NAIROBI, June 24, Xinhua - The UN Environment Program (UNEP) on Tuesday urged world governments to put in place incentives to encourage cash flow in order to finance the green economy.
UNEP Finance Initiative Director Charles Anderson told the UN Environmental Assembly (UNEA) that most policy incentives in place are fueling production and consumption in unsustainable ways.
"We therefore need to look at fiscal policies that will drive capital towards green economy as the finance is already available, " Anderson said.
The incentives should change the rules that drive the allocation of capital to more sustainable development.
He said the adoption of a green economy will save the world of massive costs required for environmental clean up.
"The present economic models in place have produced massive growth but have created liability in terms of air, water pollution as well as land degradation," Anderson said.
UNEP Co-director for the Inquiry into the design of a sustainable financial system Nicks Robbins said that the amount of money required to finance the transition to green economy is in the trillion of dollars.
"So the transition to a green economy will require incentives that must be financed," Robbins said.
"This is because the financial markets are used to the old way of doing business that does not price carbon correctly," Robbins said.
According to him, UNEP is currently developing science that the private sector will require to the finance green economy.
Already green bonds are being used to finance specific activities aimed at developing renewable energy sources. "However this activities need to be scale up," he said.
The five-day UNEA brought together hundreds of environment ministers, decision makers, scientists, civil society representatives and business leaders who are expected to tackle growing global challenges.