Green growth is a concept in economic theory and policymaking used to describe paths of economic growth that are environmentally sustainable. The term was coined in 2005 by the South Korean , a director at UNESCAP. 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.
Several countries and international organizations, such as the Organisation for Economic Co-operation and Development (OECD), World Bank, and United Nations, 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.
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.
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.
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).
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. The Environmental Kuznets curve (EKC), theorizing that environmental pressure from economic growth first increases, then automatically decreases due in part to tertiarization, is disputed. 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".
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 to stimulate the economy during the 2008 financial crisis: At the request of countries, the OECD in 2011 published a Green Growth Strategy 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.
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.Estimating Employment Effects of the Circular Economy
According to the International Labour Organization, a shift to a greener economy could create 24 million new jobs globally by 2030, if environmental 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.Green economy could create 24 million new jobsGreening with jobs – World Employment and Social Outlook 2018Tobias, Kruse. Employment Implications of Green Growth: Linking jobs, growth, and green policies June 2017.Green jobs as an unemployment solution
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. They also say that new investment in nature recovery could quickly create 10,000 new jobs.
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. 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. 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). 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. 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.
Green growth as a policy strategy Organizational efforts on green growth IEA: In 2020 the IEA published a strategy towards a "Clean Energy New Deal", which is being strongly promoted by executive director Fatih Birol. IMF: In 2020 Kristalina Georgieva, the head of the IMF, urged governments to invest emergency loans in green sectors, scrap subsidies to fossil fuels and tax carbon. UNESCAP: In 2012, the United Nations Economic and Social Commission for Asia and the Pacific released the Low Carbon Green Growth Roadmap for Asia and the Pacific to explore the opportunities that a low carbon green growth path offers to the region. The roadmap articulates five tracks on which to drive the economic system change necessary to pursue low carbon green growth as a new economic development path. OECD: In 2011 the OECD published a strategy towards green growth. In 2012, they also published a report on green growth and developing countries. UNEP: In 2008, the United Nations Environment Programme (UNEP) led the Green Economy Initiative. World Bank: In 2012, the World Bank published its report "Inclusive Green Growth: The Pathway to Sustainable Development".Sustainable Development - Getting to Inclusive Green Growth International Chamber of Commerce (ICC): In 2010, ICC launched the unique global business Task Force on Green Economy resulting in the Green Economy Roadmap, a guide for business, policymakers and society published in 2012.ICC Green Economy Taskforce ICC Green Economy Roadmap
Organizations devoted to green growth Global Green Growth Institute: Founded in 2010 by Korean President Lee Myung-bak and later GGGI was first launched as a think tank in 2010 by Korean President Lee Myung-bak and was later converted into an international treaty-based organization in 2012 at the Rio+20 Summit in Brazil. 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), and World Bank signed a Memorandum of Understanding to formally launch the Green Growth Knowledge Platform (GGKP).2012 Annual Conference | Green Growth Knowledge Platform 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.Pages - About - Green Growth Knowledge Platform
National green growth efforts China: since at least 2006 (with its 11th 5-Year Plan), China has been committed to achieving a green economy.China's progress towards green growth Emissions growth in recent years has decelerated sharply, underpinned by tighter environmental regulations and massive green investments, including in renewable 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.) China also has an impact on the implementation of environmental technologies throughout Asia, via its Belt and Road Initiative International Green Development Coalition. EU: In 2010, the EU adopted the Europe 2020 strategy for "smart, sustainable and inclusive growth" for the 10-year period 2010–2020. In 2019, the European Green Deal was launched as "Europe's new growth strategy" with the aim of making the continent's economy sustainable. 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. South Korea: Green growth is being discussed in the National Assembly in 2020. United Kingdom: Green growth was strongly advocated in 2020 by the Committee on Climate Change.