Green Growth

Understanding more about Green Growth

We believe that previous models of economic growth are no longer suitable as environmental pollution, natural resource depletion and overpopulation issues are depleting natural resources and casting a shadow on our future.

Instead of focusing merely on economic growth, we embrace, advocate for and promote green growth development that takes both environmental sustainability and social inclusivity into consideration. Being sustainable isn’t just about being green, it’s also making sure that we are able to adapt and cope with our daily lives.

Come, find out more about Green Growth and why we are such strong advocates of this exciting new way to achieve economic and social development for all!

The imperative for Green Growth

Green growth means fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies.

We need green growth because the risks from development are rising as growth continues to erode natural capital. If left unchecked, this will mean increased water scarcity, worsening resource bottlenecks, greater pollution, climate change, and unrecoverable biodiversity loss.

These tensions in themselves may undermine future growth prospects for at least two important reasons:

  • It is becoming increasingly costly to substitute physical capital for natural capital. For instance, if water becomes scarcer or more polluted, more infrastructure to transport and purify it is needed.
  • Change does not necessarily follow a smooth, foreseeable trajectory. For example, some fish stocks suddenly collapsed after declining only slowly for years.

If we want to ensure that the progress made in living standards over the past fifty years does not grind to a halt, we have to find new ways of producing and consuming things, and even redefine what we mean by progress, how we pursue progress and how we measure it.

A logical response

The eradication of poverty and all the challenges that flow from this remains a priority for the world.

It is clear from seminal work undertaken by the UN and its agencies that the prevailing development scenario is not sustainable and is leading not only to the depletion of the world’s natural assets, but is not actually achieving the desired inclusive approach. This is why the UN’s Sustainable Development Goals are needed.

In many respects, a green growth approach represents a holistic response that seeks to reconcile the desire to respond to poverty issues, well-being and inclusiveness, with the urgency to bring unsustainable development to a hault. There is a need for a balance between the desires to protect the natural resources with the desire to eradicate poverty.

If we truly want to ensure that the progress made in living standards in these past fifty years does not grind to a halt, we must find new ways of producing and consuming things; to determine a new green way of living.

What others say about Green Growth

The concept of Green Growth is still being debated internationally and refined through academic study and engagement between interested parties advocating for sustainable growth. Consequently, there is not yet a universally accepted definition. However, three definitions from highly respected organisations are set out below, which we believe are very instructive in gaining a sense and scope of the green growth concept.

Green Growth is a stated direction

We glean from these definitions that green growth represents a pathway, a stated direction, that enables economic growth to be pursued, but with a strong emphasis on social inclusion and using natural resources in a sustainable manner. It represents a viable alternative to traditional industrial economic growth, which has been responsible for the depletion of the world’s natural resources and has led to climate change.

It is becoming increasingly clear that a new green growth paradigm is needed urgently given that the risks to development are rising as growth continues to erode natural capital. If left unchecked, this will lead to further increased water scarcity, worsening resource bottlenecks, greater pollution, climate change, and unrecoverable biodiversity loss.

An Asian perspective

The bleak future scenario derived from traditional industrial growth is particularly true for developing countries like those in Asia, due to their dependence on natural assets and acute exposure and vulnerability environmental risks.

However, there is a particular challenge for the poorer countries where economic and social development seek to provide just the basic needs for the population. In these countries, there is a fundamental need to eradicate poverty and raise the living standards of the people by responding to both micro- and macro-level pressures. In short, the pace of economic development for poorer countries cannot simply be slowed down.

Micro-level pressures may manifest through a lack of access to basic services such as shelter, fuel and food and water. While macro-level pressures appear as threats to stable livelihoods due to unemployment, poverty, social inequality, or resource scarcity or mismanagement. The challenge for leaders in Asia today relates to the manner in which they might mount an effective response to these micro and macro level pressures, but accomplish this through a new growth model or framework that secures the desired economic and social development. Specifically, in a way that is sustainable and does not have an adverse impact on the environment, including human habitats, and its natural resources.

In many respects, countries in Asia have only recently started their economic development journey and therefore still have the opportunity to move away from conventional growth strategies towards a green growth model, with the aim of building resilient and fairer economies around a vision of sustainable development and inclusiveness. For the more developed countries, future growth strategies will be a transition process, away from deep rooted traditional practices towards the type of sustainability set out in the UN’s Sustainable Development Goals.

The economic case for green growth

There are cynics that cast doubt on the green growth model citing that it is likely to come at a substantial cost. This scepticism is based upon a range of incorrect assumptions. Firstly, it assumes that the current traditional growth based economy operates efficiently and that the introduction of green growth methodologies will simply generate additional cost. Secondly, it relies upon the premise that any post traditional development clean-up or remedial action does not come at a significant cost, whether financial, social or environmental.

However, research and experience now undermines these assumptions and it is evident that prevailing economic systems are not optimal given that decisions are often based on inadequate knowledge and asymmetric information. Typically, ecosystem goods and services are made available for free and therefore the cost and impact of their depletion on economic activities is not adequately priced into decision making.

The costly impact from inefficient traditional economic activities

Over exploitation

There are many cases globally of where a pristine marine environment is made available, free of charge, to commercial fishing, aquaculture and tourism without any attempt to determine sustainable carrying capacities.

As seen in so many of these locations around the world, this approach only leads to the deterioration and viability of the reef and ultimately the loss of the very natural asset that can no longer support the commercial operations.

Pollution

As seen in so many of these locations around the world, this approach only leads to the deterioration and viability of the reef and ultimately the loss of the very natural asset that can no longer support the commercial operations.

In essence, current economic models are short sighted in managing the natural resources used to generate economic and social development. Once these natural assets are lost, the economic and social gains are lost with them; a significant cost indeed.

Towards inclusive Green Growth

As we have been arguing, current models of economic growth rarely account for the many social and environmental externalities that exacerbate poverty in developing countries in Asia. Consequently, green growth seeks overcome this by putting development on a more robust and sustainable foundation.

It recognises the need to grow and develop the economy, but it seeks to do so while maintaining, increasing or restoring environmental and social assets as depicted in the figure below. Green growth aims to build a more robust and sustainable development model for the longer term.

Sustainable development recognises that the economic, social development, and environmental dimensions of development are equally important pillars for ensuring human welfare and sustainability. The traditional economic model has predominantly focused on growing the economy, which at times has led to the depletion of social (Soc-) and/or environmental (Env-) assets, like water stress, pollution, land degradation, biodiversity loss and climate change.

A green growth model seeks to grow the economy, while maintaining or increasing critical environmental (Env+) and social (Soc+) assets, thereby placing the economy on a more robust and sustainable foundation. Importantly, it aims to ensure that development is inclusive and that everyone participates in the gains from economic growth.

Low-Carbon Green Growth is feasible

A strong case has been made for the need to address climate change, poverty, the depletion of resources and energy security concerns within the Asian context. However, of all these issues climate change represents a significant and pressing area requiring attention and policy development.

ADB’s 2012 publication Policies and practices for Low- Carbon Green Growth in Asia raises some very pertinent questions for the region and for GGAF’s own work in this area. The publication highlights that in addition to prevailing environmental policy, it is also necessary to consider to what extent climate policies can help to reduce energy use, poverty and resource use, as well as increase productivity. More precisely, to what extent can emerging Asia’s other developmental policies contribute to the avoidance of dangerous climate change?

The implications are clear for any green growth strategy that seeks to mount an effective response. It must consider a wide range of thematic areas that covers the breadth of economic development and industrialisation, which extends to the size of its economy, the level of industrialisation, and the efficiency of its energy use, as well as population, lifestyle choices and land use changes. The ADB publication concludes that as a consequence of rapid and carbon intensive growth, the Asian region is fast becoming a major source of greenhouse gas emissions.

The ADB publication suggests that there is a benefit to transitioning to a low carbon economy and suggested that these benefits manifest in at least four ways.

Low-Carbon Green Growth is actually an attractive proposition

Having established that Low-carbon green growth is feasible, the ADB publication makes some important points that demonstrates that Low-carbon green growth is also attractive from an economic perspective. This insight is important as it provides key messaging points in making the case for a green growth strategies; points that we seek to develop and refine.

Having established that Low-carbon green growth is feasible, the ADB publication makes some important points that demonstrates that Low-carbon green growth is also attractive from an economic perspective. This insight is important as it provides key messaging points in making the case for a green growth strategies; points that we seek to develop and refine.

According to the publication, there is now a unique opportunity to invest in change and therefore the sooner Asian countries take advantage of low-carbon green growth, the better it will be for their long-term development prospects, economic restructuring and their quest to find new drivers of growth.

It emphasises that even though the transition to a low-carbon green growth paradigm is a long term process, the following years are crucial for Asia to seize the economic, social and environmental opportunities, gain competitive advantage and show global leadership through regional cooperation.

Developing a Green Growth Strategic Framework

A Green Growth Strategic Framework represents an intentional and concerted strategy that charts a roadmap towards a vision to achieve economic growth that is socially inclusive and environmentally sustainable.

An effective Green Growth Strategic Framework needs to be comprehensive in the thematic areas that is addresses. It also needs to cover the breadth of economic development and industrialisation, as well as other key issues like urbanisation and energy security.

In practice, these thematic areas represent green growth pathways in their own right. This focus will ensure that there is no duplication of effort, but instead will aim to promote a set of reinforcing policies and responses based upon specific themes that together work towards securing the longer term vision of sustainability for the region and world’s natural resources

This is the basis upon which the Foundation has developed its own Green Growth Vision, Goals and Green Growth Strategic Framework.