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The Political Economy of Green Growth:

Reframing Ecology, Economics, and Equity

Daniel J. Fiorino

Center for Environmental Policy

School of Public Affairs

American University

Washington, DC

Prepared for presentation at the World Congress of the International Political Science

Association, Montreal, Quebec, July 22, 2014 (RC 38 on Politics and Business). This paper is

part of a larger project on “Conceptual Innovations in Environmental Policy” being conducted

with James Meadowcroft of Carleton University.

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The Political Economy of Green Growth: Reframing Ecology, Economics, and Equity

Daniel J. Fiorino

American University

A recent concept that has gained significance in environmental policy debates is that of

the green economy. This concept differs from others discussed in this volume in many respects.

To begin, it offers an illustration of a concept that has been used to reframe political and strategic

formulations of environmental policy. Like its conceptual cousin, sustainable development, the

green economy attempts to redefine the traditionally antagonistic relationships among economic

and ecological goals in modern society. It presents economic and ecological goals as being more

complementary and synergistic than conflicting. For this and other reasons, the green economy is

one of the more politically contested of our concepts. It has drawn a great deal of criticism from

both the left and rights sides of the political spectrum, because it appears to promise more than it

can deliver and, in so doing, seems to legitimate both ecological and economic growth agendas.

As a policy framing concept, the green economy has been embraced largely by moderates

seeking a path to reconciliation of two these competing agendas. For the first few decades of the

modern environmental movement (the 1960s and into the 1980s), the primary fault line in policy

debates was the perception of inevitable trade-offs among economic and ecological goals

(Fiorino, 2001). On the one side, economic expansion, industrialization, urbanization, population

growth, and increased mobility had imposed major stresses on local, regional, and global

ecological systems, including public health. From one point of view, the policy response should

be to impose limits on growth that would keep these stresses within ecological limits (Daly,

1991). From the other side, economic growth had fueled a major enhancement of human well-

being, at least in the developed countries, and any limits imposed by ecological concerns were

either exaggerated or could be overcome by human ingenuity and technological progress Indeed,

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from this point of view, growth provides the resources and technology needed to overcome any

threats to ecosystems and health.

The green economy offers an avenue for reconciling these two conflicting perspectives.

In the tradition of the third way (Giddens, 1999) and other efforts to reframe political conflicts

toward a more pragmatic middle ground, it is embraced by many political moderates as a means

of enjoying the benefits of continued growth while avoiding long-term ecological degradation. In

the United States, it was adopted by the administration of President Bill Clinton in the 1990s as a

macro-strategy that not only would reconcile economic and ecological goals but link them in

mutually beneficial ways. Faced with a major financial crisis and severe recession, as well as the

most significant political challenges to the environmental agenda in three decades, the

administration of President Barack Obama has embraced the green economy in its energy,

climate, and water programs. Globally, the United Nations Environment Programme (UNEP),

Organization for Economic Co-operation and Development (OECD), World Bank, and business

organizations like the World Business Council for Sustainable Development advocate a green

economy framework. By 2012, the concept enjoyed a large, global cheering section.

New and still-evolving, politically contested, too-good-to-be-true, global fad of the day—

all of these labels have been applied to the green economy. Yet the argument of this chapter is

that the concept provides a useful way of framing relationships among ecological and economic

variables and of seeking some resolution of the assumed conflicts. The chapter begins with the

origins and emergence of the green economy concept, which goes back to the 1980s. It discusses

its intellectual origins in the fields of economics, political science, and business. It then turns to

the applications of the concept in recent policy debates and analyses, including the approach of

such organizations as UNEP and OECD. The third section examines the policies and strategies

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encompassed in the concept, followed by discussion of the significant criticisms of the concept.

The final section briefly assesses the current and likely future influence of the green economy.

Two definitional issues should be noted. The first is that, in the recent expressions of the

concept, the terms green economy and green growth both have been used. Given that the form

and content of growth has been a central issue in debates about the concept, the more neutral idea

of a green economy is preferred here. However, uses of one or the other term in the literature are

reflected in this discussion. Second is the relationship between green economy and sustainable

development. For the moment, it is helpful to note that the two are closely related; that the green

economy is variously seen as a complement to, variation on, or successor to the other; and that

both aim for some kind of reconciliation or synthesis of economic and ecological objectives.

The Origins and Emergence of the Green Economy

If one looks in the academic literature for the first mentions of this concept, there is the

Blueprint for a Green Economy. Originally written as a report to the British government, the

book made a strong case for the mutual interdependence of ecology and economy. Yet the ideas

embodied in the concept go back much further, to critical works in the emergence of the

environmental policy field itself. A premise of this chapter is that the notion of ecological limits

is essential to a green economy. Without such limits, a transition from a traditional brown to a

new, green economy is unnecessary. The work on ecological limits is an important source for the

green economy concept. Within political science, this recognition of limits, combined with the

apparent inevitability of economic growth, produced ecological modernization theory. Its

objective was to demonstrate how ecological limits could be maintained within the institutions

and structure of capitalist, democratic societies. Finally, the business literature in the 1980s and

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1990s exhibited a parallel transition from the assumption of an ecology-economy zero-sum to the

view that innovative and practice environmental policies could generate economic value to firms.

Blueprint for a Green Economy

The first explicit use of the green economy concept was a 1989 book by David Pearce,

Anil Markandya, and Edward Barbier, Blueprint for a Green Economy. It was followed by other

books on the same theme, including Blueprint for a Sustainable Economy, in 2000. The book’s

innovation, for its time, was to make the case for the mutual interdependence of environment and

economy. Just as the environment is affected by economy activity—from pollution, resource use,

and so on—so do our economic aspirations depend on the natural environment. The environment

is not only a source of aesthetic, recreational, or spiritual benefit but the very foundation of

economic success. The failure of the economic system is that markets do not assign value to

ecological resources, so clean air and water, coastal estuaries, the global climate system, and

other such resources are consumed or degraded. Only when natural capital is valued on an equal

footing with the other forms of capital (financial, physical, or human) will it be able to compete

in societal decision making. In sum, “valuation is important because it places the environment in

the same political dialogue as economic activity generally” (Pearce and Barbier, 2000, 7).

The Blueprint books were a landmark in the emergence of the green economy. Still, the

concept as it has evolved over the last few decades differs in significant ways from the Blueprint.

One difference is that the authors do not explicitly accept the existence of ecological limits. If the

economic valuations of resources lead to their consumption or degradation, that is justifiable. In

this sense, the books reflect the idea of weak rather than strong sustainability; natural capital is

not valued for its distinctive, irreplaceable value and not subject to “special compensation rules.”

A second difference is rejection of the no-growth strategy as part of a green economic transition.

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Such a strategy is viewed as being unnecessary, risky, and a threat to economic growth needed to

enhance the educational and social capacities of a society (Pearce and Barbier, 2000, 30-32).

The Limits to Growth

The three editions of the Limits to Growth series (1972, 1992, and 2004) are classics in

the field. Although criticized for being anti-growth and overly pessimistic, they more than retain

their relevance, and they have been central to the emergence of the green economy. Upon closer

examination, especially in more recent versions, the argument appears to be less an anti-growth

screed than a reasoned, evidence-based argument that physical limits to growth at some point

will be breached and undermine the very basis of global economic and social well-being. Recent

assessments from various sources validate the thesis of the Limits to Growth series of studies.

(Millennium Ecosystem Assessment, 2005; Rockstrom, et al., 2009; IPCC, 2013; Boston, 2011)

The central problem is that global ecological limits are fixed, yet growth is exponential:

“The physical limits to growth are limits to the ability of planetary sources to provide materials

and energy and the ability of planetary sinks to absorb the pollution and waste.” (Meadows, et al,

2004, 9) As for the economy: “Growth in population and capital generates growth in the human

ecological footprint unless or until there are profound changes in consumption preferences and

drastic improvements in efficiencies of resource use.” (27) If evidence of approaching or already

breached limits is ignored, “the growing economy will overshoot its carrying capacity, degrade

its resource base, and collapse.” (164) Limiting growth is not the only way to reduce ecosystem

pressures: “Technical, distributional, and institutional changes could reduce them greatly while

sustaining and even improving the average quality of life of the world’s people.” (56) Still,

technology and markets alone do not avoid overshoot. As a consequence, given these limits, the

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global imperative must be to “learn to live satisfying lives safely below the globe’s estimated

limits, rather than always straining to achieve the maximum that is physically possible.” (252)

Ecological Modernization Theory

Systems analysts and economists have not been the only influence on the emergence of

the green economy. Largely the work of political scientists in the Netherlands, United Kingdom,

and Germany, ecological modernization theory emerged in the 1980s (Hajer, 1995; Weale, 1997;

Mol and Spaargen, 2000). A theme was that existing democratic and capitalist systems could be

compatible with the recognition of ecological limits. Much of the environmental writing to that

point had argued for the need to fundamentally restructure institutions, including a shift to more

authoritarian governance (Ophuls, 1973 and 1977). Ecological modernization theory asserts that,

by integrating ecological and economic policy, using technology, and working collaboratively

with business and other actors, democracies could manage economies within ecological limits.

Several aspects of ecological modernization contributed to the green economy concept.

One was the view that existing political and economic institutions could cope with ecosystem

limits, including health protection, so radical change is unnecessary. Technology is viewed as a

source of solutions, not just a cause of ecological stress. Government plays a role by issuing

standards and regulating economic activity, but it also needs to work in collaboration with other

actors in society, including business and non-governmental organizations. In strategic terms, this

school of thought promoted closer linkages among ecological and other issues, such as energy,

transport, or agriculture. Eco-modernization theory promoted policy and institutional change that

would integrate ecological objectives with economic decisions, public and private, through such

mechanisms as eco-taxes, consumer incentives, investment strategies, information disclosure,

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and integrated policy analysis. It built upon existing thought by recognizing ecological limits, but

differed from much of it by seeking positive relationships with economic policies and incentives.

Ecological Economics

Some decades ago, many economists became dissatisfied with the orientation of their

field. They thought that a near-total focus on expanding economies and increasing incomes was

narrow and short-sighted, and that the field paid too little attention to such issues as ecological

limits and social equity. Of what value is a measure like GDP when it counts the destruction of a

tropical rainforest or valuable coastal estuary as a net addition to well-being? What is the worth

of increasing affluence when it costs the ecosystems and resources on which life depends? They

challenged the traditional view that well-being increases linearly with growth and incomes. A

core idea that differentiates ecological from welfare economics is “the economy is bound by the

energy and matter physically available to fuel the production of consumer goods, and by the

Earth’s ability to absorb the waste products associated with those goods.” (Clapp and Dauvergne,

2011, 109).

A pioneer in ecological economics is Herman Daly. His ideas have influenced the green

economy concept, although he would be skeptical of many of its contemporary expressions.

Daly’s vision was to design and manage a steady-state economy, one “in which the aggregate

throughput is constant and within the limits of ecological sustainability.” (Eriksson and

Andersson, 2010, 131) Eco-efficiency or another relative decoupling of growth from ecological

impacts may help, but it does not avoid the need to define and seek optimum growth (a steady-

state economy) and to replace ambitions for growth in economic scale with a more nuanced and

less damaging goal of human development (Daly, 1973 and 1997; Daly and Townsend, 1993).

Business Greening and Eco-Efficiency

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Beginning in the late 1980s, many business analysts and firms undertook their own

reframing of economics and ecology (e.g., Cairncross, 1995; Hart, 1995). A landmark work was

Porter and van der Linde, (1995), who turned standard business thinking on its head by arguing

that innovation in environmental performance not only is compatible with but contributes to

business success. The Porter Hypothesis argued that high standards made firms seek ways to

reduce waste and inefficiency in their operations and redesign products and processes through

clean technology and better management. This rethinking of the economy-ecology relationship

both reflected and promoted the macro-economic level reframing occurring at the same time.

Part of this trend was a considerable literature that emerged around the concept of eco-efficiency,

in which economic growth occurs, but with less pollution, energy, water, and materials intensity

(Hawken, et al, 1999; von Weizsacker, et al., 1998). Much of the participation of the business

community, such as that of the WBCDS, has built upon the notion of growth with eco-efficiency.

Defining the Green Economy

To get a better definitional fix on the concept, this section examines recent, significant

expressions of the green economy. All draw upon the foundations defined by the influences

discussed above. All reflect, to varying degrees, the core characteristics that are discussed below.

Expressions of the Green Economy Concept

We may begin with UNEP’s 2011 report, Towards a Green Economy. For UNEP, a green

economy is “one that results in improved well-being and social equity, while significantly

reducing environmental risks and economic scarcities.” (9) Such an economy “is not generally a

drag on growth but a new engine of growth”; a “net generator of decent jobs”; and “a vital

strategy for the elimination of persistent poverty.” (10) Investing 2% of annual, global GDP,

about $1.3 trillion US, could create an economy in which growth occurs, but within ecological

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limits. This would be achieved by sustainably managing and restoring natural capital sectors of

water, forestry, agriculture, and fisheries, while dramatically increasing efficiency and reducing

the ecological impact of built sectors of transport, energy, manufacturing, and buildings. UNEP’s

macro-economic model projects that a green investment strategy would deliver more growth,

reduce poverty more, and generate more jobs than a business as usual, brown economic strategy.

Another prominent expression, also from 2011, is the OECD’s Towards Green Growth.

Green growth is “fostering economic growth and development while ensuring that natural assets

continue to provide the resources and environmental services on which our sell-being depends.”

(9) It is growth based on the principles of sustainable natural resource use, energy efficiency, and

fair valuation of ecosystem services. Like UNEP, this report provides an optimistic scenario of

the prospects for a green economy, if the needed incentives and policies are adopted. Among

these, aside from investments in green economic sectors, are eco-taxes, such as a carbon tax;

well-designed regulation to promote innovation; energy, water, and materials efficiency; and cuts

in subsidies for unsustainable activity related to fossil fuels, irrigation, mining, and others. The

OECD places particular stress on a need to value natural capital and critical ecosystem services.

A third example of a green economy view is the World Business Council for Sustainable

Development (WBCSD) in Vision 2050: The New Agenda for Business (2012). The good news

for business, it states, is that “growth will deliver billions of new consumers who want homes

and cars and television sets.” (All quotes are from the unnumbered Executive Summary.) In

contrast, the bad news is that “shrinking resources and potentially changing climate will limit the

ability of all 9 billion of us to attain or maintain the consumptive lifestyle that is commensurate

with wealth in today’s markets.” The report offers a two-part vision for mid-century. The first

aims for “a standard of living where people have access to and the ability to afford education,

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healthcare, mobility, the basics of food, water, energy and shelter, and consumer goods.” The

second envisions “a standard of living [that] can be sustained with the available natural resources

and without further harm to biodiversity, climate, and other ecosystems.” The report explicitly

stresses a need to respect ecological limits and sets out a detailed strategy for its two-part vision.

Among the many expressions of the green economy, two others are especially revealing.

Later an adviser to President Barack Obama, Van Jones published The Green Collar Economy,

subtitled How One Solution Can Fix Our Two Biggest Problems (2008). His focus is green jobs,

or “a family-supporting, career-track job that directly contributes to preserving or enhancing

environmental quality.” (12) Like most green economy writers, he makes a social and ecological

case, asserting that “We can fight pollution and poverty at the same time.” (14) He is responding

both to trends of “rampant” ecological loss and “radical” social inequality. Job growth generated

by major investments in energy efficiency and renewable energy will provide new economic

opportunities to low and middle-income Americans. Echoing eco-modernization thought, Jones

applauds government’s role in “creating an inclusive, green economy—by setting standards,

spurring innovation, realigning existing investments, and making new investments.” (145) In part

because of Jones’ later position within the Obama administration, the book drew wide attention

as an articulation of a green economy/jobs point of view and of the value of synergistic policies.

For the World Bank, green growth is “efficient in its use of natural resources, clean in

that it minimizes pollution and environmental impacts, and resilient in that it accounts for natural

hazards and the role of environmental management and natural capital in preventing physical

disasters.” (2012, 2). A premise of Inclusive Green Growth is that “sustained growth is necessary

to achieve the urgent development of the world’s poor and that there is substantial scope for

growing cleaner with growing slower.” (xi) The Bank places a premium on inclusive growth that

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is sensitive to the needs of the poor; growth drives poverty reduction, but it must be equitable.

Like UNEP and OECD, the Bank views environmental damages as “reaching a scale where they

are beginning to threaten both growth prospects and the progress achieved in social indicators.”

(3) Such growth is affordable: “many green policies pay for themselves directly, and the others

make economic sense once externalities are priced and eco-system services are valued.” (4) Like

its counterparts, the Bank rests its case on the costs of environmental degradation to economic

well-being rather than nature’s intrinsic worth, or what Dryzek terms green romanticism (2013).

Based on these expressions, the green economy may be defined to include the following:

appreciation of the existence of ecological limits and the sources of pressures on them,

although with a lack of specifics on what the limits are and when they may be exceeded;

acceptance of the inevitability and desirability of economic growth, but also of the need

to transform institutions, policies, and behavior for achieving that growth;

recognition of a need to rethink growth in terms of human development or well-being,

and use of alternatives to simple growth measures, but with a clear preference for growth;

agreement that a green (or at least a far greener) economy is feasible within the general

outlines of existing economic and political systems, although barriers to change are large;

recognition that economic growth is needed to improve human well-being, especially in

developing countries, but that equity issues also must be addressed in some form; and

agreement that the core of a green economy is an explicit valuation of ecological assets

and services, making ecology more of a match with economics in decision-making; and

a view that, although economic prosperity increases ecological pressures, it also provides

the human, scientific, technological, and financial means for managing those pressures.

The Green Economy Policy Agenda

As a policy framework, the green economy incorporates a comprehensive policy agenda.

It departs substantially from the narrow regulatory agenda of what Mazmanian and Kraft (2009)

label a first environmental epoch to a second one made up of economic incentives, public

investment, payment for ecosystem services, technology innovation, product redesign, corporate

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greening, and tools for integrated analysis. It expands beyond typical regulatory relationships by

incorporating more collaborative, partnership-oriented participation of non-governmental actors.

Although government regulation plays a major role, the green economy stresses performance

over technology standards; flexible, predictable standards; and innovation-friendly policy design.

Policies are evaluated not only on their effects in reducing pollution but by success in meeting

more than one set of objectives, such as by reducing emissions while also promoting job growth.

The agenda also includes a major emphasis on new, comprehensive, and integrated indicators.

Table I lists examples of the green economy policy agenda and some likely impacts. Table II

presents an overview of sector-based strategies and policies, which UNEP especially analyzes.

[Tables 1 and 2 about here]

Critics of the green economy often assert that it depends on technology innovation as the

means of sustaining some level of growth while remaining within ecological limits. While it is

true that technology plays a central role in a green economic transition, especially by increasing

the eco-efficiency of most products and services, it is not the only instrument for achieving a

green or substantially greener economy. Energy conservation and efficiency, for example,

involve changes in behavior or modifications in insulation, lighting, and building design that are

low in the technology scale. Reducing deforestation or overfishing, shifting to low-input and

low-tillage agriculture, increasing mass transit, cutting fertilizer use, and preserving habitat from

development require little in new technologies, but demands changes in behavior and policies.

Moving toward more sustainable consumption through product redesign, reduced packaging, or a

focus on providing serves rather than simply selling goods are not technology-based solutions.

Criticisms of the Green Economy

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The emergence of the green economy may be seen as an explicit effort to reframe the old

debate about the economy and the environment. The policy literature on agenda setting, problem

definition, and policy framing offers insights into the use and effects of reframing concepts. It is

worth considering those insights before moving to analysis of criticisms of the green economy.

A widely-shared view in public policy studies is that the definitions of problems and thus

our ideas about their likely solutions are socially constructed. This book reflect that orientation in

its emphasis on exploring the role that concepts such as green economy, environmental risk,

critical loads, and sustainable development, as well as the green economy, have on public policy.

If ideas do matter, they matter most at the early stages of policy processes, when agendas are set,

problems are defined, and issues are put on or kept off the agenda. As a consequence, political

actors put a great deal of effort into issue framing, which defines the terms of debate, influences

the political coalitions that are able to form around an issue, and shapes the range of solutions.

The green economy is presented in this chapter as illustrating an explicit effort at issue

reframing. That is, political centrists in the US and the EU, joined later by like-minded forces in

such countries as South Korea, are using the concept to break out of a traditional economy vs.

environment mindset to one in which the two are complementary and even synergistic. Where

one stands on the green economy is shaped by how one views the motivations for this reframing.

For some critics, it is at best a misleading and, at worst, cynical effort to justify continued, rapid,

and ultimately socially and ecologically destructive patterns of economic growth. For others, it is

an agenda to limit growth, expand government, undermine markets, and harm vital industries. At

the same time, for advocates, such as those discussed earlier, the concept offers a politically

feasible third way for reconciling demands for growth with the reality of global ecological limits.

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Most of the criticisms of the green economy turn on its validity as a policy framework, its

economic and ecological consequences, and its preference for humans over nature. Because it is

contested politically, criticisms of the green economy are influenced by where one stands on

such issues as the balance of economic relative to ecological goals; government’s role in society;

the legitimacy of business engagement and intentions; the intrinsic as compared to instrumental

value of nature; and even definitions of human well-being and happiness. Debates over the green

economy thus reflect a range of underlying values about society, economy, ecology, and politics.

Given all of this, the criticisms of the green economy typically fall into one of five categories:

It perpetuates the capitalist, neo-liberal values and institutions that are at the source of

our ecological and social dilemma. For many, the concept is harmful because it invalidates or

delays the fundamental change that must occur in current economic, political, and social systems.

If excessive, exponential growth is hard-wired into modern economics and politics, why sustain

economic growth by half-measures that postpone the day of reckoning with ecological limits?

A theoretical basis for this debate originates in a critique of capitalism and industrialism.

In this critique, capitalism is unsustainable until it “changes its face in ways that would make it

unrecognizable to bankers, money managers, venture capitalists, and CEOs…” (O’Connor, 1994,

158) Critics are skeptical of incremental change pushed by “reformist greens” aiming to “remake

capitalism in ways consistent with the sustainability of nature.” (O’Connor, 1994, 157) As Jean-

Paul Deleage (1994, 46) argues, the source of the problem is more than just capitalism; for both

private and state economies, “industrialization, and the accumulation and concentration of capital

that industrialization implies, have a logic of their own…” Many early environmental writers

thought that democracy itself was incapable of avoiding ecological degradation, claiming not

only that “the market orientation of most modern societies will have to be abandoned” (Ophuls,

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1977, 227) but that “democracy as we know it cannot possibly survive.” (Ophuls, 1977, 152)

Similarly, such scholars as John Dryzek (1994) asked decades ago if liberal democracy can

overcome skewed power distributions, vested interests, and short term pressure for rapid growth.

It lacks empirical validity and promises far more than it can deliver. The “have your cake

and eat it” aspect of the concept is viewed as infeasible from both sides of the debate. From an

ecological view, the emphasis on incremental economic restructuring, technology innovation,

and business greening offers only a relative decoupling that rapid increases in economic scale

simply will overwhelm in the long term. Even if most of the policy agenda for a green economy

is adopted, and the odds are strongly against it, the numbers do not add up. On the other hand,

pro-growth and pro-market interests argue that restrictions on fossil fuels, expanded regulation,

and eco-taxes will undermine prosperity, cost jobs, and harm competitiveness. Although starting

from different premises, each side asserts that the green economy will fail to meet expectations.

It is highly anthropomorphic by placing nature at the service of human needs rather than

recognizing the intrinsic value of ecological resources. What disturbs many critics, going back to

many of the reactions to the Blueprint series, is what they regard as a commodification of nature.

By converting ecological resources and services into mere assets that support a market economy,

green economy advocates are making an instrumental case for protecting what should be seen as

intrinsically valuable and be justified on ethical grounds (Sagoff, 1990). More practically, they

place ecological resources on the market exchange table and make them fungible with financial,

physical, and other assets. For such critics, eco-valuation is a new way to legitimate capitalism,

and “nature becomes saleable at a price that signifies the value (utility) of the goods and services

flows as inputs to commodity production and in consumption.” (M. O’Connor, 1994, 126)

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It ignores social issues by focusing narrowly on the economy and ecology. A difference

between sustainable development and green economy is a relative lack of attention in the latter to

poverty, inequality, and empowerment. From a sustainability view, many critics prefer to define

a policy framework based on a three-part, not a two-part, relationship. Especially given the role

of business, the green economy is seen by many as focusing far more on haves than have-nots.

To be sure, green economy documents bring social issues into their analyses. The UNEP

uses poverty reduction in its subtitle. The WBCSD wants to expand middle classes in developing

countries, although perhaps less for normative than business reasons. Proponents of green jobs

agendas make a social case; a green economy creates more and better jobs for struggling groups.

Yet, much of the social case in the literature rests on the view that “a rising tide lifts all boats,” in

which growth creates broader economic and social well-being from which everyone benefits. As

recent history illustrates, however, benefits of growth do not accrue equally to all income groups.

It legitimizes the case for and necessity of economic growth. The contrasting perspectives

on growth demonstrate the challenges to the green economy as a reframing concept. From one

side, the concept is suspect or unacceptable, because it seeks a path to continued growth, even in

richer nations. It thus legitimizes what many critics see to be the source of the problem. From the

other side, the concept is unacceptable because it defines a rationale for possibly limiting growth.

If the UNEP model is reliable, moderate global growth is not inherently incompatible

with major reductions in pressures on global ecosystems. UNEP projects that if its 2% green

investment strategy is adopted, a global increase of 14% in per capita income is possible. At the

same time, there will be a 21% increase in forest land; a nearly 22% decrease in water demand; a

40% decrease in primary energy demand; and a nearly 50% reduction in the global footprint to

bio-capacity ratio. Even allowing for uncertainty, UNEP views a far greener global economy as

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being feasible, if the appropriate investments and policies are put into place. The compelling

caveats to this assertion are that (1) perhaps only some or very few of these actions will be taken;

(2) the projections take us only to 2050; and (3) the sheer scale of economic growth, investment,

and consumption may overwhelm the effects of a relative decoupling. Two prominent critics of

current growth models, Tim Jackson and Peter Victor, offer a critique of UNEP’s model, arguing

that it does not achieve the needed climate goals, overstates the likely investments, and relies on

global averages that ignore regional and national variations (2012). Given these caveats, should a

rethinking of growth as the predominant measure of human progress be part of the concept?

Economic Growth and the Green Economy

The central debate among environmental experts when it comes to the green economy is

the role of growth. Mainstream advocates, including the UNEP, OECD, WBCSD, and World

Bank, take pains to state in their assessments that a green economy not only is consistent with a

strong growth scenario but may even be superior to a business as usual path. As discussed

earlier, the UNEP model demonstrates that, after the first five or so years, their green strategy

delivers higher rates of growth than business as usual. Challenging this view, even to the point of

dismissing the green economy as a false and misleading vision, are the advocates of a slow, no,

or de-growth agenda. From this point of view, the green economic policy mix, assuming that

some parts of it would even be adopted, yield only a temporary, relative decoupling of growth

from ecological damages. Unless society addresses the root cause of ecological degradation and

resource loss—exponential growth and consumption—greener policies simply distract from us

from the real problems.

At one end of this growth critique is the case for de-growth, which one advocate defines

as “an equitable downscaling of production and consumption that increases human well-being

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and enhances ecological conditions.” (Alexander, 2012, p. 351) Globally, this school of thought

argues not for a reversal of growth but a global leveling of the results of growth through higher

incomes in poor countries and lower incomes in wealthy ones. It directly challenges the “growth

above all” view that has been the priority of nearly all governments since World War II. At some

point, higher incomes and consumption lead to declining marginal returns in quality of life and a

decline in well-being due to increasing stress, inequality, status competition, and ecological loss.

For the wealthy countries, principally the OECD subset, the priority should be deliberate

economic contraction through a process of managed de-growth. Instead of seeking to maximize

annual growth rates through monetary and fiscal policies, the policy goal would be to use these

same levers to bring economic scale in line with local, regional, and global eco-system limits.

Less explicitly focused on contraction and more on slow or no growth are many studies

relevant to the green economy debate. One is Tim Jackson’s Prosperity without Growth, which

challenges the assumption that a larger, constantly growing economy is a better one. As Jackson

admits, “Questioning growth is deemed to be the act of lunatics, idealists, and revolutionaries.”

(14) Yet he observes that, at current rates, the global economy will be 80 times bigger in 2100

that it was in 1950. Although countries striving to emerge from poverty and provide their citizens

with an acceptable standard of living should be able to fulfill reasonable growth aspirations,

economic scale and consumption rates in the developed ones have reached a point of diminishing

returns. Indeed, the exponential growth engines of the modern economy contain the seeds of its

own destruction: “Its natural dynamics push it towards one of two states: expansion or collapse.”

(64)

Jackson offers two arguments common to much of the critics-of-growth writing. The first

is that a growth mentality delivers less a better quality of life than a more competitive, unstable,

20

stressful, and environmentally damaging one. Reflecting the thinking on happiness, he prefers to

view prosperity in terms of Amartya Sen’s “capabilities for flourishing” than of simple wealth

accumulation. Second, he adds to the ecological stresses of growth other negative consequences,

including financial instability, excessive and unfulfilling consumerism, and social inequality. His

is not just an ecological but a social critique. On the last point, for example, he writes, “An

unequal society is an anxious society, one given too readily to ‘positional consumption’ that adds

little to overall happiness but contributes significantly to unsustainable resource throughput.”

(117) Third, he is critical of “the myth of decoupling,” in which green economy advocates assert

that declines in ecological intensity per unit of economic output will keep us within global limits.

At the same time, Jackson sees value in relative decoupling, which generally occurs with

economic and political development, if it is accompanied by growth-restraining policies. The

policies associated with green growth—energy and water efficiency, carbon pricing, protection

of ecological assets, renewable energy, green investment incentives, among others—are needed.

They will be effective, however, only in a larger context of slower growth and less consumption.

An academic analysis of the case for slower, managed growth is Peter Victor’s Managing

Without Growth: Slower by Design, Not Disaster (2008). For Victor, the focus on maximizing

growth in the last half-century failed in three areas: maintaining full employment, eliminating

poverty, and avoiding ecological degradation. Victor offers an empirically-grounded analysis of

how a managed, slow-growth scenario outperforms current policy in all three areas. “Growth,”

he asserts “is a clumsy way to meet important social, economic, and environmental objectives.”

(167) Similarly, he rejects the option of pursuing a green economic transition only with relative

decoupling, concluding that “Increases in scale can overwhelm increases in efficiency.” (110)

21

Victor’s Low-Grow Model, when applied to the Canadian economy, forecasts improved

outcomes in terms of unemployment, poverty, and ecological goals in a slower-growth scenario.

The Green Economy: Its Current and Likely Future Influence

At a rhetorical level, the impact of the green economy is obvious. Such influential entities

as the World Bank, UNEP, and OECD, among others, promote it actively as a policy framework.

These same entities created the Global Green Growth Institute (GGGI), “founded on the belief

that economic growth and environmental sustainability are not merely compatible objectives;

their integration is essential to the future of humankind.” It develops resources and is supporting

country-level, green economic planning in Indonesia, Brazil, Ethiopia, Mexico, and elsewhere.

The more circumscribed notion of the green urban economy also is used as a framework for

thinking about urban development and redevelopment (e.g., Simpson and Zimmerman, 2013).

What impact is the concept having in the US, the world’s largest economy? It has been

embraced explicitly by the Obama administration, although largely in the context of its energy

and climate policies and, even then, with a focus on green jobs. Indeed, debates over the extent

to which green economic policies affect job creation has been a recurring political issue in the

US. Although most visible in energy (and thus climate) policy debates and in the context of jobs,

the concept has emerged in other policy areas. For example, a recent Environmental Protection

Agency initiative (2013) asserts that “Water is vital to a productive and growing economy in the

United States, and directly affects the production of many good and services.” Many green

economy ideas have been incorporated into sustainability initiatives in US cities, if not always

explicitly (Portney, 2013). In most countries, many defining characteristics of green

economy/growth are captured in a range of related terms, among them smart growth, cleaner

production, green designs or chemistry, and green manufacturing or purchasing, to name a few.

22

The green economy emerged only recently as a framing concept, so that the question now

is more a matter of its future than past influence. If they are to have practical influence, concepts

for framing policy issues and solutions must strike a delicate balance. Cast them too narrowly,

and they fail to define a sufficiently complete and integrating framework; conceive them too

broadly, and they become too elastic and are likely to alienate diverse interests that are needed to

build a political coalition. If the green economy is to be effective and have an impact in the

coming decades, its proponents will need to present it in ways that maintain this balance—by

defining an integrating framework while attracting support. As a practical matter, is it possible to

formulate a green economy vision that not only provides a valid policy framework but the basis

for a working political coalition that will support change toward renewable energy, development

over growth, effective resource and ecosystem pricing, and other ideas central to the concept?

In the US, what does seem to be clear is that the concept cannot be defined in ways that

will appeal to the political right, with its rejection of ecological limits and exclusive focus on

unrestrained growth. Indeed, nearly every aspect of the current conservative agenda, as defined

by the national Republican Party, is hostile to any ecologically-protective agenda, including the

green economy (Layzer, 2012), although this may be less so at state and local levels. The key to

a green economy concept that has influence is to formulate it in ways that draw support from the

center and center-left in the US and elsewhere. For this to occur, three modifications are in order.

The first modification is to confront the growth issue directly. Empirically, there is ample

evidence that a transition from a business as usual investment/policy scenario would lead to a far

greener economy. Even if only parts of the agenda were adopted, ecological degradation and

resource use would be much lower, and these gains would provide continuing benefits. At the

same time, a transition to anything close to a green economy, where ecological pressures come

23

into balance in the long term, within ecological limits, requires rethinking the idea of growth, the

forms it may take, and its centrality in modern politics. Reconceiving growth more in terms of

development and human well-being comes across often as an afterthought in current literature.

A second modification is to stress the issue of economic, political, and social inequity. To

ague simply that growth alleviates poverty and delivers a better quality of life without addressing

inequity is irresponsible. To begin with, rising incomes in nearly all developed nations have not

improved economic prospects across the board; in the US, for example, the material benefits of

growth have gone almost entirely to the upper income quintile (Dadush, et al., 2012). Growing

research on happiness concludes that perceived well-being does not necessarily rise linearly with

income beyond some level (Graham, 2011; Nijacki, 2012; Kubiszewski, et al., 2013). There is

evidence that many social problems occur more frequently in less equal societies, independent of

income (Wilkinson and Pickett, 2010). Inequality leads to unsustainable consumption; skewing

of power toward existing interests (Boyce, at al., 1999); positional or status competition;

economic insecurity that reinforces a growth-at-all-costs mindset; and an erosion of social capital

and capacity for collective action (Uslaner, 2002; Holland, Peterson, and Gonzalez, 2009;

Magnani, 2000). The green economy writing invokes terms like inclusiveness and equity, but not

convincingly, and often as an apparent afterthought.

Third, build the green economy more explicitly on recognition of the irreplaceability and

intrinsic value of ecological assets and services. The centrality of ecosystem valuation in the

green economy is entirely appropriate; they have economic value, and recognizing it strengthens

the case for integrating ecological issues into economic policy. Yet there is a not unreasonable

suspicion among critics that any such uses of economic tools is an effort at a commodification of

ecological assets and subjects them to market trade-offs through cost-benefit or other analytical

24

methods. In contrast to some of the early influence on the concept, including the Blueprint series,

a green economy should be built on a foundation of strong sustainability, in which natural capital

is not substitutable with other forms and ecological limits are seen to have “principled priority”

in decision making (Lafferty and Hovden, 2003). Making a more explicit ethical and normative

case for ecological protection, even beyond its obvious role in sustaining human well-being, may

strengthen the concept’s legitimacy as well.

Like sustainable development, the green economy is designed to answer a question posed

by the US National Academy of Sciences in 1971: How do we live a good life on a finite earth?

It seeks to define a politically workable as well as economically and technologically feasible path

between ecological degradation and unrestrained growth leading to eventual economic collapse.

At the heart of the political meanings of the concept is an effort to reframe old, zero-sum debates

about ecology and economy. Economically, it seeks a framework for defining and implementing

demands for some form of growth, but in a synergistic relationship with ecological preservation.

It is more than arguable that the political reframing and policy framework embodied in

the concept cold lead to a greener economy than would otherwise occur. Whether it is the most

effective way to frame the issue politically and a sound analytical framework for making policy

choices will continue to be a subject of debate. It may be, as one scholar has suggested, the “next

oxymoron,” with the same mixed success as that of sustainable development (Brand, 2012).

Even so, a better appreciation of the need to rethink the issue of growth and clear foundation in

social, ethical, and ecological theory and practice will enhance its usefulness as a policy concept.

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Table I. Summary of the Assumptions, Policy Agenda, and Weaknesses of the Concept

Key Assumptions and Arguments of the Green Economy

Economic growth will continue to occur in most nations, but at much higher rates in developing countries

Local, regional, and global limits on ecosystems exist with evidence that they are being or will be breached

Economic growth in some form is feasible within ecological limits, but only with the appropriate changes

in policy, technology, behavior, and institutions (at least through much of this century)

Policy Agenda for the Green Economy

Assign economic value to ecosystem goods and services.

Develop analytic methods for ecosystem valuation and link with decision making.

Integrate ecological considerations into economic and other policy sectors.

Make transport, land use, energy, and other decisions with awareness of ecological limits.

Actively engage the business groups and NGOs in searching for and implementing solutions.

Make effective use of partnerships and collaborative methods in problem-solving.

Develop and apply new indicators that incorporate a more balanced view of well-being.

Push for wider adoption of Green GDP and other more valid measures of well-being.

Strive to maximize the eco-efficiency of goods and services.

Design incentives, evaluate firm and product performance, and educate consumers.

Promote policies that emphasis labor-intensity over resource or capital-intensity.

Link actions that combine ecological with employment benefits (e.g., energy)

Rely as much as possible on an economic sector approach to defining and applying solutions.

Implement options for manufacturing, mining, forestry, buildings, energy, and so on.

Weaknesses in the Concept

Varied levels of concern with social issues and their role in a green economic transition

Vagueness about where and to what extent economic growth may exceed ecological limits

Lack of clarity about an explicit need to rethink generic growth, especially beyond the next decades

Risk of a commodification of ecological resources; emphasizing instrumental over intrinsic values

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Table II. Overview of Sector Strategies, Policies, and Selected Impacts

Sector Sector Strategies Policies & Tools Selected Impacts

Agriculture

soil management

low-input, organic

ecosystem protection

food procurement

nonpoint water trades

input fees

higher yields

more climate resiliency

higher profits

Water

green infrastructure

reuse and recycling

water use efficiency

price eco-services

cut input subsidies

price water fairly

some job loss

reduced water stress

water efficiency

Energy

shift to renewables

smarter grids

product/building efficiency

tax or trade carbon

subsidize R&D

renewable standards

more labor intensity

health/climate gains

major efficiency gains

Manufacturing

eco-efficiency

remanufacturing

product redesign

lifecycle analysis

price inputs fairly

implement EPR

possible net job gains

major climate benefits

material & water gains

Fisheries

maximum sustainable yield

protected areas

rebuild fisheries

expand ITQs

reform methods

decommission

vessels

stabilized fishing stocks

job losses

gain in net-added value

Forests better forest management

protected areas

comprehensive forest

management

expand certification

pay for eco-services

long-term job gains

biodiversity/climate

benefits

more forested area

Tourism

biodiversity

green infrastructure/design

alter tourism experience

value ecosystems

increase entry fees

carbon tax or trades

major job gains

local poverty reductions

water & waste cuts

Transport

denser development

mass transit

new mobility technology

tax or trade carbon

growth restrictions

invest in public R&D

climate benefits

job gains

lifestyle gain

(e.g., less congestion)

31