Rachel Waddell, Senior Advisor for GGGI, reports on the Economics of Green Growth Conference, organized in October by GGGI, the Grantham Research Institute on Climate Change and the Environment and the Oxford Review of Economic Policy.
Some of the world’s leading development economists and experts in the field of green growth and sustainable development convened in early October at the Economics of Green Growth conference, supported and organized by The Global Green Growth Institute, the Grantham Research Institute on Climate Change and the Environment, and the Oxford Review of Economic Policy. Held at the Royal Society of Arts in London, participants discussed a wide range of pressing topics, such as carbon pricing, industrial policy, global economic policy coordination with regional specific issues and concerns about the potential for green growth in China and India also addressed.
The Conference was opened by Lord Nicholas Stern, Chair of the Grantham Research Institute and GGGI Council Member, speaking about the immense risks of climate change and the danger of delay in action.
Papers were then presented for discussion across a broad range of topics around Green Growth including a paper by Justin Yifu Lin and Jintao Xu on ‘Green Growth and Structural Transformation [in China]’, Ottmar Edenhofer and Michael Jakob on ‘Green Growth, Degrowth and the Commons’, Kermal Dervis and Claire Langley on ‘Economic Policy and Climate Change: a Reference Price for Carbon’ and Philippe Aghion, Daron Acemoglu and David Hemous on ‘Global environmental externalities and policy coordination’.
Recordings of full presentations are available online at: http://www.lse.ac.uk/GranthamInstitute/events/Multimedia/podcast-green-growth-conference-2013.aspx
Following the Conference, a number of papers are expected to be selected for publication in a special edition of the Oxford Review of Economic Policy.
The Conference was the key event in a three day series of workshops and meetings around the GGGI – Grantham Research Institute research programme on ‘Green Growth: The New Industrial Revolution?’. Project Workshops were held on two of the themes under the programme: ‘Macroeconomics: Jobs, Poverty and Growth’ and ‘Empirical Policy Evaluation (Innovation)’. These workshops were well attending by both GGGI colleagues and counterparts from other international organisations and academic institutions.
The first workshop on Macroeconomics focused on a detailed discussion of papers produced by Baran Doda on ‘Evidence on CO2 emissions and business cycle fluctuations’ and Karlygash Kuralbayeva on ‘Carbon taxes and labour markets in developing countries’ as part of the GGGI – GRI research programme. Doda’s paper presented the conclusions that the business cycle properties of emissions differ across countries and the relationship between emissions and GDP is different 1) across periods of growth and decline and 2) across countries – with policy implications around the pros and cons of alternative climate change mitigation policy instruments. Kuralbayeva’s paper presented an analysis of the effects of green tax policy (raising pollution taxes, while cutting payroll taxes in a budget-neutral way) on the size of the informal sector, after-tax wages, workers’ incomes in rural areas and city size. The key findings of the paper suggest that when public spending responds endogenously to green tax reforms and higher energy taxes can reduce the income from self-employed work in the informal sector, after-tax wages, unemployment benefits and the income of rural workers follow a hump-shaped pattern. The implications of this for policy-making in developing countries are that the labour market effects of environmental practices can be improved if appropriate complementary policies are introduced along with carbon tax policies.
The second workshop on empirical policy evaluation focused on presentations of work from the GRI-GGGI programme by Antoine Dechezlepretre on ‘Knowledge spillovers from clean and dirty technologies: A patent citation analysis’, by Stefania Lovo on ‘The effect of environmental decentralisation on polluting industries in India’ and Mintewab Bezabih on ‘The role of land certification in reducing gender gaps in productivity in rural Ethiopia’. Dechezlepretre’s study focused around the question of ‘How much should governments subsidize the development of new clean technologies?’. Using patent citation data to investigate the relative intensity of knowledge spillovers in clean and dirty technologies in four technological fields: energy production, auto- mobiles, fuel and lighting it is evident that clean patents receive on average 43% more citations than dirty patents across all four technological areas. Two factors are shown to explain the clean superiority: clean technologies have more general applications, and they are radically new compared to more incremental dirty innovation. The results demonstrate that stronger public support for clean R&D is warranted. They also suggest that green policies might be able to boost economic growth.
Lovo’s paper looked at the unintended effects of the 2006 reform of the Environmental Impact Assessment (EIA) process in India. The reform favoured a decentralization process by delegating the responsibility over environmental clearance of certain activities to state-level authorities. Variations in the strength of environmental enforcement across states is shown through the paper to have resulted in an increase of births for polluting industries affected by the reform in states with lower level of enforcement.
Through looking at the impact of a low cost and restricted rights land certification program on the productivity of female-headed households in Ethiopia, Bezabih’s results support the hypothesis that land certification in general has a positive effect on plot-level productivity in Ethiopia. In addition, the analysis also suggests different marginal effects of certification on male and female productivity, with female-headed households gaining significantly more.
Full final papers produced for the GRI- GGGI programme are available via www.gggi.org and http://www.lse.ac.uk/GranthamInstitute/research/ResearchProjectsGGGI/home.aspx
The Conference and Workshops were followed up on the 2nd October with the first meeting of the programme’s advisory committee. Mike Toman from the World Bank, Nick Johnstone from OECD and Fulai Sheng from UNEP attended in person to provide feedback and advice on the programme to date and to suggest possible additional research for the second year of the programme.