Conclusion

Globally Asia is leading the way out of recession. The region's three largest countries—the People's Republic of China, India, and Indonesia—have remained buoyant throughout the downturn due in great part to domestic demand. In export-oriented economies, like Taipei,China; Thailand; and Malaysia, which were worst hit by the recession, the governments are promoting new domestically focused service industries. Yet questions remain about whether there has been enough change to set the recovery on a truly environment-friendly and pro-poor course.

At the same time, the crisis provides both an opportunity and an incentive to improve efficiency in the use of energy and eco-friendly materials, and to develop new green industries and business that can benefit both the poor and the environment. Over the longer term, moving toward a low-carbon green economy can also help to reduce poverty, increase energy security, and reduce vulnerability due to climate change. New public and private sector investments will be needed to deal effectively with many of the most pressing environmental challenges, for example in innovative energy-efficient buildings and transport systems, alternative energy supplies such as renewable fuels and “smart” electricity grids, and pollution control, as well as investments in key environmental infrastructure, such as increased forest area and measures to protect coastlines or reduce flood risks. Investments will be needed to facilitate adaptation to the climate change that is already locked in, to “climate-proof” infrastructure, and protect urban areas. Investing in the environment is thus an important element of many of the stimulus packages being put in place by governments. Countries also need to ensure that the right policy frameworks are in place to encourage private investment flows that support environmentally sustainable long-term growth.

The global financial crisis and economic slowdown can also spur much-needed structural reform, which could result in both environmental gains and poverty reduction. This situation provides an opportunity to reform or remove policies that may be expensive, socially inefficient, and environmentally harmful. Examples of immediate win-win policies that governments can take advantage of include

• Formulating alternate energy policies that could achieve a given environmental objective more cost effectively. In this context, the long-term cost effectiveness of some renewable energy support policies should be carefully addressed. Such policies can encourage technology development and deployments but can also prove costly in the short term.
• Cutting trade barriers to environmentally friendly technologies. For example, barriers to trade in more renewable energy, energy-efficient waste treatment, and pollution prevention technologies should be addressed urgently.
• Addressing market failures that prevent the uptake of eco-products in socioeconomic systems. For example, where these failures are not already addressed through other sectoral polices, governments should strengthen the environmental and energy standards governing products and services.
• Restructuring trade patterns and policies. For example, appropriate environmental management systems and fair trade policies can conserve exhaustible natural resources as well as bring in potential competitive advantages.
• Enhancing low-carbon product and green service systems. For example, introduction of product service systems in high-impact sectors could both drastically reduce greenhouse gas emissions compared to business as usual, while contributing to increased economic efficiency.

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