits. The Climate Fund is a market-based mechanism that will be responsible for purchasing emissions reduction and removal credits on behalf of the Government of Canada.36

EU Greenhouse Gas Emissions Trading Scheme (2005) is the first international trading system for CO2 emissions in the world and covers about half of the CO2 emissions in the EU. Allocations of emissions allowances are done

by Member-States on the basis of historical emission trends, expected production levels and the respective CO2 emission reduction commitments under the Kyoto Protocol. 45

Green Taxation Plan for Automobiles in Japan, which provides tax relief for low-polluting vehicles and for certain fuel-efficient and low-emissions vehicles, has been in place since 2001, and taxes on old polluting vehicles have been increased.42 Under the Kyoto Protocol Target Achievement Plan approved in 2005, an environmental tax on all fossil fuels is planned for 2007. 43

In the US, climate change mitigation actions are being initiated by several states and municipalities. Currently, 30 states have developed GHG action plans, either independently or under a regional agreement. Actions include voluntary and mandatory mechanisms and have focused on energy issues, including vehicle GHG emission standards. Several northeastern states have recently initiated a regional cap-and-trade program.37

National Biodiesel Program in Brazil was created with the intent of reducing GHG emissions by progressively increasing the share of biodiesel content in diesel fuel. From zero use at present, the goal is to have at least 3% of biodiesel added to fossil diesel by 2008, and 5% by 2012. Biodiesel can be produced from several beans and palms that grow in Brazil. 38

23

Several European countries tax energy use or energy-related CO2 emissions. However, implicit taxes applied to fossil fuels are inversely related to carbon content (Sweden and Denmark are exceptions). Some firms joining voluntary agreements to improve energy efficiency pay a reduced carbon tax rate. 44

Australiaâ&#x20AC;&#x2122;s GHG Abatement Program is a subsidy program that supports activities likely to result in substantial emission reductions or sink enhancement. 39

Carbon tax and negotiated GHG agreements in New Zealand: under these agreements, firms or industries that, as a result of the carbon tax to be introduced in 2007, face significant risk to their competitiveness vis-Ă -vis producers in countries with less stringent climate change policies are eligible to receive full or partial exemption from the tax in exchange for moving to world best practice in emissions management. 40

Although China does not have GHG reduction obligations under Kyoto, its proactive stance in energy efficiency policymaking has contributed to reducing emissions. The 2005 Law on renewable energy, for instance, establishes that, by 2020, 10% of total power consumption should come from renewable sources (the share was 3% in 2003). In 2004, China also adopted its first vehicle fuel efficiency standards. 41

CLIMATE CHANGE

Evidence of climate change and its impacts is steadily accumulating

Recent evidence indicates that current atmospheric CO2 concentrations are high compared with levels over the last million years.46

Qori Kalis Glacier, Peru 1978

Historical and current pictures of Arctic sea ice and tropical glaciers indicate the extent of warming and melting that has occurred over the past 25-35 years.47 Global warming is currently raising sea-levels by almost 2 cm per decade,48 and that rate is expected to increase with rising atmospheric CO2 concentrations, leading to flooding of low-lying coastal areas. Recent research suggests that global warming is increasing the intensity of hurricanes and other storms,49 leading to greater storm damage and coastal flooding. Increasing atmospheric CO2 is also increasing ocean acidity,50 with negative impacts on marine biodiversity, including coral and plankton, and thus on the fish that rely on them for habitat and food.51 Agricultural models suggest that climatic warming will tend to reduce agricultural productivity in the tropics.52 There are also some indications of changing oceanic circulation patterns, notably in the North Atlantic Gulf Stream, which could lead to disruptive climate change.53

Arctic Sea Ice September 1979

September 2003

Source: Thompson, L., Byrd Polar Research Center, Ohio State University.

Sea-level rise and damage to marine biodiversity from climate change are increasing the vulnerability of small island developing States (SIDS)

The dependence of SIDS on tourism poses a long-term sustainable development challenge as many of these countries are atolls and low-lying island states that are vulnerable to sea-level rise as a result of climate change. Expected impacts include loss of beaches, salinization of soils and freshwater sources, increased stress on coastal ecosystems such as coral reefs, and infrastructure damage. These threaten the tourism industry and other economic activity and make adaptation to climate change a priority in these countries. 54 International Tourism Receipts as a % of Total Exports in Selected SIDS, 1995-2003 Suriname Solomon Islands Trinidad and Tobago Mauritius Belize Fiji Vanuatu Seychelles Jamaica Comoros Cape Verde Samoa Barbados The Bahamas 0%

24

2000

Source: NASA Earth Observatory.

3.29 4.53 8.82 29.82 30.92 34.34 41.68 44.55 46.09 48.01 49.47 53.48 53.65 74.64

10%

20%

30%

Source: World Development Indicators Online Database.

40%

50%

60%

70%

80%

END NOTES

1

International Energy Agency (IEA), Oil Crises & Climate Challenges — 30 Years of Energy Use in IEA Countries, 2004.

27

Lovei, M. (1998), “Phasing-out lead from gasoline: worldwide experience and policy implications”, World Bank Technical Paper No.397, Pollution Management Series.

2

IEA, CO2 Emissions from Fuel Combustion, 1971-2003.

28

3

Stern, D. (2005), “Global sulphur emissions from 1850 to 2000”, Chemosphere, 58, 163-175 (update from November 2005, http://www.rpi.edu/~sternd/datasite.html).

IPIECA — International Petroleum Industry Environmental Conservation Association (2003): “Getting the lead out”.

29

Intergovernmental Panel on Climate Change, IPCC Third Assessment Report – Climate Change 2001.

4

IEA, World Energy Outlook 2005, Energy Balances of Non-OECD Countries 2002-2003.

30

5

a.

United Nations Framework Convention on Climate Change (UNFCCC), 2005, Key GHG Data: Greenhouse Gas Emissions Data for 1990-2003.

31

Wright, L. and Fulton, L. (2005), “Climate change mitigation and transport in developing nations”, Transport Reviews, Vol.25 (6), 691-717, November.

32

World Resources Institute (WRI) (2005), “Navigating the numbers: greenhouse gases and international climate change agreements”, World Resources Institute Research Report, p. 100.

33

WRI (2005), op. cit., p.100.

34

“CDM Taking stock and looking forward”, Jane Ellis, Harald Winkler, Jan Corfee-Morlot, Frederic Gagnon-Lebrun, Energy Policy, 2005.

b. IEA, 6

a.

7

2004, Natural Gas Information online database.

IEA Statistics, Electricity Information 2004.

b. UN

DESA, “Multi-Dimensional Issues in International Electric Power Grid Interconnections”, 2005.

Galitsky, C., Price, L. and Worrell, E., 2005, “Energy Efficiency Programs and Policies in the Industrial Sector in Industrialized Countries”, LBNL-54068, Lawrence Berkeley National Laboratory, 2005.

8

World Health Organization, World Health Report 2002.

9

a.

http://www2.kankyo.metro.tokyo.jp/clean-air-asia/old/forum2002_e/asianrepo_e.html

35

Galitsky, C., et. al, 2005, op. cit.

b. www.progress-project.org

36

Environment Canada: http://www.climatechange.gc.ca/

c. www.itdp.org/read/brtplanningguidedec04.pdf

37

IEA Climate Change database: http://www.iea.org/

10

Lall, S. with the assistance of Kraemer-Mbula, E. (2005), “Is African industry competing?”, Working Paper No. 121, QEH Working Paper Series, University of Oxford.

38

Lèbre La Rovere, E. and Santos Pereira, A. (2005), “Brazil & climate change: a country profile”, Science Development Network Policy Brief, November (http://www.scidev.net/).

11

Teitel, S. (2005) “Globalization and its disconnects”, The Journal of Socio-Economics, 34, 444-470.

39

Australian Greenhouse Office: http://www.greenhouse.gov.au/index.html

12

UNIDO, 2004 Industrial Development Report, “Industrialization, Environment and the Millennium Development Goals in Sub-Saharan Africa — The new frontier in the fight against poverty”.

40

IEA Climate Change database: http://www.iea.org/

41

Carbon Disclosure Project, Carbon Disclosure Report, 2005, http://www.cdproject.net/report.asp

42

People’s Daily Online (English), “Renewable energy law creates new opportunity”, 1 March 2005; IEA Climate Change database: http://www.iea.org/

43

Ministry of the Environment of Japan: http://www.env.go.jp/

Giuliani, E., Pietrobelli, C. and Rabelotti, R. (2005), “Upgrading in global value chains: lessons from Latin American clusters”, World Development, 33 (4), 549-573.

44

Galitsky, C., et. al. 2005, op. cit.

45

Galitsky, C., et. al. 2005, op. cit.

16

Reinhardt, N. (2000), “Back to basics in Malaysia and Thailand: the role of natural-resource based exports in their export-led growth”, World Development, Vol.28 (1), 57-77.

46

17

Rodrik, D. (2006), “What’s So Special About China’s Exports?”, Harvard University, Research paper prepared for the project on “China and the Global Economy 2010” of the China Economic Research and Advisory Programme.

Climate & Air Quality, Ecosystems & Human Well-Being: Current State & Trends, Findings of the Condition & Trends Working Group, Millennium Ecosystem Assessment Series (Coordinating Lead Authors: Jo House, Victor Brovkin), Island Press; http://www.millenniumassessment.org/ en/products.global.condition.aspx

47

Arctic Climate Impact Assessment, 2004.

18

World Bank, “Doing Business in 2006”.

48

19

Hettige, H., Martin, P., Singh, M. and Wheeler, D. (1994), “The industrial pollution projection system”, World Bank Policy Research Working Paper #1431.

Douglas B., “Global sea level change: Determination and interpretation”, NOAA, D.C., 1995; Velicoga, I., & Wahr, J., “Measurements of Time-Variable Gravity Show Mass Loss in Antartica”, Science, March 2006; Zwally, H.J., et al. “Mass changes of the Greenland & Antarctic ice sheets & shelves & contributions to sea-level rise: 1992-2002,” Journal of Glaciology, Vol. 51, No. 175, December 2005, 509-527.

20

WHO (2000), “Air quality guidelines –Second edition”, WHO Regional Office for Europe, Copenhagen.

49

21

WHO (2000), “Air quality guidelines –Second edition”, WHO Regional Office for Europe, Copenhagen.

“Global Warming and Hurricanes”, Geophysical Fluid Dynamics Laboratory, Princeton, NJ, 2006, www.gfdl.noaa.gov/~tk/glob_warm_hurr.html

50

22

OECD (2004), “OECD Key Environmental Indicators”. OECD Environment Directorate, Paris, France.

Caldeira, K. and Wickett, M.E. (2003), “Oceanography: Anthropogenic carbon & ocean pH,” Nature, 425(6956), p. 365.

23

WHO (2000), “Air quality guidelines –Second edition”, WHO Regional Office for Europe, Copenhagen.

51

24

ADB (2003), “Reducing vehicle emissions in Asia. Policy guidelines for reducing vehicle emissions in Asia.”

Riebesell, U., Zondervan I., Rost B., and Zeebe R.E. (2001), “Effects of increasing atmospheric CO2 on phytoplankton communities and the biological pump,” Global Change Newsletter, 47, 12–15.

52

25

UNEP, Synthesis of the 2002 Reports of the Scientific Assessment Panel, Environmental Effects Assessment Panel, Technology and Economic Assessment Panel of the Montreal Protocol.

Fischer G., Shah M., & van Velthuizen, H., “Climate Change and Agricultural Vulnerability”, IIASA, Vienna, Austria, 2002.

53

26

Von Storch, H., Costa-Cabral, M., Hagner, C., Feser, F, Pacyna, E. and Kolb, S. (2003), “Four decades of gasoline lead emissions and control policies in Europe: a retrospective assessment”, The Science of the Total Environment, 311, 151-176.

Bryden, H., Longworth, H., and Cunningham, S., “Slowing of the Atlantic meridional overturning circulation at 25° N”, Nature, vol.438, 1 Dec. 2005, p. 655.

54

The Regional Impacts of Climate Change: An Assessment of Vulnerability.1997, A Special Report of IPCC Working group II, Watson, R.T., Zinyowera, M.C., Moss, R.H., (Eds), Cambridge University Press, UK.

13 14

15

25

“The Geopolitics of Natural Gas”, http://bakerinstitute.org/Pubs/study_29.pdf

UNIDO, 2004 Industrial Development Report.

ILO (2005a), “Promoting fair globalization in textiles and clothing in a post-MFA environment”, report for discussion at the Tripartite Meeting on Promoting Fair Globalization in Textiles and Clothing in a PostMFA Environment, Geneva.

SOURCES FOR GRAPHICS

a.

UNDESA-DSD, based on World Bank, World Development Indicators 2005. For Sulphur: Stern, D. (2005), Rensselaer Polytechnic Institute, http://www.rpi.edu/~sternd/datasite.html

b.

World Bank, World Development Indicators 2005

ENERGY

d.

World Bank, World Development Indicators 2005

e.

Stern, D. (2005), Rensselaer Polytechnic Institute, http://www.rpi.edu/~sternd/datasite.html

f.

UNEP GEO data portal (http://geodata.grid.unep.ch/) with data from the Ozone Secretariat

g.

UNEP Partnership for Clean Fuels and Vehicles (http://www.unep.org/pcfv/Data/Data.htm); For midnineties data: Lovei, M. (1998): “Phasing-out lead from gasoline: worldwide experience and policy implications”, World Bank Technical Paper No.397, Pollution Management Series

h.

Thomas V., Socolow, R., Fanelli, J. & Spiro, T., “Effects of Reducing Lead in Gasoline: An Analysis of the International Experience”, Environmental Science and Technology, 33(22):3942-3947, 1999

a.

IEA, World Energy Outlook, 2002 & 2005

b.

UN Energy Balances & Electricity Profiles 2002; UN Demographic Yearbook 2002; Unpublished data from the World LPG Association

c.

World Bank, World Development Indicators 2005

d.

EIA, Non-OPEC Fact Sheet 2004, http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html

e.

New York Mercantile Exchange (NYMEX)

f.

IEA, Energy Balances of Non-OECD Countries 2005; Renewables Information 2004

a.

UNFCCC 2005, Key GHG Data: Greenhouse Gas Emissions Data for 1990-2003

g.

IEA Natural Gas Information 2004 Online Database

b.

UNDESA-DSD based on UNFCCC 2005, Greenhouse Gas Emissions Data for 1990-2003

h.

IEA Electricity Information 2004

c.

UNFCCC 2005, Greenhouse Gas Emissions Data for 1990-2003

i.

World Energy Council based on ISII & ENERDATA data

d.

IEA 2005, CO2 Emissions from Fuel Combustion

j.

WHO, World Health Report 2002

e.

UNDESA-DSD based on IEA 2005, CO2 Emissions from Fuel Combustion

f.

UNDESA-DSD based on IEA 2005, CO2 Emissions from Fuel Combustion

g.

GEF project database, http://www.gefonline.org/projectList.cfm

INDUSTRIAL DEVELOPMENT

CLIMATE CHANGE

a.

World Bank, World Development Indicators Online Database

h.

Energy Climate Change & Sustainable Development, URC & UNEP, November 2005

b.

UNIDO, 2005 Industrial Development Report

i.

UNFCCC Website (http://cdm.unfccc.int/) as of 1 March 2006

c.

UNIDO, 2004 Industrial Development Report

j.

Thompson, L., Byrd Polar Research Center, Ohio State University

d.

UNDESA-DSD, based on COMTRADE data

k.

NASA Earth Observatory, http://earthobservatory.nasa.gov/

e.

ILO 2005, Promoting Fair Globalization in Textiles & Clothing in a Post-MFA Environment

l.

World Bank, World Development Indicators Online Database

f.

UNDESA-DSD, based on UNIDO INDSTA3, ISIC Rev. 2 data

g.

World Bank 2005, Doing Business in 2006

h.

UNDESA-DSD, based on unpublished information from the UN Global Compact and Global Reporting Initiative (GRI); ISO Survey of Certifications 2004

i.

ISO Survey of Certifications 2004

j.

UNDESA-DSD, based on UNCTAD 2005; the UN Global Compact and GRI websites

ATMOSPHERE & AIR POLLUTION

26

(BADEIMA). New York: New York State Department of Environmental Conservation. Seoul: Ministry of Environment of the Republic of Korea. Tokyo: APMA Seoul Workshop Report: Urban Air Pollution Management and Practice in Major and Megacities of Asia (http://www.asiairnet.org/seoulreport.asp)

INTRODUCTION

a.

World Bank, World Development Indicators 2005, and World Bank Air Pollution in World Cities Database

b.

Data on particulate pollution in cities: Bangkok: AMIS and Benchmarking Report on Bangkok, Clean Air Initiative Asia (http://www.cleanairnet.org/caiasia/1412/articles-36911_recurso_1.pdf). Cities in China: AMIS and WHO-UNDP (2001), “Environment and People’s Health in China”. Cities in India: Central Pollution Control Board. Jakarta: AMIS and World Bank Environment Monitor. London: The UK National Air Quality Information Archive. Los Angeles: South Coast Air Quality Management District. Manila: World Bank Environment Monitor. Mexico City and Santiago: ECLAC (BADEIMA) and Pan-American Health Organization (2005), “Evaluación de los efectos de la contaminación del aire en la salud de América Latina y el Caribe” for 2004 data. Nairobi: AMIS. New York: New York State Department of Environmental Conservation. Seoul: AMIS. Tokyo: APMA Seoul Workshop Report: Urban Air Pollution Management and Practice in Major and Megacities of Asia (http://www.asiairnet.org/seoulreport.asp)

c.

Data on sulphur dioxide pollution in cities: Cape Town: City of Cape Town Environment Report (http:// www.capetown.gov.za/soe/). Cities in China: WHO-UNDP (2001), “Environment and People’s Health in China”. Cities in India: Central Pollution Control Board. London: The UK National Air Quality Information Archive. Los Angeles: South Coast Air Quality Management District. Mexico City and Santiago: ECLAC

27

READER’S NOTES

28

READER’S NOTES