Green Growth: Managing the Transition to a Sustainable Economy

This chapter argues that game-changing green-growth must be rooted on economic approaches allowing for the inherent complexity of human-environment relationships, implemented through multi-stakeholders and multi-scale governance arrangements and fuelled by policies and managerial techniques promoting synergies – rather than just decoupling – between environment and growth. The evolution of conceptualizations between growth and environment is first discussed in this chapter. The debate evolves from zero-growth versus uncontrolled growth, to sustainability and parallel discourses emphasizing such principles as ecological modernization and the win-win paradigm. The chapter then describes the emerging discourse of Green Growth and positions this discourse in the context of its predecessors. Transition challenges (e.g. how can we define and measure green growth) and an overview of diverse methods to meet environmental challenges, such as cradle-to-cradle will also be summarized. A framework conceptualizing the main dimensions of Green Growth and mapping the chapters to this framework is then introduced.

The Korean government recently announced the official national greenhouse gas (GHG) emission reduction target, which is to cut carbon emissions by 30% from its business-as-usual (BAU) level forecast for 2020. In this chapter, we critically review the contents and processes of the low-carbon green growth national strategy as it has existed up to now, and then suggest a new framework to help realize the ambitious vision and the goals.

This chapter summarizes the prominent characteristics of the contents and processes of the national strategy based on critical reviews of all the relevant governmental and private responses. The results from this case study enable us to propose a new framework for the development and evaluation of national low-carbon, green growth (LCGG) strategies. We focus on various stakeholders who can compete against and cooperate with other players in the game. The dynamic interaction involves both the top-down and bottom-up drivers of change. Also we propose that a national LCGG strategy should incorporate the policy effects not just within the country borders, but also on the global supply chains. LCGG strategies require many disruptive changes in business and technology platforms. There are huge uncertainties in the competition among alternative platforms. We propose a multi-sided market competition model to help analyze the dynamics of this phenomenon. The evolutionary progress toward a global standard will determine the performance of these efforts.

A reduction of the greenhouse gases emissions is one of the most important policies to tackle the long-term changes to the climate system. The emission trading schemes are flexible market mechanisms, which, if implemented wisely, can contribute to achieving sustainable green growth. The chapter will, firstly, review the relevant literature indicating the theoretical underpinnings and the crucial elements of an effective emission trading system. Secondly, it will analyse the legal framework of the European Union Emission Trading System and assess its achievements and challenges. Thereafter it will trace the legislative and institutional development of the Korean counterpart which is in the development stage. In its conclusion the chapter will suggest policy alterations which Korean government could implement to increase the efficiency of its scheme. It will argue that the Korean government should centralise the governance of its scheme to increase market liquidity and reduce a threat of favouritism. Moreover, Korea should contribute to developing effective mechanisms to combat carbon leakage and establish links with other similar schemes at the global scene.

The latest IPCC report reinforced the idea that a complete climate change strategy must consider both the mitigation and adaptation aspects of addressing the causes and possible effects of climate change. The Singapore National Climate Change Strategy (NCCS) has included both these strategic aspects. Although the NCCS contains broad directions and statements on adaptation, there is almost no mention in the industry at the national level on the detailed strategies to adapt building stocks and infrastructures to cope with the possible consequences of climate change. This study sets out to find out what local industry experts think the most likely effects of climate change in Singapore are, and the most suitable strategies of adapting building stocks and infrastructures to these likely effects. A series of structured interviews were conducted using the Delphi technique. Incoherence was observed between the arrived consensus on the possible effects of climate change on Singapore and the required strategies. Based on this observation, an integrated interaction-based design concept for building was proposed by first characterizing the problem with three design elements – water, soil and built environment. Various policy strategies were then suggested, which were then combined with the help of four integrated policy strategies aimed at promoting adaptation measures for the building industry. Suggestions were also given on how this model can also be applied to countries and territories at large.

The purpose of this study is to analyze technical efficiency, technology gaps and productivity of the manufacturing industries introducing the meta-frontier model in Korea and China for 2000–2004. We compare technical efficiency ignoring pollution with environmental technical efficiency considering pollution in order to estimate the influence of environmental factors on the competitiveness of manufacturing industries in the two countries. While the technical efficiencies of the Chinese manufacturing industries are higher on average than those of Korea in the two cases (ignoring and considering the pollution), the productivities of the Korean manufacturing industries are higher on average than those of China in both cases. This suggests that the China has a difficulty in reducing pollutants and increasing desirable outputs simultaneously. That is, Korean manufacturing is seemingly closer to sustainable growth than Chinese manufacturing.

Using a system dynamics model, we compute the realized environmental investment rate. Using this rate as the weight, the green welfare index is computed from the consumption index and environmental services index. The environmental investment rate that maximizes the present value of the future stream of green welfare indices is estimated and called the optimal environmental investment rate. The normalized gap between these two rates is called ‘green growth gap,’ which gauges the deviation of the economy from the dynamically optimal path. The Green Growth Index is also developed to express this concept in a more digestible manner. These concepts and index are expected to be useful in the performance assessment of the national green growth strategy. This chapter provides a system dynamics model that can serve as a basis for measurement and policy feedback for green growth as a national strategy of Korea.

The question of how growth can be reconciled with sustainability is particularly pertinent in the case of cars. Environmental impacts of vehicle manufacture and use have been widely studied; those of the logistics of new vehicle distribution less so. Japan and Korea together constitute by far the leading source region for shipped cars both in terms of volume and carrier-miles generated. By implication, exported Japanese and Korean vehicles account for substantial amounts of greenhouse gases as they travel; first by ship, then onward by rail or road. Loading and unloading cars under their own power generates additional impacts.

In an apparent reversal of globalization, recent years have witnessed a gradual transfer of production from the home countries of Asian firms – notably Japan and Korea – to locations nearer to recipient markets. However, the environmental implications of such shifts in production location have not been widely considered. Here we are analyzing this process from an environmental perspective.

The research centres on Kia and Hyundai, contrasting the conventional route from Ulsan/Pusan to Western Europe whereby shipping is the principal mode, with the alternative of trucking cars from the new transplant locations in Slovakia and the Czech Republic. The latter is shown to have a significantly lower impact. The results may be surprising, but could have implications for future location decisions of car factories and – potentially – other manufacturing facilities, as well as raising wider questions about the long term viability of the globalised car system in favour of some more localized solution.

This article examines the responses of multinational corporations (MNCs) to environmental protection issues in emerging economies in Latin America (the petroleum industry in Colombia and Peru) and Greater China (the chemical sector in Mainland China and Taiwan). MNCs play an increasingly important role in the sustainable development of emerging economies as more and more developing countries begin to adopt green growth policies. This paper shows how the liability of foreignness imposed by local institutions on MNCs influences them to be more responsive to environmental protection issues than other types of companies. At the same time the paper shows that while the environmental responsiveness of MNCs is largely driven by the local operational context (in particular, legislative demands), when MNCs see good environmental performance as a source of potential competitive advantage in a host country’s market, they are more prone to draw upon resources, environmental capabilities, and experiences based upon their global policies and practices. Within this context and provided the right external institutional and internal corporate contexts MNC subsidiaries play an important role in Green Growth of developing countries.

Sustainability reporting as facilitated by the Ministry of Environment’s environmental accounting and reporting guidelines has been standardized in Japan for over a decade now. Product and process improvements pertinent to environmental innovations are measured in environmental costs. Following literature on the resource-based view perspective, this chapter describes the positive impact of environmental innovations on financial performance. Alternatively, the slack availability of resources perspective describes the reverse effect of the relationship, i.e. financial performance positively affects investments in environmental innovations. Finally, we investigate the existence of virtuous cycles between the constructs and how tangible and intangible benefits accumulate within the context of greening businesses.

This chapter looks at how green-growth policy can be translated into business practice. Following ‘cradle-to-cradle’ and the ‘natural steps’ perspectives, it contends that ‘greening the business’ can add value to existing business models via the symbiotic pursuit of green values and lean production practices (the so-called “Green and Lean” paradigm). A framework is presented – drawing on the contingency theory – to suggest basic requirements for successful symbiotic ‘green and lean’ relationships. The model proposes that a sustainable corporate action plan, enabling a strategic orientation of lean and green decision-making, draws upon five interrelated dynamic contingencies: corporate values, consumption, business benefits, legislation, and technology. The theoretical propositions are illustrated and extended using the case study of Adnams Brewery (Southwold, UK) – a company that has come to symbolise the benefits of adopting strong eco-friendly values to ‘green’ the business and its products. In particular, the company is effectively exploiting marketing opportunities – through a “strong brand and growing reputation” – and enhancing productivity.

This research was based on a participatory research approach aimed at improving the production methods of silk and cotton woven products to be environmentally friendly products. It was approximately designed to be in line with Green Growth and Sufficient Economy concepts. It was not a full technical research but it was an action research using the social process (participatory approach) to search for scientific findings that come up with enhancement of sustainable development. The action research was conducted at household level in the northeastern region of Thailand during 2008 and 2009 with a total number of 83 entrepreneurs participating. This kind of research requires willingness of entrepreneurs to participate and strong cooperation among line agencies, local authorities and the entrepreneurs. The technology transferred to the entrepreneurs includes cleaner technology and wastewater treatment process. Integration of the appropriate transferred technology with the local knowledge of production process resulted not only in more effective production processes, but also gave rise to green production towards sustainability.

The European Union has set goals to tackle climate change by increasing energy efficiency and renewable energy use. A survey in eight regional groups of small and medium-sized enterprises in different member states was conducted and analysed to show how these goals are achieved by the end users. The attitude towards energy efficiency improvements seems to be more positive than that towards increasing renewable energy use. Based on the survey, the enterprise size measured by the average number of staff members and annual turnover correlates with the attitude towards renewable energy and the staff size with the attitude to energy efficiency. Enterprises in member states that joined the EU in 2004 or later view energy efficiency more positively than those in older member states. The number of investment appraisal methods applied correlates with attitudes towards both energy efficiency and renewable energy. The ability to allocate energy costs to projects or products is linked with the experienced significance of energy and the attitude to renewable energy. Clearly, one of the most important factors in attitudes towards renewable energy and energy efficiency is the nationality of the answerer. National and regional energy policies, markets and culture seem to have more influence on attitudes than the common goals of the European Union. In future, SMEs and their distinctive qualities need to be addressed when initiating future energy-related programmes with them.

The green technology of LUBEI Eco-Industrial Park has undergone a process of evolution including a technology R&D stage, a technology improvement stage, a technology integration stage and a product innovation stage. The evolution of green technology of LUBEI Eco-Industrial Park in China during the last decade indicates a variety of green technological trajectories. The emerging green technology receives resistance from end-of-pipe technologies. The breakthrough of the path dependence by the existing technology is facilitated by changes in the ‘selected environment’ (the dynamic factors shaping technological evolution), i.e. favourable policies, auxiliary technological support, market environment, corporate culture and resources endowment.

The diffusion of clean energy technologies is important to foster Green Growth. In the Netherlands the housing sector has considerable potential to increase energy efficiency by applying innovative energy technologies (IES). In this chapter we aim to answer the question of which factors explain the successful application of IES in neighbourhood renovation projects. Our research involves a comparative design, looking at 11 case studies. Comprehensive data collection was carried out, including 70 semi-structured interviews. We found that in only 3 out of 11 cases were IES successfully applied. Ambitions were reduced as the projects progressed. The main results of the analysis identify three factors that are positively related to IES application: policy instruments, housing associations’ organizational characteristics, and inter-organizational collaboration. The results of our analysis suggest that more policy efforts are needed to deploy IES in residential areas over a wider scale. This is important to facilitate Green Growth.

Increasingly, consumers are becoming more knowledgeable about the environment and reflecting this knowledge in their decisions to buy green products. While previous research on the topic has generally examined green consumption related to a single product label, numerous questions exist about why consumers choose various green products and services. We address these concerns by examining individuals’ actual green consumption as it relates to their trust of various sources to provide them with environmental information, environmental knowledge, and personal affect towards the environment. These relationships are studied for a sample of more than 1,200 UK residents using multiple regression techniques. We show that individuals’ total green consumption is related to their trust of various sources to provide them with environmental information, environmental knowledge, and personal affect towards the environment. These findings have important implications to policy-makers and businesses alike as greater efforts are made to encourage more widespread green consumption.

Challenges and strategies related to Green Growth transitions are occurring globally. European and Asian regions of the world play a very considerable role in these transitions. This final chapter provides a closing to the book with contributions clearly identified. The chapter highlights insights and linkages within the book as well as providing areas for further research. We make a distinction between “Greener Growth” and “Deep Green Growth”. Greener Growth is conceptualised as a policy focused version of sustainability where the environmental impacts of growth are minimised by making investment in the Environment a driver for economic growth. Deep Green Growth is anchored in sustainability science and defined as the increase of all economic activity that is not harmful to natural and social capital. We argue that Deep Green Growth is possible, and see ‘Greener Growth’ just as the start of the journey towards radical change in the design of consumption and production systems.