Why we need a “new deal” on green growth

The looming spectre of environmental degradation – potentially leading to catastrophe — could help form consensus for sweeping change. A shift in mindsets could take place, from the current paradigm, which sees the environment predominantly as an externality, towards one which views it as a global common good and as a potential driver for economic growth.

One outcome of such a shift could be a new and novel public-private sector collaboration – what we might call a “new deal” on green growth – that could have as profound an effect upon societies as the New Deal in the United States (in the 1930s) and the Marshall Plan in Europe (in the 1940s), which together paved the way for much of the economic growth achieved during the remainder of the 20th century, helping educate and lift millions out of poverty and effectuating a not insignificant measure of global stability. This “new deal” would not just be about deploying the right technologies; it would also call for innovation in technology, business models, finance, governance, regulation and social innovation (i.e. co-design, co-delivery and co-utilization such as car sharing). Responsive governments, for example, can make a profound impact by supporting private sector innovation via public procurement. This would be a public-private partnership where all societal forces agree on common outcomes.

What might drive a shift in mindsets that reframes the environment as a global common good?

This shift in mindsets could be driven by a recognition of the potential that such a “new deal” on green growth holds for economic renewal and growth. A tipping point may be in the offing, instigated by both the public and private sectors, whereby governments, civil society and private enterprises all converge upon a shared understanding that environmental degradation not only portends ecological instability, but conversely the potential for economic renewal as well. There are growing signs that the private sector may en masse come to recognize the opportunity inherent in the large-scale adoption of green technologies and the provision of green services and products. The massive move recently towards hybrid and, increasingly, electric cars, the spectacular rise of organic farming and the sharing economy (“collaboratism” as the new capitalism) are but a few examples of this trend. From a governance perspective, the European Commission has embraced the notion that so-called “Grand Challenges” can stimulate new sectors of economic growth.

A further possible driver of a shift in mindsets is pressure on governments by citizenry to address environmental issues. Complaints about rampant pollution by citizens at a local level are spurring the Chinese Government, for example, to expand its countrywide investments in green technologies. This phenomenon of local populaces prodding government to act could replicate all over the globe as pollution, flooding owing to rising sea levels and climate-induced droughts increasingly levy a toll on livelihoods and quality of life.

A change could also be prompted by the realization that the cost of inaction is significantly higher than that of investing in projects that deal with the root causes of environmental degradation and promote green growth. Tackling issues borne from environmental degradation after they have already manifested themselves carries tremendous costs. The recent report by the Intergovernmental Panel on Climate Change calculated that the cost of inaction would be 138% higher than taking action.i Moreover, missing out on or coming late to the opportunities of green growth can actually stifle a country’s growth expectations for years, if not decades. Indeed, as has often been the case historically with emerging technologies, over the next few years we might expect to see a few nations emerging as dominant winners from early adoption of green growth policies, leaving losers well behind. Losing in this context means not only decreased economic growth, but potential degradation in other areas of national concern as well, such as resources, infrastructure and human capital.

There is already evidence of a significant increase in public-private collaboration to move towards a greener economy.

The solar industry in Germany now provides more power than 22 nuclear plants and has grown to employ more people than the nuclear industry.ii By 2020, 35% of all electricity in Germany will be green. Rapidly expanding growth, pushed by public finance, in markets for solar and wind power throughout Europe, the United States and China could serve as indicators to the private sector that a tipping point is imminent, providing an opportunity for it to rush in to service strong demand. This is supported by an increase in investment from private and public sources alike.

The time is now to spur discussion within the global community on how, collectively, we can create the conditions for a “new deal” on green growth.

Global effort is needed. It must be made loud and clear to the remaining “sceptics” who continue to deny climate science and underscored among the rest of us that, when it comes to the fate of the planet, we are all in the same boat. After all, though some were travelling first class, the iceberg did not discriminate among passengers of the Titanic. The UN’s climate change meetings, while laudable in intent, have failed time and again to forge the necessary inroads. Hence, we risk missing the aforementioned tipping point, which, in this case, could not only mean missing out on new opportunities for growth, but also quite literally mean dooming the planet to greater and greater shocks caused by environmental degradation. Missing the tipping point, therefore, is missing a win-win option.

If we were all to view the environment as a global common good, just as we currently view poverty and education, our collective future could be brighter than we dare dream.