This paper focuses on how developing countries can change the way they prepare for disasters so they are better equipped to sustain economic growth. It discusses the importance of considering the goals of key decision makers and the need to understand the perceptions, systematics biases, and heuristics used by the relevant interested parties (the affected public, private and public sector organizations, and nongovernmental organizations) in choosing between alternatives. The paper highlights the importance of undertaking benefit-cost analysis to evaluate disaster risk reduction measures, recognizing that decision makers might not make meaningful use of this policy tool given their behavioral biases and simplified heuristics. To address these issues, the authors propose green growth strategies that involve multi-year contracts coupled with short-term incentives that have a chance of being implemented. The strategies focus on the role of multi-year micro-insurance, long-term loans, and multi-year catastrophe bonds that reflect the institutional arrangements in the developing country.
This paper reviews the challenges and opportunities raised by international trade for developing countries considering a green growth strategy. A key concern is the effect of environmental policies on international competitiveness. For production-generated pollution, there is evidence that stringent environmental policy reduces some indicators of competitiveness, but the effect is small in most sectors. However, tightening up environmental standards is unlikely to reduce international competitiveness when pollution is generated by consumption. And where depletion of natural capital is a threat, effective environmental policy is an important component of a policy aimed at developing long-run international competitiveness. The effects of trade on environmental policy, the interaction between trade and technology transfer, and the interaction between trade and transboundary environmental problems are also reviewed. An emerging issue is the potential use of border taxes to curtail carbon leakage. The paper discusses some of the possible responses by developing countries.
Transportation is vital to economic and social development, but at the same time generates undesired consequences on local, regional, and global scales. One of the largest challenges is the mitigation of energy-related carbon dioxide emissions, to which this sector already contributes one-quarter globally and one-third in the United States. Technology measures are the prerequisite for drastically mitigating energy use and all emission species, but they are not sufficient. The resulting need for complementing technology measures with behavioral change policies contrasts sharply with the analyses carried out by virtually all energy / economy / environment (E3) models, given their focus on pure technology-based solutions. This paper addresses the challenges for E3 models to simulate behavioral changes in transportation. A survey of 13 major models concludes that especially hybrid energy models would already be capable of simulating some behavioral change policies, most notably the imposition of the full marginal societal costs of transportation.
This paper reviews dynamic general equilibrium models in order to collect insights on the interaction between economic growth and environmental issues. The authors discuss the Ramsey model and extend it for natural resource inputs and pollution, as well as for endogenous technical change. Green growth becomes within reach if there is good substitution, a clean backstop technology, a small share of natural resources in gross domestic product, and/or green directed technical change.
What kind of clean-energy support measures can be maintained under international trade rules and what cannot? Policy certainty reflected within a clear and coherent trade and energy governance regime is critical for boosting investor confidence and fostering clean energy investments. Ambiguity on clean energy support measures within WTO rules could cast a chilling effect on domestic efforts to scale up sustainable energy. One way of dispelling such ambiguity is through a possible sustainable energy trade agreement (SETA). This paper emphasises the importance of understanding what are the types of clean energy subsidies countries usually provide, why countries provide them, and how they fit into existing legal mechanisms. A SETA, by simultaneously addressing these questions and clarifying existing WTO subsidy rules, would add to the certainty and predictability of a country’s trade and investment climate.
This paper, written for the United Nations High-Level Panel of Eminent Persons, seeks to 1) Explain the relationship between the sustainable development, green economy and green growth concepts; 2) Summarize the state of knowledge regarding the feasibility and ultimate potential of green growth; and 3) Recommend how the post-2015 international development cooperation agenda could be structured to maximize the contribution of green growth to sustainable development over the next two crucial decades.
Achieving global goals for poverty reduction, economic growth and environmental health will require widespread innovation and implementation of new and appropriate “green growth” technologies. Establishing a sufficiently large suite of innovative options, suitable to all economies, and at the urgent pace required will involve unprecedented innovation activity not only from developed regions, but also from new clusters and enterprises in emerging economies and least developed countries. Stronger international cooperation can play a critical role in facilitating this transformative process. In this paper, we look at areas for new partnerships or cooperation that could most effectively accelerate a green growth transformation. We do this by reviewing the components of a successful innovation “ecosystem,” assessing the current status and prospects for green growth innovation, compiling and analyzing existing international initiatives, assessing the needs and pragmatic constraints on international institutions, and recommending an integrated approach to spur global green growth innovation partnerships, especially within developing countries.
This paper discusses some of the challenges and opportunities in infrastructure investment in developing countries. Infrastructure investment in emerging and developing countries will need to more than double over the next decade. This means a significant step-up in the amount of public and private finance flowing to these countries. Such investment will be crucial not only to ensure that emerging and developing countries meet their growth and development aspirations, but also to ensure that they lay the foundations for sustainable growth, which entails low emissions and resilience to climate change.
A new Development Bank for Infrastructure and Sustainable Development could provide a new channel through which developing country governments could borrow to finance economically productive infrastructure assets - whilst still remaining within prudent levels of debt. In addition, a new institution could make up for the deficiencies of the existing architecture and help catalyze the private sector investments required.
ICTSD senior fellow and Professor Emeritus Thomas Brewer, addresses the issues associated with technology transfer used by firms, namely international direct investments, licensing, and trade in services and goods. The author makes a case for the creation of a new international institutional architecture built around a sustainable energy trade agreement (SETA), with a view to enhancing such transfer. The paper considers a wide range of related topics that need to be addressed in designing and negotiating a SETA, especially four key elements: subsidies, government procurement, standards and intellectual property rights.
Climate change is an unprecedented challenge facing humanity today, one that requires a quick and concerted response. With this context in mind, a rapid scale up in the deployment of renewable or sustainable energy sources is essential in order to reduce the emissions responsible for global warming. In this paper, Gary Hufbauer and Jisun Kim examine the conditions necessary for achieving a credible, low cost alternative to fossil fuel-based energy, placing an emphasis on how trade policy can be used to spur development in the sector, and the key issues that need to be addressed in order to accomplish a sustainable energy trade agreement (SETA). This publication is a joint effort by ICTSD, the Global Green Growth Institute (GGI) and the Peterson Institute for International Economics (PIIE).