sowing the seed corn

Last month I attended a Chatham House event on ‘Green Growth: Transforming economies for competitiveness and resilience?’. The concept of green growth is based on the idea that there is a form of economic growth and development that uses natural resources in a sustainable way. An additional facet of the concept is that perhaps in becoming ‘green’ and sustainable we can stimulate economic growth and prosperity. It is an attractive concept; rather than seeing environmentally-friendly measures as a hindrance they could instead be a solution to both our economic and environmental problems.

As might have been expected from the attendees of such a conference, there was generally a great deal of support for the concept and its benefits; there were a range of examples of how companies were seeing economic gains and increasing competitiveness by moving to sustainable business models. In addition Sweden, Denmark, Mexico, Ethiopia and Indonesia showcased their green growth strategies. Dr Fraser Thomson from the McKinsey Global Institute discussed the opportunities for increasing both resource use efficiency and economic returns as identified in the McKinsey report ‘Resource Revolution: Meeting the world’s energy, materials, food, and water needs’. 70% of the productivity opportunities they identified had internal returns of more than 10% at current prices.

The green growth sceptics at the conference took issue, not with whether implementing more sustainable practices would be economically beneficial, but with whether green enough growth could be achieved. It was questioned whether constant growth is possible in the context of finite resources. And, whether we even want traditional economic growth in the first place; if what we really want are increased levels of human well-being perhaps we should see economic growth as just one means to an end rather than the end itself. It was overwhelmingly felt that the way that we measure growth should be altered as GDP alone is unable to reflect the wide variety of factors that make up improvements in human well-being. This was reminiscent of one of the recommendations made in the Royal Society’s ‘People and the Planet’ report: that national governments should accelerate the development of comprehensive wealth measures, including reforms to systems of national accounts and improvements in natural asset accounting.

It was also suggested that we need to be more specific about what green growth looks like in practice. The example of CO2 emissions and GDP growth in the countries of the OECD and EU was used to illustrate that there are a range of ‘greener than business as usual’ growths. Although many countries have managed to decouple CO2 emissions and GDP, only a small handful (France, Italy and Germany) have managed to absolutely decouple the two for consumption based emissions. Furthermore, none of the countries examined had managed to achieve absolute green growth sufficient to meet environmental goals.

While the numerous positive examples of green growth point to its potential, for proof of the concept and for it to truly be a solution to both our economic and environmental crises implementation will need to be significantly scaled-up. It would also need to be achieved across all resources and in a way that ensures social inequalities are not increased.

One of the key questions that the conference aimed to discuss was how to do this. A wide range of mechanisms were suggested: classical regulation; stimulating companies to innovate through market pricing signals; raising consumer awareness; rethinking GDP as our measure of growth; utilising the tool of public procurement; and implementing technology specific mechanisms such as feed-in tariffs. Although all these mechanisms seem like sensible and good ideas, I am certain that I was not alone in feeling a sense of déjà vu upon hearing them. These mechanisms have been called for numerous times before. The message from the conference was that a lack of political and public will combined with powerful vested interests hinders implementation. So what can generate the public and political will needed? The answer seems to be rather circular: proof of the economic and environmental benefits of green growth. Unfortunately, the conference ended there, but I for one would be interested to hear solutions to this circular problem.