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World Bank Expert Calls for Inclusive Green Growth

As Rwanda moves to implement green growth strategy and build green secondary cities across the country, World Bank Group chief economist on sustainable development Marianne Fay has advised the country to observe inclusive green growth agenda.

Inclusive green growth is a concept through which countries can make strategic investments and farsighted policy changes that acknowledge natural resource constraints and enable the world’s poorest and most vulnerable to benefit from efficient, clean, and resilient growth.

For this matter, Marianne advises that the sustainable development strategy of building secondary cities must be implemented without putting at stake the development opportunities of the poor.

Fay also hailed Rwanda Housing Authority’s new system to manage building permits in secondary cities across the country. Fay believes the move is a breakthrough in achieving green growth and sustainable development.

Fay spoke on the sidelines of Global Green Growth Week 2016, which closed last week in South Korea.

The forum was themed “Maximising Impacts for Inclusive and sustainable Green Growth.”

“It is fantastic that Rwanda is now focusing on secondary cities and not just the big city; because the structures of the cities of tomorrow are being planned today. However, the policy community needs to understand which policy works better for the people and also bring the evidence from different countries on what is there,” she said.

Fay noted that sustainable development is the one that increases the wellbeing of the people without putting at stake the development opportunities of the poor and that of future generations.

In order to do that, there’s a need to have development that is economically, socially and environmentally sustainable, Fay said.

She added that some of the biggest challenges in ensuring that green growth policies are equitable and inclusive are because such policies tend not to go well with the poor.

“We have to make sure that these policies are accompanied by measures that will really help the poor-policies that will be equitable and inclusive. Going green is just not enough; the challenge is to make sure that inclusive green growth is built from the beginning so that we don’t get excited about how growth is green alone,” Fay said.

She said for developing countries such as Rwanda to achieve Sustainable Development Goals (SDGs) on climate change and to successfully implement the Paris Agreement on Climate change, the country has to do so in a way that both mitigates climate change but also allows people to achieve their economic and social ambitions.

“The implementation of these policies should be designed in a way that creates fiscal growth and allow the people to achieve what they aspire to, which is a comfortable life, where we can raise our children in safety and security both from health and from disturbances and without destroying the environment around us,” Fay said.

Fay said inclusive is about including people.

“If, let’s say, people live in or around the forest and you are discouraging them to cut trees, you should be able to involve everyone in the green growth process and encourage them to do something else that relates to their environment in a sustainable way-without destroying the environment. The easiest way we can convince people to go green is to make them see the benefits,” she added.

Private sector vital to green economy

Fay said without the involvement of the private sector, green growth will remain a wishful thinking. She said it is upon the government to design policies and put incentives that would facilitate the development of a green economy.

“Without business community on board, green growth is not going to happen,” Fay warned. “The role of the policy-makers is to create incentives and frameworks within which the business community works. The business community is not going to do something that will make them lose money, at the same time they want to do something that makes them happy and proud; they want to do work that makes money but also improves people’s life.”

She noted that as developing countries aspire for middle class lifestyle, they should do so with consideration of the current status of life, land and population.

“A middle class lifestyle doesn’t have to be the California Vision with a mansion in the suburbs and a nice view in front. It can be a nice apartment in the city or town, and the ability to recycle everywhere; it can be the ability to send your kids to play outside without them having an asthma attack-those are the kind of things we need to think about,” Fay said.

Green growth; what does it actually mean?

Green growth means fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which people’s well-being relies.

To do this, it must catalyse investment and innovation which will underpin sustained growth and give rise to new economic opportunities. Green growth is not a replacement for sustainable development. Rather, it provides a practical and flexible approach for achieving concrete, measurable progress across its economic and environmental pillars, while taking full account of the social consequences of greening the growth dynamic of economies.

The focus of green growth strategies is ensuring that natural assets can deliver their full economic potential on a sustainable basis. That potential includes the provision of critical life support services – clean air and water, and the resilient biodiversity needed to support food production and human health. Natural assets are not infinitely substitutable and green growth policies take account of that.

What does it aim to achieve?

  • Green growth policies are an integral part of the structural reforms needed to foster strong, more sustainable and inclusive growth. They can unlock new growth engines by:
  • Enhancing productivity by creating incentives for greater efficiency in the use of natural resources, reducing waste and energy consumption, unlocking opportunities for innovation and value creation, and allocating resources to the highest value use.
  • Boosting investor confidence through greater predictability in how governments deal with major environmental issues.
  • Opening up new markets by stimulating demand for green goods, services and technologies.
  • Contributing to fiscal consolidation by mobilising revenues through green taxes and through the elimination of environmentally harmful subsidies. These measures can also help to generate or free up resources for anti-poverty programmes in such areas as water supply and sanitation, or other pro-poor investments.
  • Reducing risks of negative shocks to growth due to resource bottlenecks, as well as damaging and potentially irreversible environmental impacts.
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