1 Rebalancing Asia: Implications for inclusive green growth Dr Alex Bowen Principal Research Fellow, Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science Overseas Development Institute, London, 13 March 2013
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Rebalancing Asia: Implications for inclusive green growth
Dr Alex Bowen
Principal Research Fellow,Grantham Research Institute on Climate Change and the Environment,
London School of Economics and Political Science
Overseas Development Institute, London,13 March 2013
‘Going green’ as a development strategy for Asia
• The application of sustainable development principles?– ‘Green’ to the fore because of the increase in the
perceived threat of environmental degradation, especially by climate change
– Growth to the fore because of the experience of recent decades, especially in Asia
– The three pillars still relevant• Environmental• Economic • Social
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Innovation• Market failures
– Spill-overs from knowledge– Need to differentiate the ‘price’ of new ideas– Difficult to capture returns– Danger of introducing monopoly power
• Changing sources of growth– In the past, capital accumulation and the reallocation of workers
from less to more productive sectors – But populations age, saving rates decline and the movement of
people out of rural agriculture into urban industry and services slows over time
– Increasing importance of knowledge-based growth, including growth based on new skills
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Innovation
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Source: Batelle/R&D Magazine
Innovation
5Source: OECD
Innovation
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Innovation• Policy implications
– Strengthen national innovation systems• Examples from Japan, Korea, China and Singapore
– For most countries in Asia, focus R,D, and D on• Adapting innovations from leading innovators• Exploiting comparative advantages• Delivering innovations appropriate to the structure and resources of
the economy
– Environmental pricing– Take into account the problem of overcoming previous path
dependence– Use UNFCCC negotiations 7
Green jobs
• Another area where market failures abound– Labour market frictions– Acquisition of (general) skills– Macroeconomic shocks– Segmented labour markets e.g. rural/urban,
formal/informal– Poor information and inadequate opportunities to
reduce risks
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Need for additional jobs
Green jobs
• ‘Green jobs’ difficult to define
• Much scope for gross job creation in the transition to green growth
• But policy-makers seeking co-benefits should focus on net job creation
• Studies for high-income countries not necessarily a good guide for developing countries
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Not all measures equally ‘jobs-friendly’The Korean stimulus
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India: jobs in wind energy
Source: TERI (2010)
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Erosion of natural capital
Source: World Bank Little Green Data Book 2011
Energy depletion
Mineral depletion
Net forest
depletion
CO2 damage
Particulate emissions damage
Total
East Asia/
Pacific
3.3 0.3 0.0 1.0 0.7 5.3
South Asia
2.1 0.9 0.9 0.9 0.5 5.3
World 2.0 0.3 0.0 0.4 0.2 2.9
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Damages from particulate pollution
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Costs of adjustment in labour markets
Source: Babiker and Eckaus (2007): ‘Unemployment effects of climate policy’
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Preparedness of Asian countries
Source: ABC
Green jobs
• Policy implications– Active labour market policies– Facilitating investment in skills– Tailoring public employment programmes– Taking account of the state of the macro-economy– Understanding the structure of labour markets– Look beyond formal urban jobs– Focus more on net than gross job formation
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Rebalancing Asia: Implications for inclusive green growth
Thank you for your attention!
Dr Alex Bowen
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