Some convenient truths for 'green growth'
by Varad Pande | As negotiators engaged in a heated debate at the climate change talks in Warsaw last week [11-23 November 2013], a related concept called 'green growth' is gaining currency and proving equally controversial. At one level, it is hard not to 'like' (to use a Facebook term) green growth - a concept that brings together the best of 'economic growth' and 'environmental sustainability'. In countries such as India - where a recent World Bank study shows that environmental degradation costs 5.7 per cent of gross domestic product every year, the necessity of a green growth approach seems obvious.
So why has green growth become contentious? First, many developing countries feel that green growth could become a tool to limit their economic growth, by imposing unnecessary environmental constraints. They argue that much of the global environmental degradation has been caused by developed countries, leaving little "environmental space" for them. If anyone, it is developed countries who should practise green growth and transition to low consumption paths, rather than preaching it to others.
Many see green growth as a 'post-material' concern, a luxury that developing countries can scarcely afford. Some even see green growth as a conspiracy by developed countries to put up new non-tariff trade barriers or create markets for their (green) industries, and to impose new conditionalities on foreign aid. Conspiracy theories aside, the real question facing the green growth agenda is about 'trade-offs'. How will developing countries be compensated if they decide to follow a (more expensive) greener growth path? How will 'green technologies' be shared, and on what (financial) terms? These are the questions that will define how the green growth agenda progresses.
The Rio+20 Conference held last year attended by several heads of government, including India's prime minister, was an important milestone for the green growth debate. Green growth, or green economy, was incorporated into the final agreement and agreed to as 'one of the important tools available for achieving sustainable development'. It was seen as a set of guidelines, with each country given freedom to choose their own approach. This impetus needs to be sustained. While international negotiations will be long and painstaking, we can do more than just wait and watch, and push ahead with tangible initiatives. Here are three concrete ideas that offer win-win opportunities.
First, since the major trade-offs involves finance, an international fund to finance green growth investments could be set up. This could be particularly useful for co-funding greener infrastructure in developing countries where the bulk of the modern infrastructure will be built in the coming decades. The fund could also finance 'venture-capital' type high-risk early-stage investments in green technologies that would not happen on their own through commercial finance. Previous multilateral financial initiatives, such as the Montreal Protocol, that financed the phase-out of chlorofluorocarbons and, more recently, the International Finance Facility for Immunisation, show us that such an approach is feasible if the world community puts its mind to it. A Green Climate Fund along these lines has been on the discussion table for a while now but little tangible progress has been made. Since universal agreement will not be easy, the fund could initially be a plurilateral initiative, with a group of like-minded countries capitalising it, and others coming on board over time.
Second, countries could set up a major new initiative on technology co-operation for green growth, that focuses on the 4Ds - development, demonstration, dissemination and diffusion of green technologies (such as more energy efficient buildings or emissions monitoring technologies), implemented through a network of institutions across the world. The fund discussed above could finance many of the network's activities.
The Rio+20 agreement called for a 'facilitation mechanism that promotes the development, transfer and dissemination of clean and environmentally sound technologies' and a technology co-operation mechanism has been under discussion in the climate negotiations, but these seem to be moving painfully slowly. Once again, a plurilateral initiative may get things going. Here too, previous examples of global co-operation, such as the Consultative Group on International Agricultural Research, that supported the first Green Revolution in agriculture, provide us with useful models.
Third, a major initiative to promote valuation of ecosystem services, i.e., quantifying the economic benefits of the environment, and mainstreaming 'green' national accounts needs to be pushed. Existing initiatives such as The Economics of Ecosystems and Biodiversity and the Wealth Accounting and the Valuation of Ecosystem Services Partnership provide a good start. Countries such as India have already embarked on a major green national accounting initiative, with a government appointed expert group chaired by Sir Partha Dasgupta charting the road map for a new paradigm of 'national wealth' and economic growth that adequately factors in the environment. Such green accounting initiatives help objectively estimate costs, identify trade-offs and prioritise win-win opportunities.
Instead of being embroiled in theological and ideological debates about the merits and conspiracies of green growth, the world will be better served if we prioritise concrete initiatives such as these that create the conditions for a genuinely greener and more prosperous world.
This article first appeared on the Business Standard
Varad Pande is Officer on Special Duty (OSD) to India’s Minister for Rural Development, where he advises on sustainable livelihoods, climate resilience, and skills. Previously he was OSD to the Minister for Environment, advising on climate change and environmental governance. Varad is a member of the Government’s Expert Group on Low Carbon Inclusive Growth. He advises Prof Abhijit Banerjee on the UN SG’s High Level Panel on the Post-2015 Agenda and was advisor on the UN SG’s Global Sustainability Panel.