Green Growth is Still a Challenge for Developing Countries
The balance between growth and development is still a major challenge for developing countries, especially emerging economies such as the BRICS (Brazil, Russia, India, China, and South Africa). Provisions from one of the major themes of the Rio+20 Conference, the “green economy”, are slowly making their way to domestic policy. But proponents of the green economy face technological and financial obstacles as well as resistance from major polluting industries. According to the outcome document, “The Future We Want”, green economy policies should be guided by poverty eradication and sustainable development efforts, recognizing “the critical role of technology as well as the importance of promoting innovation, in particular in developing countries.”
In this context, international investment is likely to produce significant changes by providing incentives for developing countries to shift from status quo, carbon-based growth to sustainable development. For instance, in August, 2013, the Asian Development Bank announced $4.2 billion in assistance to support green growth in China, “focusing on innovative projects, and supporting more environmentally sustainable and inclusive development.” Innovation and technological advancements in energy, transportation, and pollution reduction have never been more important, as they allow countries to address global issues like climate change, as well as local-cumulative problems such as air and water pollution.
Similarly, Professor Julian Hunt notes in a recent article in The Guardian that, “The international finance institutions, including the World Bank, then need to direct their investments to ensure the natural capital, such as the Amazon rainforest in Bolivia, are preserved rather than being considered as less value than oil exploration, which will rapidly destroy rain forests.” In addition to multilateral institutions, investment in the green economy and natural capital is also coming from bilateral agreements with developed countries, such as Norway’s involvement in deforestation reduction efforts in Brazil. It remains to be seen to what extent developing countries will be able to learn from and sustain environmentally-sound industries and technology, and whether developed countries and multilateral institutions will invest in green growth policies in the longer-term.