Don’t forget the lessons of the emerging world.

So, I went back to study and I currently find myself in Paris doing a Masters in International Economic Policy. Within this I have countless new forms of inspiration. At the same time however I don’t have an unlimited supply of hours so squeezing in blogs will require some discipline. I’ll try…

Anyway, today I am supposed to be researching Greek Debt but whilst doing so I came across a Schumpeter blog in the Economist concerning Green Growth and was very happy to do so. I thus felt compelled to write.

So what does it have to say? It focuses on some emerging-world companies which are combining growth with greenery. They have been identified by a new study conducted by the World Economic Forum and the Boston Consulting Group. They include India’s Shee Cement and Broad Group, a maker of air conditioning, in China as well as Masisa a Chilean forestry company.

Dubbed “the new sustainability champions” they are using their eco-competitiveness to actually reinforce economic growth not undermine it. They have taken their various limited resources and in fact turned them into their advantage.

Manila Water, a utility in the Philippines was losing water through  wastage and illegal tapping. It reduced this waste from 63% in 1997 to 12% in 2010 by making water affordable to the poor. Broad Group taps the heat wasted from its buildings to power its machines. The Chilean forestry company, invites employees to “imagine unimaginable businesses”.

What’s even more interesting is the focus on emerging countries. As the blog reminds us this Western-centric focus on a top-down regulatory approach may not be the key in the emerging world where most of the world’s population actually lives.

“Their home-grown ideas will probably be easier for
peers to copy than anything cooked up in the West”

As discussed at the end of the article there is always the question of which came first the green or the growth? But what matters is that both are there. If we are indeed to focus on putting green first what this study and blog reminds us is that for many areas, especially in the emerging world, businesses are an essential player if this is going to work. Not only because they are a central part of everyday life but because in emerging countries where institutions and regulation may not play the same role businesses can step into the breach.

http://www.economist.com/node/21529015

Green Growth – OECD

In May of this year I went to the annual OECD Forum where they discussed economic questions for 2011 and beyond. Key subjects such as the crisis, jobs, the young and of course Green Growth were discussed. This year saw the official launch of the Green Growth paper and here was my related work. It’s a little late and I have a lot of catching up to do but I thought this was a good start.

Green Growth –Crossing Borders

So what exactly is Green Growth? Is it about implementing recycling systems? What about insulating buildings? On the other hand is it related to unemployment or education? Does it concern economic growth and furthermore what kind of economic growth? Moreover, why is Green Growth so important to us? And finally, how are we supposed to achieve this so-called Green-Growth?

Green Growth concerns all of the above and it is here where the challenge lies. What is certain, however, is that we have to take up this challenge whole-heartedly. A rising global population, growing industrial output, increasing energy demands and mounting levels of waste alongside depleting natural resources, energy scarcity and rising levels of atmospheric CO₂ indicate that something has to change. Add to this mix a recently shocked economy, high–levels of personal and government debt and on-going concerns over social-welfare and poverty it is certain that something really does need to change.

By working across silos, listening to each other and most importantly by involving as many sectors and people as we can, we will be able to achieve a growth which is all-encompassing, truly sustainable and indeed “green”. The key to its success lies in ‘crossing borders’.

First of all, this needs to cross disciplinary borders. Disciplines such as energy need to be looked at alongside transport, housing, education, welfare, as well as economics and finance. We need to take into account that, for the OECD as a whole, the contribution of renewables to energy supply increased from 4.8% in 1971 to only 7.1% in 2008[1] to see how far we need to go. Furthermore we have to realise, for example, that 96% of energy for transport is from oil-derived products[2], or that our biggest waste of energy comes from the lack of energy efficient buildings. On top of this we need to address welfare issues such as an aging population and on-going unemployment, which is currently 8.2% in OECD countries.[3] Then, questions of personal and sovereign debt as well as issues and opportunities in the financial industry should be incorporated into the solution.

Secondly, this work needs to cross disciplines. It needs governments, businesses and individuals to get involved. Government policy can indeed make a difference, this is evident from the fact that solar and wind experienced the most rapid growth in OECD member countries particularly where government policies stimulated expansion of these energy sources.[4] At the same time however businesses are very important especially SMEs which count for more than 99 percent of European enterprises and are the backbone of an economy being a major source of entrepreneurial innovation and skills.[5] The involvement of citizens is also extremely important as they are our grass-roots link to real change.

Finally this needs to cross geographical and political borders. It has to be done on a global scale to ensure that we really are achieving our goals and furthermore that we are not simply pushing the problem elsewhere. This is highlighted by figures which show China accounted for 15% of world energy production, the United States for 14%, the Middle East region for 13% and the Russian Federation for 10% in 2007. [6]

Green Growth is a big task and the nature of the challenge means that we have to work together and everyone has to be on board. Consequently, only through an open dialogue crossing borders will we be able achieve a truly sustainable economy and society.

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[1] E:\factbook-2010-en\05\01\06\index.html

[2] ‘Renewables make the difference’ European Commission 2011, p. 7.

[3] http://www.oecd.org/topicstatsportal/0,2647,en_2825_495670_1_1_1_1_1,00.html#499797

[4] E:\factbook-2010-en\05\01\06\index.html

[5] http://www.neurope.eu/articles/65119.php

[6] E:\factbook-2010-en\05\02\01\index.html