Republic of Moldova: green economy policies trump business-as-usual
New UNEP study reveals policy options and benefits of the transition for
the agriculture and energy sectors
Chisinau, Moldova – 18 June 2015: When farmer earnings are included, economic
gains from organic agriculture could immediately trump those from conventional
farming provided that crop yields are not more than 20% lower, a new UNEP
report reveals.
The Report is being launched by UNEP in the margins of a Special Session on Organic
Agriculture that is part of the 4th ‘Greening Economies in the Eastern Neighbourhood’
(EaP) Green Steering Committee Meeting in Chisinau.
Costs and benefits to different green economy scenarios are laid out in the study,
entitled Green Economy Scoping Study for the Republic of Moldova and commissioned in
the frame of the EaP Green Programme, funded by the EU, in order to help the country
meet its National Development Strategy, known as ‘Moldova 2020’.
Moldovan farmers can expect to profit from expanding organic agriculture in the
medium and long-term thanks to premium market prices that are higher than for
conventional ones, lower production costs and demand from EU countries, the report
indicates.
Under the 30% lower-yields scenario, it would cost €176 million in economic incentives
to farmers for the conversion from conventional farming and ensure Moldova has 5.8%
of its agriculture land under organic agriculture by 2030. Supporting the conversion
would bring economic gains by 2030, even if organic yields are up to 30% lower than
under conventional farming.
Among other policy options sounded, Moldova can expect to earn back investments in
renewable energy within ten years, while investments in energy efficiency could secure
savings in energy consumption of more than €100 million by 2020.
Three sectors in focus
This UNEP green economy scoping study provides a sectoral analysis focusing on
organic agriculture, energy demand (energy efficiency) and energy supply (renewable
energy).
The costs and benefits of pursuing business-as-usual and green economy policies are
examined for each, with the latter projected to generate economic returns, reduce costs
and strengthen national resilience to external shocks. In order to achieve these gains,
several policy recommendations are proposed:

The right network of economic incentives across policy tools, such as regulation,
fiscal instruments and informational tools. A deep analysis and understanding of
existing incentives is essential to identify key barriers to green investments.

A green economy policy package to balance government expenditure and
revenues. For instance, targeted subsidies and taxation, which can reduce
pollution and promote green economy interventions, as well as the provision of
low-cost capital to green producers. Infrastructure investments are also
important in balancing government finances, as remote areas suffering from
poverty might not have adequate transmission lines connected to renewable
energy sources.

Capacity-building for policy-makers and market actors to take advantage of
green economic opportunities. Measures may include: awareness of bestpractice policy-making, research development related to green sectors, and
familiarizing businesses and enterprises with green business models and new
policy frameworks.
Additional beneficial impacts from policies for a green economy include economic
growth, employment, lower poverty rates, improved contributions to social well-being,
reduced greenhouse gas emissions and retention of natural capital.
Within the agricultural sector, organic farming is estimated to provide positive net
returns, employment opportunities and improved soil fertility. However, investments
would only be profitable for organic agriculture yields that are 20% - 30% lower than
the business-as-usual ones; yields that are 40% lower would result in a loss due to the
short-term decline in productivity while chemical fertilizers are replaced and
insufficient jobs created.
Within the energy sector, investments in renewable energy technologies are estimated
to have a payback time of ten years. Benefits would consist of reduced energy demand
and related costs, diversification of the energy supply and lower emission rates.
How will the green economy scenarios compare with business-as-usual? Is the €176
million needed to expand organic agricultural land to reach 5.8% of available land by
2030 worth the investment? The costs and benefits have been examined using both
models and based on existing national and international statistics.
Background
Since the country achieved independence in 1991, Moldova has undergone economic,
social and political reforms. However, some challenges remain, which include: low GDP
per capita, high emigration, income inequality, high poverty rates and a declining
population. Therefore, the Government of Moldova requested the United Nations
Environment Programme (UNEP) to showcase the economic, social and environmental
impacts of implementing a green economy framework within the context of sustainable
development and climate change adaptation and mitigation.
Moldova’s National Development Strategy notes that, without a change to its
development paradigm, economic growth cannot exceed 5% - preventing the country
from achieving key socio-economic objectives. Under the strategy, Moldova aims to
secure 20% of its energy use from renewables by 2020. The government would also like
20% of the country’s agricultural land to be devoted to organic farming by 2020.
Policy changes within both of the agriculture and energy sectors can furthermore
ensure better alignment with Sustainable Development Goals (SDGs) and rules set by
the European Union, where most of Moldova’s organic exports are sold. Organic
agriculture and investment in renewables would provide income and employment for
the poor and people living in rural areas.
In order to further explore Moldova’s potential towards a green economy, this study
may be extended to include a more integrated cross-sectoral analysis.
The “Greening Economies in the Eastern Neighbourhood” (EaP Green) programme
supports Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine in their efforts to
move towards a green economy by decoupling growth from environmental degradation
and resource depletion, and by adopting sustainable consumption and production. The
project - which is financially supported by the European Union and other donors - is
jointly implemented by the Organization for Economic Cooperation and Development
the United Nations Economic Commission for Europe, the United Nations Environment
Program and the United Nations Industrial Development Organization (UNIDO).
www.green-economies-eap.org
For more information, please contact:
Isabelle Valentiny, Head of Communications, UNEP’s Regional Office for Europe,
+41 79 251 82 36, isabelle.valentiny@unep.org