Economic and Social Survey of Asia and the Pacific 2020 Towards sustainable economies Jyoti Bisbey and Zhenqian Huang Macroeconomic Policy and Financing for Development Division, United Nations ESCAP Presentation to the World Bank Group Thailand, the Philippines and Malaysia Policy Dialogue 8 May 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 • 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 (LHS) 200 0 ($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 (RHS) ($5.50 per day) (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 : World Inequality Database (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 CO 2 emissions Domestic resource use 200 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 www.globalcarbonatlas.org/en/CO2-emissions (accessed on 13 February 2020). Source : ESCAP data portal (accessed on 4 December 2019); Global Carbon Atlas, available at
Similar trends are observed in South-east Asian countries 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 60 0 ($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 Asia and the Pacific is off-track to achieve the 2030 Agenda, with Goal 12 regressing the most 2030 Agenda Snapshot of SDG progress in 2019: Asia-Pacific 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.
Current economic slowdown should not deter policy actions to facilitate transition towards sustainable consumption and production
Business-as-usual cannot continue in the face of climate emergency… Domestic material consumption and GHG emissions in 2020-2060, compared with 2020 levels 180 170 Domestic 160 material Index, 2020 = 100 150 consumption 140 130 GHG emissions 120 110 100 2020 2030 2040 2050 2060 Source : ESCAP, based on methodology in UNEP International Resource Panel’s Global Resource Outlook 2019 .
… which requires collective actions by all stakeholders Local People action action GOVERNMENTS Businesses Global People action action Cross-border Consumers cooperation
Governments should embed Local sustainability in policymaking and action decarbonize their economies q Remove fossil-fuel subsidies 500 Billion United States dollars 400 $434 300 billion 200 $240 billion $150 100 billion 0 Fossil fuel subsidies Investment in renewable Average annual investment (in 2018) (in 2018) needed to achieve affordable and clean energy Source : ESCAP (2020 and 2019).
Governments should embed Local sustainability in policymaking and decarbonize their economies action q Remove fossil-fuel subsidies Fossil Fuel Subsidies 3500 2936.7 • Inconsistent pattern with 3000 downward in the past and now 2500 2015.3 increasing Million US$ 2000 • Thailand needs to adopt long-term 1271.8 1500 policies to phase out fossil fuel 956.8 863.9 subsidies 1000 550.8 500 0 2013 2014 2015 2016 2017 2018 Source : IEA(2019)
Governments should embed Local sustainability in policymaking and action decarbonize their economies q Remove fossil-fuel subsidies q Adopt carbon pricing 4 Carbon tax revenue Reductions in carbon emissions 60 below business as usual in 2030 3.5 50 3 40 2.5 Percentage reduction Percentage of GDP in 2030 2 30 1.5 20 1 10 0.5 0 0 Based on $35 per ton Additional amount based on $70 per ton Based on $35 per ton Additional amount based on $70 per ton Source : ESCAP, based on IMF (2019g)
• Considering to implement a National Emissions Trading System (ETS) • Pilot project: Voluntary Emissions Trading Scheme (Thailand V-ETS) • A direct carbon tax has not been implemented yet and plans for doing so have been discontinued • The 2017 tax reform introduced excise taxes on carbon intensive products (petroleum, cars, coal) • Converting these taxes into carbon taxes leads to carbon prices between $ 1.60 for coal and $ 90 for gasoline No immediate plans to implement carbon pricing •
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