Elsevier

Futures

Volume 63, November 2014, Pages 37-48
Futures

A new approach to measuring green growth: Application to the OECD and Korea

https://doi.org/10.1016/j.futures.2014.08.002Get rights and content

Highlights

  • Balancing economic growth with depletion of natural assets is a policy imperative.

  • Using the OECD framework, this paper develops indicators to assess green growth.

  • Applying these, we show that Korea's past green growth lags in the economic sector.

  • We identify factors that can usher Korea into a paradigm of green growth.

  • This indicator framework can aid planning and assessing green growth strategies.

Abstract

Green growth, or environmentally sustainable economic growth, is imperative in light of current environmental crises and resource depletion. Green indicators and statistics can measure environmentally sustainable development; they thus enable evaluating green growth and support its integration into policy. As such, this study uses an OECD framework to select a set of 12 indicators, designed for cross-country comparisons of green growth strategies. These indicators are assessed for 30 countries, including South Korea. Current data for each international indicator is compared to the 10th percentile of OECD countries and evaluated on a scale of 1–10. South Korea ranked 17th among the 30: its natural capital and quality of life indexes are relatively high, but its economic activity scores (production, consumption, and trade) are relatively low. These findings suggest that production and consumption processes must be made more environmentally and economically sustainable. Given that South Korea's green growth strategy currently emphasizes economic value, the country is moving in the right direction and our analysis projects that economic activity scores will rise in the future. This study offers a novel tool for measuring overall effects of green growth strategies, providing the information necessary to re-shape national economic plans based on current circumstances.

Introduction

While many countries associate rapid economic growth with poverty reduction and improvement in quality of life, the process is often accompanied by environmental depletion such as pollution of water, air, and other related problems. The accelerating pace of climate change has added another dimension of complexity to the relationship between economic growth and environmental degradation (Cole, Rayner, & Bates, 1997), leading to calls for policies directed at achieving a balance between the two. According to the Intergovernmental Panel on Climate Change (IPCC), global temperature, on an average, recorded a rise of 0.74 °C (estimated range 0.56–0.92 °C) during the period 1906–2005 (IPCC, 2007). In addition to altering normal weather conditions, climate change will likely alter the frequency and intensity of extreme weather events, threatening human safety, health, and survival worldwide. Because of the common set of threats it poses on a global scale, response to the challenge of climate change must emerge out of a common multilateral participative agenda, a worldwide resolve geared toward combating the effects of climate change. The negotiation process, however, involves complex coordination among many countries, which has essentially prevented any such participative agenda from crystallizing. Stalled international negotiations make it increasingly urgent for countries to adopt national policies to balance the demands of economic growth against potential depletion of natural assets. It has become essential for countries to integrate global climate change issues into their own national policy perspectives, not merely address water and air quality problems on a localized scale. These concerns are what motivate the green growth policy paradigm.

“Green growth” is a fairly new concept with varied definitions. This concept was first promoted by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in 2005 as a way of exploring opportunities to introduce a new low-carbon sustainable development model for fast-developing Asian countries (ESCAP, 2005). The concept was similar to “sustainable development,” a term being embraced by many developed nations. However, many developing countries had long considered environmental protection costly and worried that sustainable development might curtail their growth rates (Brundtland, 1987). Unlike sustainable development, green growth seeks to encourage economic growth and development in a way that balances concerns about environmental harm with long-term economic growth (Popp, 2011).

At the UNESCAP conference, known as the “Second Green Growth Policy Dialogue,” the green growth paradigm was described as seeking “to harmonize economic growth with poverty reduction and improved well-being with environmental sustainability, while improving the eco-efficiency of economic growth and of consumption patterns, and enhancing the synergy between the environment and the economy” (ESCAP, 2006). The Organization for Economic Cooperation and Development (OECD) gives the following definition for green growth: “Green growth is about fostering economic growth and development while ensuring that the natural assets continue to provide the resources and environmental services on which our well-being relies. To do this it must catalyze investment and innovation which will underpin sustained growth and give rise to new economic opportunities” (OECD, 2010a). Despite the differences in these definitions, the consensus view is that green growth entails environmentally sustainable economic growth. Since the UNESCAP conference, the concept of “green growth” has gained support as an alternative development path and found a place within the global policy discourse (Sterner & Damon, 2011). Green growth is now identified as an objective that requires strong policy instruments to deliver a new path for economic development, including tools to foster innovation, investment, and competition in exploring new sources of economic growth.

Green growth indicators are crucial for monitoring and assessing the status of operational green growth models. However, the existing literature on sustainable development and green growth offers only single-indicator interpretations or comparisons of single sectors; such approaches do not amount to an overall evaluation of how well a green growth strategy is being achieved (Bagheri and Hjorth, 2005, Fehr et al., 2004, Hugé et al., 2010, Niemeijer and Groot, 2008, Ou, 2012). Crucial tasks for advancing the practice of green growth assessment include selecting indicators to monitor current green growth status, deciding on a framework, and establishing a system to make green growth achievements quantitatively comparable across countries.

The aims of this study are thus to provide a tool for measuring the current status of green growth and to highlight its implications for policy and practice. These insights will help inform an agenda to improve green growth worldwide. The paper proceeds as follows. In Section 2, we select indicators for monitoring and assessing the current status of green growth, based on the OECD green growth framework. Achievements based on these parameters are then compared across OECD countries in Section 3. In Section 4, we place a particular focus on South Korea to review major trends in its green growth indicators and consider the effects of green growth policies; based on these results, we suggest the way forward in Section 5.

Section snippets

Indicator framework selection

Indicator selection entails deciding on a framework to guide measurement of green growth and then ensuring that the set of indicators chosen covers all aspects of this framework. The OECD has outlined a framework that includes three categories: production, consumption, and environment. According to the OECD green growth strategy, the framework is comprised of five interrelated measurement categories (OECD, 2010b): (1) indicators of environmental efficiency of production and changes in

Green growth in OECD countries

For each international indicator, the value for a given country was compared to the 10th percentile value for that indicator across all OECD countries and evaluated on a scale of 1–10, with 10 being the highest score. Accordingly, indicator levels were calculated for 30 OECD countries across five categories: (1) environmental efficiency of production and changes in production patterns, (2) environmental efficiency of consumption and changes in consumption patterns, (3) natural capital stocks

Measuring the success of South Korea's green growth strategy

South Korea faces the same balancing dilemma confronting other OECD countries. The country has registered strong economic growth since its rapid industrialization in the 1970s, recording a growth rate of 7.1% from 1971 to 1980 and 9.0% from 1981 to 1990 (KICSD, 2008). The 1990s Asian Financial Crisis, however, led to a faltering growth, prompting the country to reorganize its growth strategy and subsequently opt for a knowledge-based model. This approach led to modest 4.6% growth over the

Discussion and conclusion

In this study, we developed a tool for measuring overall achievement of green growth, compared levels of green growth among OECD countries, and analyzed past trends in major green growth indicators in South Korea. Our system of indicators lends itself to being adapted to different national contexts and also enables comparisons within and across nations. This represents one of the first attempts at developing indicators to monitor and measure green growth in OECD countries. While inter-country

Acknowledgments

The authors thank the anonymous reviewers for their useful comments on earlier versions of this paper. This study is supported by the “Climate Change Correspondence R&D Program” funded by Korea Ministry of Environment (2013-001310002 and 2012-001300008).

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