Climate Change and Development Policy: Competing Aims?

, ,

  • 2012•11•27

    Yongfu Huang

    Green Economy

    Photo: DWIA

    The climate change crisis and development needs of the world’s poor require us to acknowledge the necessity and urgency for both continued growth at the current pace, and rapid greening of this growth strategy. But are the aims of growth and environmental protection irredeemably incompatible?

    The recent history of economic growth has largely been achieved at the expense of the environment. Thus serious environmental problems such as ecosystem disturbance, climate change, water and air pollution, and rising sea levels can be seen as the unintended consequences of the development process. The threat of human-induced climate change poses a serious question to humanity: how can the world achieve well-rounded human development in the future without degrading our environment?

    Do we need to trade off our environment for development?

    Compared to developed nations, developing countries are much more vulnerable to the effects of climate change due to their low capacity to adapt and their disproportionate dependency on natural resources for welfare. As pointed out by Roberts and Parks (2006), developing countries actually suffer “a double injustice”: environmental degradation and climate change will impinge on the poor countries hardest, but at the same time, they are required to be “part of the solution” by cutting greenhouse gas (GHG) emissions at the expense of their economic development.

    However, an economic slowdown in developing countries can jeopardize their ability to address pressing problems such as poverty, lack of adequate health care, high unemployment and gender inequality. Environmental degradation can only intensify these existing development problems. For example, increased maximum temperatures and changing rainfall patterns are already exerting negative impacts on the agriculture and food security of many low-income communities, while several coastal nations are suffering from damage to their ocean fisheries brought on by ocean acidification (Howes and Wyrwoll 2012).

    On the other hand, if growth continues on what has been called the “business as usual” development path, it is likely to exaggerate existing development problems and compromise the well-being of present and future generations. Growth enables human development that includes non-income dimensions such as education, health, gender equality and freedom of expression, which are essential for human well-being. At first glance, it looks like whichever path developing countries choose they will not be able to attain all their central development goals.

    Bowen (2012) argues that since environmental degradation will harm human productivity and welfare, the traditional economic growth pattern cannot be sustainable, and will eventually be self-defeating. As pointed out by Jänicke (2011), the resource-intensive model of growth of the past fails not only because of the lack of cheap raw materials, but also because of the earth’s limited capacity to absorb carbon emissions and waste.

    Green growth?

    Contrary to conventional intuition, economic growth and environmental conservation are not necessarily conflicting goals, and can even be seen as complementary aims. Furthermore, at this point in time environmental conservation can play an essential role in sustaining economic development. With sound protection and management, natural capital can actually yield considerable economic dividends for low-income nations — especially countries dependent on agricultural production, which are in turn highly dependent on natural resources for the livelihoods of producers (Purvis 2003). Hallegatte et al. (2011) argue that the main direct contributions of environmental protection, understood as natural capital, to economic growth is through increased inputs of natural resources which lead to a greater economic return.

    On the other hand, economic development can provide a solid material foundation for environmental protection efforts, enabling governments to take a better care of their ecosystems, and equip them financially and technologically for the fight against climate change. Green growth aiming to achieve a harmony between economic growth and environmental sustainability is just what the world needs to obtain long-term and well-rounded human development.

    Green growth can be defined as “fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies” (Hallegate et al. 2011). As a different kind of growth that stays within the limits of the Earth’s natural systems, green growth marks a revolutionary conceptual and material transition from the traditional resource-intensive growth model to an eco-friendly growth model. It is about growing cleaner and greener, but not slower, simultaneously taking into account both short-term economic growth and long-term environmental sustainability.

    The ever-worsening environmental crisis has sent out a serious alert to the global community as to the urgency of embarking on the green growth development path before it is too late. By maximizing the synergies between economic development and environmental protection, the concept of green growth emphasizes that strategic environmental policies can not only foster environmental sustainability at a low cost, but also have the potential to sustain long-term economic growth (Toman 2012). In other words, strategic climate policies should not be framed as a choice between the environment and economic development, but rather as a choice between effective measures to achieve balance between the two dimensions.

    A role for foreign aid?

    Green growth is being more and more widely recognized as a central theme of the development agenda, and many emerging economies, such as China and India, have in fact put green growth as their primary national development objective (Howes and Wyrwoll 2012). To achieve it, we need a transformation towards a new set of policies, institutions, and behaviours. However, many developing countries simply lack adequate financial and technological resources to follow such an eco-friendly trajectory.

    Here, traditional development aid could play a crucial part in supporting the strategic move by developing countries to a path of sustainable development. Foreign aid is especially important in promoting green technology transfers from developed nations to developing nations, to help establish a green growth-enabling framework in developing countries and to enhance capacity building in low-income communities to raise awareness and capacities of local people to pursue a low-carbon growth path.

    UNU-WIDER is now undertaking a major work programme — ReCom (Research and Communication on Foreign Aid) — to study the effectiveness of foreign aid for environmental protection and green growth. Ongoing research includes topics such as “Can foreign aid stimulate sustainability?”, “Does foreign aid fuel inclusive growth?” and “The convergence of green growth”. Output will be released in due course.

    ♦ ♦ ♦

    This article originally appeared in the September 2012 issue of the UNU-WIDER WIDERAngle newsletter.

    Climate change and environment questions are one of the main pillars of the current UNU-WIDER research programme. Projects under this theme include Development under Climate Change and ReCom – Research and Communication on Foreign Aid (which includes work on aid, climate change and the environment). 


    • Bowen, A. (2012). “Green Growth, Green Jobs and Labour Markets”. World Bank Policy Research Working Paper No. 5990.
    • Habito, C.F. (2010). “Patterns of Inclusive Growth in Developing Asia: Insights from an Enhanced Growth-Poverty Elasticity Analysis”. ADBI Working Paper No. 145.
    • Hallegatte, S. et al. (2011). “From Growth to Green Growth: A Framework”. World Bank Policy Research Working Paper No 5872.
    • Howes, S., and P. Wyrwoll (2012). “Climate Change Mitigation and Green Growth in Developing Asia”. ADBI Working Paper No. 369.
    • Jänicke, M. (2012). “Green Growth: From a Growing Eco-industry to Economic Sustainability”. Energy Policy, 48(0): 13–21.
    • Purvis, N. (2003). “Greening US Foreign Aid through the Millennium Challenge Account”. Brookings Institution Policy Brief No. 119.
    • Roberts, J.T. and B. Parks (2006). A Climate of Injustice: Global Inequality, North-South Politics, and Climate Policy. Boston: MIT Press.
    • Toman, M. (2012). “Green Growth: An Exploratory Review”. World Bank Policy Research Working Paper No. 6067.