Since the financial crisis and the Great Recession, economic growth has been at the top of the political agenda in most countries. In some quarters, there have been calls for urgent efforts to stimulate a return to business-as-usual growth, at any cost. In others, at least for a while, commentators have concluded that low or zero growth in developed economies is inevitable, and that nothing much can be done. Some even consider economic growth undesirable, often for environmental or social reasons.
Both the “business-as-usual” view and “no growth” views are dangerously misguided. Economic growth is a natural element of a flourishing society, where development goals are achieved, poverty is reduced and human wellbeing improves. But business-as-usual growth is self-defeating; it undermines the very assets that allow growth to occur. A new approach is required and is available. Green growth integrates environmental concerns, especially climate change, into growth.
It is the only growth path that allows humanity to develop and flourish, reduce poverty and achieve development goals, while at the same time protecting natural capital – such as climate stability – without which growth and development will be retarded or reversed. The good news is in addition to being necessary, the green growth model is also incredibly attractive, because it:
1. Creates prosperity: A green growth model implies a new wave of technological change, full of innovation, the dissemination of new ideas, and will lead to a cleaner, quieter, safer, more efficient, more secure and more sustainably prosperous world;
2. Builds community: Key elements of green growth, such as energy efficiency, public transport and closedloop consumption models, require bringing communities together to share lessons and insights and make the most out of resources;
3. Reduces risks: In addition to reducing the worst risks of climate change, a green growth model also reduces shorter-term economic risks. It is likely that 10 or 15 years from now, other countries will tax goods from countries that subsidise pollution (by not dealing with it). Those countries that do not transition early will eventually have the transition forced upon them. And early means the transition can take place in a measured and structured way. Many countries – including New Zealand’s neighbours in the Asia-Pacific region – are already transitioning their economies onto a green growth path. Australia has introduced a broad-based carbon price, with full carbon trading by 2015.
This will link with the European and New Zealand carbon trading systems. South Korea is making strong and determined moves to capture the benefits from green growth, and houses the headquarters for the new Global Green Growth Institute. China has taken a leadership position in the production and installation of wind and solar technologies, and has launched seven pilot carbon trading schemes. In Europe too, there is strong commitment of the EU as a whole, Sweden has had a strong carbon price for 15 years and the UK is putting a floor under carbon prices. The Californian carbon trading scheme is up and running. And so on. The fact that New Zealand’s neighbours are transitioning to green growth makes it easier for New Zealand to do the same, and more costly if it does not.
I therefore warmly welcome research, such as this report, that develops and shares insights into green growth. This report shows that there are important economic opportunities for an agricultural trading nation such as New Zealand in rapidly transitioning to green growth. For instance, humanity needs to develop technologies to provide food for 9-10 billion people within a few decades. New Zealand has an enormous opportunity to develop a high-yield, low-emissions agricultural system that would both increase national prosperity and contribute to solving a major global problem.
More broadly, the green growth transition can protect New Zealand’s current competitive advantages and globally respected clean green brand, and create new sources of wealth. Sharing this insight within New Zealand society will be critical to taking full advantage of the green growth opportunity, because success requires industry and government to work together. This report identifies 21 specific green growth opportunities that build on existing policy in important areas; these represent a good start to charting a green growth pathway for New Zealand.
Professor Lord Nicholas Stern
IG Patel Professor of Economics & Government and Chairman of the Grantham Research Institute on Climate Change and the Environment, LSE.Download (300 page PDF, 5.2MB)