World Bank’s “Inclusive Green Growth” (IGG) Report – A Brief Assessment

The World Bank's May 2012 volume on "Inclusive Green Growth" has some positive solutions to offer, but falls short in several crucial ways: the lack of emphasis on poverty reduction, equality and human rights; an uncritical regard for market mechanisms to govern asset markets, and a view of infrastructure as the “heart of green growth,” among other things.

Context: Many governments and much of civil society are critical of the concepts of “green growth” and “green economy”. Many believe that:

1. these paths will not lead to the desired goal of “sustainable development” unless there is priority placed on poverty reduction, equality and human rights. The World Bank report could have refuted this argument. But, although its “analytical framework” has three pillars of IGG (economic, social and environmental sustainability), the report gives little attention to the “inclusive” and “social” dimensions of IGG with the exception of a chapter on jobs that promotes labor flexibility (fewer labor rights) and training to remedy shortages in critical skills. As a result, the Bank gives more ammunition to critics of these concepts. The Bank does not question the links between growth, poverty reduction, and inequality. It claims that, in most cases, these goals are complementary – that economic and social goals are mutually reinforcing – as a justification for superficial treatment of them. According to the IGG concept, there is a “virtuous cycle” wherein growth drives poverty reduction and improved social outcomes which are in turn good for growth.
2. Property rights (privatizing nature), utilization of market mechanisms to govern asset markets (e.g., water), and placing prices/values on ecosystems and ecosystem services can create a “slippery slope” toward enhanced resource exploitation and violation of human rights. However, the report does not address the risks of these approaches.
3. Infrastructure is not a “magic bullet” or the “heart of green growth” (as asserted on p. 134). Indeed, the report avoids the issue of conflicts between local communities and investors, which plagues development efforts worldwide. It fails to identify the preconditions for infrastructure to contribute to sustainable development, including the scale and type of infrastructure, cost recovery schemes, risk sharing between public and private sector, and the need for “free prior and informed consent” (FPIC) from affected communities. The report suggests focusing on urbanization, particularly transportation; urban redevelopment; integrating land policy with urban mobility and transportation; and integrating urban planning with natural risk management. Equity is a leitmotif in the discussion of “energy for all.”
4. Trade and investment rules could diminish any gains from “green growth” and “green economy” approaches by strengthening investor rights at the expense of human and earth rights. Trade and investment agreements can “tie the hands” of governments by paralyzing their capacity to implement environmental and social regulations or green technological approaches. They can also provide a “smoke screen” for green protectionism. The report largely side-steps these issues. Rather than seriously addressing these four concerns, the report devotes itself to the forceful repudiation of the “myth” that green development paths will diminish the potential for growth. Chapter 5, which focuses on natural capital, suggests that improved management can transcend the ultimate management problem: finite planetary limits. Despite these fundamental criticisms of the volume, it offers some convincing and well-reasoned perspectives on some of the changes required to protect the planet from the ravages of carbon-intensive growth.