KRISTIN BANEY

810001681

BIOL 6214: ENVIRONMENTAL RESOURCES

POLICY

Policy Brief 3 – Green Growth: Economic

Theory and Political Discourse
Executive Summary:
Green growth is a relatively new concept when compared to sustainable development. Green
growth aims to make the process of growth economical while preserving the environment. It is a
much more focussed concept than sustainable development and one that might be more easily
understood. Growth in terms of Keynesian theory and market failure is discussed further.
Environmental policy can be the means of the creation of new jobs but can also be seen as a
hindrance to growth in some cases.

Introduction:
The most commonly known definition of sustainable development and the most widely referred to is
the one that was outlined in the Brundtland Report of 1987, otherwise known as “Our Common
Future.” The report defined sustainable development as development that allows for the needs of
the present without compromising the needs of future generations. This definition held within it the
importance of prioritizing the needs of poorer countries over more well-developed ones and also,
the idea that technology and society posed a limitation on the ability of the environment to meet
both the present and future needs (Brundtland, 1987).

The concept of green growth is a relatively new one, when compared to sustainable development
which was out since even before the Brundtland Report in 1987. Green growth is about making the
process of growth more efficient, resilient and cleaner without slowing it down. The green growth
concept aims to focus on resolving matters before the world is locked into expensive and difficult to
modify patterns, as well as to reconcile short and long term by offsetting short-term costs and
maximising synergies and economic co-benefits (Hallegatte et al, 2011).

Key Messages:
1) Green growth is not to be thought of as a substitute for sustainable development but as a
mean of achieving it.
2) Environmental policy can be the means of creation of new jobs.
3) Economically, it is better to face the issues of environmental degradation now than to let the
problem worsen in future.

Background:
The concept of green growth is discussed in the paper. It relates green growth to the earlier concept
of sustainable development and makes a distinction between green growth that results in long term
economic benefits of environmental protection and the strong interpretation which claims that
environmental policy can be a driver for growth. The concept of green growth was popularized
around 2008.

Four organizations are involved in the promotion of green growth. They are the Organization for
Economic Cooperation and Development (OECD), the Global Green Growth Institute (GGGI), the
United Nations Environment Programme (UNEP), and the World Bank.
Green growth is defined as growth that allows for economic growth while achieving a significant
amount of environmental protection (Jacobs, 2012). There are other definitions, but they all come
down to the same thing.

Green growth was promoted as being an offspring of sustainable development. Sustainable

development is an ambiguous concept, and can be interpreted differently by many different persons
(Lele, 1991, Hopwood et al, 2005). Green growth provides a much more focused concept in that it
was more easily understood and rather self-explanatory. However, it is stated that green growth was
not to be a substitute for sustainable development, but rather, a means of achieving it. The purpose
of green growth, thence, was to shift the focus from something that was seemingly negative (the
concept of sustainable development) to a more positive one. It was to show that environmental
protection need not come at the cost of economical growth.

Analysis:
The paper is well thought out and very well written. It provides a clear statement of the issues
(green growth) and clearly defines green growth. The author then proceeds to state the arguments
for green growth.

The concept is one that clearly states that economic growth can occur together with environmental
conservation. The modern green growth concept stated that the long term effects of a damaged
environment would be more than dealing with the issues at present. The example of the costs of
climate change was cited. It would be more feasible and better economically to act on global
warming now rather than not acting and having the problem worsen (Stern, 2007).

Keynesian theory is also discussed where it was stated that the economies that had experienced
huge setbacks during the financial crash of 2008 can be stimulated back into growth by the use of
measures aimed at improving the environment. Keynesian theory is the total spending in economy
and its effects on output and inflation (Blinder, 2008). However, it was argued that during recessions
green measures were better for short term growth.

The other issue discussed was market failure. Market failure occurs when an idealized system of
price-market institutions fail to sustain desirable activities (Bator, 1958). The environment provides a
wide range of goods and services which are over exploited and resources are used inefficiently.
Resources are misallocated and unaccounted for. It is difficult to put a price on the services that
ecosystems provide. It is argued that this is how the already developed countries got to the point at
which they are now. They exploited resources at a time when the environment was healthy and
resources were plentiful. This was termed as “brown” growth. While this was possible back then,
such levels of exploitation cannot continue.

There are four kinds of market failure that are relevant to environmental policy:

1) Inefficient use of energy and resources

2) Market left by themselves do not place sufficient resources into research and development
3) There are additional benefits to environmental policy
4) Environmental policy can improve taxation systems.

Another argument for green growth is the creation of jobs. This is because to meet standards,
companies will need more efficient technology and hence require qualified personnel.
Policy Options:
Every country should have a National Environmental Policy, for instance, Trinidad and Tobago,
implemented one in 2006. However, this policy is now being revised and the draft of the revised
policy is open for comments from the public.

Additionally, environmental companies will have their own policies, such as an Environmental Policy
which would outline the company’s commitment to upkeeping the health of the environment. Other
policies that would be implemented alongside this is a Quality Policy which ensures that the
company meets their standards and commitment to ensuring that growth is not just economical but
sustainable as well.

Policies should be implemented at a national level that equate ecosystem goods and services with
monetary value, for example, Reducing Emissions from Deforestation and Forest Degradation
(REDD).

Recommendations:
Countries and environmental companies should have a clear understanding of what green growth is
and how it differs from sustainable development.

Policies should be reviewed and updated regularly such as on a yearly basis, and approved by those
in authority. For example, national policies must be reviewed, updated and approved by government
or governmental agencies. Company policies would be reviewed, updated and approved by upper
management.

Additionally, these policies must be made public. Citizens should be aware of policies that affect
them and be given the right to challenge any part of the policy that they do not feel comfortable
with. The same goes for an environmental company. Employees must be made aware of the policies
and be given the right to comment on or address any parts of the policies that they do not agree
with.

Conclusions:
Green growth is a relatively new concept as compared to sustainable development. While it is a
concept that is easier to understand and clearer, it is not quite as widely accepted. In many
countries, strong environmental policies are seen as a hindrance to growth rather than a driver,
however, there may be some policies that can have a positive influence on growth.

Environmental degradation is much more significant today than ever before. It might be more
economically beneficial to deal with the costs of environmental degradation now than to let the
problem worsen.
References and recommended links:
Bator, Francis M. 1958. “The Anatomy of Market Failure.” The Quaterly Journal of Economics, 72 (3),
351 – 379.

Blinder, Alan S. 2008. “Keynesian Economics” The Concise Encyclopedia of Economics.

http://www.econlib.org/library/Enc/KeynesianEconomics.html

Hallegatte, Stephane et al. 2011. “From Growth to Green Growth, A Framework.” Policy Research
Working Paper. The World Bank.

Harris, Jonathan M. 2003. “Green Keynesianism: Beyond Standard Growth Paradigms.” GDAE
Working Paper No. 13-02. http://ase.tufts.edu/Gdae/Pubs/wp/13-
02HarrisGreenKeynesianism.pdf

Hopwood, Bill et al. 2005. “Sustainable development: mapping different approaches.” Wiley Online
Library. http://onlinelibrary.wiley.com/doi/10.1002/sd.244/full

Lele, Sarachchandra M. 1991. “Sustainable Development: A Critical Review” World Development, 19

(6), 607 – 621.

Republic of Trinidad and Tobago. 2006. “National Environmental Policy.”

http://www.ema.co.tt/new/images/policies/national-environmental-policy2006.pdf

Stern, Nicholas. 2007. “The Economics of Climate Change: The Stern Review.” Cambridge, UK,
Cambridge University Press.