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Green Growth, South Korea's National Policy, Gaining Global Attention

A new economic paradigm is arising out of the ashes of the global financial crisis. Could it take hold?

Jan 26, 2011

When the global financial crisis rippled through economies around the world in 2008, experts warned that global warming would slide down on the list of the world's priorities. In part, they were right.

Trillions flowed to resuscitate teetering economies, which were based on fossil fuels. Money pledged to address climate change was never mobilized.

But something else happened at the same time: Many nations' fiscal-stimulus packages included billions to finance clean energy projects.

No nation was as bullish on the idea as South Korea. Asia's fourth-largest economy poured 80 percent of its $38 billion stimulus program into what it calls "green growth." Later, it committed 2 percent of its annual GDP over five years to the same national cause.

Now, both rich and poor nations are turning to Seoul for lessons in green-powered development, and the new economic approach that was born out of financial mayhem. 

Could it take hold?

The Organization for Economic Cooperation and Development (OECD) seems to think so.

"It's on the minds of many countries who want to preserve their national capital and limit the risk to economic growth," said Nathalie Girouard, an economist and coordinator of OECD's green growth program.

The OECD — the economic policy institute of wealthy and aspiring nations — describes green growth as a new paradigm for how to run an economy in a way that limits environmental degradation and ensures prosperity.

In 2009, with the world in the throes of fiscal panic, 34 nations mandated it to pinpoint policy areas on which governments need to focus in order to "green" their growth, as well as to remove policy barriers, like market-distorting fossil fuel subsidies. In May, it will issue its first "Green Growth Strategy Synthesis Report" at the OECD ministerial council meeting.

Other organizations are also doing "big think work." Next month, the UN Environment Program (UNEP) will publish its own case for green growth under its Green Economy Initiative.

At the same time, the newly established Seoul-based Global Green Growth Institute — headed by former South Korean Prime Minister Han Seung-soo and climate change expert Lord Nicholas Stern — is working on the ground in poor countries. The goal there is getting states to "leapfrog" over the dirty technologies like coal that were ushered in by the first industrial revolution.

Financial Crisis Drives Big 'Green' Ideas

Why now, exactly? Experts agree that the green growth experiment came out of the need to sustainably stimulate national economies back to life.

"There's really an element of prevention that has been ingrained in this work," Girouard told SolveClimate News. "We have to find new ways of producing and consuming things. We need to change the way we use the Earth’s resources. This, I think, is what is driving countries."

"How we grow is at least as important as how much we grow," she continued. "Traditional indicators, like GDP, are not enough of a definition of what the economy should help the society to achieve."

The work appears to mark a turning point in the way countries think about going green, especially in poor and fast-emerging nations. In the past, many lamented that they could not afford to build cleaner energy infrastructure at a respectable pace. 

China, India and other emerging economies "think that greening their economies is not a choice anymore," said Jung Tae-yong, executive director of the Global Green Growth Institute and a former economist at the Asian Development Bank. They must do it "to survive in these competitive economic conditions."

And that means, for the first time, that the push to decarbonize the future power system is coming from "domestic need," not international pressure, Jung told SolveClimate News.

The shift is spilling into global climate change negotiations.

A case in point was December's UN climate talks in Cancun, Mexico, Jung said, which saw a "mood change" from hostile to cooperative across the entire summit compared with the previous year. As national pressure builds for reducing carbon dioxide emissions, "we can totally change the negotiation paradigm."

Birth of the 'Green Growth' Concept

While South Korea is often credited with creating the term "green growth," Jung said the UN Economic and Social Commission for Asia and the Pacific first floated the phrase about a half a decade ago. UN agencies have used it loosely ever since.

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