Economic Growth in the Low Carbon WorldMontenegro, 9 October 2015Sahba Sobhani, Programme Advisor Private Sector, Sustainable Development Cluster, UNDP

United Nations Development Programme

Low Carbon Economy as an Inevitable Choice for the World’s Development • The New Climate Economy report states that

countries can reconcile the twin goals of carbon reduction and economic growth

• Stronger cooperation between the private sector, governments, investors, cities and communities to drive economic growth in the emerging low-carbon economy is needed

• Tourism sector has tremendous potential to contribute to strong economic growth that is also low-carbon

Tourism as a driver for growth and employment worldwideAccording to the latest report by the World Travel & Tourism Council, tourism sector generated US$7.6 trillion (10% of global GDP) and 277 million jobs for the global economy in 2014. Including direct and indirect impacts, the industry contributes to around 1 in every 11 jobs

Tourism industry already responding to the dual challenge of CO2 emissions and sustainable growth

• Lowering energy consumption and improving efficiency

• Offsetting carbon emissions

• Investing in greening of the industry (infrastructure, innovation, etc.)

• Engaging with governments and international stakeholders in joint efforts for low carbon world

• Green tourism creates green jobs

• Sustainable tourism supports local economy and reduces poverty

• Tourism directly contributes to the achievement of UN’s Sustainable Development Goals

Tourism is a critical enabler of the UN’s Sustainable Development Goals

• Tourism sector strategically contributes to Goals 8, 12, and 14 on inclusive and sustainable economic growth, sustainable consumption and production and sustainable use of oceans and marine resources:

SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.SDG 12: Ensure sustainable consumption and production patterns.SDG 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable development

Finance Gap for Low Carbon Tourism

• Trends in climate financing: international financing (57%), domestic funds (18%), and hybrid financing (24%)

• Channels of financing: co-financing and loans (68%), grants (22%), voluntary contributions (11%), policy incentives & carbon market financing

• Purpose: mitigation and general investment (70%), adaptation, conservation and capacity (30%)

• International Energy Agency’s investment estimates for CO2 emissions reduction range between 1-2.5% of global GDP

• Private sector estimates the transition to a low carbon economy will see a total growth in cumulative capital investments of US$ 10 trillion between 2010-2020

Incentives for Tourism Sector to Contribute to Low Carbon Economy(Caribbean Study)

• 26% of the total funds included tourism as an initiative, however only contributed around 3% of the total value (USD $1.2 billion). Overall, there was limited comprehensive data available on the amount of funding provided in support of tourism funds. However, of the 14 of 28 funds which did report the amount of financing, the total funding amounted to $1.15 billion

• A large majority of funds that include tourism as an initiative, USD $1.12 Billion of USD $1.15 Billion (97%), are used for conservation and mitigation measures; the remainder, USD $31 Million (3%), are directed towards general investments.

• The main mitigation activities within the tourism funds involved improving energy efficiency, increasing the use of renewable energy, carbon offsetting strategies, and sustainable destination planning and management.

Role of private sector

• The private sector, especially small firms, can, and must be mobilised to support green tourism.

• The tourism sector involves a diverse range of actors. The awareness of green tourism exists mainly in a selection of larger-scale firms. Smaller firms are mostly outside this sphere and diverse supplier groups may not be connected at all. Specific mechanisms and tools to educate small and medium-sized tourismrelated enterprises are critical and are most effective when they are accompanied by actionable items.

• Much of the economic potential for green tourism is found in small and medium-sized Enterprises (SMEs), which need better access to financing for investing in green tourism. The majority of tourism businesses are SMEs with potential to generate greater income and opportunity from green strategies.

Session Description 

This thematic session will explore international success stories in tourism industry and provide

answers to the following questions: How to encourage tourism businesses to address CO2

emissions? How are tourism businesses already responding to the dual challenges of sustainable

growth and CO2 emissions? Is it possible to identify and describe customers for low carbon tourism products? What are the opportunities for new green jobs? How can we work together

to take the next steps?

Session Panel  

Panelists: 

Ms. Milena Lukic, Ministry of Sustainable Development and Tourism, Montenegro

Mr. Giulio Moreno and Mr. Romano Pehar, European Bank for Reconstruction and

Development (EBRD), MontenegroMr. Zarko Radulovic, Montenegrostars Hotel

GroupMr. Yanni Papapanagiotou, Systema, Greece

Mr. Matija Vajdic, Energy Institute Hrvoje Pozar (EIHP), Croatia