Green Growth: an imperative of economic development

30 March 2012
ITC News

As the world recovers from the economic downturn that followed the 2008 financial crisis, it has become clear that industrial development models created in the past are increasingly unsustainable, both economically and environmentally. Economic progress and population growth, particularly in developing countries, have compounded the already enormous strain developed economies have put on the world’s natural resources and ecosystems. This has increased global commodity prices and stressed the environment and supply of natural resources, stymieing growth. The world needs to embrace a new economic growth paradigm, green growth, if emerging economies are to expand and prosper and developed countries are to maintain high standards of living.

Put simply, green growth is a development model that does not view the concepts of economic growth and environmental sustainability as separate and distinct. All too often, development planners both in government and in the private sector view environmental protection as an obstacle to economic modernization or, at best, a luxury for nations that have passed through the industrialization phase of development. Conversely, environmental activists and climate change experts see market forces as the primary drivers of ecological degradation and destruction. These opposing views have been counterproductive and have impeded progress on both fronts. Green growth attempts to integrate key aspects of economic performance, such as poverty reduction, job creation and social inclusion, with those of environmental performance, such as the mitigation of climate change and biodiversity loss, and access to clean water and energy.

Political will and technological breakthroughs have made it possible for emerging economies to skip the dirty stages of development that marked much of the 20th century and for developed countries to green their economies more rapidly. Through partnerships between governments, local and international institutions, and private players, numerous countries around the world are forming green growth policies. For instance, the Global Green Growth Institute (GGGI) has partnered with the governments of Cambodia, Ethiopia, Kazakhstan, Mongolia and the United Arab Emirates as well as a multitude of local and international organizations to assist countries in developing broad national green growth programmes tailored to meet specific national and local needs.

Clearly defining and measuring green growth outcomes and successes is an ongoing and fluid process, and depends significantly on local conditions on the ground. In broad terms, the GGGI tends to measure success in terms of the implementation and continuation of green growth plans (GGPs), not only the level of commitment from partner governments and institutions and the number of stakeholders in the process, but also the degree to which the GGP is institutionalized at local and national levels, the internal capacity it has built, its development and diffusion of suitable green technology, and the level of financing it has received.

A real world example of this is GGGI’s work in Ethiopia, one of the largest African countries in terms of population, with 85 million people and growth at over 3% per year. It has a diverse geography with a wide variety of climate zones and soil conditions. In recent years, the country has experienced rapid economic growth, and despite many challenges it has demonstrated significant capacity for further economic expansion.

In this context, the GGGI partnered with the Ethiopian Government and others to draw up a comprehensive GGP designed to reinforce and provide the groundwork for the government’s broader Growth and Transformation Plan, an ambitious economic development plan intended to drive Ethiopia to middle-income status by 2025. The climate-resilient green economy strategy is designed to serve as a road map for the country’s green development. It includes efforts to strengthen the government’s institutional capacity to support the implementation of green growth policies. Local capacity is being built through the formation of sub-technical committee groups that transfer knowledge from green growth experts to the next generation of local green economy leaders. In addition, a cabinet level ministerial steering committee has been established to coordinate activities across government ministries and establish links to local organizations to facilitate buy-in and knowledge transfer.

In terms of technology, Ethiopia’s green growth plans call for green technologies and techniques to be used in various sectors, including forestry, agriculture and energy. Extensive sectoral analysis found that Ethiopia could greatly reduce deforestation by boosting farmland productivity through more intense agriculture and introducing low-emission agricultural techniques. Productivity could be increased in part by accelerated use of green household irrigation technologies, essentially motor and manual pumps that can capitalize on Ethiopia’s significant water resources. These technologies are already used on more than 100,000 hectares of land and their use is growing at a rate of 30% per year. If scaled well, they could contribute to increasing income and food security for almost 700,000 farming households, approximately five million people, in five years.

If green growth in Ethiopia is implemented successfully it will have profound impacts and implications in the context of the country’s ambitious economic plans, and could have further impacts in the region by demonstrating that green growth is a viable economic model. Ultimately, however, broad green growth success on a national level will be determined by whether Ethiopia can, over time, consistently and rapidly grow and develop its economy while mitigating greenhouse gas emissions and minimizing other forms of environmental degradation that have been characteristic of economic development. This balance applies to all nations pursuing green growth.

While GGGI focuses on partnering with developing economies, the dual threats of climate change and increasing resource scarcity have made it imperative that developed countries also adopt green growth strategies. Although governments are generally the most powerful actors in spurring green growth, sustained successful outcomes also require continued investment and creativity from the private sector and civil society. GGGI seeks to bridge these facets of society to accelerate and scale the transition of the world economy to a much more resource-efficient model of broad-based economic progress. Green growth as a concept may still be in its infancy, but the need to incorporate it into core economic policy and business strategy is urgent considering the environmental and economic circumstances we face today.