Tunis: In the international development discourse, Green Growth and the related concept of a Green Economy are gaining increasing attention among decision-makers and development practitioners. Spearheaded by the Organization for Economic Cooperation and Development (OECD) and the United Nations Environment Programme, a range of definitions have emerged. These definitions generally share the recognition that current economic models are too limited, given the persistence of poverty, social inequalities, pollution and environmental degradation, and the additional challenge of climate change.
Similarly to the concept of sustainable development, the Green Growth model calls for a more holistic approach that seeks to maximize synergies between economic, social and environmental objectives, while minimizing trade-offs. Several African countries, including South Africa, Ethiopia, Kenya and Ghana are developing initiatives aimed at promoting greener development pathways.
Over 30 African countries adopted the Libreville Declaration, demonstrating a significant political commitment to transitioning towards a Green Economy. Within this context, the African Development Bank recognizes that a new growth paradigm is required in order to ensure that economic growth is socially inclusive and environmentally sustainable and also utilizes new growth drivers that can broadly be linked to a “Green Economy”.
Consequently as the continent’s leading development finance institution, AfDB has embarked on a process that seeks to define its strategic approach to Green Growth at the corporate level. In a first working definition, AfDB seeks to define
Green Growth as enabling sustainable growth and creating prosperity by taking a holistic approach to development, which values human, social and natural capital, efficiently and sustainably uses ecosystem goods and services, and builds resilience in a changing world, where countries, industries and people are increasingly interconnected. AfDB recognizes that a Green Growth Agenda for African countries will have a different scope than a Green Growth Agenda the industrialized countries, where emphasis is largely placed on shifting towards a low carbon economy.
For Africa the priority is to develop, which requires investment, growth and jobs, as well as life sustaining goods and services such as food, access to safe water and sanitation, and energy. Harnessing recent economic momentum to alleviate poverty, improve food security and create employment opportunities, requires balancing near-term and long-term risks to development, strengthening the resilience of growth processes to exogenous shocks, and ensuring the efficient use of natural resources in the face of a growing population and the challenges posed by climate change.
A Green Growth agenda for Africa recognizes that the realities for development have changed and development processes need to be adapted to these new realities. AfDB’s Green Growth Strategy will guide its operational engagement with its Regional Member Countries and provide targeted assistance to countries committed to developing their Green Growth development. This operational engagement will need to be balanced with new tools for awareness raising and capacity development, which will enable Regional Member Countries (RMCs) and other partners of AfDB to make informed decisions about greener development pathways.
- Green Growth: Adapting to New Realities of Development
Africa has experienced rapid economic growth over the last decade. Annual growth rates across the continent, averaging five to six percent per year, regularly outpaced those of other regions (AfDB). A significant driver of growth was the high demand and prices for raw materials. However, macro-economic reforms, greater political stability and urbanization also saw a strengthening of the services sector, a growing middle class and the emergence of pan-African entrepreneurship.
Despite these promising developments, the progress has been uneven across Africa. Poverty and food security remain pervasive problems. Lack of access to energy, education and infrastructure continue to constrain business growth and economic development. Limited access to skills, markets and technology mean that most enterprises are insufficiently equipped to be competitive in an increasingly globalized market.
With Africa’s working age population set to increase from about 400 million in 2010 to around half a billion in 2020, economic growth has to create economic opportunities for all, if it is to be inclusive. If it is to be sustainable, economic growth must also be based on an optimization of financial, social and environmental capital by pursuing investment pathways that use resources more productively and efficiently.
A range of regional and global trends have consequences for the sustainability of development pathways in Africa. The global economic crisis has underscored the volatility of markets in an increasingly inter-connected world. Such short-term economic crisis are juxtaposed to long-term challenges, such as climate change, which has long been recognized as a threat for achieving the Millennium Development Goals (MDGs) and particularly sustaining progress beyond 2015 (AfDB et al. 2003).
The challenge lies in making development in Africa more robust to financial and environmental exogenous shocks and ensuring that economic progress is achieved but not at the cost of eroding ecosystem goods and services, which are the foundation of many Africans’ livelihoods.
A new growth paradigm and a greener development model for Africa consequently needs to address a range of socio-economic and environmental issues. Some of these issues are already major constraints today, while others, such as population growth and climate change impacts, will amplify in effect, if left unaddressed. Many development decisions taken today, such as decisions on transportation and energy infrastructure, have longer-term consequences as they will define and influence a development path. This represents both a challenge and an opportunity for Africa.
Ultimately, Green Growth is part of a broader discussion about the quality of growth and how the international community should approach development in the 21st century. AfDB’s strategic work on Green Growth consequently intersects with and complements the work on the Long Term Strategy and the focus on inclusive growth. Hence, AfDB’s Green Growth Strategy is part of new growth paradigm, which is green, sustainable and inclusive. This implies shifting away from a purely quantitative focus on growth towards a focus, which also considers at the qualitative aspects of growth.
The proposed concept and approach for green growth emphasizes the need for Africa to pursue economic growth and argues that this can best be achieved if a more holistic approach to development is undertaken and efforts are made to ensure that Africa’s environment and natural resources are utilized in a sustainable manner, so that ecosystem goods and services upon which many livelihoods depend are not being eroded any further. In light of the dispersed graphical location of key resources (water, energy, minerals) and the limited size of many national markets, strengthened regional integration will be important for economic growth and a more effective and sustainable management of resources. Transformative efforts on Green Growth in Africa should also focus on opportunities for Africa to pursue low carbon development pathways, while meeting the energy needs of a growing population, while enhancing the resilience of livelihoods and economic sector to climate variability and change through improved disaster risk management and adaptation is an absolute necessity for sustainable development pathways.
Positioning AfDB as “Africa’s Green Development Bank” will require resources for internal capacity development, awareness-raising, as well as for strategic dialogue and provision of technical assistance to Regional Member Countries. It also requires a decisive, long-term commitment and appropriate incentives for cross-sectoral collaboration, integrative planning, and partnership development.
- Extracted from: Green growth: perspectives for Africa and the AfDB in the 21st century, Briefing Note 8 for the AfDB's LongTerm Strategy (dated 7 March 2012). The 11 page document can be accessed here.