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Green Growth

The promises of Green Growth are striking – conserving nature, overcoming poverty, providing equity and creating jobs are all possible without additional investment in means of nature protection or damage remediation. Like in the late 1970s and the early 1990s, market-based environmental modernisation, through for example, eco-design, technological improvements and structural change towards a service economy will deliver solutions to sustainability challenges, without requiring substantial changes in attitudes, behaviour, management, and power structures.

The disciplinary basis of Green Growth is environmental economics, a version of neoclassical economics complementing the two production factors of capital and labour with a third one, natural capital. Besides this extension, Green Growth shares the world view and values of neoclassical thinking, the homo economicus as its basic anthropological model, the trust in technology as reliable problem solver and the welfare optimising market equilibria.

Based on this world view, environmental and social damages emerging from economic processes are not seen as successful business strategies (as W. Kapp analysed them 50 years ago), but as market failures. The assumption is that if the value of natural (and sometimes social) capital was properly reflected in the prices, the market would continue to deliver an optimal result, in this case an economic growth path which simultaneously provides optimal social and environmental development. Unfortunately, unsustainable development is not a market failure to be fixed but a market system failure. As such, it is a system that cannot deliver results such as long-term thinking, environmental consciousness and social responsibility. Green Growth is not only an economic, strategy, it is a political strategy: those that consider the failure of sustainable development to be a market failure call for better markets, not for replacing market decisions by political prioritising.

The assumptions

However, the positive expectation of Green Growth rest on a number of questionable assumptions. Some of them are:

  • That markets automatically provide a welfare optimum, and function best without regulation and external intervention.
  • That economic instruments are always better and more efficient than regulation and control.
  • That problem solving technologies will exist, and will be available in due time.
  • That no absolute limits exist for resource consumption – there will always be enough substitutes available.
  • That prices can be determined for all social and environmental goods (implying a complete commodification of nature, humans and society).
  • That depreciation of environmental and social goods and services reflects their value development over time (so damages in – say – 100 years’ time have hardly any value today and can be ignored).
  • That society is composed of independent individuals. However, justice is an interpersonal value relation, and democracy (as government for and of the people) an interpersonal process; both play a marginal role in Green Growth prescriptions.

The objectives

The micro-economic objective of the green growth strategy is essentially to revitalise the conditions of business. Faced with Peak Oil and global resource limits (sources and sinks), it is an attempt to turn the challenge into a business opportunity. The primary macro-level objective of the green economy initiative is enabling future economic growth by decoupling growth from environmental limitations. The advanced goods-producing economy requires the permanent generation of new demand (dressed and partly perceived as needs); otherwise saturation and a marginal profit of zero are threatening. The second, less explicit objective is avoiding distribution debates – beyond growth, more justice cannot be generated by distributing surplus, but only by taking from those who have and giving to those who do not. The Green Growth strategy has in fact been constructed by the same financial and global institutions that have underwritten climate change, income polarisation within and between countries, and brought us to the brink of global economic collapse.



European Commission (2011). Roadmap to a Resource Efficient Europe. COM(2011) 571 final. European Com­mission: Brussels.

Spangenberg, J.H. (2010). World civilisations at cross­roads: Towards an expansionist or a sustainable future – Lessons from history. Futures 42(6): 565-573.

UNEP (2011). Towards a Green Economy. Pathways to Sustainable Development and Poverty Eradication., retrieved Oct. 28th, 2011.

United Nations (2011). World Economic and Social Sur­vey 2011: The Great Green Technological Transformation. United Nations: New York.


This glossary entry is based on a contribution by Joachim H. Spangenberg

EJOLT glossary editors: Hali Healy, Sylvia Lorek and Beatriz Rodríguez-Labajos.


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