Presentation to the Climate Change Commission of the Philippines and the World Bank Aligning post ‐ COVID 19 recovery towards sustainable economies: Recommendations for the Philippines and South East Asian countries Ms. Jyoti Bisbey, United Nations ESCAP 9 June 2020
Key messages Rapid economic growth in the region is coming at a cost to People and the Planet • ⎼ Our region is not on track to achieve any of the SDGs ⎼ Region remains highly susceptible to disasters and climate risks ⎼ Material consumption is outpacing population and income growth ⎼ Current COVID-19 pandemic and economic crisis has exposed these vulnerabilities and lack of emergency preparedness
Key messages • UN ESCAP’s Survey 2020 emphasizes sustainable consumption and production (SDG12), by… • ...linking all stakeholders to act collectively and calls for UN Decade of Action: ⎼ Local action – embedding the green transitions into policies, budgets and regulatory frameworks ⎼ People action – moving businesses towards cleaner production and consumers towards sustainable lifestyles ⎼ Global action – collectively raising our level of ambition and seeking for smart solutions
GDP growth-centric development approach has come with costs to PEOPLE and the PLANET
Asia-Pacific region has continued to drive the world economic growth 12 Developing Asia-Pacific 10 economies 8 6 Percentage 4 2 World 0 -2 -4 1971 1977 1983 1989 1995 2001 2007 2013 2019 Source : ESCAP and UN DESA.
Economic growth-centric development approach has contributed to income growth and poverty reduction… Economic growth and its social impact in Asia and the Pacific 250 200 GDP per capita Index, 2000 = 100 150 Employment 100 50 Poverty headcount ($1.90 per day) 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source : ESCAP data portal (accessed on 4 December 2019); ESCAP calculation based on World Bank, PovcalNet, available at http://iresearch.worldbank.org/PovcalNet/home.aspx (accessed on 13 February 2020); IMF, World Economic Outlook database, October 2019 (accessed on 4 December 2019); Global Carbon Atlas, available at www.globalcarbonatlas.org/en/CO2-emissions (accessed on 13 February 2020).
… however, the gains in poverty reduction are marginal if we raise our ambitions… Economic growth and its social impact in Asia and the Pacific 250 -50 GDP per capita Poverty headcount 200 0 (LHS) ($1.90 per day) Index, 2000 = 100 Index, 2000 = 100 (RHS) 150 50 100 100 Poverty headcount Poverty headcount ($3.20 per day) 50 150 ($5.50 per day) (RHS) (RHS) 0 200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source : ESCAP data portal (accessed on 4 December 2019); ESCAP calculation based on World Bank, PovcalNet, available at http://iresearch.worldbank.org/PovcalNet/home.aspx (accessed on 13 February 2020); IMF, World Economic Outlook database, October 2019 (accessed on 4 December 2019); Global Carbon Atlas, available at www.globalcarbonatlas.org/en/CO2-emissions (accessed on 13 February 2020). Note : LHS = left-handed side axis; RHS = right-handed side axis.
…and the distribution of income has been unequal Share of income (pre-tax national income) by income groups in Asia 100% Top 1% 90% 80% Top 10% 70% Next 9% 60% 50% 40% Middle 40% 30% 20% 10% Bottom 50% 0% 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source : WID (accessed 3 October 2019)
…while the costs to the PLANET have also been significant Growth of resource use and CO 2 emissions in Asia and the Pacific, 2000-2019 240 220 Domestic material CO 2 emissions 200 consumption Index, 2000 = 100 180 160 140 120 100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source : ESCAP data portal (accessed on 4 December 2019); ESCAP calculation based on World Bank, PovcalNet, available at http://iresearch.worldbank.org/PovcalNet/home.aspx (accessed on 13 February 2020); IMF, World Economic Outlook database, October 2019 (accessed on 4 December 2019); Global Carbon Atlas, available at www.globalcarbonatlas.org/en/CO2-emissions (accessed on 13 February 2020).
Similar trends are observed in South-east Asian countries The Philippines 200 Thailand 200 GDP per capita 180 180 Domestic resource use GDP per capita 160 CO 2 emissions CO 2 emissions 160 140 Index, 2000 = 100 Index, 2000 = 100 Employment 120 140 Employment Domestic 100 resource use 120 Poverty headcount 80 ($5.50 per day) 60 Poverty headcount 100 ($5.50 per day) Poverty headcount 40 ($3.20 per day) 80 Poverty headcount Poverty headcount 20 ($1.90 per day) ($1.90 per day) Poverty headcount 0 60 ($3.20 per day) 2000 2003 2006 2009 2012 2015 2018 2000 2003 2006 2009 2012 2015 2018 Source : ESCAP data portal (accessed on 2 May 2020); ESCAP calculation based on World Bank, PovcalNet, available at http://iresearch.worldbank.org/PovcalNet/home.aspx (accessed on 13 February 2020); IMF, World Economic Outlook database, October 2019 (accessed on 4 December 2019); Global Carbon Atlas, available at www.globalcarbonatlas.org/en/CO2-emissions (accessed on 13 February 2020); UNEP-IRP, Global Material Flows Database (accessed 2 May 2020).
Asia and the Pacific is off-track to achieve the 2030 Agenda, with Goal 12 regressing the most Snapshot of SDG progress in 2019: Asia-Pacific region Source : ESCAP (2020). Asia and the Pacific SDG Progress Report 2020 .
Progress of Goal 12 is stagnant in South East Asia Snapshot of SDG progress in 2019: South East Asia region Source : ESCAP (2020). Asia and the Pacific SDG Progress Report 2020 .
SDG 12: Ensuring sustainable consumption and production patterns 8 Key Targets focusing on sustainable... Business Practices Resource Management Tourism & Reporting Finance Green Public Procurement Market Mechanism Living
Progress on Goal 12 can be an effective way to accelerate progress towards the 2030 Agenda Synergies between Goal 12 and other Goals 15.1 Use of ecosystems 2.3 Double agricultural productivity and incomes of 15.3 Restoration of degraded land small‐scale food producers 15.9 Ecosystems and biodiversity in planning 2.4 Ensure sustainable food production systems and resilient agricultural practices 14.2 Sustainably manage 4.7 education for sustainable and protect marine and development and sustainable coastal ecosystems lifestyles.. 13.2 Integrate climate change 6.3 Water quality measures into national policies, 6.4 Water‐use efficiency strategies and planning 11.6 Environmental impact of cities 7.2 Energy efficiency 11.B Resource efficiency for 7.3 Renewable energy disaster risk management 9.4 Upgrade infrastructure and retrofit industries 8.4 Global resource efficiency for sustained economic growth. 9. A Sustainable and resilient infrastructure in developing countries Source : One Planet Network, 2019.
COVID-19 impact and policy response
COVID-19 pandemic has brought shocks from both of the supply and demand sides… LOWER EARNINGS Lower demand for Affect commodity importers Goods and Services and exporters People mobility to affect (Tourism, Hospitality, Civil Aviation) other countries FIRMS Lower demand PEOPLE LAYOFF WORKERS for Commodities SMEs are more vulnerable. Measures to Contain COVID-19 Higher demand (e.g. travel restrictions, suspension of for Healthcare production, and lockdown of cities) Disruptions in Supply Chains FINANCIAL DEMAND SIDE CHANNEL MARKETS Affect other countries’ Stock markets and foreign SUPPLY SIDE CHANNEL manufacturers in supply exchange markets chains FINANCIAL MARKET CHANNEL Source: ESCAP. Potential financial CROSS-BORDER CHANNEL contagion
…significantly weighing on the region’s economic performance… Downgrade of GDP growth in Asia and the Pacific Source : ESCAP, based on DESA’s World Economic Forecasting Model (based on data and information available up to 27 April 2020).
What has been done and can be done?
Policy responses to COVID-19 need to prioritize people over economic recovery Fiscal policies: Large and targeted fiscal measures to contain and respond to COVID-19, and to ease the shock to jobs and guarantee minimum living standards Size of fiscal support packages (as a share of GDP) by country grouping Source : ESCAP, based on information available up to 1 May 2020 from IMF Policy Responses to COVID‐19, ILO COVID‐19 Country Policy Responses, OECD Country Policy Tracker, and various national sources. Note : If a country announced a fiscal stimulus package but did not reveal its size, then it is not included in calculating the range and the median.
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