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Equity and economic growth

Whilst economic growth is by no means overlooked in climate change and development debates, there are two broad issues to consider, one of which receives significantly more attention than the other.

The first issue relates to the energy intensity of economic growth: it is well established and accepted that the way in which we generate economic growth must change. Economic growth has, in short, to be decoupled from energy intensity if the future is to be prosperous and low carbon. There is an increasing effort to paint a clearer picture of the ‘green economy’, as well as to envisage the pathways for arriving there. The UNEP report on the green economy serves as a good example.

The second issue is about equity. Perhaps the most common framing of low-carbon growth leaves intact the goal of maximising economic growth, often with the assumption that this is the best form of poverty reduction. However, there are grounds for concern that the current extent of decoupling energy intensity from growth is not occurring quickly enough to avoid dangerous climate change, as Tim Jackson has argued. Moreover, there is reason to challenge the assertion that maximising growth maximises poverty reduction, as the Donaldson and Cornia papers demonstrate. Growth has an important role to play. Yet the state’s redistributive capacity, as well as its use of the proceeds of growth, especially in the realm of social policy, is key to reducing the gap between rich and poor. What cannot be lost from this important consideration of equity is the need for social policy that can reduce inequity, and contribute to reductions in carbon emissions.

Towards a green economy: pathways to sustainable development and poverty eradication
United Nations [UN] Environment Programme 2011
The paper presents the importance and relevance of green economies. It describes a green economy as one which results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scar...
Prosperity without Growth? Steps to a sustainable economy
T. Jackson / Sustainable Development Commission 2009
This report attempts to shed light on whether nations can prosper without actually achieving sustainable growth. It also questions whether the benefits of continued economic growth still outweigh the costs, and scrutinises the assumpt...
Growth is good for whom, when, how? Economic growth and poverty reduction in exceptional cases
J. A. Donaldson (ed) / Elsevier 2008
This paper seeks to identify pathways to poverty reduction other than economic growth. It focuses on exceptional cases where specific political, social or economic factors explain a pattern of economic growth and poverty reduction. It...
Income distribution under Latin America's new left regimes
G. Cornia / Routledge Taylor and Francis Group 2010
This paper reviews factors that have led to a decline in income inequality that has taken place over 2002–2007 in most Latin American countries against the background of its steady increase over 1980–2002. The paper then a...
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This key issue guide is produced in collaboration with the Learning Hub project, managed by IDS with support from UKaid.

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