Investing two percent of global GDP into ten key sectors can kick-start a transition towards a low carbon, resource efficient and socially-inclusive 'green economy', says a new report launched by the UN Environment Programme (UNEP) at its annual gathering of the world's environment ministers in Nairobi.

The ten sectors identified in the report as key to greening the global economy are agriculture, buildings, energy supply, fisheries, forestry, industry including energy efficiency, tourism, transport, waste management and water.

The report outlines the public policy choices, urgent actions and investments needed to a global green economy.

It demonstrates, for example, that investing 2 percent of global GDP across ten key sectors will trigger a new engine of economic growth and provide a net generator of decent jobs. Greater investment in a Green Economy model is also vital for eradicating extreme poverty.

The sum, currently amounting to an average of around USD1.3 trillion a year and backed by forward-looking national and international policies, would grow the global economy at around the same rate if not higher than those forecast, under current economic models.

But without rising risks, shocks, scarcities and crises increasingly inherent in the existing, resource-depleting, high carbon 'brown' economy, says the study.

"The Green Economy as documented and illustrated in UNEP's report offers a focused and pragmatic assessment of how countries, communities and corporations have begun to make a transition towards a more sustainable pattern of consumption and production," said Achim Steiner, UN Under-Secretary General and UNEP Executive Director.

Catalyst for growth also in developing countries

The report sees a green economy as not only relevant to more developed economies but as a key catalyst for growth and poverty eradication in developing ones too, where in some cases close to 90 percent of the GDP of the poor is linked to nature or natural capital such as forests and freshwaters.

Currently, the world spends between one and two per cent of global GDP on a range of subsidies that often perpetuate unsustainable resources use in areas such as fossil fuels, agriculture, including pesticide subsidies, water and fisheries.

Many of these are contributing to environmental damage and inefficiencies in the global economy, and phasing them down or phasing them out would generate multiple benefits while freeing up resources to finance a green economy transition.

The report acknowledges that in the short-term, job losses in some sectors are inevitable if they are to transition towards sustainability.

Investment, in some cases funded from cuts in harmful subsidies, will be required to re-skill and re-train some sections of the global workforce to ensure a fair and socially acceptable transition.

The report makes the case that over time the number of "new and decent jobs created" in sectors - ranging from renewable energies to more sustainable agriculture - will however offset those lost from the former "brown economy".

For example, investing about one and a quarter per cent of global GDP each year in energy efficiency and renewable energies could cut global primary energy demand by nine percent in 2020 and close to 40 percent by 2050, it says.

The report also highlights enormous opportunities for decoupling waste generation from GDP growth, including in recovery and recycling.

Governments as a central role in transition

Governments have a central role in changing laws and policies, and in investing public money in public wealth to make the transition possible, said Pavan Sukhdev, on secondment from Deutsche Bank and head of UNEP's Green Economy Initiative.

"By doing so, they can also unleash the trillions of dollars of private capital in favour of a Green Economy."

"Misallocation of capital is at the centre of the world's current dilemmas and there are fast actions that can be taken starting literally today - from phasing down and phasing out the over USD600 billion in global fossil fuel subsidizes to re-directing the more than USD20 billion subsidies perversely rewarding those involved in unsustainable fisheries," he said.

"A Green Economy is not about stifling growth and prosperity, it is about reconnecting with what is real wealth; re-investing in rather than just mining natural capital; and, favouring the many over the few," added Mr. Sukhdev.

"It is also about a global economy that recognizes the intergenerational responsibility of nations to hand over a healthy, functioning and productive planet to the young people of today and those yet to be born."

The report aims to help set the agenda for "Rio+20", a global summit next year slated to take stock of Earth's environmental health two decades after the landmark Earth Summit in Brazil laid out bedrock principles for sustainable development.