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Posted by: David Hone

Green Growth or Green Confusion?

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I have just been at the inaugural Global Green Growth Forum (3GF) in Copenhagen. This was a high level event, opened by the Crown Prince of Denmark and the new Danish Prime Minister, then following the initial panel discussion there was an introductory keynote by United Nations Secretary General Ban Ki-Moon – in person. The venue was also around the corner from the Copenhagen Tesla dealership!! 

So the event got off to a flying start, but what then? One of the issues for me is that it wasn’t entirely clear what the conference was actually about. Green growth has become one of those new catch phrases that means many things, depending in large part on the listener. Perhaps the best articulation came in a coffee break discussion – “green growth” is the recognition of the type of growth in energy production and the provision of key goods and services that will be required over the coming decades as some three billion people move from a relatively low income status to middle class.

In fact this income shift is well underway and is placing stresses on a number of systems. Rising CO2 in the atmosphere is perhaps the early warning, but little has been done to mitigate that problem. Now there is concern about water, food, energy supply and general resource availability. Unlike the CO2 issue, there is little clarity as to what we might do about these issues. Faced with rising CO2 emissions, economists, the business community and much of civil society have been clear on the course of action to pursue – to put a price on carbon. We know how to do this, we know the timeframe within which it must be done and we have a reasonably clear notion of where it will lead (CCS, renewable energy etc.), but even this seems beyond our collective capacity to act. Instead, we are arguing about science, an otherwise solid bedrock of society.

At its root, the green growth agenda feels like a growing worry that the market structure we have created over the last two centuries isn’t sufficiently robust to take us forward and that somehow market fundamentals like supply, demand and ultimately price won’t work. It’s not exactly a surprise that we might be thinking this today, after all the financial markets have hardly done us any favours over the last two to three years. But does that mean markets in general will let us down? In the 1970s similar worries surfaced – then it was overpopulation, food supply and energy as the primary concerns. It was also a time of deep recession (1974), oil price shocks(1973) and a prevalence of floods (Australia 1974) and famine (Ethiopia 1973-74). But economies grew, the energy system adapted, amazing new technologies surfaced and food supply issues soon faded.

So back to the conference in Copenhagen and two days of leading figures talking about all things green. It was certainly interesting, but I don’t think it got very far. Leadership was identified as a key component, but there was no articulation as to where that leadership should take us. In fact, when one key panelist was answering a question on the agenda for Rio+20 he said that the agenda was currently lacking because there was no leadership. There was also a spattering of business bashing (e.g. “it is the fault of Japanese business that Japan won’t accept a second Kyoto commitment”) and even the assertion that government had sent a clear signal to business that it was serious about addressing climate change because of the agreement on the 2 °C target.

It looks like the green growth agenda is here to stay, even though we may just decide to take our chances with the market system that we have. But we shouldn’t do nothing. The CO2 issue represents a market failure, the Stern Report  made this clear in 2006. Arguably, deforestation is another. There are ways to address these failures within the existing market system, the application of a carbon price as discussed above is one. The development of REDD has the necessary ingredients to tackle deforestation.

A green growth agenda that can propose, clearly define and implement a limited number of such approaches is what we need. Hopefully the meeting in Copenhagen was a forerunner to this, rather than just a taste of more and more discussion forums.



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David Hone

David Hone serves as the Chief Climate Change Advisor for Royal Dutch Shell. He combines his work with his responsibilities as a board member and Chairman of the International Emissions Trading Association (IETA). Additionally, he works closely with the World Business Council for Sustainable Development and has been a lead contributor to many of its recent energy and climate change ...

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October 16, 2011

A guest says:

"...and even the assertion that government had sent a clear signal to business that it was serious about addressing climate change because of the agreement on the 2 °C target."

"A goal without a plan is just a wish.", Antoine de St. Exupery

I would suggest that, at least in the US, the clearest signal government has sent industry is the attempted regulatory adoption of the "Shylock verdict", in which industry may take its "pound of flesh" as long as it does not spill "one drop of blood". In the face of this effort, industry is following Shylock's example, complaining loudly and angrily but doing nothing. Down that path lies progress! (sarc off)

To continue the Shakespearian metaphor, the global effort at climate change mitigation has so far been: "all sound and fury, signifying nothing". And now, onward to Durban. Let the "sound and fury" begin anew!

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October 15, 2011

Rick Engebretson says:

Very good summary. Hopefully, I can offer some marginally useful feedback.

In my area, there are people looking for "leaders", and people leaders are looking for. The people leaders are looking for are already out in the woods, nuturing them, and the forest and natural landscape is improving. Unfortunately, there are a lot of people law enforcement is looking for also in these forests. But law enforcement seems increasingly interested in leaders, too.

I went through the same thing in a beat up urban area some 30 years ago that recently hosted the Republican National Convention and more recently got a ton of money from Nancy Pelosi to become a commuter rail hub in the upper Mid-West US. Rare bi-partisan support. I pushed the internet from there anecdotally.

Yes, it is confusion. How can we know our efforts become what we hope they will be??? How can a soldier know the bullet will miss??? But we soldier on.

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