‘Green growth’ and the new Industrial Revolution
The green growth transition will be large, system-wide and structural. In other words, a new industrial revolution. This will require new green growth policies that foster economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies (OECD, 2011). More and better evidence is needed to support the design of effective green growth policies and to understand their impact on the economy. This policy brief summarises the main policy implications of a two-year research programme, sponsored by the Global Green Growth Institute (GGGI), which aimed to contribute to the growing evidence base.
The research programme focused on a number of important aspects of green growth, primarily as related to climate change, namely climate-resilient development, the economics of internalising the carbon externality via carbon pricing and the impact of green growth policies on jobs and innovation.
Key findings for policy-makers include:
- Environmental regulation, including climate change policies, are unlikely to harm economic growth and competitiveness unless there are large differences in policy stringency between countries. Conversely, these policies drive innovation in new, high value, clean technologies that have broad application across economic sectors. As a result, environmental regulations can be a source of economic growth and future prosperity.
- Economic development plans should become more climate-aware.
- Development planners and adaptation planners need to work more closely together.
- In order to cushion the impact of economic fluctuations on the carbon price, it is preferable that the policy – whether it is a tax or cap-and-trade – covers as large a group of emitters as possible.
- Efforts to establish common statistical standards for measuring the number of existing green jobs should be accelerated.
- The likely labour market impacts of economy-wide green growth should be assessed using an appropriate macroeconomic framework.
- Strategies for coping with employment losses in the sectors that will suffer from green growth policies need to be developed.