1. GREEN ECONOMY and GREEN GROWTH

Green Economy can be defined as an economy where economic prosperity can go hand-in-hand with ecological sustainability. Green Growth is the process of greening conventional economic system and a strategy to arrive at a green economy.

Thus, pursuing a Green Economy and Green Growth means more than just investing in ecological resources and green technologies, such as renewable energy technologies. It needs to be a strategy of economic system change that can make investment in ecological resources and services as a driver of economic development. The current economic system needs to internalize the ecological price of the ecological resources and services we consume into the market price so that investment in renewable energies and ecological resources can generate profits, employment and growth without subsides or incentives from the government.

2. ECONOMY CHANGE TOWARD GREEN ECONOMY

Green Economy and Green Growth is a concrete strategy in the sense that it focuses on greening the economic system for achieving sustainable development. A shift towards a new development paradigm of a Green Economy requires a fundamental system change, by restructuring both the invisible as well as the visible systems of the economy.

The invisible systems are those intangible patterns that affect the way we produce and consume, such as market prices, fiscal policy, financial policy, financial systems, regulations, social values, life-styles, know-how, etc. These need to be re-aligned based on ecological prices that recognize the real value of ecological resources and services. In particular, internalizing true costs of ecological resources and services into the market price is of critical importance.

The visible systems are those tangible patterns that affect the way we produce and consume, such as urban design and planning, the built environment, transport systems, energy systems, water systems, technologies, etc. These need to be restructured and re-designed based on ecological efficiency and sustainability.

3. ENVIRONMENTAL TAX REFORM AND ENVIRONMENTAL FISCAL REFORM FOR GREEN ECONOMY

Whether the greening of the economy can be done without increasing the burden on the economy and damaging economic growth is a critical and relevant concern. In that point, the Environmental Tax Reform (ETR) as a fiscal policy for green economy has been coming to the fore. ETR means applying green taxes, on pollution or inefficient use of energy and other resources, to encourage enterprises to reduce pollution and economize on resources, while using the proceeds to reduce labor costs and enable enterprises to take on more workers, thus maintaining revenue neutrality and avoiding increasing the overall tax burden on the economy. In short, ETR is the shifting of taxation from ‘goods(like income and profits) to ‘bads(like resource use and pollution).

In regard to this issues, recent experiences in Europe in introducing ETR, suggest that such measures can be effective from an environmental point of view and have even the potential to generate a double dividend in terms of reducing carbon emissions while promoting growth and employment at the same time. In practice, however, there is so far limited empirical evidence that a Green Economy/Green Growth is feasible. Some developed countries, such as Denmark, have successfully decoupled growth from CO₂emissions.

4. HOW TO JUMP-START GREEN ECONOMY/GREEN GROWTH?

The process of green economy will not happen automatically and cannot be driven by the market. This is due to two gaps: (1) the time gap between short term costs and long term benefits, and (2) the price gap between market prices and ecological prices. Thus it is only governments that can make it happen. Green Growth has to be jump-start by the government. Governments can lead the process though green fiscal packages, such as the green stimulus packages issued by many governments in the wake of the financial crisis. Governments, however, cannot pump in fiscal stimulus packages forever. Thus, investments in green sectors need to be made commercially viable and profitable through measures aimed at internalizing ecological costs into market prices.

As Green Economy/Green Growth will not happen automatically and the Government needs to jump-start it, political leadership to push the necessary policy measures is essential. The paradigm shift towards a green economy is a journey through uncharted waters. Thus, political leadership and commitment at the top are crucial.

5. IMPLICATIONS FOR REGIONAL COOPERATION

Many Green Growth policies are sound development policies to start with, and developing countries may pursue them with no regrets. A comprehensive economic system change towards a green economy, however, can be effectively done only when countries collaborating collectively on a regional or global level.

For fear of losing competitiveness and due to a lack of empirical evidence, countries may find it difficult to initiate certain measures for Green Growth on their own. Since each region has its distinct features and development challenges, the shift towards a green economy can be best pursued when it is collectively done at regional level. Political consensus at the regional or sub-regional level is required on the general framework for a system change to a green economy, while the choice of specific policy options should be left to each country, depending on country specific circumstances and political considerations.

6. LEARNING BY DOING

As the idea of Green Economy/Green Growth is new and innovative, political consensus may take time to emerge. The level of understanding and definition of it will vary according to the level of development of member countries. The promotion of Green Economy/Green Growth could be a process of learning by doing. Since there is no established and pre-defined Green Economy/Green Growth blue print available for policy makers, governments are coming up with various approaches based on their respective priorities and circumstances. The 5-year green growth program of the Republic of Korea is a case in point. Many other governments are coming up with diverse initiatives. Cambodia adopted a Green Growth Roadmap. Kazakhstan came up with the Green Bridge Initiative to link Europe with Asia and the Pacific through Green Growth. China is promoting green development. Other governments, such as Indonesia, Malaysia or Philippines are also promoting green growth strategies.

The demand for technical assistance in developing Green Economy/Green Growth strategies and policies is increasing. Demands for green growth approaches are increasing. There is a clear indication that policy makers are increasingly interested in pursuing a paradigm change. However, there is a clear gap between the desire to pursue green growth and the understanding on how to pursue green growth system change. Collective efforts to craft a generic framework, roadmap or blueprint to pursue Green Economy/Green Growth will enable member states to support the paradigm shift.

7. THE 6TH POLICY CONSULTATION FORUM OF THE SEOUL INITIATIVE ON GREEN GROWTH

The Ministry of Environment of the Republic Korea and UNESCAP have been holding policy consultation forums every year to promote Green Growth as a political strategy for member counties. The SINGG Secretariat The 6th policy consultation forum of the SINGG will cover subjects as follows:

• a) Green Economy and Green Growth
• b) Environmental Tax Reform for Green Economy
• c) Multi-stakeholders’ Role for changing economy system toward Green Growth
• d) Best Practices implemented Green Growth policy in member countries

The objectives of the 6th Policy Consultation Forum of the SINGG are:

• a) To exchange information and views on adopting Green Economy and Green Growth as a strategy;
• b) To build consensus on policy direction for incorporating Green Growth concept into economy system;
• c) To discuss how to promote Green Economy as an economy system in Asia and the Pacific region, focusing on environmental tax reform and fiscal policies;
• d) To share best practices among member countries.

The Forum will attempt to generate interactive discussion and debate on developing innovative approaches to promote Green Growth with the active participation of policy makers, academia, the private sector, civil society and non-governmental organazations.