The Architecture of Green Economic Policies

178 Pages·2010·1.346 MB·English

by  P.K. Rao (auth.)

The Architecture of Green Economic Policies

P.K. Rao
The Architecture of Green
Economic Policies
123
Prof.P.K.Rao
InternationalDevelopmentConsultant
120CarterRoad,Princeton
NewJersey,USA
[email protected]
ISBN978-3-642-05107-4 e-ISBN978-3-642-05108-1
DOI10.1007/978-3-642-05108-1
SpringerHeidelbergDordrechtLondonNewYork
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TotheLovingMemoryofMyMother

Preface
Afternumerousscientificpapersandbooksonmostaspectsofclimatechangeand
the design of pro-environmental policies (including some that suit some industrial
lobbyoranother),isthererelevanceforanotherbookandwhatisthepurportedrole
ofthisone?Isthisyetanotheracademicexerciseor“muchadoaboutnothing”?Do
wehavetobotherdesigninggreeneconomicpoliciesandincurtransactioncostsof
thiseffort?Arethereshortcomingsofexistingpoliciesifwecaretolive“happily”
onthisplanet?Isitnotenoughtocareforthecurrentgenerationssothatthefuture
generations can take care of themselves (or even be given the incentives for inno-
vations–forlackoffullyprovidedresources)?Whatcan“we”doaboutthegreen
economic policies (and what are these anyway)? What trade-offs, if any, are rele-
vant in foregoing some benefits and in incurring some costs (not all of which can
beexpressedinmonetaryunits)?Whataretheoverarchingobjectivesandpriorities
inthecurrentcontext?Whateconomicandotherapproachesarerelevantforattain-
ingtheobjectives? Thesearesomeofthequestionstheauthorreflected inwriting
thisbook.
AfterafewbookpublicationsthatIlaunchedaboutadecadeago,andaftersus-
taining most of these foundations that have been found rather resilient, I believe
thisbookstrengthensthecauseofgreeneconomicpolicyformulationsandimple-
mentations in the interests of the humanity, not to exclude the rest of living
creatures.
Undoubtedlyanumberofsignificantthoughtfulcontributionshavebeenmadeby
avarietyofscientificdisciplinesandexpertise,anditishopedthatthisbookoffers
afewadditionalinsightsforpolicyformulationsandtheirimplementationinacost-
effective manner. Much of what is suggested in the design and implementation of
greeneconomicpolicieshereholdsrelevantevenwhenthereisanelementofuncer-
taintyaboutthedegreeofclimatechange,sincetheprimarymotivationisnotmerely
to address change issues but a meaningful balancing of economic, environmental
andsocialsustainabilityrequirementswithimprovedmechanismsofgovernance.
Readers’familiaritywitheconomicsisuseful,especiallyindealingwithChap.4.
Ratherthandetailingallrelevantconceptsinthetextchapters,anextensiveglossary
isprovidedattheendofthebook.
Princeton,NewJersey P.K.Rao
January2010
vii

Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 WhyGreenEconomicPoliciesandWhatAreThese? . . . . . 1
1.1.1 ObjectivesofGEP . . . . . . . . . . . . . . . . . . . 1
1.2 GlobalClimateChangeandEnvironmentalFeatures . . . . . . 3
1.2.1 GlobalWarming-HistoricalBackground . . . . . . . 3
1.2.2 EffectsofClimateChange . . . . . . . . . . . . . . . 4
1.3 TheIPCCReports . . . . . . . . . . . . . . . . . . . . . . . . 5
1.4 MoreRecentAssessments . . . . . . . . . . . . . . . . . . . 5
1.5 RecentTrendsinEmissionsandContributingFactors . . . . . 7
1.5.1 ProgressinRemedialActions . . . . . . . . . . . . . 9
1.6 GreeningofEconomics–WhyandHow . . . . . . . . . . . . 11
1.6.1 Green Economics and the Economics of
GreeningEconomics . . . . . . . . . . . . . . . . . . 12
1.6.2 DemandforandSupplyofGreenEconomicPolicies . 13
1.6.3 AbouttheRestoftheBook . . . . . . . . . . . . . . 14
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2 BasicElementsofGreenEconomics . . . . . . . . . . . . . . . . . 17
2.1 RoleofNewInstitutionalEconomics . . . . . . . . . . . . . . 17
2.1 Box2.1ResourceRegimes . . . . . . . . . . . . . . . . . . . 19
2.2 EconomicandEnvironmentalExternalities. . . . . . . . . . . 19
2.2 Box2.2ClassificationofExternalities . . . . . . . . . . . . . 20
2.3 ClassificationofEnvironmentalDimensions . . . . . . . . . . 21
2.4 SustainabilityConcepts . . . . . . . . . . . . . . . . . . . . . 21
2.4.1 SustainableDevelopment . . . . . . . . . . . . . . . 22
2.5 PovertyandSD . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.6 InclusiveSustainableDevelopment . . . . . . . . . . . . . . . 25
2.6.1 SustainableEconomicGrowthandSD . . . . . . . . 26
2.6.2 ResilienceandVulnerability . . . . . . . . . . . . . . 27
2.6.3 HealthandEnvironment . . . . . . . . . . . . . . . . 28
2.7 SynergiesandConflictsinEconomyandEnvironment. . . . . 29
2.8 EcologicalEconomics:AdoptionofEcosystemsApproach . . 30
2.8.1 LandUse,DeforestationandCC . . . . . . . . . . . 32
ix