The concept of ‘green growth’ implies that a wide range of developmental objectives, such as job creation, economic prosperity and poverty alleviation, can be easily reconciled with environmental sustainability. This study, however, argues that rather than being win-win, green growth is similar to most types of policy reforms that advocate the acceptance of short-term adjustment costs in the expectation of long-term gains. In particular, green growth policies often encourage developing countries to redesign their national strategies in ways that might be inconsistent with natural comparative advantages and past investments.
In turn, there are often sizeable antireform coalitions whose interests may conflict with a green growth agenda. We illustrate this argument using case studies of Malawi, Mozambique, and South Africa, which are engaged in development strategies that involve inorganic fertilizers, biofuels production, and coal-based energy, respectively. Each of these countries is pursuing an environmentally suboptimal strategy but nonetheless addressing critical development needs, including food security, fuel, and electricity. We show that adopting a green growth approach would not only be economically costly but also generate substantial domestic resistance, especially amongst the poor.
Introduction: Over the last decade, the growing threat of climate change has mobilized the international development community around a variety of initiatives. These efforts initially revolved around a commitment to ‘low-carbon development,’ which primarily aims to reduce greenhouse gas emissions. The broader notion of ‘sustainable development’ sought to not only address carbon emissions but to preserve scarce water sources, fragile ecosystems, and biodiversity. More recently, the politically palatable concept of ‘Green Growth’ (GG) has emerged, which promises to reconcile low-carbon and sustainable development with other valued outcomes, including job creation, poverty alleviation, and high economic growth.
Indeed, the belief that GG represents a ‘win-win’ option for developing countries is suggested in many recent reports on this topic. For instance, the Organization for Economic Cooperation and Development (OECD) notes that ‘Green growth means fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies’ (OECD 2011: 9). For the United Nation’s Environmental Programme (UNEP), the concept refers to ‘improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities’ (UNEP 2011: 1). According to the United Nation’s Economic and Social Commission for Asia and the Pacific (UNESCAP), green growth is a policy of ‘environmentally sustainable economic progress to foster low-carbon, socially inclusive development’ (UNESCAP 2011).
World Bank researchers state that ‘Green growth is about making growth processes resource-efficient, cleaner and more resilient without necessarily slowing them’ (Hallegatte et al. 2011).
This study, however, argues that GG strategies are only ‘win-win’ with respect to certain micro, project-level interventions, such as the installation of solar panels in poor households. In terms of a national development strategy, GG poses more trade-offs than is readily acknowledged. The reasons for this are at least twofold. First, despite the rhetoric, the main focus of GG strategies essentially remains to reduce carbon emissions. Doing so requires that countries deviate from both the prescriptions of conventional development theory and their current development trajectories. Although the long-term environmental benefits could be sizeable, this naturally will prove extremely costly in the short-term. Second, the GG agenda shares many parallels with the structural adjustment programmes of previous decades, which were motivated by a crisis in economic management rather than environmental sustainability. Importantly, the short-term costs associated with those policies often generated substantial antireform coalitions that, in some cases, included both powerful actors as well as the poor.
Without concurrent interventions by donors to protect the ‘losers’ of reform, the same reality confronts the GG agenda.
To illustrate these points in greater detail, we focus on Southern Africa. This region represents a high level of diversity, ranging from mineral-rich to agricultural-dependent economies and includes both middle-income and extremely poor countries. In particular, we look at three countries within this region: Malawi, Mozambique, and South Africa. These cases were chosen because they are currently pursuing development strategies that revolve around fertilizers, biofuels, and coal, respectively.
Although these strategies generate large costs to the environment, they are being used to address development issues, such as the provision of adequate food, fuel, and electricity, that are highly relevant to the broader African context. Moreover, such strategies allow each of these three countries to not only tackle their current development priorities but also pursue their respective comparative advantage in terms of resource availability.
More specifically, Malawi’s comparative advantage lies in its favourable agroecological conditions. Yet, given its land scarcity, the sustainability of an agriculture-led development strategy requires a more intense use of available land. To do this, the government of Malawi has been heavily promoting the use of fertilizer, even though fertilizer can be highly detrimental to water sources and generates high levels of greenhouse gases (GHG). Since fertilizer use has been promoted through a subsidy scheme that is highly popular among poor farmers and therefore an electoral boon to many politicians from the ruling party, shifting towards a more environmentally friendly mode of enhancing soil fertility will be extremely challenging.
In contrast to Malawi, Mozambique’s comparative advantage lies in its land abundance as well as possessing ideal agro-ecological conditions for growing bio-fuels. As such, the country has pursued an agricultural extensification strategy that involves clearing forests in order to grow sugar and jatropha. Even though such deforestation is a major contributor to GHG, the biofuels industry offers the potential to create jobs for the rural poor and offers a diversified export base for Mozambique. A more environmentally friendly strategy for biofuels production would involve a more intensive plantation approach, but this would create fewer employment opportunities. As such, key interest groups would be opposed to shifting towards such a strategy.
Finally, an abundance of mineral resources constitutes South Africa’s comparative advantage. In a country where electricity demands are high, South Africa has exploited its coal resources for energy production. Shifting to a more environmentally friendly source of electricity, including nuclear and renewable energy, requires South Africa to forego long-standing and expensive investments in physical capital. Moreover, electricity generated from coal is relatively cheaper than other potential alternatives, which is critical in a country where much of the poor population still lacks any type of reliable and affordable electricity. Deviating from coal production will not be popular for unionized workers in the mining and metals industries, private businesses, and poor South Africans who cannot afford higher electricity prices. The government’s potential adoption of a carbon tax to reduce energy demand likewise produces powerful antireform constituencies.
In order to further illustrate these points, the following section elaborates on the nexus between economic development, GG, and the political economy of reform, drawing on relevant lessons from the structural adjustment era where applicable. Subsequently, each of the three country cases is discussed in greater detail. The final section summarizes the findings concludes.
- Abstract and introduction to: The Political Economy of Green Growth - Illustrations from Southern Africa, by Danielle Resnick, Finn Tarp, and James Thurlow, UNU-WIDER Working Paper February 2012. The 21 page report can be accessed here.