Since the old economy broke down in 2008, presidents, prime ministers and mayors have been promising their electorate "green" or "sustainable growth" -- and that is good news. In order to confront "the epidemic" of global warming and shape a safe economic future, we need to combine green and growth.
The bad news is that nobody knows what "green growth" is. The term has risen to stardom despite a very fragile fact base and almost no academic understanding of how, e.g., reducing emissions of CO2 can actually create jobs and additional activity in the economy. And that is a very dangerous situation. Without firm definitions and a body of evidence to support policies and investments, there is a great deal of risk that green growth will not happen. It will be too easy to argue against.
This is why a new study on green growth by researchers at UC Berkeley, released last week in Copenhagen by the organization Green Growth Leaders, is so important. The study, "Shaping The Green Growth Economy," provides a foundation and qualification for the global discussions on how to shape a greener economy. The researchers have gone through the literature and evidence behind green growth, and offer some fascinating and provoking ways of looking at the green economy. The fact that it is probably the first study in the world to investigate the concept of green growth is in itself amazing -- and it underlines the importance.
It concludes, first of all, that that green growth is possible. Economic growth can be compatible with reductions of emissions of CO2. Basic as it seems, this is a fundamental piece of know-how. The dichotomy that environmental progress will be at the expense of the economy -- often used by skeptics -- is, in other words, false.
In fact, evidence show that green strategies can drive growth. When the EU, President Obama and governments in Korea, China, Germany and the UK propose economic growth driven by emissions reduction, it is a viable strategy. They are not dreaming. Their views can be substantiated.
This does not mean, though, that the best argument for sustainable growth is that it creates green jobs in the energy or clean tech industry. Actually, one should be careful about pointing to very direct, short-term links between green and jobs or GDP since it very quickly becomes a tricky discussion on causal relations and on how many brown jobs are lost when creating green jobs.
The experts recommend us to see "green growth" as something bigger. Much bigger. Something that grows out of a system transformation like that of the railroad in the 18th century or the internet in the 1990es. Achieving green growth will require capitalizing on the advantages created by a new energy system -- but the gains could be enormous.
Sustainable, long-term green growth will depend on identifying and capturing the economic opportunity in three domains: new sources of renewable energy; smarter power grids and more efficient means of distributing energy; and better means of managing and optimizing energy consumption. And growth might very well happen outside the energy and clean tech sector, through innovations, services, and products, we cannot even imagine today.
Identifying today the growth caused by the new energy system in 2020 is like guessing in 1992 what kind of activity the internet would create in 2002. Nobody could foresee Facebook or Amazon, and nobody today can foresee how intelligent energy systems will transform our houses, our cars, or our work places in the future and what new businesses will be created on the back of this evolution.
But history tells us that this will happen -- and that this will lead to a new economy and a new kind of wealth, which should be the starting point of long term decisions today.