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World Bank - Inclusive Green Growth: The Pathway to Sustainable Development

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World Bank Inclusive Green Growth: The Pathway to Sustainable Development
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As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that may or may not be sustainable in the future. Care must be taken to ensure that cities and roads, factories and farms are designed, managed, and regulated as efficiently as possible to wisely use natural resources while supporting the robust growth developing countries still need. Economic development during the next two decades cannot mirror the previous two: poverty reduction remains urgent but growth and equity can be pursued without relying on policies and practices that foul the air, water, and land.

Inclusive Green Growth: The Pathway to Sustainable Development makes the case that greening growth is necessary, efficient, and affordable. Yet spurring growth without ensuring equity will thwart efforts to reduce poverty and improve access to health, education, and infrastructure services. Countries must make strategic investments and farsighted policy changes that acknowledge natural resource constraints and enable the worlds poorest and most vulnerable to benefit from efficient, clean, and resilient growth. Like other forms of capital, natural assets are limited and require accounting, investment, and maintenance in order to be properly harnessed and deployed. By maximizing co-benefits and avoiding lock-in, by promoting smarter decisions in industry and society, and by developing innovative financing tools for green investment, we can afford to do the things we must.

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Inclusive Green Growth The Pathway to Sustainable Development Inclusive - photo 1
Inclusive Green Growth The Pathway to Sustainable Development Inclusive - photo 2
Inclusive Green Growth
The Pathway to Sustainable Development
Inclusive Green Growth
The Pathway to Sustainable Development

2012 International Bank for Reconstruction and Development International - photo 3

2012 International Bank for Reconstruction and Development / International Development

Association or The World Bank

1818 H Street NW

Washington DC 20433

Telephone: 202-473-1000

Internet: www.worldbank.org

1 2 3 4 15 14 13 12

This volume is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent.

The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

Rights and Permissions

The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to the work is given.

For permission to reproduce any part of this work for commercial purposes, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com.

All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: .

ISBN (paper): 978-0-8213-9551-6

ISBN (electronic): 978-0-8213-9552-3

DOI: 10.1596/978-0-8213-9551-6

Cover design: Richard Fletcher, Fletcher Design.

Library of Congress Cataloging-in-Publication Data has been requested.

Contents
Foreword
Acknowledgments
Abbreviations
Overview
Greening growth is necessary, efficient, and affordable
But obstacles are plentiful, and green growth is no substitute for good inclusive growth policies
The way forward: Good and inclusive growth policies tailored to real-world challenges
Conclusions
Notes
References
An Analytical Framework for Inclusive Green Growth
Why not grow now and clean up later?
Delaying action can be costly
Is green growth really possible? The analytical basis
A real-world framework for green growth
What about welfare?
Trade-offs and synergies between green policies and growth
Notes
References
Influencing Firms, Consumers, and Policy Makers through Market and Nonmarket Mechanisms
Incentivizing: Providing effective market signals to spur green growth
Informing and nudging: Using information and framing to infl uence economic actors
Imposing: Using rules and regulations
Notes
References
Green Innovation and Industrial Policies
Innovation policies: Tailoring mixes of instruments to a countrys innovation potential
Green industrial policies: Ensuring that the standard caveats apply
Notes
References
Human Capital: Implications of Green Growth Policies for Labor Markets and Job Creation
Green policies may create jobs, but are no substitute for sound labor markets
But environmental regulation need not kill jobs either
Smoothing the transition to greener growth paths for the labor market
Notes
References
Natural Capital: Managing Resources for Sustainable Growth
Extractable renewable resources: Defi ning property rights and moving up the value chain
Cultivated renewable resources: Innovation, sustainable intensifi cation, and integrated landscape approaches
Nonprovisioning services: Creating knowledge and markets for economic valuation
Nonrenewable resources: Promoting rent recovery and reinvestment
Notes
References
Physical Capital: The Role of Infrastructure in Green Growth Strategies
Infrastructure as the heart of green growth
Recognizing the need for efficiency: Meeting large unsatisfi ed infrastructure needs within tight fiscal constraints
Minimizing the potential for regrets and maximizing short-term benefits
Notes
References
Crafting a Green Growth Strategy
The challenges of developing a green growth strategy
A step-by-step process for crafting a green growth strategy
Uncertainty and the need for robust decision making
Notes
References
Boxes
O.1What is the aggregate economic support to the (over)use of natural capital? $1 trillion to $1.2 trillion annually
O.2The many ways in which green policies can contribute to growth
O.3Why grow dirty and clean up later is misleading
O.4Morocco: The importance of political economy
O.5Green cash transfers are helping poor communities in the Brazilian Amazon
O.6Joining forces: A common platform to move forward on greening our economies and growth processes
1.1Persistent concerns about local pollution in high-income countries
1.2An economic framework for green growth
1.3Using individual transferable quotas to revitalize fisheries
1.4Reducing vulnerability to oil shocks by increasing energy efficiency
2.1Institutional and market failures that help explain why growth is often environmentally unsustainable
2.2Lessons from CO2 emission trading schemes
2.3The political economy of subsidy reform
2.4What is green accounting?
2.5Changing the default option to spur the use of renewable energy
2.6Modifying car buyer behavior in France
2.7How are PERPs faring in developing countries?
2.8What is the best way to promote vehicle fuel economy?
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