The Brundtland Report, “Our common Future” (world Commission on environment and Development, 1987) heavily popularized the notion of “sustainable development” which sparked conversation around the possibilities and tools that could be enhanced in order to achieve it. Around the same time, the phrase “green growth” started to be used, even though it didn’t make it to policy-makers’ agendas up until recently (Bowen and Hepburn, 2014). Efforts to encompass “green growth” scenarios in public policy also intensified other arguments about the inefficiency and unsustainability of the current growth economic model which seems to promote “growth over everything” and ideas such as dismissing gross domestic product (GDP) as an indicator for nations wealth, started to rise. As a result, alternatives have been proposed and discussed at the dawn of the rather recent realization that individual welfare depends on a multitude of factors other than economic output as well as the realization that for the continuation of any type of “growth” the environment needs to be preserved and protected, otherwise it is being risked to lose everything. As the Secretary-General of the OECD, Angel Gurria highlighted, “the erosion of our natural environmental capital will increase the risk of irreversible changes that could jeopardize two centuries of rising living standards” (OECD, 2012). The aforementioned skepticism has intensified the debate around what is the interplay between green growth and economic growth.

In an attempt to define “green growth” one might find it useful to first define the terms green and growth. Growth usually refers to economic growth mainly measured by the growth of gross domestic product (GDP). Green, on the other hand, whilst it could have multiple definitions, for the purpose of this article it would be most suitably defined as “preserving or enhancing aggregate natural capital within a specific area, or possibly the planet as a whole” (Bowen and Hepburn, 2014). The two terms combined have come to create the term “green growth” which has various definitions, some of them vaguer than others. The main concept of most of the aforementioned definitions is a continuation of the economic growth, in terms of all the final goods and services produced, whilst doing it in a sustainable way that will have long term effects in the preservation of the environment and the protection of resources and the natural capital. For instance, OECD defines “green growth” as “fostering economic growth and development while ensuring the natural assets continue to provide the resources and environmental services on which our well-being relies” (OECD, 2011a), whilst Jacobs (2013) refers to it as GDP growth that also achieves “significant” environmental protection.

According to Jacobs (2013) environmental policies would have positive effects on economic output even in the short term, a view shared by UNEP (2011a, p. 24): “Greening the economy can generate consistent and positive outcomes for increased wealth, growth in economic output, decent employment and reduced poverty”. Therefore, the key elements of the “green growth” paradigm are the notions of “sustainable development”, which could be interpreted as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (World Commission on Environment and Development, 1987), and economic growth.

Notably green growth does not solely refer to climate change issues but it rather encompasses natural resource use and environmental impacts, thus making it necessary “to address the question of the long-run limits to growth and the desirability and feasibility of ever-rising global GDP” (Bowen and Hepburn, 2014). An additional concern derives directly from the aforementioned definitions of “green growth” which are rather normative given the fact that they presuppose that green growth is a positive thing that only leads to positive outcomes, which is not necessarily the case. Dercon (2014) for example argues that for developing countries, green growth measures may hurt the poorest members of society. According to Dercon (2014) “there may be some windows of opportunity whereby poverty reduction now can be combined with greener growth, but a priori assuming that these are plentiful and effective would be wrong. It would risk making the poor pay for greening growth”. Additionally, with regards to positive output in employment, it has been argued that the positive effects might not materialize, therefore making “green jobs” “a waste of taxpayer resources, a drain on the federal budget” (Frurcchtgott-Roth, 2012). Moreover, positive economic output based on renewable energy, for instance by lowering fossil fuels prices, are difficult to track down (Borenstein, 2012) and if the costs of ensuring grid stability for high shares of renewable energy are considered, its costs might prove to be significantly higher than often assumed (Ueckerdt et al., 2013). In sum, conjecturing that green growth is normatively positive seems to rest on weak empirical foundations.

Moreover, questions arise regarding whether “green” and “growth” can actually be combined meaning whether “green growth” and an ever-rising GDP is even a realistic possibility as well as whether “green growth” “is likely to compare with business-as-usual growth” (Bowen and Hepburn, 2014). The issue seems to be rather controversial given that a few argue that it is an oxymoron due to the fact that the preservation of the environment is intertwined with the preservation of the economy itself and therefore the pursuit of economic growth in any way is bound to undermine itself by causing severe damage to the necessary environmental conditions needed for its own preservation. Others argue that green growth is inevitably slower and less effective in terms of gain, hence considering it less attractive or desirable. Lastly, another view taken is a more positive one based on the concept of “circular economy” (Pearce and Turner, 1990; Ellen MacArthur Foundation, 2012). Within that concept green growth appears to be more feasible due to the contention of the ecological footprint of economic activity through recycling and waste minimization. Hence, it is worth further investigating whether comprehensive decoupling of the economic activity and the environmental pressure could be achieved through well designed policies and proper incentives as well as to further understand where does the problem with growth ultimately lies.

In the “Limits to Growth”, a report commissioned by the Club of Rome, the authors conclude that “If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity” (Meadows, Meadows, Randers and Behrens III, 1972). In the year 2020 the planet has not yet collapsed, although the indications appear ominous. In its 2011 report UNEP examines the possible scenarios for future global material use in an attempt to expose the possible entanglements for resource use of the normative hypothesis that underpin the various economic growth and development models. In the first scenario -Business as usual- in which developed countries freeze their metabolic rate as of year 2000 in order for developing countries to develop the same metabolic rate by 2050, the global metabolic scale would inflate all the way to 140 billion tons (140 Gt) annually by 2050 which translates into a tripling of annual global resource extraction. In the second scenario -Moderate contraction and convergence- where industrial production and consumption patterns change is assumed, global resource use would still increase by an approximate amount of 40% and the average per capita CO2 emissions would still increase by approximately 50%. Lastly in the third scenario -tough contraction and convergence- developing countries would probably take a hit as they would be required to comply, along with developed countries, with complete resource use reduction. A scenario like that would keep global resource consumption to the same level but it would simultaneously restrict the developmental efforts of the developing countries.

In conclusion whilst nowadays it is clear that some model of sustainable development needs to be introduced it is rather unclear which one would be more effective in the long run. Whilst green growth appears to be an appealing concept given the fact that it promises the preservation of the natural capital simultaneously with a rise of the GDP, its realization comes with many practical problems whilst it also poses a threat to poorer countries. That is not to say that it is impossible but rather to point out that an ever-rising GDP and the preservation of aggregate natural capital are likely to be at odds with each other.