Green growth

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Wind turbine with workers - Boryspil, Ukraine

Green growth is a concept in economic theory and policymaking used to describe paths of economic growth that are environmentally sustainable. [1] It is based on the understanding that as long as economic growth remains a predominant goal, a decoupling of economic growth from resource use and adverse environmental impacts is required. As such, green growth is closely related to the concepts of green economy and low-carbon or sustainable development. A main driver for green growth is the transition towards sustainable energy systems. Advocates of green growth policies argue that well-implemented green policies can create opportunities for employment in sectors such as renewable energy, green agriculture, or sustainable forestry.

Contents

Several countries and international organizations, such as the Organisation for Economic Co-operation and Development (OECD), World Bank, and United Nations, [2] have developed strategies on green growth; others, such as the Global Green Growth Institute (GGGI), are specifically dedicated to the issue. The term green growth has been used to describe national or international strategies, for example as part of economic recovery from the COVID-19 recession, often framed as a green recovery.

Critics of green growth highlight how green growth approaches do not fully account for the underlying economic systems change needed in order to address the climate crisis, biodiversity crisis and other environmental degradation. Critics point instead to alternative frameworks for economic change such as a circular economy, steady-state economy, degrowth, doughnut economics and others. [3]

Terminology

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, including climate change, are reduced – or while the natural environment continues to provide ecosystem services –, meaning that a decoupling takes place. [4] [5] [6] [7]

On the subject of decoupling, a distinction is made between relative and absolute decoupling: Relative decoupling occurs when environmental pressure still grows, but less so than the gross domestic product (GDP). With absolute decoupling, an absolute reduction in resource use or emissions occurs, while the economy grows. [8] [9]

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 within planetary boundaries). [10] [11]

History

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 report The Limits to Growth by the Club of Rome and reflected in the I = PAT -equation developed in the early 1970s. The consequent understanding of the need for a sustainable development was in the focus of the 1987 Brundtland Report as well as the United Nations Conference on Environment and Development (UNCED), or Earth Summit, in Rio de Janeiro in 1992. [12] The Environmental Kuznets curve (EKC), theorizing that environmental pressure from economic growth first increases, then automatically decreases due in part to tertiarization, is disputed. [11] Further influential developments include work by the economists Nicholas Stern and William Nordhaus, making the case for integrating environmental concerns into economic activities: The 2006 Stern 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”. [13]

The term “green growth” originates from the Asia Pacific Region and first emerged at the Fifth Ministerial Conference on Environment and Development (MCED) in Seoul, South Korea in 2005, where the Seoul Initiative Network on Green Growth was founded. Several international organisations had since turned their attention to green growth, in part as a way out of the financial crisis of 2007–2008: At the request of countries, the OECD in 2011 published a Green Growth Strategy [14] and in 2012, the World Bank, UNEP, OECD and GGGI 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. [12] [11]

Employment

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. [15]

According to the International Labour Organization, a shift to a greener economy could create 24 million new jobs globally by 2030, if the right 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. [16] [17] [18] [19] [20]

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. [21] They also say that new investment in nature recovery could quickly create 10,000 new jobs. [22]

Metrics

One metric commonly used to measure the resource use of economies is domestic material consumption (DMC). The European Union, for example, uses the DMC the measure its resource productivity. [23] 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. [24] 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). [24] The MF aims to encompass the resource use from the beginning of a production chain to its end, meaning from where raw materials are extracted to where the product or service is consumed. [24] Research based on the MF indicates that resource use might be growing similarly to GDP for a number of countries, as for example for the EU-27 or the member countries of the OECD. [24]

Green growth as a policy strategy

Organizational efforts on green growth

Organizations devoted to green growth

National green growth efforts

Green Growth in Developing Countries

Developing countries tend to have economies which are more reliant on exploiting the environment’s natural resources. [30] Green technologies and sustainable development are not as affordable or accessible to them. [55] 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. [55] 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. [30] 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.

Requirements of Green Growth

Energy sources that meet the requirements of green growth must fit the criteria of the efficient use of natural resources, affordability, access, the prevention of environmental degradation, low health impacts, and high energy security. [56] Renewable energy sources, including nuclear power, increase the power supply options for our current and future populations, and meet sustainable development requirements. While solar, wind, and nuclear energy have nearly no negative interactions with the environment when generating electricity, there is waste and emission connected to material extraction, manufacturing, and construction. [57] Overall, all renewable energy sources are a fundamental part of a nation's green growth strategy. Nuclear, [58] wind, [59] and solar energy [60] can all be beneficial and used together to combat climate change and kickstart green growth. [61]

Limits

There are several limits to green growth. As described by the European Environmental Bureau (EEB), seven barriers could make green growth wishful thinking.

These barriers are as follows: [62]

- 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.

Criticism

Trends in material footprint (MF) and gross domestic product (GDP) in the European Union from 1990 to 2018 MF EU vs GDP colours.png
Trends in material footprint (MF) and gross domestic product (GDP) in the European Union from 1990 to 2018

A 2020 two-part systematic review published in Environmental 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." [64] 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 by sufficiency-oriented strategies and strict enforcement of absolute reduction targets." [9]

A 2020 paper by Jason Hickel and Giorgos Kallis published in New 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. [65]

The Degrowth movement is opposed to all forms of productivism (the belief that economic productivity and growth is the purpose of human organization). Because of that it is also opposed to Green growth concepts.

Another 2020 study shows that the pursuit of ‘green growth’ would increase inequality and unemployment unless accompanied by radical social policies. [66] [67]

See also

Related Research Articles

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<span class="mw-page-title-main">Infrastructure</span> Facilities and systems serving society

Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and private physical structures such as roads, railways, bridges, tunnels, water supply, sewers, electrical grids, and telecommunications. In general, infrastructure has been defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions" and maintain the surrounding environment.

The United Kingdom's Climate Change Programme was launched in November 2000 by the British government in response to its commitment agreed at the 1992 United Nations Conference on Environment and Development (UNCED). The 2000 programme was updated in March 2006 following a review launched in September 2004.

A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment. It is closely related with ecological economics, but has a more politically applied focus. The 2011 UNEP Green Economy Report argues "that to be green, an economy must not only be efficient, but also fair. Fairness implies recognizing global and country level equity dimensions, particularly in assuring a Just Transition to an economy that is low-carbon, resource efficient, and socially inclusive."

<span class="mw-page-title-main">Business action on climate change</span> Range of activities by businesses relating to climate change

Business action on climate change includes a range of activities relating to climate change, and to influencing political decisions on climate change-related regulation, such as the Kyoto Protocol. Major multinationals have played and to some extent continue to play a significant role in the politics of climate change, especially in the United States, through lobbying of government and funding of climate change deniers. Business also plays a key role in the mitigation of climate change, through decisions to invest in researching and implementing new energy technologies and energy efficiency measures.

<span class="mw-page-title-main">Clean technology</span> Any process, product, or service that reduces negative environmental impacts

Clean technology, in short cleantech or climatetech, is any process, product, or service that reduces negative environmental impacts through significant energy efficiency improvements, the sustainable use of resources, or environmental protection activities. Clean technology includes a broad range of technology related to recycling, renewable energy, information technology, green transportation, electric motors, green chemistry, lighting, grey water, and more. Environmental finance is a method by which new clean technology projects can obtain financing through the generation of carbon credits. A project that is developed with concern for climate change mitigation is also known as a carbon project.

<span class="mw-page-title-main">Low-carbon economy</span> Economy based on energy sources with low levels of greenhouse gas emissions

A low-carbon economy (LCE) is an economy which absorbs as much greenhouse gas as it emits. Greenhouse gas (GHG) emissions due to human activity are the dominant cause of observed climate change since the mid-20th century. There are many strategies and approaches for moving to a low-carbon economy, such as encouraging renewable energy transition, efficient energy use, energy conservation, electrification of transportation, carbon capture and storage, climate-smart agriculture. An example are zero-carbon cities.

<span class="mw-page-title-main">Renewable energy commercialization</span> Deployment of technologies harnessing easily replenished natural resources

Renewable energy commercialization involves the deployment of three generations of renewable energy technologies dating back more than 100 years. First-generation technologies, which are already mature and economically competitive, include biomass, hydroelectricity, geothermal power and heat. Second-generation technologies are market-ready and are being deployed at the present time; they include solar heating, photovoltaics, wind power, solar thermal power stations, and modern forms of bioenergy. Third-generation technologies require continued R&D efforts in order to make large contributions on a global scale and include advanced biomass gasification, hot-dry-rock geothermal power, and ocean energy. In 2019, nearly 75% of new installed electricity generation capacity used renewable energy and the International Energy Agency (IEA) has predicted that by 2025, renewable capacity will meet 35% of global power generation.

<span class="mw-page-title-main">Green-collar worker</span> Environmental-sector worker

A green-collar worker is a worker who is employed in an environmental sector of the economy. Environmental green-collar workers satisfy the demand for green development. Generally, they implement environmentally conscious design, policy, and technology to improve conservation and sustainability. Formal environmental regulations as well as informal social expectations are pushing many firms to seek professionals with expertise with environmental, energy efficiency, and clean renewable energy issues. They often seek to make their output more sustainable, and thus more favorable to public opinion, governmental regulation, and the Earth's ecology.

<span class="mw-page-title-main">Energy in New Zealand</span>

Despite abundant natural resources and a relatively small population, New Zealand is a net importer of energy, in the form of petroleum products. The ratio of non-renewable and renewable energy sources was fairly consistent from 1975 to 2008, with about 70 per cent of primary energy supply coming from hydrocarbon fuels. This ratio decreased to about 60 per cent in 2018. The proportion of non-renewable energy varies annually, depending on water flows into hydro-electricity lakes and demand for energy. In 2018, approximately 60% of primary energy was from non-renewable hydrocarbon fuels and 40% was from renewable sources. In 2007 energy consumption per capita was 120 gigajoules. Per capita energy consumption had increased 8 per cent since 1998. New Zealand uses more energy per capita than 17 of 30 OECD countries. New Zealand is one of 13 OECD countries that does not operate nuclear power stations.

<span class="mw-page-title-main">International Resource Panel</span>

The International Resource Panel is a scientific panel of experts that aims to help nations use natural resources sustainably without compromising economic growth and human needs. It provides independent scientific assessments and expert advice on a variety of areas, including:

<span class="mw-page-title-main">Eco-economic decoupling</span> Economy able to grow without corresponding increases in environmental pressure

In economic and environmental fields, decoupling refers to an economy that would be able to grow without corresponding increases in environmental pressure. In many economies, increasing production (GDP) raises pressure on the environment. An economy that would be able to sustain economic growth while reducing the amount of resources such as water or fossil fuels used and delink environmental deterioration at the same time would be said to be decoupled. Environmental pressure is often measured using emissions of pollutants, and decoupling is often measured by the emission intensity of economic output.

<span class="mw-page-title-main">Climate finance</span> Type of investment in the context of climate action

Climate finance is an umbrella term for funding investments in the area of climate change mitigation and adaptation. In a wider sense, the term refers to all financial flows relating to climate change mitigation and adaptation. In a narrower sense it only refers to transfers of public money from developed countries to developing countries. This would be in light of their obligations under the UN Climate Convention to provide new and additional financial resources.

<span class="mw-page-title-main">Energy transition</span> Significant structural change in an energy system

An energy transition is a significant structural change in an energy system regarding supply and consumption. Currently, a transition to sustainable energy is underway to limit climate change. It is also called renewable energy transition. The current transition is driven by a recognition that global greenhouse-gas emissions must be drastically reduced. This process involves phasing-down fossil fuels and re-developing whole systems to operate on low carbon electricity. A previous energy transition took place during the industrial revolution and involved an energy transition from wood and other biomass to coal, followed by oil and most recently natural gas.

Sustainable Materials Management is a systemic approach to using and reusing materials more productively over their entire lifecycles. It represents a change in how a society thinks about the use of natural resources and environmental protection. By looking at a product's entire lifecycle new opportunities can be found to reduce environmental impacts, conserve resources, and reduce costs.

<span class="mw-page-title-main">Green industrial policy</span> Strategic government policy

Green industrial policy (GIP) is strategic government policy that attempts to accelerate the development and growth of green industries to transition towards a low-carbon economy. Green industrial policy is necessary because green industries such as renewable energy and low-carbon public transportation infrastructure face high costs and many risks in terms of the market economy. Therefore, they need support from the public sector in the form of industrial policy until they become commercially viable. Natural scientists warn that immediate action must occur to lower greenhouse gas emissions and mitigate the effects of climate change. Social scientists argue that the mitigation of climate change requires state intervention and governance reform. Thus, governments use GIP to address the economic, political, and environmental issues of climate change. GIP is conducive to sustainable economic, institutional, and technological transformation. It goes beyond the free market economic structure to address market failures and commitment problems that hinder sustainable investment. Effective GIP builds political support for carbon regulation, which is necessary to transition towards a low-carbon economy. Several governments use different types of GIP that lead to various outcomes. The Green Industry plays a pivotal role in creating a sustainable and environmentally responsible future; By prioritizing resource efficiency, renewable energy, and eco-friendly practices, this industry significantly benefits society and the planet at large.

<span class="mw-page-title-main">Labor and the environment</span>

Labour and the environment are two different concepts that can be linked as one. Labour is defined as a task that is performed, typically for an economic return. Environment is defined as air, water, minerals, organisms, and all factors that contribute to ecology. It is the gregarious and cultural pressures that builds the lives of individuals or an entire population. Human labour in the forms of Logging, Mining, and Tourism, have negatively impacted the functions of the environment in various countries that are part of the Organization for Economic Cooperation and Development (OECD) forum. The OECD is a list of 34 countries whose governments work together to ensure that the market economies function accordingly and strive to increase economic growth, wealth and sustainable development. The impacts of labour on the environment have been so large that many corporations and campaigns have begun, striving to change the way humans exert their abilities on the environment by implementing policies to limit negative outcomes.

<span class="mw-page-title-main">Greenhouse gas emissions by China</span> Emissions of gases harmful to the climate from China

China's greenhouse gas emissions are the largest of any country in the world both in production and consumption terms, and stem mainly from coal burning, including coal power, coal mining, and blast furnaces producing iron and steel. When measuring production-based emissions, China emitted over 14 gigatonnes (Gt) CO2eq of greenhouse gases in 2019, 27% of the world total. When measuring in consumption-based terms, which adds emissions associated with imported goods and extracts those associated with exported goods, China accounts for 13 gigatonnes (Gt) or 25% of global emissions.

<span class="mw-page-title-main">European Green Deal</span> Plan to transform the EU into a climate-neutral economy by 2050

The European Green Deal, approved in 2020, is a set of policy initiatives by the European Commission with the overarching aim of making the European Union (EU) climate neutral in 2050. The plan is to review each existing law on its climate merits, and also introduce new legislation on the circular economy, building renovation, biodiversity, farming and innovation.

Green recovery packages are proposed environmental, regulatory, and fiscal reforms to rebuild prosperity in the wake of an economic crisis, such as the COVID-19 pandemic or the Global Financial Crisis (GFC). They pertain to fiscal measures that intend to recover economic growth while also positively benefitting the environment, including measures for renewable energy, efficient energy use, nature-based solutions, sustainable transport, green innovation and green jobs, amongst others.

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