Transcript Alex Bowen presentation 13 Mar 2013

Rebalancing Asia:
Implications for inclusive green growth
Dr Alex Bowen
Principal Research Fellow,
Grantham Research Institute on Climate Change and the Environment,
London School of Economics and Political Science
Overseas Development Institute, London,
13 March 2013
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‘Going green’ as a development
strategy for Asia
• The application of sustainable development
principles?
– ‘Green’ to the fore because of the increase in the
perceived threat of environmental degradation, especially
by climate change
– Growth to the fore because of the experience of recent
decades, especially in Asia
– The three pillars still relevant
• Environmental
• Economic
• Social
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Innovation
• Market failures
–
–
–
–
Spill-overs from knowledge
Need to differentiate the ‘price’ of new ideas
Difficult to capture returns
Danger of introducing monopoly power
• Changing sources of growth
– In the past, capital accumulation and the reallocation of workers
from less to more productive sectors
– But populations age, saving rates decline and the movement of
people out of rural agriculture into urban industry and services slows
over time
– Increasing importance of knowledge-based growth, including
growth based on new skills
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Innovation
Source:
Batelle/
R&D
Magazine
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Innovation
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Source: OECD
Innovation
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Innovation
• Policy implications
– Strengthen national innovation systems
• Examples from Japan, Korea, China and Singapore
– For most countries in Asia, focus R,D, and D on
• Adapting innovations from leading innovators
• Exploiting comparative advantages
• Delivering innovations appropriate to the structure and resources of
the economy
– Environmental pricing
– Take into account the problem of overcoming previous path
dependence
– Use UNFCCC negotiations
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Green jobs
• Another area where market failures abound
– Labour market frictions
– Acquisition of (general) skills
– Macroeconomic shocks
– Segmented labour markets e.g. rural/urban,
formal/informal
– Poor information and inadequate opportunities to
reduce risks
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Need for additional jobs
Change in working population (15-64) from 2010 to 2025 as a % change of 2010
population (medium variant scenario)
30%
25%
15%
10%
5%
0%
-5%
Japan
Korea
Hong Kong
China
Singapore
Thailand
Vietnam
Indonesia
India
Malaysia
Phillipines
-10%
Saudi Arabia
% of 2010 population
20%
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Green jobs
• ‘Green jobs’ difficult to define
• Much scope for gross job creation in the
transition to green growth
• But policy-makers seeking co-benefits
should focus on net job creation
• Studies for high-income countries not
necessarily a good guide for developing
countries
10
Not all measures equally ‘jobs-friendly’
The Korean stimulus
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India: jobs in wind energy
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Source: TERI (2010)
Erosion of natural capital
Energy
depletion
Mineral
depletion
Net
forest
depletion
CO2
damage
Particulate
emissions
damage
Total
East
Asia/
Pacific
3.3
0.3
0.0
1.0
0.7
5.3
South
Asia
2.1
0.9
0.9
0.9
0.5
5.3
World
2.0
0.3
0.0
0.4
0.2
2.9
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Source: World Bank Little Green Data Book 2011
Damages from particulate pollution
Particulate Emission Demage 2010 (GNI per Capita)
Particulate Emission Demange (%GNI)
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
0
5
10
15
20
25
30
35
40
45
50
GNI per Capita ($ thousand)
55
60
65
70
75
80
• ADB Members
• World
Source: World Bank (2010) "The Little Green Data Book"
85
90
95
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Costs of adjustment in labour
markets
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Source: Babiker and Eckaus (2007): ‘Unemployment effects of climate policy’
Preparedness of Asian countries
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Source: ABC
Green jobs
• Policy implications
– Active labour market policies
– Facilitating investment in skills
– Tailoring public employment programmes
– Taking account of the state of the macro-economy
– Understanding the structure of labour markets
– Look beyond formal urban jobs
– Focus more on net than gross job formation
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Rebalancing Asia:
Implications for inclusive green growth
Thank you for your attention!
Dr Alex Bowen
[email protected]
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