Green growth: economic theory and political discourse

This paper explores the concept of green growth in international policy discourse. It distinguishes between a ‘standard’ version, which asserts the long-run economic benefit of environmental protection, and a ‘strong’ interpretation, which claims that environmental policy can be a driver for growth. The paper discusses three different forms of this claim. The first is a Keynesian argument for short-term ‘green stimulus’ in times of recession. Second, a revision of standard growth theory identifies the contribution made to growth by investment in natural capital and the correction of a variety of market failures through environmental policy. Third, the theories of comparative advantage and long waves of capitalism emphasise the importance of technological innovation in generating growth. The paper offers some conclusions on the political economy of green growth and how likely it is to succeed in increasing the priority given to environmental policy.