South Korea Pledges $40 million to Promote Green Growth for All
SEOUL May 9, 2012 –The World Bank today released a report urging governments to think green when pursing growth policies, which can be inclusive, efficient, affordable and above all necessary to sustain economic expansion in years ahead.
Launched at the Global Green Growth Summit in Seoul, Inclusive Green Growth: The Pathway to Sustainable Development, lays out an analytical framework that factors atmospheric, land and marine system limitations into plans for economic growth needed to further reduce poverty. The report debunks the myth that a green growth approach is a luxury most countries cannot afford – pointing instead to political barriers, entrenched behaviors and a lack of appropriate financing instruments as the chief obstacles.
“Truly remarkable gains have been made in health and social welfare since the 1992 Earth Summit in Rio de Janeiro, Brazil, yet too often progress has resulted in environmental degradation and resource depletion,” said Rachel Kyte, World Bank Vice President for Sustainable Development. “Decisions made today will commit countries to growth patterns that may or may not be sustainable in the future. Great care must be taken to ensure that cities and roads, factories and farms are designed and regulated in a way that raises standards of living while efficiently harnessing natural, human and financial capital.”
The report challenges governments to change their approach to growth policies, better measuring not only what is being produced, but what is being used up and polluted in the process. It asserts that assigning value to farmland, minerals, rivers, oceans, forests and biodiversity, and awarding property rights, will offer governments, industry and individuals sufficient incentive to manage them in an efficient, inclusive and sustainable manner. The World Bank strongly supports incorporating natural capital into national accounts and will be seeking country commitments at the United Nations Rio+20 Summit in Brazil next month.
The Government of Korea pledged $40 million to strengthen and expand the Bank Group's global green growth portfolio by tapping into and leveraging Korea's successful experience.
“We are delighted to partner with the World Bank Group and to share Korea’s experiences and expertise since making green growth our national strategy in 2008,” said Jaewan Bahk, Minister of Strategy and Finance. “The transition to green growth paths is not easy. Sharing know how and capacity is imperative if developing countries are to leapfrog inefficient and outdated growth and production patterns.”
At a high-level event held on the sidelines of the World Bank/International Monetary Fund Spring Meetings, other finance ministers expressed growing support for the concept of inclusive green growth.
The new World Bank Inclusive Green Growth report emphasizes five main points:
- Greening growth is necessary, efficient and affordable – it is critical to achieving sustainable development.
- Political barriers, entrenched behaviors and norms, and a lack of financing instruments are the chief obstacles to greening growth. Green growth must focus on the policies and investments that need to be made within the next 5-10 years – to avoid getting locked into unsustainable paths, damaging policy reversals and costly public health consequences.
- Progress requires multi-disciplinary solutions, blending economics, political science, and social psychology – to tackle political economy constraints, overcome deeply entrenched behaviours and social norms and develop the needed financing tools.
- Green growth is neither monolithic nor static – strategies will vary across countries, reflecting local contexts, preferences and resource bases. All countries, rich and poor, have opportunities to green their growth without slowing it.
- Green growth is not inherently inclusive, but can be designed to be so. While better environmental performance will generally benefit the poorest and most vulnerable, green growth policies must be carefully designed to maximize benefits and minimize costs for them, particularly during the transition.
“There is a frequent misconception that poor countries cannot stimulate growth without degrading the environment and burning the cheapest and dirtiest sources of energy: coal, biomass and at times oil and gas,” said Kandeh Yumkella, Director General, United Nations Industrial Development Organization. “This simply isn’t true. Developing countries won’t replicate growth patterns of previous centuries, nor should they try. They need to grow smarter, greener and quicker. The natural environment, minerals and raw materials are the principal sources of capital in poor countries, and therefore must be rigorously protected while being responsibly harnessed.”
“This report makes a compelling case that boosting economic growth and improving social and environmental welfare are neither mutually exclusive nor cost-prohibitive,” Yumkella added. “Developing countries must overcome policy obstacles and institute investment incentives now as they make infrastructure and production decisions that will carry consequences for generations.”