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FEATURE: CDKN seeks your views on green growth – part two

In part two of CDKN’s exclusive new discussion series on green growth, our Executive Chairman Simon Maxwell seeks your views on what green growth means for developing countries. Simon has put together ten propositions on green growth, and will be answering your questions and comments on two of these propositions each week for the next four weeks. Visit Ten observations on climate change and growth to read the paper in full, and read last week’s discussion here.  

In part one of this discussion series, we looked at the importance of growth for poor countries and the dual impact on growth from measures taken to reduce and adjust to climate change, and from climate change itself.

This week, Simon’s propositions focus on the need to adopt a global perspective when considering the impact of climate change on growth, and when adopting climate compatible strategies.  Globalised economies and the global impacts of climate change will create winners and losers across the north and south, both in terms of growth and environmental impacts.  In response, countries need national response plans.  So far, these have too often been rigid and top-down rather than flexible and participatory.

A new generation of plans is developing, but it is too early to pass judgement on their effectiveness.  How these plans should address the question of green growth is a vital part of their formulation.

Here are this week’s propositions for debate:

3. A global perspective is needed

An important insight of work on climate compatible development is that the drivers of climate change impacts on growth can come from outside countries or develop within their borders, and may be positive as well as negative. The current global food price crisis provides an example. Simplifying somewhat, fires in Russia and floods in Australia, combined with the use of 100 megatonnes of corn for biofuels in the US, have contributed to world record food prices, which affect welfare, political stability and growth prospects around the world.

Thus, discussion of mitigation and adaptation policies conducted in a national context is misleading. Furthermore, climate change creates opportunities as well as threats. Two examples are lithium in Bolivia and solar cell production in China. Bolivia has an estimated 50% of the world’s reserve of lithium, needed for a new generation of low-carbon batteries for electric vehicles, found in brine deposits below the Uyuni salt flats. The Government has valued these at $US 1.8 trillion, and has plans to use the resource as the basis for development of battery and other downstream manufacturing.  China has developed a large solar cell industry, largely for export. China itself has installed capacity of about 220 MW, but one firm alone, Renesola, produced more than 1 GW in 2010 alone, entirely for export. This is a $US 1 billion business, contributing jobs, tax revenues, and foreign exchange to the Chinese economy.

These negative and positive cases illustrate the way in which climate change and climate-related policy will (a) shift production possibility frontiers which determine what outputs can be produced with what inputs, (b) change relative prices, and (c) create entirely new markets. It may be too strong to say that global production will be restructured, but the impacts are likely to be significant.

Simon suggests that responses to climate change may have positive impacts on growth, creating new markets, prices and production systems. Do you agree, and what do you think can or should be done to consolidate these impacts?

4. A climate compatible strategy needs to be at the heart of the response

Four conclusions follow from the previous discussion. First, climate change will change development options and pathways. Second, adjustment is likely to be disruptive, with winners and losers as between sectors, geographies, genders and generations. Third, a focus on mitigation and adaptation alone is unlikely to encompass the range of likely effects. And fourth, some kind of national strategy is necessary to manage change on the scale expected.

National strategies can be problematic. The current generation of climate-related plans are heir to a long tradition of national plans, ranging from the top down and strongly interventionist, to the lighter touch and more strategic. Examples include national development plans, like those found in India or China, integrated rural development programmes, food security strategies and plans, sustainable development strategies, structural adjustment programmes, poverty assessments and poverty reduction strategy papers, and MDG plans of action.

In the worst case, national strategies have been data-hungry, time-consuming to prepare, top-down in nature, often with analysis disconnected from action, and, where action is foreseen, inflexible. They have also often been vehicles for the interests of one Ministry or sector within Government, at the expense of others. They have consisted of a list of projects for donor funding, rather than addressing the incentive and regulatory framework. And private sector and civil society actors have been excluded. The worst case is sometimes described as ‘blueprint planning’.

In the best cases, national development planning has been an open, participatory and flexible process, led from the centre, starting with objectives, addressing both the regulatory framework and public expenditure, subject to flexible implementation, and with frequent monitoring and re-planning. It sometimes uses scenario planning, as a tool both to explore options, but also to build consensus. The best case is sometimes described as ‘process planning’, drawing more recently on the lessons of complexity theory.

Note that the style of plan is independent of the content. It would be easy but misleading to characterise blueprint plans as necessarily being associated with state-led, top-down development, and process plans as being associated with market-led options. Sadly, many market-friendly governments have fallen into the trap of blueprint planning.

Climate change planning has so far concentrated on two documents mandated by the UNFCCC: for mitigation, the NAMA, or Nationally Appropriate Mitigation Actions; for adaptation, the NAPA, or National Adaptation Programme of Action. These have begun to be superseded at national level by more comprehensive documents, like Low Carbon Development Plans, Low Carbon Growth Plans, or Climate Compatible Development Plans. In principle, these have the potential to deal with the wider development agenda.

There are too few of the new generation plans to reach unambiguous judgements about their quality. What, however, in terms of growth, should they aspire to achieve?

Simon suggests that climate change plans at a national level are vital, but may be problematic.  How do you think a new generation of national climate strategies should address the issue of growth, and help stimulate climate compatible development?  

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5 responses to “FEATURE: CDKN seeks your views on green growth – part two”

  1. Fouad Khan says:

    Simon suggests that responses to climate change may have positive impacts on growth, creating new markets, prices and production systems.

    I don’t see how. There are two examples you cite, both are illuminating. Solar as an energy generation technology is still not net-positive and its cost effectiveness relies on input of cheap hydrocarbon based energy for manufacturing processes, the true cost of which is not built into the system, and which won’t be as cheap and abundant in the future as it is now. The main reason China’s billion dollar solar cell industry is servicing mostly western markets, is because even at the current raw material costs, solar power is truly profitable only after significant subsidies from the governments. These subsidies are in place in Germany, UK and other western nations but developing nations like China cannot afford to subsidize such futile misadventures in feel-good-environmentalism.

    You talk about looking at things in a global perspective, well here’s looking at it from the top. When buyers in UK and US for instance import solar cells from China and deploy them for subsidized power generation in their own communities, what they are essentially doing is exporting their greenhouse gas production to China. A more direct example of this is the billion dollar CDM based carbon credit industry in China and India. Shipping your greenhouse gas emissions to poorer countries is in no way or means equivalent to emissions reduction and it is definitely not the kind of “global perspective” that we need at the moment.

    When we talk about having a global perspective in terms of climate change, it must mean looking at the world as a finite system. If an industry is not productive in the global, holistic, net-energy context, it must not be propped up by artificial means. These schemes are unsustainable on principle and will always lead to disasters of the kind that emerged from subsidizing corn biofuel production. In the barebones, the rise of the solar cell industry in China is no different from the rise of the corn-for-biofuel market in South America. There’s a disaster at the end of the end of each tunnel, only, one covers more ground temporally than the other. It’s only a matter of time.

    So, localized bubbles aside, climate change preparedness, should in essence mean, coming to terms with a contraction.

    That is the true global perspective we need.

    Our growth of the last two centuries was based on the availability of cheap, abundant energy. Now we’ve ran into the limitations of the system we inhabit on two ends. There isn’t a lot of oil left, and secondly, we can’t burn more much of what’s left in the ground anyway because our climate can’t take it anymore. What does this mean? This means the fossil fuel growth fiesta is over. Contraction is upon us. We’d either prepare for it and realize that there’s more to our civilization than the specter of unhindered consumption, or we’d die the death of the proverbial frog in the boiling water.

  2. Hannah Ryder says:


    Great to see that you’re seeking views and feedback on your 10 propositions. I’m curious to see the changes you’ll make to them as a result of the discussions! I for one hope you’ll get a few more case-studies to feed into the propositions. Your Bolivian Lithium and China Solar examples are powerful. In DFID, we’re trying to compile as many case studies as possible – with facts and figures like you’ve set out – that illustrate the potential for green growth in a wide range of sectors, whether that’s energy, transport, agriculture, even tourism…

    However, one of the problems I’ve noticed is that looking at green growth from a “national” level may be quite limiting. As you say, national level strategies are crucial, but in many cases, cities or provinces may have the competence and vision to deliver green growth. In addition, focusing on the national often relegates the private sector to just one other actor to be consulted. But again, the private sector – whether thats one-person micro-finance entrepeneurs, domestic small and medium enterprises, large transnational companies, or institutional investors – may well be a (if not, the) key player in envisioning and delivering green growth. That’s why, for example, DFID has a new private sector strategy (see that we hope will contribute to green growth and poverty reduction globally.

    It would be very interesting to hear from you about whether you’ve seen any examples of climate strategies that manage the national-to-local-to-private translation well?

    Also, are there any open access guidelines/templates out there for good “scenario” or “process planning”? As an economist, I’m finding complexity theory more and more intriguing (explained in the easiest terms I can find a few years back by Duncan Green: – so it would be great to see it in practice!


  3. Kenneth Odero says:

    I think we need to quickly come to a broad consensus, taking into account historical responsibilities, how the costs and the benefits of new growth are going to be shared. Addressing the question of burden sharing is central to unlocking resources (technological, financial, etc.) required to undergird new production frontiers. It is encumbent upon us to bear in mind that we need such a consensus as a risk premium for sustainability. It is precisely the blind or unmitigated pursuit of growth as if it did not have limits that has led us to this historical crossroad. Failure to grasp the ‘global’ perspective is partly a result of nesting climate change science on a geopolitical framework and mistakenly assuming they are aligned. It is unacceptable to the majority of people in Africa to think that questions around growth opportunities can or should be addressed separately from the question of historical responsibiliy and the real danger that climate risks poses. Accelerating global agreement is certainly what is required to set the world on a path towards sustainable growth. However, and this is the fundamental point: there must first be a radical shift in the rules of the game as is currently apply at UNFCCC, WTO and similar platforms.

  4. Seeing what has happened to NAPAs (that have remained largely unimplemented), climate change plans at a national level may be vital, but remain unattended to in preference to other national plans related to poverty reduction, and economic growth.

    The thinking amongst development partners to involve the private sector sounds plausible. But in situations where there are no standards, controls, and adequate inspections, we may get negative results that only favor business. For example in a lot has been said about how biofuels are ‘fueling’ land grabs, while rural electrification schemes involving solar energy development have attracted importation of substandard panels and equipment.

    We therefore need financial support mechanisms to roll out developed national plans, capacity for development of monitoring and regulatory frameworks across all countries if we are to achieve the global climate change objectives and meet the related obligations

    A few questions remain: Who will play the role of independent monitoring and regulating climate compatible strategies? What are the global needs for this support? What is the source of such support?

  5. Thanks for all these comments – and apologies for not getting back more quickly. I was away.

    Fouad. Another stimulating contribution. I’ll leave the contraction point aside for the time being, and also the point about developed countries exporting their carbon emissions (a point I agree with, of course). The point I do want to pick up is about whether it is reasonable to subsidise infant industries, like wind. We had an interesting discussion on that at one of the ODI-hosted meetings on climate finance, with Edwin Ritchkins from South Africa (see He talked about the pioneering, early independence and fully commercial stages of new technology development, and said they had calculated that if South Africa subsidised the first 1.5 GW of wind power, that would be enough to prove the technology and institutional arrangements, after which wind would be able to compete. We also know, of course, that there are big economies of scale which will bring down costs – in solar, for example. I expect you have seen the new Ernst and Young analysis, which says the price of solar halved between 2009 and 2013, and could fall as low as $US 1 per unit of installed capacity by 2013. See

    Hannah. Good questions, as usual. Funnily enough, I chaired a public meeting on private sector development only this week, for Business Actin for Africa, at which Gavin McGillivray presented the new private sector thinking from DFID. I expect the powerpoint will be available soon at We talked quite a lot about how to support SMEs, and there was a good discussion about the role of diasporas. On your point about planning and complexity theory, there is good work by people like Ben Ramalingam and Harry Jones on the topic (see e.g. and On scenario planning, I would recommend Stef Raubenheimer’s new book, as exciting as a novel! See

    Kenneth. Yes, burden-sharing is an important issue, and issues of historic responsibility play loudly in that conversation, but I also think that developing countries need to engage quickly with the big economic shifts that re likely to take place. If they simply wait for money to come, they may get left behind.

    Richard. More good points, esp on the quality of climate plans and on MRV-type issues with respect to finance. I do think climate plans (NAMAs or NAPs) benefit from being mainstreamed in Government planning, rather than remaining as ‘special interest’ documents. It is when Treasuries and Ministries of Industry and Agriculture engage, that climate planning has real bite. In South Africa, for example, the whole renewables strategy hinges on industrial policy rather than on climate policy – again, listen to Edwin Ritchkins at the ODI meeting (link above). And, yes, project finance should be of high quality. The World Economic Forum has done some interesting work on scaling up investment in low carbon infrastructure, supported by PwC (see A key idea is that countries need ‘investment grade’ policy frameworks, offering long term regulatory certainty and transparency.

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