Responsible Investor

Green growth: an opportunity to rethink the sustainability of the planet

Scientific research is often an opportunity to put paid to clichés. For example, research just published in the Lancet explains that the Earth will be home to 8.8 billion people in 2100, two billion below the United Nations’ current projections. The research - Fertility, mortality, migration, and population scenarios for 195 countries and territories from 2017 to 2100: a forecasting analysis for the Global Burden of Disease Study – has several surprises:  barring an influx of immigrants, dozens of countries will fall below the threshold needed to maintain their population, and more than 20 countries will see their population fall by at least half by 2100, both in Europe and in Asia (Japan, South Korea, Thailand and even China).  Sub-Saharan Africa, on the other hand, will triple in size (the research can be found here.

But although the research offers surprises, it does not solve the problems themselves, whether they concern overpopulation or a decrease in residents in that country: what we have known for some years now is that it is a good idea to take precautions in good time and avoid draining all the planet’s resources. This is what we call sustainable development, and this is an area that needs just as much research, ideas, innovation, and funding.

From this point of view, Asia is leading the way and is an interesting testing ground, especially from a technology point of view, but also regarding the relationship between environmental protection, resources and sustainability, as explained in a 2012 joint report by the Asian Development Bank (ADB), the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the United Nations Environment Programme (UNEP). The “Green Growth, Resources and Resilience” report described a changing political and economic landscape, characterised by a rise in demand for resources, increasingly visible impacts of environmental and climate change, and greater risk and uncertainty. The report provided new insights into trends in the use of resources in Asia and the Pacific region and outlined key actions, including the reform of economic incentives and the promotion of more inclusive and flexible governance approaches to help bring economic growth strategies closer to the goal of sustainable development. Where are we now?

“The nations of Asia and the Pacific,” wrote Gregg Jones in Development Asia - a magazine of the Asian Development Bank that dedicated its March issue to this very topic (Going Green. Why Asia is moving toward a green model of economic growth) - “have dazzled the world with their robust economic growth over the past 2 decades, reducing poverty rates and delivering middle-class comforts to millions.” But the region has also become a leader in the unwelcome byproducts of traditional development: reduced water and air quality, depleted natural resources, and imperiled biodiversity.” The traditional scourges of underdevelopment, in short.

“That is beginning to change,” added Jones. “Green growth projects are sprouting around the region.” In terms of technological innovation and green capacity, China is a strong example: “The PRC has become a leader in the development of green technologies. In 2009, the PRC overtook Denmark, Germany, Spain and the United States to become the world’s top manufacturer of wind turbines, and its domestic market for turbines has already become the world’s largest. The PRC also boasts the world’s longest high-speed rail network, and holds close to 1,000 local and international patents for high-speed rail technologies.” And staying in Asia, perhaps it is no coincidence that Korea organized a global green growth summit in Seoul last year, the theme of which was “Building a Planet-Responsible Civilization”.

The emergence of a different economic model is not without problems in Asia: in 2005, for example, China and India had a material intensity* of 9.2 and 6.84 kilograms per dollar of GDP, respectively, while the value for Japan was 0.30 kilograms per dollar. But this gap is narrowing, and closing it, said Nessim Ahmad, Director of the ADB’s Environment and Safeguards Division, also represents an opportunity to adopt more efficient production models to ensure growth “with fewer resources per gross domestic product unit:  a key factor in the region for sustainable development”.

* Material intensity is a globally recognized measure of materials needed for the production, processing and disposal of a unit of a good or service.