Abstract
The world economy today is facing two major threats: increasing environmental degradation and a growing gap between rich and poor. Drawing on historical and contemporary evidence, this book has argued that these two threats are symptomatic of a growing structural imbalance in all economies, which is how nature is exploited to create wealth, and how this wealth is distributed among the population. The root of this imbalance is that natural capital is underpriced, and hence overly exploited, whereas human capital is insufficient to meet demand, thus encouraging wealth inequality.
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See, for example, Jeremy Rifkin (2011) The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World. London: Palgrave Macmillan. Rifkin’s positive view of innovation is based on what he calls the “five pillars of the Third Industrial Revolution”: (1) shifting to renewable energy; (2) transforming the building stock of every continent into micro-power plants to collect renewable energies on-site; (3) deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies; (4) using Internet technology to transform the power grid of every continent into an energy-sharing inter-grid that interacts in a decentralized way just like the internet; and (5) transitioning the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart, continental, interactive power grid.
Robert J. Gordon (2012) “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds.” NBER Working Paper 18315. Cambridge, MA: National Bureau of Economic Research.
This view has been expressed by the UNEP (2011) Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication — A Synthesis for Policymakers. Nairobi: UNEP. Available at: www.unep.org/greeneconomy: “This recent traction for a green economy concept has no doubt been aided by widespread disillusionment with our prevailing economic paradigm, a sense of fatigue emanating from the many concurrent crises and market failures experienced during the very first decade of the new millennium, including especially the financial and economic crisis of 2008. But at the same time, we have seen increasing evidence of a way forward, a new economic paradigm — one in which material wealth is not delivered perforce at the expense of growing environmental risks, ecological scarcities and social disparities.”
Organization for Economic Cooperation and Development (OECD) (2011) Towards Green Growth. Paris: OECD. See also the various documents and reports available at the Green Growth Knowledge Platform, http://www.greengrowthknowledge.org/
See also Edward B. Barbier (2010) A Global Green New Deal: Rethinking the Economic Recovery. Cambridge: Cambridge University Press;
Nick Robins, Robert Clover and Charanjit Singh (2009) Taking Stock of the Green Stimulus, 23 November, New York: HSBC Global Research;
and Nick Robins, Robert Clover and D. Saravanan (2010) Delivering the Green Stimulus, 9 March. New York: HSBC Global Research.
Pew Charitable Trusts (2009) The Clean Energy Economy: Repowering Jobs, Businesses and Investments Across America. Washington, DC: Pew Charitable Trusts. In comparison, the Pew report found that the biotechnology sector employed fewer than 200,000 workers, or approximately 0.1% of total US jobs in 2007, and the fossil fuel sector, including utilities, coal mining, and oil and gas extraction, employed 1.27 million workers in 2007, or about 1% of total US jobs.
Sustainable Prosperity (2012) Towards a Green Economy for Canada. Ottawa: Sustainably Prosperity.
Environmental Careers Organization (ECO) Canada (2013) Profile of Canadian Environmental Employment: Labour Market Research Study 2013. Available at: https://resourcemanagementdmt.files.wordpress.com/2014/02/profile-of-canadian-environmental-employment.pdf
Motoko Aizawa and Chaofei Yang (2010) “Green Stimulus, Green Revolution? China’s Mobilization of Banks for Environmental Change”, Journal of Environment and Development, 19(2): 119–144;
M. Ho and Z. Wang (2015) “Green Growth for China?” Resources, 188: 40–44;
and L. Ping, Y. Danui, L. Pengfei, Y. Zhenyu and D. Zhou (2013) “A Study on Industrial Green Transformation in China”, Nota di Lavoro 27. Milan, Italy: Fondazione Eni Enrico Mattei.
W. Cai, C. Wang, J. Chen and S. Wang (2011) “Green Economy and Green Jobs: Myth or Reality? The Case of China’s Power Generation Sector”, Energy, 36(10): 5994–6003.
W.-S. Hwang, I. Oh and J.-D. Lee (2014) “The Impact of Korea’s Green Growth Policies on the National Economy and Environment”, BEJ, Economic Analysis and Policy, 14(4): 1585–1614; and Barbier (2010), op. cit.
Sam Fankhauser, Alex Bowen, et al. (2013) “Who Will Win the Green Race? In Search of Environmental Competitiveness and Innovation”, Global Environmental Change, 23: 902–913.
For example, a study of the German feed-in-tariff by C. Böhringer, et al. (2014) “The Impacts of Feed-in Tariffs on Innovation: Empirical Evidence from Germany”, CESIFO Working Paper No. 4680. Center for Economic Studies and Ifo Institute, Germany, March 2014 found that the subsidy did lead to a massive growth in electricity production from renewables; however, the policy did not reduce greenhouse gas emissions substantially, as renewable expansion led to too little abatement from other mitigation opportunities such as fuel switching, nor was there a significant boost to clean energy innovation.
Fankhauser et al. (2013), op. cit., p. 911. Similarly, the Asian Development Bank (ADB) and Asian Development Bank Institute (ADBI) (2013) Low-Carbon Green Growth in Asia: Policies and Practices. Manila: ADB and ADBI, pp. 18–19 identifies “low-carbon green growth” in Asia as “a process of structural change”, which envisions patterns of industrial development, specialization and innovation, “thereby defining low-carbon development as the capacity of an economy to generate new dynamic activities”. Thus, a major component of this strategy is to ensure the dissemination of low-carbon and energy-saving technologies, the adaption and dissemination of these technologies throughout the economy, support for infant green firms, government procurement policies to achieve mainstream emission reduction targets, and public sector investments to support these industrial developments. In other words, the approach advocated is to enhance economy-wide “green” structural transformation through a combination of “public investment and industrial as well as trade policies, aiming at encouraging in both cases a strong private sector response”.
C. Lu, Q. Ton and X. Liu (2010) “The Impacts of Carbon Tax and Complementary Policies”, Energy Policy, 38: 7278–7285.
Sirini Withana (2015) “Overcoming Obstacles to Green Fiscal Reform”, Paper for the Green Growth Knowledge Platform Third Annual Conference: Fiscal Policies and the Green Economy Transition: Generating Knowledge — Creating Impact. 29–30 January, Venice, Italy: University of Venice. Available at: http://www.greengrowth-knowledge.org/event/conference2015#node_event_full_group_event_program
See Edward B. Barbier and Anil Markandya (2012) A New Blueprint for a Green Economy. London: Routledge/Taylor Francis, pp. 114–119. The Organization of Economic Cooperation and Development tracks environmentally motivated subsidies for a number of economies at http://www2.oecd.org/ecoinst/queries/#, which is frequently updated.
See Edward B. Barbier (2014) “Is Green Growth Relevant for Poor Economies?”, Keynote Address, 3rd International Conference: Environment and Natural Resources Management in Developing and Transition Economies, CERDI, Clermont-Ferrand, France: Clermont University, 8–10 October.
Lawrence H. Goulder (2004) Induced Technological Change and Climate Policy. Arlington: Pew Center on Global Climate Change.
See also Daron Acemoglu, Philippe Aghion, Leonardo Bursztyn and David Hemous (2012) “The Environment and Directed Technical Change”, American Economic Review, 102(1): 131–166.
Acemoglu et al. (2012), op. cit.; ADB and ADBI (2013), op.cit.; Goulder (2004), op. cit.; Hwang et al. (2013), op. cit.; Lu et al. (2010), op. cit.; M. Blesl, T. Kober, D. Bruchof and R. Kuder (2010) “Effects of Climate and Energy Policy Related Measures and Targets on the Future Structure of the European Energy System in 2020 and Beyond”, Energy Policy, 38: 6278–6292;
Carolyn Fischer and Richard Newell (2008) “Environmental and Technology Policies for Climate Mitigation”, Journal of Environmental Economics and Management, 55: 142–162;
David Popp (2010) “Innovation and Climate Policy”, NBER Working Paper 15673. Cambridge, MA: National Bureau of Economic Research.
Even the role of renewable energy technologies in ending the problem of global energy poverty is not straightforward. According to United Nations Development Programme (UNDP) (2010) Energy for a Sustainable Future: The Secretary-General’s Advisory Group on Energy and Climate Change, Summary Report and Recommendations. New York: UNDP, more than 1.5 billion people live without access to electricity, another billion have only unreliable electricity, and nearly half the world’s population depends on traditional biomass fuels for cooking and heating.
J. Rogelj, D. L. McCollum and K. Riahi (2013) “The UN’s ‘Sustainable Energy for All’ initiative is compatible with a warming limit of 2°C”, Nature Climate Change, 3: 545–551, examined the compatibility of achieving three global energy objectives by 2030: providing reliable access to electricity or clean fuels for cooking, or both, to three billion poor people currently without such access; doubling the share of renewable energy in final energy, from 15% to 30%; and doubling the rate of energy efficiency in all economies. The analysis found that ensuring universal access to modern energy services was not only attainable with overall climate mitigation strategies for limiting global warming to 2°C but also was fully consistent with the 2030 energy efficiency objective. The only goal not achieved was for renewable energy, which comprised just 28% of final energy by 2030, because energy access for cooking and heating is provided mainly by switching from biomass to low-pollution fossil fuel alternatives rather than renewables. One also has to be careful in assuming that solar and other renewable energy sources are more financially feasible for the rural poor in remote areas.
According to C. E. Casillas and D. M. Kammen (2010) “The Energy-Poverty-Climate Nexus”, Science, 330: 1181–1182, the use of communitylevel marginal abatement cost curves in rural Nicaragua indicates that the options for replacing off-grid diesel generation of electricity, which is the main method of expanding rural energy services, can vary considerably in cost. For example, solar photovoltaic electricity would cost villagers over $300 per tCO2/year conserved, whereas energy efficiency measures, such as meter installation, compact fluorescent lights (CFL) and more effective public lighting, actually save households almost $400 per tCO 2/year mitigated.
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Barbier, E.B. (2015). Redressing the Structural Imbalance. In: Nature and Wealth. Palgrave Macmillan, London. https://doi.org/10.1057/9781137403391_9
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DOI: https://doi.org/10.1057/9781137403391_9
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