GREEN ECONOMY AS A STRATEGY IN ADDRESSING ECONOMIC AND MULTILATERAL ISSUES

GREEN ECONOMY AS A STRATEGY IN ADDRESSING

ECONOMIC AND MULTILATERAL ISSUES

Introduction

In 2020 as communities around the world struggled to contain the spread of COVID-19 and

manage health costs, governments implemented a range of policies in response to the crisis

to mitigate the worst social and economic impacts of the pandemic. Mobility restrictions and

other public health measures needed to contain the pandemic quickly impacted the largest

global economic crisis in more than a century. This was compounded by a drop in demand as

the pandemic affected consumer behavior. Economic activity contracted in 2020 in about 90

percent of countries, exceeding the number of countries that experienced such declines

during the world wars, the 1930s depression, the emerging economic debt crisis of the 1980s,

and the 2007 to 2009 global financial crisis. In 2020, the first year of COVID-19, the global

economy shrank by about 3 percent and global poverty increased (IMF, 2021).

To limit the impact of the crisis on households and businesses, governments enacted rapid

and comprehensive policy responses using a combination of fiscal and monetary sector

policies. Many countries enacted massive emergency responses to the first wave of the

pandemic, implementing bold policy responses using a range of policy instruments to

mitigate the worst immediate impacts of the crisis.

As the economic impact of the pandemic continues, policymakers have a vital role to play in

aiming to strike a balance between providing sufficient support to mitigate the crisis while

limiting the longer-term financial and macroeconomic risks that could arise from higher debt

levels due to the crisis. Such risks are likely to emerge more quickly in developing countries

and especially in low-income countries due to the much lower public and private debt

carrying capacity compared to developed countries and the more challenging economic

conditions of developing countries even before the pandemic.

The economic impact of the pandemic will be more persistent and more severe for

developing countries. After a worldwide collapse in per capita income in 2020, about 40

percent of developed countries recovered and exceeded output levels in 2021 (IMF, 2021).

Achieving a "fair recovery" that includes the poor, women, and small businesses recovering

from lost jobs, income, human capital, and assets requires the implementation of appropriate

policies. COVID-19 has expanded inequality around the world.

The importance of maintaining a sustainable economic climate for the welfare of the United

States people for current and future generations with a primary focus on economic activities

that produce products and create jobs needs to be the focus of policymakers. Thus the

concept of green economy is needed in order to support the welfare and fairness of domestic

market players to be given the opportunity to develop the United States economy. The

existence of a green economy aims to maintain a balance between improving people's

welfare and maintaining the national economy. Therefore, the micro and macroeconomic

development carried out by the government must adopt the principles of green economy in

its implementation.

There are five principles of economic development based on a green economy. First, a

green economy must be able to create prosperity for all people. Second, it must be able to

create equality for various generational periods. Third, it must be able to maintain, restore

and invest in various natural resource-based activities. Fourth, it is expected to support

sustainable consumption and production levels. Fifth, it must be supported by a strong,

integrated and accountable system.

In terms of geopolitics, economic growth in Asia and the Pacific is projected to slow to 4.2

percent in 2022, 0.7 points lower than the April forecast and slower than the 6.5 percent

growth in 2021. The Asia Pacific economy in 2023 is expected to grow 4.6 percent

(Srinivasan, 2022). Asia's total global debt has increased from 25 percent before the global

financial crisis to 38 percent post-COVID, increasing the region's vulnerability to changes

in global financial conditions. Moreover, rising trade policy uncertainties and supply chain

cracks contributing to the trend of geoeconomic fragmentation are expected to delay

economic recovery and worsen production networks in Asia one of the biggest beneficiaries

for decades of deepening global trade. While growth is weakening, Asia's inflationary

pressures are rising, driven by a global spike in food, and fuel costs due to wars and related

sanctions. The worst hit the poor and vulnerable, who are least able to cope, reducing

consumption and increasing the likelihood of unrest.

Social. Fiscal policy needs to be tightened in countries facing high debt levels to

complement monetary efforts to tame inflation. Such fiscal support should be budget neutral

in most cases, funded by raising new revenues or reorienting budgets to avoid adding to

debt or working against monetary policy. Beyond this solution Global and regional

collaboratives that reduce trade policy uncertainty, ease trade restrictions, and avoid the

most severe fragmentation scenarios are urgently needed to increase productivity and

improve people's living standards.

The impact of the Ukraine war on countries like United States is faced with a dilemma

between pragmatism and ethics: either seize the moment and capitalize on the supply chain

and financial disconnect triggered by sanctions or take a firm moral decision in response to

any party that has done United States harm. Although not as exposed to the Russian and

Ukrainian economies as Europe, Moscow and Kiev are important economic partners for

United States. The former is a significant supplier of (semi-finished) iron, coal briquettes and

potash fertilizer with total Russian exports to United States reaching $671 million in the year

(Economic, 2020). Russia is also a significant trading partner for United States palm oil and

coconut oil with Moscow being the 24th largest importer of United States commodities

(totaling $1.24 billion in 2020). Central Bureau of Statistics (BPS) data shows that Ukraine

was also United States largest supplier of wheat and meslin in 2020. Ukraine supplied 2.96

million tons of wheat and meslin to United States in that year (Nada, 2022).

Southeast Asian countries' difficulty in taking an impartial position is also due to a lack of

understanding of the root of the problem in Ukraine. As a country in the region that strives

for neutrality amidst great power competition, has good relations with both the West and

Russia, United Statess are forced to compare and contrast different media claims and reports

and distinguish media framing from facts. The weakening of sovereignty at the global level

symbolized by the frequent occurrence of foreign interventions from major powers initially

gave some resonance to the framing of Russia's actions as a pre-emptive mission to

demilitarize a neighboring country deemed to be on the verge of aggressive destruction of the

nation. For countries like United States that are geographically located far from the epicenter

of war, recent political divisions and frictions could derail some of the most critical aspects

of the foreign policy agenda regarding the region and the world.

United States main focus is its G20 presidency, which it sees as a forum to address the post-

COVID global recovery gap as a representative of emerging economies and to promote its

interest in enhancing United States international recognition as a leading emerging economy

as well as readiness for a return of investment, tourism, and attention to United States and

Southeast Asia as a whole. The G20 Summit agenda will require cooperation between

developed and developing countries. However, with the distraction of countries and the

reluctance of key countries to put aside the crisis in Europe, the agenda risks facing the threat

of deadlock. Therefore, to secure the presence of the world's top economic leaders and

prevent a disastrous host, United States has tried to accommodate mutual interests by also

inviting Ukraine as an observer. But given the challenges for cooperation and participation in

a hostile high-level environment and the pressure to include (or exclude) war-related topics,

United States faces a major challenge to its diplomatic leadership. As the impact of the war

ripples across several multilateral forums ASEAN countries including Cambodia as ASEAN

Chair, Thailand as APEC host, and United States as G20 host are challenged to prove

Southeast Asia's weight in global issues.

Green economy research through literature review has been conducted by previous

researchers. Research that discusses the green economy relies on fiscal policy and funding

instruments for climate change (Makmun, 2016). Victory and Setiawan's research uses a

green economy approach through the Sovereign Wealth Fund in order to improve the

economy. In both studies, the green economy is an economic practice that is concerned

with short-term benefits that can optimize national economic recovery (A.K. & Setiawan,

2021).

However, Angling Nugroho Kemenangan and Lisno Setiawan's research only discusses

green economy-based funding so that it does not explore the influence of the green

economy on United States macroeconomy (A.K. & Setiawan, 2021). Various issues related

to the green economy to uncertain world turmoil make the author's interest to examine the

influence of the green economy on macroeconomic recovery or development to multilateral

issues.

This study modifies research that examines the policies taken regarding the implementation

of the green economy and the role of agencies in supporting the green economy. Fiscal

policy is taken as an effort to encourage the green economy for economic recovery and

climate mitigation (Makmun, 2016). Different from research that is more directed to the

policies that need to be implemented to achieve a green economy, this study examines the

benefits of implementing a green economy for economic growth and overcoming

multilateral problems. The results of this study are expected to make a positive contribution

to research and knowledge of green economy implementation policies.

Theoretical Framework

Green Economy Theory

Sustainable development has three pillars: economic, environmental and social. Economic

sustainability is growth without damaging the capital base of the economy. Environmental

sustainability includes a stable climate and biodiversity. There is a need to integrate the three

dimensions. Various assessment tools are available to facilitate this integration. However, in

practice it is more about reconciliation than integration in dealing with relationships so the

concept of green economy can help. A green economy is defined as low-carbon, resource-

efficient and socially inclusive. In a green economy, growth in employment and income is

driven by public and private investments into economic activities, infrastructure and assets

that enable the reduction of carbon emissions and pollution, the improvement of energy and

resource efficiency, and the prevention of loss of biodiversity and ecosystem services

(UNEP, 2022). Summarizing that green economics seeks growth from pro-poor

environmental investments, this concept can help shift the focus of the debate from

reconciliation to synergizing relationships.

A green economy must address the issue of economies of scale as a whole, through the

deployment of materials and energy. GDP growth can continue if we only make green

products. The concept of a 'green economy' is useful insofar as it engages policymakers,

economists and business people in a critical dialog with other stakeholders aimed at

comparing alternative paths for development. The comparison should then consider

economic criteria alongside social, political, cultural and ecological sustainability criteria.

Economic policies and practices govern how sustainable development pathways are as they

drive two key drivers: overproduction of waste and overexploitation of natural resources as

well as key drivers of employment, education and health welfare. Creating a sustainable

future for the environment requires a shared societal commitment to greener jobs, greener

production and consumption, and greener technologies for energy, transportation,

agriculture, waste management, water supply and wastewater sanitation, and disease

prevention and health. Not just one sector or topic is of concern but all are explicitly linked

as dynamic socioeconomic and ecological systems. Authentic and innovative green economy

thinking and action can shape a new concept of "economy" whose core is sustainability and

social justice.

Three key points need to be considered in policy discussions: there is a multiplicity of green

economies; Different notions of greenness can lead to conflicts between sustainable

development initiatives; and comparisons with the green economy. An environmental utopia

may exist where activities driving economic growth are complementary and green:

agriculture is organic and diversified; renewable energy; conservation of forests and wildlife

is economically beneficial; and waste materials can be reused. The use of land for agriculture

can be seen to conflict with conservation schemes built around parks and protected areas.

Finally, these different types of greenness are implicitly or explicitly the focus of policy

debates. Despite these complications, the idea of a green economy that inherently suggests

alternatives that are not environmentally friendly will encourage policymakers and the public

to consider sustainable options.

The concept of a green economy is crucial for guiding sustainable development policies, as

it goes to the heart of the matter as well as organizing the economy in a way that is

compatible with local and global ecological preconditions and long-term dynamics.

Humanity faces serious challenges in the coming decades: climate change, biodiversity loss,

rising inequality and other challenges. These systemic global crises cannot be addressed in

isolation, as they are all interconnected. But our economic system is not well-suited to strike

a good balance between environmental and social goals. An economy is essentially a

collection of rules and norms that reward some behaviors. In its current form, our economy

encourages overconsumption, degrades communal ties, and destroys natural wealth.

But this is not inevitable or unavoidable; the important point is that the economy must

evolve to operate. To address these issues, a new economic vision is needed. A green

economy provides prosperity for all within the ecological limits of the planet. It follows five

key principles that each draw on important precedents in international policy and together

can guide economic reform in diverse contexts. First, the prosperity principle; a green

economy enables all people to create and enjoy prosperity. It focuses on the growth of

wealth that will support prosperity. This wealth is not just financial but includes all human,

social, physical and natural capital. It prioritizes investment in and access to sustainable

natural systems, infrastructure, knowledge and education that all people need to prosper.

The principle of Equity; the green economy promotes equality within and between

generations. The green economy is inclusive and non-discriminatory. This includes sharing

decision-making, benefits and costs fairly; avoid elite capture; and especially support

women's empowerment. It takes a long-term perspective on the economy, creating wealth

and resilience that serves the interests of future citizens while also acting immediately to

address today's multidimensional poverty and injustice. Planetary Boundaries Principle; a

green economy protects, restores and invests in nature. An inclusive green economy

recognizes and nurtures nature's diverse values, the functional values of providing goods

and services that sustain the economy, the cultural values of nature that sustain society, and

the ecological values of nature that sustain all life. Efficiency and Sufficiency Principle; the

green economy is geared towards supporting sustainable consumption and production. An

inclusive green economy is low-carbon, resource-conserving, diverse, and circular.

Principles of good governance; the green economy is guided by integrated, accountable and

resilient institutions. The inclusive green economy is evidence-based, its norms and

institutions are interdisciplinary by applying good science and economics together with

local knowledge for adaptive strategies.

Economic and Multilateral Issues

COVID-19 is the first major test of the global financial system since the G20 financial

reforms were enacted after the 2008 financial crisis. Unlike the 2008 crisis, the shock

originated outside the financial system. COVID-19 and government containment measures

led to a sudden halt in real economic activity and put the financial system under stress

culminating in severe liquidity pressures. The events were followed by unprecedented policy

actions to contain the economic crisis and stabilize markets. Policymakers should maintain to

support financial resilience and ensure the continued flow of financing to the real economy

in response to economic uncertainties and growing risks to financial stability.

The COVID-19 shock has hit the global financial system which has changed fundamentally

over the past decade. A number of factors including regulatory reforms and market-driven

adjustments following the 2008 financial crisis, technological changes, and the growth of

non-banking financial institutions have affected the structure and functioning of the financial

system. The global financial system entered the pandemic in a more resilient state than

during the 2008 financial crisis. But the pandemic experience has also highlighted

differences in resilience across the financial sector. While the core part of the financial

system has been able to survive and absorb the shock of COVID-19. The existence of

COVID-19 highlights several issues about procyclicality in the financial system that may

require further consideration. Procyclicality is an inherent feature of the financial system but

an important role of macroprudential policy is to address factors that magnify the

transmission of shocks in the financial system and the real economy.

The Russia-Ukraine war is causing trade and investment disruptions around the world.

World trade will fall by one percent, reducing global GDP by just under one percent (Ruta,

2022). Economic shockwaves travel through five channels: commodity markets, logistics

networks, supply chains, foreign direct investment, and the tourism sector. Disruptions to

world trade and investment will hamper growth in developing countries and add to price

pressures. The potential food crisis is the most worrisome concern. Wheat and other grain

prices are already soaring. In 2019, Russia and Ukraine accounted for a total of 25 percent

of world wheat exports and 14 percent of corn shipments. Many countries around the world

are heavily dependent on the two countries in conflict. After food prices, energy prices are

most directly affected. Russia is one of the world's largest energy suppliers, providing 14

percent of its crude oil and 9 percent of its natural gas globally (Srinivasan, 2022). Higher

prices for natural gas, a key ingredient for ammonia fertilizer will increase costs for farmers

and reduce crop yields further exacerbating food shortages. The war and resulting sanctions

have severed key transportation links between Russia, Ukraine and the rest of the world,

disrupting trade more broadly. Disruptions to global and regional supply chains have led to

input shortages and price increases. Ukraine is a supplier of key inputs including ignition

cables for cars, fluorescent gas for semiconductors, and iron ore for steel mills. Companies

that make transportation equipment, machinery, electronics, and food products rely heavily

on Russian metals, chemicals, fertilizers, and other commodities. Some worry that the war

will lead to the corrosion of globalization. The risks are largely unknown and stem from

policies aimed at fragmenting the trading system rather than easing tensions and

strengthening global value chains against future disruptions.

Green Economy Indicators

Economic growth is one of the macro indicators that is very influential for improving

people's welfare. According to Palmer (2012), economic growth is very important for

society because it is reflected in the increase in goods and services that can improve people's

lives (Palmer, 2012). Arka (2021) states that economic growth is a phenomenon that aims to

increase national income, which will increase national income improve the general welfare

of society (Arkas, 2021). Therefore, every government must strive for positive and stable

economic growth. One of the countries with positive and stable economic growth is United

States (Aminata, 2022). With positive and stable economic growth, it is indicated that this

growth has not had a positive impact on people living in the present and future. Indications

of the uneven and comprehensive impact of economic growth can be seen from the Gini

index, which increased from 0.36 in 2010 to 0.38 in 2021 (BPS, 2022). Inequality is also

shown from the results of the PISA survey which shows that United States level of

educational segregation based on the socioeconomic status of students is still low with the

survey results showing a decrease in the level of segregation from 45% to 39% in 2015 until

2018 (Suprayitno .T., 2019). Equitable education is very important as an effort to increase

human capital that can play a role in the convergence of economic conditions in United

States (Anwar .A., 2018). All indications of the impact of uneven economic growth are also

shown by several studies that have been conducted. Warsito mentioned that United States

Williamson Index increased from 0.72 in 2011 to 0.76 in 2019 (Warsito, 2020). Indications

were also put forward by Ilham and Pangaribowo who stated that United States Theil

Entropy Index confirmed the existence of high inequality between provinces in United

States. Based on this, previous economic growth is indicated to have not had an equitable

positive impact on everyone or has not been inclusive (Ilham & Pangaribowo, 2017). This

argument is in line with Klasen's view cited in Kusumaningrum and Yuhan (2019), which

states that growth can be categorized as inclusive growth only if the process involves

everyone and the results can be felt thoroughly without inequality (Kusumaningrum &

Yuhan, 2019).

The impact of economic growth also needs to be measured for future societies. As reported

in the Brundtland Report, economic growth will be an excessive burden on the earth in the

future (Hajian & Kashani, 2021). Measuring the economic impact on the environment is very

important, considering that the environment has provided various resources that can support

the production of goods and services for society. One way to measure and evaluate the

impact of economic growth on society in the future is to internalize the concept of green

growth. The notion of "green growth" is appropriate because it refers to increasing economic

activity while maintaining the efficiency of natural resource consumption and the

environment minimize the harmful effects of economic activities on the environment

(WorldBank, 2012).

Many studies have tried and formulated to measure inclusive green growth and determine

its shaping indicators. The Green Growth Knowledge Platform (2016) uses natural assets,

resource efficiency and decoupling, risk and resilience, economic opportunity and effort,

and inclusiveness as its shaping indicators. The World Economic Forum (2017) uses GDP

per capita, employment rate, labor productivity, healthy life expectancy, average household

income, poverty rate, income Gini, wealth Gini, adjusted net savings, dependency ratio,

public debt, and carbon intensity of GDP. Research from the United Nations Economic and

Social Commission for Asia and the Pacific (2014) used equitable distribution and access,

structural transformation, eco-efficiency, investment in natural capital, and planetary

boundaries as shaping indicators in the calculation of inclusive green growth. Some of these

studies have various shortcomings because the indicators used are not comprehensive in

accommodating important indicators to describe inclusive green growth (ESCAP, 2014).

Research Methods

The research method used is literature study. Literature study can be defined as a series of

activities related to library data collection methods, reading, recording, and processing

research materials (Zed, 2003). Literature studies can also study various reference books

and the results of previous similar research so that they can be used to obtain a theoretical

basis for the problem to be studied (Sarwono, 2006). Literature study also means data

collection techniques by examining books, literature, notes, and various reports related to

the problem to be solved (Nazir, 2003). Meanwhile, according to Sugiyono, literature study

is a theoretical study, references, and other scientific literature related to culture, values, and

norms that develop in the social situation under study. The type of data used in this study is

secondary data. Information is obtained from various institutional reports, scientific articles,

websites, books, and related regulations. The focus of data acquisition sources is credible

journal publishers.

The data collection technique in this study is documentation, namely looking for data on

things or variables in the form of notes, books, papers or articles, journals and so on

(Arikunto, 2013). After all the data is collected, the next step is for the author to analyze the

data so that a conclusion can be drawn. To obtain correct and precise results in analyzing

data, the author uses critical analysis techniques. Critical analysis is a view that states

researchers are not free subjects when looking at research. Critical analysis generally stems

from certain views or values believed by the researcher. Therefore, the partisanship of the

researcher and the researcher's position on a problem determine the text/data that is

interpreted. Analysis as one of the author's efforts in facilitating understanding by analyzing

the truth through the opinions of experts who then take the meaning and essence of the

opinions of these experts.

Research Results

Green economy research through literature reviews has been carried out by previous

researchers. Research that discusses the green economy, green economy research (Makmun,

2016). This study focuses on the economic sector and multilaterals to complement existing

research.

Green Economy as a Step Out of Crisis

The concept of Green Economy is not new, first introduced in 1984 by Pearce, Markandya,

and Barbier in their book "Blueprint for a Green Economy". In the book, the green economy

is defined as "a system of economic activities related to the production, distribution, and

consumption of goods and services that results in an increase in human welfare in the long

term, without the need for the production, distribution, and consumption of goods and

services without making future generations future generations bear the risks environment and

significant ecological scarcity". The economy and the environment are currently reaching a

high level of interaction as society considers the damage that productive activities cause to

the natural environment. These activities cause pollution processes in water, air, soil, and

biodiversity resources that affect the dynamics of the environment dynamics social

dynamics. Awareness This awareness makes it possible to seek more sustainable and

environmentally responsible alternatives in the sense of achieving a set of measures and

regulations by the state and social initiatives to control, minimize, repair, and prevent the

harmful effects of economic activities on natural systems. The process of such activities is

known in the media as the green economy. The concept of green economy is related to

"ecological economy", a term that emerged from the Spanish translation of "green economy".

The green economy was elaborated by the United Nations Environment Program - UNEP in

late 2008 as a comprehensive and practical working mechanism through analysis and

investment policy support to encourage green sectors and change the hostility of economic

sectors to the environment. At Currently, economy green It is described as an economy that

seeks to improve human well-being and achieve social justice by significantly reducing

environmental risks and using sustainable ecological services. The economy strives for

development that is low-carbon, resource efficient and socially inclusive. A green economy

relies on three main strategies: reducing carbon emissions, greater efficiency of energy and

natural resource use, and preventing the loss of biodiversity and ecosystem services. To

implement these strategies, support through investments at the public and private levels is

required and political reforms and regulatory changes. It is therefore important to preserve,

strengthen and rebuild natural capital as an economic asset and public good.

One of the main actions pursued by the green economy in sustainable development is

poverty alleviation so that a better quality of life is assured without affecting natural

resources. Deploying the green economy concept without considering the needs of

vulnerable groups and the damage to nature is a mistake considering that the restoration of

environmental and social dynamics is not guaranteed in the short, medium and long term.

In a green economy physical-technological and financial capital or wealth-building capital

is generated at the cost of over-reliance on fossil fuels, resource depletion of natural

resources, and environmental harm. On the other hand the green economy is sized towards

natural capital, which can achieve growth. To achieve the transition to a green economy,

eight key sectors of the economy need to be considered with the capacity to: reduce poverty,

invest in natural capital and its recovery, create jobs and improve social equity, and promote

renewable energy and energy efficiency.

To optimize such implementation in order to achieve a green economy requires an annual

investment of 2% of global GDP that would allow maintaining the current growth rate of

the global economy and in turn achieve a shift towards sustainable processes (Yu, 2019).

Countries should promote fiscal incentives and economic instruments that help conserve

natural resources (Kunanutakij, n.d.). All investments together with political reforms should

promote the transformation of sectors involved in the green economy to gain a competitive

position in the long run (WorldBank, 2003).

Reconfiguring the economy towards a sustainability framework can lead to eco-efficiency,

i.e. more efficient use of natural resources and benefits to society, such as the creation of

"green jobs" at the macro level to reduce poverty, minimize income disparities, and achieve

an economy with inclusive growth.

To achieve this goal, the options are wide and varied, including from direct creation of

green jobs, access to environmental goods and services by marginalized communities,

structuring of specific conditional cash transfer strategies, direct subsidies to specific

industrial sectors, and restructuring of national public procurement policies. In addition to

investment, it is also necessary to consolidate aspects such as a strong regulatory

framework, limiting spending in areas that deplete natural resources, implementing tax and

market-based instruments that allow modification of consumer preferences and stimulate

green investment and innovation, investment in training and capacity building, as well as in

the development of a green economy strengthen governance processes at all levels (Lu,

2015).

Another important consideration for achieving the transition to a green economy is found at

the international level in multilateral environmental agreements, legal and institutional

frameworks established to address global environmental challenges (Aidt, 2010). These

agreements include the United Nations Framework Convention on Climate Change

(UNFCCC) and the renewal of the post-Kyoto agreement on carbon. But in the same way, all

these considerations cannot be addressed unambiguously for all countries, but a different

way should be proposed in terms of the green economy approach, which is proposed to

divide countries into three groups with certain characteristics. At the same time with several

levels of responsibility as follows:

•

Developed countries have a pioneering role and are obliged to change their production

and consumption patterns.

•

Developing countries: with the possibility of achieving their goals in sustainability

schemes.

•

Industrialized countries: who should guarantee financial and technological assistance to

developing countries.

Decarbonizing United States as a Scenario to Achieve Net-Zero Emissions

Low-carbon development can generate average GDP growth of 6% per year until 2045, help

accelerate poverty alleviation, drive job creation, and unlock many other economic, social

and environmental benefits (BAPPENAS, 2019). United States aims to reduce emissions to

540 million tons of CO2e by 2050, declining steadily to net zero by 2060 or sooner. The

target reflects a number of decarbonization efforts that have been undertaken by various

institutions. The greenhouse gas emission reduction scenario is 29% by 2030 (Ministry of

Environment and Forestry, 2022). As a result, greenhouse gas emissions will continue to

increase from 1.8 Gt CO2e in 2030 to nearly 3.5 Gt CO2e in 2050. It is important to identify

ways to scale up existing ambitions as well as new interventions that can further reduce

emissions, increase job creation, advance United States medium- and long-term development

goals, and build resilience to climate change and other shocks.

The energy sector is critical to achieving net-zero because as United States develops and

incomes rise, energy demand is increasing rapidly. Projections for the Reference Case show

demand more than tripling from 9.3 terajoules (TJ) in 2021 to 31.9 TJ in 2060. If all the

additional demand is met with fossil fuels, the impacts of greenhouse gas emissions and air

pollution will be severe. The National Medium-Term Development Plan (RPJMN) 2020-

2024 has recognized this challenge aiming to reduce the energy intensity of the United

States economy (a proxy measure for energy efficiency) by 2.5% per year and increase the

share of renewable energy in the primary energy mix to 23% by 2025. As mentioned above,

the net-zero scenario increases ambition on both fronts and puts a price on carbon from

2022 to accelerate the transition. Table 2 provides a summary of energy sector interventions

and how they compare to the 2020-2024 National Medium-Term Development Plan

(RPJMN) and the High scenario in the 2019 Low Carbon Development United States

(LCDI) analysis.

As outlined above, an energy strategy that supports a net-zero scenario has three key

elements: improving energy efficiency; decarbonizing energy supply, through renewables

combined with electrification and clean alternatives to fill the gap; and realigning incentives

by ending fossil fuel subsidies and phasing in a carbon price.

Multilateral Solutions to Global Challenges

The prospect of dangerous divergence across countries continues to be felt today as a result

of COVID-19. More than half of developing countries that once caught up to the income

levels of advanced economies will now fall further behind (IMF, 2021). This economic

divergence could also strain long-term growth in developed countries, lead to increased

economic migration, and undermine social stability around the world. The growing effects

of climate change are likely to make the impacts worse. There are three economic priorities

for multilateral action that the IMF sees as essential for a strong, sustainable, inclusive and

green recovery.

Economic Priorities for Multilateral Action First, vaccines. Vaccine policy is currently the

most important economic policy. Investing to ensure everyone quickly has access to

vaccines may be the highest return public project. Predicted faster progress in ending this

crisis would add nearly $9 trillion to global GDP by 2025, enabling more than $1 trillion in

additional tax revenue. Coordinated international action on vaccines is key.

International taxation It is broadly in the interest of states and the private sector to limit tax

competition and the proliferation of chaotic unilateral tax measures. Multilateral efforts are

already underway with the Inclusive Framework initiated by the OECD now covering 139

countries. This type of coordinated approach will help simplify an overly complex system,

better align incentives and provide predictability. It will also help create a fair system

towards companies to pay taxes in the countries where they operate.

Climate change impacts macroeconomic and financial stability, presenting risks to the

functioning of economies. At the same time this way of responding to challenges also offers

opportunities for growth and jobs. So as the world begins to recover it must accelerate the

shift to a green economy. To do so requires a strong carbon price that can send critical

market signals and advance climate-friendly investments. IMF analysis shows that a steadily

rising carbon price and a green investment push could boost global GDP by about 0.7

percent per year in the next 15 years and create millions of new jobs. Carbon pricing is

already gaining momentum, with many businesses now using shadow carbon prices in their

models. But the average global price of $2 per ton needs to rise substantially by 2030 to be

in line with the Paris Agreement.

Policies can be implemented through carbon taxes, trading systems, or other equivalent

measures that suit local policy preferences. Most importantly, such a floor price can avoid

less efficient border adjustments if some countries proceed with strong pricing while others

do not. Focusing on a more environmentally friendly recovery is clearly opening up

prospects. But the harsh reality is that poor countries risk missing out on this historic

transformation. IMF research shows that low-income countries need $450 billion over five

years to fight the pandemic, maintain buffers and get back on track to pursue higher income

levels. They can only cover part of this on their own. The G20 Common Framework is also

an important initiative to address debt vulnerabilities and create policy space in low-income

countries. And here, private financial sector institutions have a key role to play in debt

restructuring, not only from the point of view of fairer burden sharing, but also to help avoid

protracted debt crises that are detrimental to growth.

Climate change is an archetypal global challenge, as greenhouse gas emissions from each

country have a global impact. International efforts to address it therefore tend to be framed as

a way to tackle collective action problems. Understanding this mandates a multilateral

response to change climate change organized scale collective. From an institutional

perspective, climate cooperation can be seen as something of a multilateral success story.

Nonetheless, climate change is accelerating. The multilateral system global so far not able to

inhibit the impact of disasters that will become much more serious over the coming decades.

Extreme weather is causing major damage in many parts of the world. Current climate

governance can be seen as a 'regime complex': an overlapping collection of regimes of

different types rather than a single, single system single system, comprehensive, and

integrated. The UNFCCC is at the center, but other elements include several UN agencies,

cooperation between like-minded countries, sectoral cooperation, and public-private

partnerships. COP26 produced important outcomes. The Glasgow meeting was largely

largely reached agenda: finalizing a 'rulebook' with guidelines on how to implement the 2015

Paris agreement. The conclusion, essentially in the form of the Glasgow Climate Pact 2021

decision included pledges on climate finance and a commitment to "phase out coal-fired

power plants and inefficient subsidies for fossil fuels". Geopolitical tensions also

complicated preparations for COP27. War Russia-Ukraine war has reinforced divisions

between Russia and the West and leading to food and fuel inflation that adversely affects

low- and middle-income countries. At the same time, the increasingly sharp Sino-Western

competition for influence limits both sides' willingness and capacity to cooperate. Hence,

there is a stark contrast between the geopolitical backdrop for COP27 and Paris 2015. The

landmark agreement of 2015 was heavily influenced by strong cooperation between the EU

and developing country groups such as the most vulnerable countries and small states. Such

cooperation remains essential for further progress in multilateral fora but will be more

difficult to pull off in the current global context.

While grounded in national realities, stimulus investments need to be anchored in a

common agreement that provides a shared roadmap for a more sustainable future. However,

for multilateralism to work it requires all parties to work together. It requires trust and

transparency, ownership and optimism. It requires goals that can be detailed and

implemented at the national level and national actions that support international goals. In

conclusion stimulus funds need to be invested in the green transition. It must be inclusive,

pro-poor and gender responsive. In a post-pandemic world only a revived multilateralism

can deliver the best returns on investment and realize a world living in harmony with nature,

a stable climate and a pollution-free planet.

Projected Policy Implications

In the long term, green growth policies can increase welfare by improving resource

management and productivity, encouraging economic activity to take place where it

provides the best benefits to society in the long term, and leading to new and innovative

ways to meet these goals. Possible policy applications include making policies to reduce air

pollutant emissions, to limit the energy and carbon intensity of the economy, to reduce

freshwater abstraction and to expand the number of protected areas. There is also evidence

that absolute decoupling between economic growth and CO2 emissions (emissions are no

longer associated with growth at all) has occurred in some countries, although less

frequently than relative decoupling (emissions increases are smaller than growth).

Governments need to integrate green growth in economic policy-making and broader

development planning. Frameworks are typically limited to climate change or energy policy

and there is some risk that climate-related questions override other important environmental

and developmental issues such as biodiversity and water. Analysis of the effects of green

growth on poverty and inequality is often underdeveloped and many countries lack an

overall green growth strategy for key sectors such as agriculture. Awareness of the need to

integrate environmental concerns into development or poverty reduction plans in

developing countries is on an upward trend.

Rigorous policy evaluation needs to be further developed to better calibrate support and

ensure that resources are directed to the most cost-effective use. This requires precise

information and relevant development between policy and performance indicators.

Green innovation as measured by the number of patents has been trending fast in recent

years. The contribution of emerging market economies to green patents has increased.

Emerging economies often have to adapt in innovating to international production.

Green patents are an important driver of green innovation. Successful innovation is more

likely in fast-growing economies or sectors. Policies that encourage diffusion, strengthen

the market for green innovations, and change user behavior should therefore be considered.

In particular, regulation of hazardous substances and activities, performance standards,

green labels and certificates, and technology-based standards seem to be among the most

successful instruments. Public procurement and consumer subsidies can also help ensure the

economic viability and service diffusion of green products. Such policies need to be well

designed to ensure that they support and do not distort market formation. This requires a

mix of policies within a coherent policy framework.

Many of the enabling conditions are the same for green innovation as for innovation more

generally. For example a well-designed intellectual property rights system is important to

provide incentives for innovation and the deployment of new technologies. The optimal

approach is to combine taxes imposed directly on environmentally damaging activities with

broad policies that address key barriers to innovation.

Conclusions

The green economy is a growth-, income- and job-creating model that seeks to change the

interaction between economic progress and environmental sustainability, especially when

wealth is measured by considering natural assets and not just productivity. The green

economy contributes substantially to reducing social inequality between countries and

alleviating poverty in the world. From the results of the research that has been done, it can be

concluded that the implementation of a green economy can achieve technological changes

that allow the implementation of sustainable environmental strategies by utilizing natural

resources and waste from its activities can be reintroduced into the production process

thereby reducing the causes of pollution. To achieve this goal, alternative green economy

policies must be implemented that are developed through the allocation of economic

resources, stricter environmental regulations, the creation of subsidies, to environmentally

friendly activities and optimization of the regional planning process. There is a need to

establish a new economic framework that allows for implementation without ignoring the

fundamental premise of sustainable development. The green economy aims at poverty

alleviation by engaging vulnerable social sectors to achieve economic development within

the sustainability parameters of maintaining a healthy environment and a decent living

environment.

The principles of green economy development are based on aligning economic recovery

measures with the achievement of medium- and long-term climate change mitigation and

sustainability goals. Renewable energy is a key sector in decarbonizing the economy and

achieving climate goals. In this context, there are certain strengths of the public policy

scenario to promote green recovery. It is up to the state to strengthen pro-nature policies by

setting natural capital-oriented outcome targets, ensuring consistent funding for policy

implementation and policy determination. Good governance is essential for this. In addition,

governments need to work to minimize policy gaps such as policies or programs with

adverse natural capital impacts, address the absence of vital environmental regulations,

consider long-term recovery targets and address missing policies, data and assessments.

Global lessons from green recovery, global targets and commitments, and global, regional

and national cooperation between stakeholders.

The results of this study show that in the medium and long term there will be benefits in

implementing a green economy. Green economy can basically be a tool to handle economic

to multilateral issues. Appropriate policy implementation accompanied by monitoring and

involvement of various parties makes it possible that the functioning of the green economy

will be on target and can benefit the country and the international community.