Although there is progress in developing green sectors in some countries, the key challenge facing the expansion of economy-wide green innovation and structural change is the absence of relevant policy follow-up to the green stimulus enacted during the Great Recession. The boost to green sectors provided by such measures is waning quickly, given that much of the green stimulus focused on energy efficiency. The biggest obstacles to sustaining green growth are major market disincentives, especially the underpricing of fossil fuels and market failures to spur green innovation. A three-part strategy to overcome these obstacles would involve, first, removing fossil fuel subsidies, second, employing market-based instruments to further reduce the social costs of fossil fuel use, and third, allocating any resulting revenue to public support for green innovation and investments. Such a strategy would ensure that green growth is not about promoting niche green sectors but instigating economy-wide innovation and structural transformation.
The Inquiry into the Design of a Sustainable Financial System has been initiated by the United Nations Environment Programme to advance design options that would deliver a step change in the financial system’s effectiveness in mobilizing capital towards a green and inclusive economy.
This paper has been produced by the Inquiry’s Secretariat as an invitation to engage in its activities. It also provides a background briefing on the case for linking the development of the financial system with green and inclusive policy objectives, highlights emerging innovation across the world, and offers a set of questions and themes to frame inputs and feedback to the Inquiry’s work. This paper is based on an initial mapping of existing efforts to align the rules that govern the financial system with a green and inclusive economy, as well as inputs from the Inquiry’s Advisory Council and dialogue with policymakers, financial institutions and civil society organisations.
This Working Paper was commissioned by the UNEP Inquiry into the Design of a Sustainable Finance System (“the Inquiry”) to feed into its process of analysis and knowledge dissemination. This Working Paper has attempted to do three things:
1- summarise the underlying logic for why the financial sector should care about the state of the environment and environment-related risks;
2- review the main structural barriers that could prevent the financial system from managing such issues;
3- identify the main researchers and organisations undertaking work on these topics internationally.
The aspiration being that this document should be a useful initial reference guide to those concerned with both how environment-related risks could affect the financial sector and what financial institutions can do to manage such risks.
Costa Rica is regarded by many as an economic and environmental success story, with an admirable record of ‘green growth’—economic growth that minimizes pollution and uses and manages resources efficiently. Yet Costa Rica is also a victim of its own success: its leadership in some areas may have blinded it to its green growth gaps. As Costa Rica approaches a crossroads in its economic and environmental journey, its choices could provide the model for others to follow.
This report looks at concrete results of green growth in Costa Rica, rather than listing policies and projects. It examines the root causes of under-performance, the synergies between the country’s economy and environment and prospects for future progress in both domains. Finally it highlights the deep structural challenges to the organisation of Costa’s Rica’s economy, and it suggests some ‘quick wins’ that will propel Costa Rica towards long-term approaches to better align its economic and environmental performance.
This report is also available in Spanish, which can be downloaded here.
Well-timed and targeted innovation boosts productivity, increases economic growth and helps solve societal problems. But how can governments encourage more people to innovate more of the time? And how can government itself be more innovative?
This report argues that policy makers can and should do better in marshalling the power of innovation to achieve core objectives of public policy such as green growth. Policies for innovation require a strategic approach. The OECD Innovation Strategy provides a set of principles to spur innovation in people, firms and government. It takes an in-depth look at the scope of innovation and how it is changing, as well as where and how it is occurring, based on updated research and data.