COMMENTARY

A Global Green New Deal for Sustainable Development

Jomo Kwame Sundaram

The protracted global economic slowdown and the deep ecological crisis that the world nds itself in both call for a Global Green New Deal, similar to the New Deal of the United States that tackled the Great Depression. The 21st century New Deal must include developing countries and has to be economically, socially and ecologically sustainable.

Jomo Kwame Sundaram ( jomoks@yahoo.com) is at the UN Food and Agriculture Organisation, Rome.
Economic & Political Weekly EPW

lmost eight decades ago, in the midst of the Great Depression, the newly elected United States (US) Government of Franklin Delano Roosevelt introduced the New Deal. The New Deal consisted of a number of mutually supporting initiatives of which the most prominent were: A public works programme nanced by decit nancing. A new social contract to achieve greater security and rising living standards for working families programme, including the US social security system, and Regulation of nancial markets to protect the assets of citizens and channel nancial resources into productive investment. The Citizens Conservation Corps created two million jobs for a US population then of 125 million, equivalent to over ve million for the current population exceeding 300 million. The New Deal effectively used the scal stimulus for recovery, employment, development as well as environment goals. Not only
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did it help ensure US economic recovery, it successfully addressed unsustainable agricultural practices that had caused widespread ecological, social and economic crisis in the Midwest, and helped usher in a new era of economic growth and expanding prosperity, especially in the relatively poorer regions. The best known public works programme is the Tennessee Valley Authority (TVA), which pioneered an integrated regional development programme in an underdeveloped region of the country, and laid the infrastructural foundation for energy provision as well as sustained industrial and agricultural growth in the region. Thus, the New Deal restored the ecological health of the US Midwest while addressing social security, food security and conservation objectives. Today, we are in the midst of another protracted economic slowdown, comparable to the Great Depression. This crisis also needs a New Deal, but one which is both global and sustainable. First, it has to be international and must include developing countries. The current system and crises are global in nature, necessitating a similar response to be adequate to the challenge. Second, it has to be sustainable, economically, socially and ecologically. We are in the midst of a profound environmental crisis, with global warming increasingly
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recognised as the greatest threat. While most attention is focused on climate change, the sustainability of economic development is also threatened by air and water pollution, and the degradation of natural resources, the loss of forests and biodiversity, as well as sociopolitical instability due to growing inequality, globally and nationally. Therefore the New Deal should direct public works programmes to move countries to a different developmental pathway, one that protects the natural resource base equitably in the spirit of Rio, both in 1992 as in 2012. What Would a Global Green New Deal Look Like? Simply stated, it would have ingredients similar to the original New Deal, namely public works programmes, support for social protection, and measures to encourage productive investments for output and job recovery. Developing countries are particularly adversely affected by the systemic biases of the global nancial system. At lower levels of development, they are less resilient and more vulnerable to uctuations in world markets. With fewer resources, they are often forced to pursue procyclical macroeconomic policies, causing greater economic instability and undermining long-term growth. The Global Green New Deal (GGND) should be part of the broader countercyclical response to the crisis with three main elements. First, national stimulus packages in developed and developing countries that aim to revive and build green national economies. Second, international policy coordination to ensure that developed countries stimulus packages are not only effective in creating jobs in the North but also generate strong developmental impacts in developing countries through collaborative initiatives between the governments of rich and poor countries. Third, nancial support to developing countries to counter the global economic slowdown. Resources would also be needed to strengthen social protection systems. This will be critical to protect billions of people in developing countries directly affected by rising unemployment, higher food prices, declining export earnings and other
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consequences of the crisis from falling deeper into hunger, poverty and food insecurity. This required scal response provides an opportunity to make longterm investments to reduce food insecurity and to address climate change. Given the multiple environmental challenges faced by the world today, we need to promote investments that put the global economy on a more sustainable pathway. After half a decade of economic contraction and stagnation with even developing countries slowing down in recent years, it is urgent for all countries to prioritise economic recovery measures, and not to hope for recovery at the expense of others. These stimulus packages also provide the opportunity to lay the foundation for new sustainable growth. Given the unmet needs for infrastructure, additional investments in such sectors will contribute to growth. Such investments must be especially targeted at poor and vulnerable groups and regions. In other words, the investment should lead to the revival of growth that is both ecologically sustainable and socially inclusive. Support for food security and agricultural productivity could be an important feature of national stimulus packages in developing countries, many of which are still highly dependent on agriculture. Reinvigorating agricultural research and development as well as extension services will be key. Special attention will be needed for investments that promote climate smart and ecologically sustainable agriculture. There are many examples of socially useful public works activities in developing countries, but priorities must be made, considering national conditions. Constraints to economic recovery and sustainable development should be prioritised in most circumstances. Projects could improve water storage and drainage, contributing to agricultural productivity as well as climate adaptation, e g in many developing countries, simple storage dams, digging of wells and basic ood barriers/ levees could be constructed, and existing drainage and canal networks rehabilitated. Public works programmes could target the construction of basic sanitation infrastructure as well as the regeneration of wetland ecosystems that act as lters for water courses.
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After a half century of decline, except in the mid-1970s, real agricultural commodity prices have been rising since around the turn of the century. The recent price trend reects yield growth slowing in recent years, while demand has continued to grow rapidly. Rising incomes have increased food demand for humans and animal husbandry, while demand for feedstock for biofuels production has expanded rapidly in the last decade. Prices have also become increasingly volatile, with successively higher peaks in 2007-08, 2010-11 and now mid-2012. Recent food price volatility has some of its origins in climate change-related weather shocks in key exporting countries. Prices have risen due to the closer linkages between agricultural and energy markets with ofcial promotion of rst generation biofuels. Financialisation, linking commodity derivatives markets with the prices of other nancial assets, has also worsened price volatility. Policy Coordination, Collaborative Programmes and Initiatives Another component of the GGND would be collaborative initiatives of governments of rich and poor countries simultaneously to create jobs in developed countries while generating strong developmental impacts in developing countries. Such initiatives could be pursued, in part, by using the resources mobilised by developed countries stimulus packages. But over the longer term, the reforms of the international nancial and multilateral trading systems will need to support the investments required to promote sustainable development, e g, to promote the shift to low carbon economies in both rich and poor countries alike. There are several areas in which investment in developing countries could not only promote national development in those countries, but also protect global public goods (such as forests or other environmental resources, or the global climate system by mitigating greenhouse gas emissions) and lead to increased aggregate demand in rich countries, thereby enhancing employment levels in the latter group. Initiatives with long-term horizons should be designed to allow for a smooth transition, with nationally-owned
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COMMENTARY

and implemented initiatives and programmes. Some examples of such programmes would include: (i) investments in public transport in developing countries, (ii) a global feed-in-tariff regime to cross-subsidise and promote renewable energy, (iii) energy efciency, (iv) building the global IT highway, (v) human skills transfer programme and reverse outsourcing utilising the new ICT to provide expert services in critical areas from developed to developing countries, (vi) multilateral response to disasters, and (vii) multilateral response to food insecurity. Addressing Food Insecurity After three food price increases in ve years, food insecurity is now recognised as a serious threat. Higher and more volatile food prices threaten the nutrition of billions of people. The FAOs food price index is now at its highest level, higher than in June 2008 when the food price spike sparked violent protests in many

countries. There have also been signicant drops in ofcial development assistance for agricultural development in developing countries for decades. Meanwhile, rich countries have continued to subsidise and protect their farmers, undermining food production in developing countries. Food security should be treated as a global public good since the political and social consequences of food insecurity will have global ramications. Hence, there should be a multilateral response to ensure food security. The green revolution of the 1960s and 1970s with considerable government and international not-for-prot support had led to much increased crop yields and food production, reducing hunger, starvation and poverty. However, the efforts in wheat, corn and rice were not extended to other crops, especially those associated with waterstressed agriculture in arid areas, e g in Sub-Saharan Africa. We need a second

generation green revolution to promote sustainable, including climate smart agriculture, especially for other food crops. Public investments with international assistance must provide the incentives and other support needed to promote the needed investments on an accelerated basis. To be sure, many other complementary interventions are urgently needed. Food security cannot be achieved without much better social protection. But sustainable social protection requires major improvements in public nances. While revenue generation requires greater national incomes, tax collection can still be greatly enhanced through improved international cooperation on tax and other international nancial matters. Clearly, the agenda for a GGND requires not only bold new national developmental initiatives, but also far better and more equitable multilateral cooperation offered by a strong revival of the inclusive multilateral or United Nations system.

Economic & Political Weekly

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