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September 25, 2009

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China among leaders in 'green' stimulus funding

CHINA and South Korea lead the world's 20 largest economies in the percentage of economic stimulus money they invest in environmental projects, the UN Environment Program reported yesterday.

Other members of the Group of 20 leading economic powers, including the United States, trail behind in percentage of green investment from stimulus money, the agency found.

Almost exactly a year after the global financial crisis began, the United Nations agency found that about 15 percent of the estimated US$3.1 trillion in global stimulus funds are green in nature.

But only 3 percent of stimulus funds committed to environmental projects were actually disbursed by the middle of this year, and the total in committed funds is still below 1 percent of global gross domestic product, the amount economists recommend to reduce dependence on carbon and fuel the transition to a greener world economy, the agency said.

The funding for renewable energy is not enough to cut carbon emissions and limit average global warming to 2 degrees Celsius, the increase above which some of the most severe effects of climate change are predicted.

The UN agency's executive director, Achim Steiner, called on the G20 leaders to implement stimulus packages that double their green investments in sustainable energy to US$500 billion a year to keep the global temperature rise below this threshold.

The report said global stimulus commitments include some US$250 billion in what the agency called "perverse subsidies" for fossil fuels and agriculture that can actually add to climate change, and those subsidies are operating in the G20 economies.

Pavan Sukhdev, project leader of the UN agency's Green Economy Initiative and director of the current report, said the study does not address climate negotiations focused on crafting a follow-on agreement to the carbon-capping Kyoto Protocol at a December meeting in Copenhagen.

But, he said, the report does show there is already significant green investment commitment, about US$512 billion, pegged to some hope of a carbon market after this phase of the Kyoto Protocol expires in 2012.

"So it would of course be a huge disappointment if Copenhagen did not make headway toward a new 2012 agreement, as that would reduce if not defeat business interest in greening processes and energy use," he said.

In order of the percentage of stimulus money committed to environmental projects, South Korea was first with 79 percent, China had 34 percent, Australia 21 percent, France 18 percent, United Kingdom 17 percent, Germany 13 percent, United States 12 percent, South Africa 11 percent, Mexico 10 percent, Canada 8 percent, Spain 6 percent, Japan 6 percent, Italy 1 percent.


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