A green economy will ensure greater prosperity and healthy environment

The chief economist for sustainable development at the World Bank Group Marianne Fay. PHOTO | CHRISTOPHER KIDANKA | NATION 

In Summary

• Developing countries like Tanzania are concerned that transitioning to a green economy will hinder economic growth and the ability to reduce poverty.

By VICTOR KAREGA
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The chief economist for sustainable development at the World Bank Group Marianne Fay spoke to Victor Karega on why Tanzania should embrace green growth.

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What are the main obstacles to achieving green growth in Tanzania?

The concept of ‘green growth’ is only questioned by powerful players in politics and business, and, by the environmental community.

For them, sustainability and growth are mutually exclusive. Therefore, they either go for growth regardless of the environmental consequences or jealously guard the environment to the exclusion of all else.

So we have to convince the policy makers, businesses and green activists that you do not have to choose between economic prosperity and a healthy environment.

There are of course powerful vested interests who see their business model at risk. Like every revolution, the green industrial revolution is about structural change, and profiteers from the status quo will always try to defend their special interests.

What are some of the concerns here?

One question people would ask is “can we afford this?” We are still in the wake of the global financial crisis and many people perceive green economy solutions as expensive.

Developing countries like Tanzania are concerned that transitioning to a green economy will hinder economic growth and the ability to reduce poverty.

Furthermore, there will be short-term, non-trivial losses associated with changes in industry and market structure.

For example, the decline of the coal industry led to job losses. It is vital to support those who will bear the brunt of the transition. This will be critical to building broad ownership for a green economy.

Others feel that their country is lacking in green technology know-how and, therefore, will be at a competitive disadvantage in the race for future markets.

What are the challenges to making this transition possible?

The principal one is how we move towards an economic system that will benefit more people over the long run. Transitioning will require a fundamental shift in thinking about growth and development, production of goods and services, and consumer habits.

It will not happen solely because of better information on impacts, risks or good economic analysis; ultimately, it is about politics and changing the political economy of how big decisions are made.

You mentioned the key elements of approaching a green economy, which include a revolution in efficiency, zero waste emissions, agricultural greening and sustainable mobility. What can the average person in Tanzania do to support these efforts?

Every one of us should and can be an agent for change. We can change our eating habits, rest our private cars in favour of public transport, biking and opt for environment-friendly products.

But I won’t move all the responsibility to the private individual. Policy and technical innovation matter even more.

Why is collaboration between businesses, investors, organisations and public institutions so important to achieving green growth?

It is important because the world is complex, and so are the sustainable development challenges we face – the environment, technical capabilities, finance, governance and social justice.

No single arm of the public or private sector can address these challenges alone at the speed and scale that is necessary. We need their expertise and combined strength.

Experience has shown that collaboration is the best way to tap into the diverse strengths of different stakeholders. For example, the private sector tends to be more innovative and flexible and can complement what policy makers bring to the table.

Working across geographic and sector boundaries, we can identify the most pressing challenges, break down policy and investment barriers, and explore practical solutions. The whole is greater than the sum of the parts.

Would a green economy spur Tanzania’s economic growth?

Yes. It will become a veritable tool for economic growth and diversification just as it has done in countries that are not as endowed with natural resources. Tanzania’s challenge at this point is how to harness the huge opportunities in the environment.

The green economy supports national economic advancement as it cuts across every aspect of the economy. With proper harnessing of natural resources economic gain will be faster.

However, realising the full potential of green jobs depends on how Tanzania develops the green economy and enact policies that will foster investment.

Therefore, the government should sensitise the citizens towards going green and achieving a toxic-free environment. A green economy is pragmatic, sound economics.

A word for the policymakers?

We look at which public policy instruments are best suited to scale up and accelerate the green economy. We need to leverage the markets since this kind of transition will not happen with public funding alone.

They will happen because the market is given signals to invest in greener production technology, and a more diversified energy infrastructure.

The price of carbon is important: the economy can actually make a major innovation leap if it believes that a transition to low-carbon output is now a firm decision.

Then the private sector would start changing its product, investment, innovation and research and development strategies. But so long as private sector does not see seriousness from government and society, it will continue to hedge.

Bio

Background: Founding member of the Green Growth Knowledge Platform.

Education:

PhD in Economics from Columbia University.

Experience: Held positions in different regions of the World Bank (Eastern Europe, Central Asia, Latin America, the Caribbean, Africa), working on infrastructure, urbanisation, and climate change. She is the author of a number of articles and books on these topics.

Work: Has previously served as the chief economist for climate change.

She contributed to a number of World Development Reports, notably the World Development Report 2010 on Development and Climate Change which she co-directed, and led a number of recent World Bank reports, such as  Inclusive Green growth: the Pathway to Sustainable Development and Decarbonising Development: Three Steps to a Zero-Carbon Future.