Economic growth that is environmentally sustainable
Wind turbine with workers - Boryspil, Ukraine
Green growth is a concept in economic theory and policymaking used to describe paths ofeconomic growth that are environmentally sustainable.[1][2][3] The term was coined in 2005 by the South Korean Rae Kwon Chung (de), a director atUNESCAP.[4] It is based on the understanding that as long as economic growth remains a predominant goal, adecoupling of economic growth from resource use and adverse environmental impacts is required. As such, green growth is closely related to the concepts ofgreen economy andlow-carbon orsustainable development. A main driver for green growth is the transition towardssustainable energy systems. Advocates of green growth policies argue that well-implemented green policies can create opportunities for employment in sectors such asrenewable energy,green agriculture, orsustainable forestry.[5]
Green growth and related concepts stem from the observation that economic growth of the past 250 years has come largely at the expense of the environment upon which economic activities rely. The concept of green growth assumes that economic growth and development can continue while associated negative impacts on the environment, includingclimate change, are reduced – or while the natural environment continues to provideecosystem services –, meaning that adecoupling takes place.[7][8][9][10]
On the subject ofdecoupling, a distinction is made betweenrelative andabsolute decoupling: Relative decoupling occurs when environmental pressure still grows, but less so than thegross domestic product (GDP). With absolute decoupling, an absolute reduction in resource use or emissions occurs, while the economy grows.[11][12]
Further distinctions are made based on what is taken into account: decoupling economic growth from resource use (resource decoupling) or from environmental pressure (impact decoupling), different indicators for economic growth and environmental pressures (e.g. resource use, emissions,biodiversity loss), only the domestic level or also impacts along the global value chain, the entire economy or individual sectors (e.g. energy, agriculture), temporary vs. permanent decoupling, or decoupling to reach certain targets (e.g. limiting global warming to 1.5 °C or staying withinplanetary boundaries).[13][14]
While the related concepts of green growth,green economy and low-carbon development have received increasing international attention in recent years, the debate on growing environmental degradation in the face of economic growth dates back several decades. It was for example discussed in the 1972 reportThe Limits to Growth by theClub of Rome and reflected in theI = PAT-equation developed in the early 1970s. The consequent understanding of the need for asustainable development was in the focus of the 1987Brundtland Report as well as theUnited Nations Conference on Environment and Development (UNCED), or Earth Summit, inRio de Janeiro in 1992.[15] TheEnvironmental Kuznets curve (EKC), theorizing that environmental pressure from economic growth first increases, then automatically decreases due in part totertiarization, is disputed.[14] Further influential developments include work by the economistsNicholas Stern andWilliam Nordhaus, making the case for integrating environmental concerns into economic activities: The 2006Stern Review on the Economics of Climate Change assessed the economic costs and risks of climate change and concluded that "the benefits of strong and early action far outweigh the economic costs of not acting".[16]
The term "green growth" originates from the Asia Pacific Region and first emerged at the Fifth Ministerial Conference on Environment and Development (MCED) inSeoul, South Korea in 2005, where theSeoul Initiative Network on Green Growth was founded. Several international organisations had since turned their attention to green growth, in part to stimulate the economy during the2008 financial crisis: At the request of countries, theOECD in 2011 published a Green Growth Strategy[17] and in 2012, theWorld Bank,UNEP,OECD andGGGI launched the Green Growth Knowledge Platform (GGKP).
The related concepts of green growth,green economy and low-carbon development are sometimes used differently by different organisations but are also used interchangeably. Some organisation also include social aspects in their definitions.[15][14]
The report "Growth Within: A Circular Economy Vision for a Competitive Europe" predicts that there are many opportunities in recycling, producing longer-lasting products and offering maintenance services from the manufacturer.[18]
According to theInternational Labour Organization, a shift to a greener economy could create 24 millionnew jobs globally by 2030, ifenvironmental policies are put in place. Also, if a transition to a green economy were not to take place, 72 million full-time jobs may be lost by 2030 due to heat stress, and the temperature increases will lead to shorter available work hours, particularly in agriculture.[19][20][21][22][23]
According to a 2020 report by the Green Alliance the job-creation schemes with the best value for money in the UK are: retrofitting buildings and creating cycle lanes; followed by electric ferries, battery factories and reforestation; and that these would create more jobs than proposed road-building schemes.[24] They also say that new investment in nature recovery could quickly create 10,000 new jobs.[25]
One metric commonly used to measure the resource use of economies isdomestic material consumption (DMC). TheEuropean Union, for example, uses the DMC the measure itsresource productivity.[26] Based on this metric, it has been claimed that some developed countries have achieved relative or even absolute decoupling of material use from economic growth.[27] The DMC, however, does not consider the shift of resource use which results from global supply chains, which is why another proposed metric is the material footprint (MF).[27] The MF aims to encompass the resource use from the beginning of a production chain to its end, meaning from whereraw materials are extracted to where the product or service is consumed.[27] Research based on the MF indicates that resource use might be growing similarly toGDP for a number of countries, as for example for the EU-27 or the member countries of theOECD.[27]
IEA: In 2020 the IEA published a strategy towards a "Clean Energy New Deal",[28] which is being strongly promoted by executive directorFatih Birol.[29]
OECD: In 2011 the OECD published a strategy towards green growth.[32] In 2012, they also published a report on green growth and developing countries.[33]
UNEP: In 2008, the United Nations Environment Programme (UNEP) led the Green Economy Initiative.[34]
World Bank: In 2012, the World Bank published its report "Inclusive Green Growth: The Pathway to Sustainable Development".[35]
Green Growth Knowledge Platform: In January 2012, the Global Green Growth Institute,Organisation for Economic Co-operation and Development (OECD),United Nations Environment Programme (UNEP), andWorld Bank signed a Memorandum of Understanding to formally launch the Green Growth Knowledge Platform (GGKP).[40] The GGKP's mission is to enhance and expand efforts to identify and address major knowledge gaps in green growth theory and practice, and to help countries design and implement policies to move towards a green economy.[41]
China: since at least 2006 (with its11th 5-Year Plan), China has been committed to achieving a green economy.[42][43] Emissions growth in recent years has decelerated sharply, underpinned by tighter environmental regulations and massive green investments, including inrenewable energy and electric vehicle infrastructure. China's national emissions trading system (ETS) — which will be rolled out to the power sector in 2020 — could help facilitate the shift to cleaner energy. For price signals to be effective however, power producers need to compete, allowing less polluting and more efficient ones to trade freely and expand their market share (which has not yet been the case in 2020.)[44][45] China also has an impact on the implementation of environmental technologies throughout Asia, via itsBelt and Road Initiative International Green Development Coalition.
EU: In 2010, the EU adopted theEurope 2020 strategy for "smart, sustainable and inclusive growth" for the 10-year period 2010–2020.[46] In 2019, theEuropean Green Deal was launched as "Europe's new growth strategy" with the aim of making the continent's economy sustainable.[47] Eastern European businesses currently fall behind their Southern European counterparts in terms of the average quality of their green management practices, notably in terms of specified energy consumption and emissions objectives.[48]
South Korea: Green growth is being discussed in the National Assembly in 2020.[49]
United States: PresidentBarack Obama took several steps toward green growth. He believes that by investing in the future,energy production will not only reduce the dependency on foreign energy sources but will also create jobs and a 'clean-energy economy'. Obama had a goal of installing 10 gigawatts ofrenewable projects by 2020, doubling thewind andsolar energy production by 2025, and to develop such policies, which will help to shape the nation's green economy.[51] A 2014 report by theCenter for American Progress quantified the levels of investment necessary for the US to attain green growth, while meeting the levels ofemission reduction spelled out by theIntergovernmental Panel on Climate Change (IPCC).[52] In 2019, Democratic members of Congress introduced theGreen New Deal resolution to create an umbrella for future government programs.[53][54]
Japan: In 2021, the Ministry of Economy, Trade and Industry proposed the "Green Growth Strategy Through Achieving Carbon Neutrality in 2050" plan achievecarbon neutrality by 2050.[55] There are 14 growth sectors identified in the strategy, categorized into 3 main industries: the energy-related industries, transportation/manufacturing-related industries, and home/office-related industries.[56] Furthermore, this strategy established a Green Innovation Fund worth 2 trillion JPY (18.2 billion USD) that aims to fund research and development and social implementation, as well as hoping to inspire private companies to also invest in their green growth R&D.[56]
Developing countries tend to have economies which are more reliant on exploiting the environment's natural resources.[33] Green technologies and sustainable development are not as affordable or accessible to them.[57] At the same time, they are less able to protect themselves from the adverse effects of climate change and environmental degradation. They can face adverse health effects of polluted air and water, for example.[57] Therefore, Green Growth could help improve the livelihoods and wellbeing of those in developing countries by protecting the environment and fostering economic growth.
In 2012, the Organization for Economic Co-operation and Development (OECD) drafted a report on Green Growth and developing countries as a summary for policy makers.[33] This report outlines a policy framework that can be used by developing countries to achieve environmental and socio-economic goals. It also notes some concerns for Green Growth held by developing countries such as its ability to address poverty in practice and possible high cost barriers to green technologies.
Energy sources that meet the requirements of green growth must fit the criteria of the efficient use ofnatural resources, affordability, access, the prevention of environmental degradation, low health impacts, and high energy security.[58]Renewable energy sources, including nuclear power, increase the power supply options for our current and future populations, and meetsustainable development requirements. Whilesolar,wind, andnuclear energy have nearly no negative interactions with the environment when generating electricity, there is waste and emission connected to material extraction, manufacturing, and construction.[59] Overall, all renewable energy sources are a fundamental part of a nation's green growth strategy. Nuclear,[60] wind,[61] and solar energy[62] can all be beneficial and used together to combatclimate change and kickstart green growth.[63]
There are several limits to green growth. As described by the European Environmental Bureau (EEB), seven barriers could make green growth wishful thinking.
- Rising energy costs. The more natural resources are needed, the more expensive it will be to extract them.
- Rebound effects. Improved efficiency is often accompanied by the same or higher consumption of a given good or service.
- Displacement of the problem, all technological solutions lead to environmental externalities.
- Underestimated impact of services, the service economy is based on the material economy, so it will add a footprint rather than replace it.
- Limited recycling potential.
- Insufficient and inappropriate technological change. Technological progress is not disruptive and does not target the factors of production that matters for ecological sustainability.
- Cost shifting and decoupling phenomena have emerged, but they are characterised by the externalisation of environmental impact from high-consumption countries to low-consumption countries.
In a representative survey of Spanish citizens, Drews andvan den Bergh (2016) found that a majority regarded economic growth and environmental sustainability as compatible (green growth), about one-third preferred either disregarding economic growth as a policy goal (agrowth) or halting it altogether (degrowth).[65]
Drews and Van den Bergh surveyed scientists' views on economic growth versus the environment. The respondents were academics publishing on the relationship between economic growth and environmental sustainability, drawn from an interdisciplinary group of economists, environmental social scientists, and environmental natural scientists, selected based on their publications in leading peer-reviewed journals. Less than 1% favoured pursuing economic growth regardless of its environmental impacts ("growth at all costs"), 42% supported the view that growth can be made compatible with environmental sustainability ("green growth"), 31% preferred to disregard economic growth as a policy objective ("agrowth"), and 17% favoured halting economic growth altogether ("degrowth").[66]
Trends in material footprint (MF) and gross domestic product (GDP) in the European Union from 1990 to 2018[67]
A 2020 two-part systematic review published inEnvironmental Research Letters analyzed the full texts of 835 papers on the relationship between GDP, resource use (materials and energy) and greenhouse gas emissions. The first part found that "the vast majority of studies [...] approach the topic from a statistical-econometric point of view, while hardly acknowledging thermodynamic principles on the role of energy and materials for socio-economic activities. A potentially fundamental incompatibility between economic growth and systemic societal changes to address the climate crisis is rarely considered."[68] The second part concluded "that large rapid absolute reductions of resource use and GHG emissions cannot be achieved through observed decoupling rates, hence decoupling needs to be complemented bysufficiency-oriented strategies and strict enforcement of absolute reduction targets."[12]
A 2020 paper byJason Hickel andGiorgos Kallis published inNew Political Economy concludes that "there is no empirical evidence that absolute decoupling from resource use can be achieved on a global scale against a background of continued economic growth" and that "absolute decoupling from carbon emissions is highly unlikely to be achieved at a rate rapid enough to prevent global warming over 1.5°C or 2°C, even under optimistic policy conditions." It thus suggests looking for alternative strategies.[69] Environmental scientist Rikard Warlenius argues in the scientific journalEcological Economics that the pessimistic assessment of Hickel regarding decoupling is not based on robust arguments but rather on mystifications of what decoupling entails. Warlenius also finds their pessimism unfounded, noting that decoupling above 4% has already occurred and that there is no reason strong policy measures could not achieve even higher rates. Warlenius finds it surprising that scholars such as Hickel and Kallis could not imagine more "aggressive policies" than those used in their model. Under normal conditions, economic growth increases emissions (whilecarbon intensity declines), and degrowth (recession) stabilizes emissions. At the same time, however, growth is likely better positioned than degrowth to create the conditions necessary for ambitious climate action, such as the deep, transformative, and costly transitions outlined by theIPCC.[70]
Another 2020 study shows that the pursuit of 'green growth' would increase inequality and unemployment unless accompanied by radical social policies.[71][72]
^Jacobs, Michael (2013). "Green Growth". In Falkner, Robert (ed.).The Handbook of Global Climate and Environment Policy. John Wiley & Sons. pp. 197–214.doi:10.1002/9781118326213.ch12.ISBN978-1-118-32621-3.
^Parrique T., Barth J., Briens F., C. Kerschner, Kraus-Polk A., Kuokkanen A., Spangenberg J.H., 2019. Decoupling debunked: Evidence and arguments against green growth as a sole strategy for sustainability. European Environmental Bureau.
"Green economy".UNEP -UN Environment Programme. Retrieved2020-04-21.If current trends continue, the global per capita use of natural resources will increase by 70 per cent by 2050.
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