KOREA FOCUS

 

The “National Strategy for Green Growth,” announced by the government recently, manifests an ambitious development paradigm that encompasses the overall economy and society, including environment, energy, climate change, industry, land, transportation and people`s lives. The whole world, including Korea of course, is paying renewed attention to green growth, as they awaken to the possibility of developing a new growth engine that will help to overcome the climate, environmental, energy and economic crises, all at the same time. Green growth advocates as its basic philosophy a win-win strategy for simultaneous economic growth and environmental conservation, which has been regarded as an impossible feat thus far.     

 

Conventional economics perceives growth promotion and environmental improvement as conflicting goals. Environmental goods, such as clean air and water, are public goods that are not traded. Therefore, they generate negative externalities. Corporate profits, consumer welfare and economic growth will be sacrificed if we turn social costs into private costs through government regulation or market mechanism to remove the negative externalities.

 

Technological innovation has unusual significance in green growth, because it can serve as the basis for turning the conflicting relationship between growth promotion and environmental improvement into a mutually beneficial one.

 

The nature of green growth is “inducible” rather than spontaneous. Green growth has to contribute to corporate profits and consumer welfare through the development and proliferation of environment-friendly technologies. New technology expected from green growth should help save energy or prevent environmental contamination. Green technology is economically unattractive compared with other, more general technologies because it requires additional efforts to shoulder or reduce the social costs for environmental improvement.

 

In view of the current technological level, the cases of environment-friendly technology or goods contributing to corporate profits and sustainable growth can be found only in some leading business enterprises. Green technology has a very long and tumultuous journey before it can be commercialized enough to embrace growth and environment simultaneously.  

 

Moreover, a green technology strategy to cope with a global natural phenomenon occurring very slowly over several decades, like climate change, can be more effective when it takes a gradual approach by properly formulating a policy portfolio that combines environmental concerns, energy, technological development and industrial growth, rather than the technology-push method singularly focusing on the development of a few specific technologies.