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A keynote paper for a Round Table “Prosperity for Asia’s Billions: Green Growth and Poverty Reduction” at the 14th General Conference of UNIDO, November 29, 2011

Towards Green Growth in Asia and the Pacific+

by

Hyun-Hoon Lee++

Kangwon National University, Republic of Korea

+ The views expressed in this paper are those of the author and do not necessarily represent those of the UNIDO secretariat or UNIDO member countries. I am grateful to the panelists and the audience of the Round Table “Prosperity for Asia’s Billions: Green Growth and Poverty Reduction” at the 14th General Conference of UNIDO, November 29, 2011, for their constructive comments and discussions. I also thank Seiichiro Hisakawa, Takao Otsuka and other staff of UNIDO’s Asia and the Pacific Program for their comments, encouragement and assistance. I also thank Hyung-suk Byun for his excellent research assistance.

++ Hyun-Hoon Lee, Department of International Trade and Business, Kangwon National University, Chuncheon, 200-701, South Korea. Phone: +82-33-250-6186; Fax: +82-33-256-4088; Email: hhlee@kangwon.ac.kr

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<Abstract> Asia and the Pacific, a vast region covering 40 per cent of the world land area and home to some 60 per cent of the world’s population, has been experiencing the fastest economic growth anywhere in the world. This rapid economic growth has enabled the reduction of poverty and advance of social welfare in many parts of the region. However, this has placed enormous pressure on the ecological carrying capacity of the region. Unless economic growth is properly checked, the ecological carrying capacity for future generations will be seriously compromised. This is especially so because the carrying capacity is relatively more limited in the Asia-Pacific region than in other regions of the world. Nonetheless, the need for continued economic growth is enormous, given the continuing high poverty levels. This requires the region to embrace the new paradigm of environmentally sustainable economic growth or Green Growth. The purpose of this paper is to provide reasons for the urgency of shifting the current form of economic growth toward Green Growth and the paper explains how such Green Growth can be achieved. This paper also summarizes the experience of the Republic of Korea and draws lessons from this. This paper argues that that economic policy planners and businesses alike in the region need to believe that there are policies and strategies that can create synergy between economic growth and environmental sustainability. The other crucial concept required for Green Growth is improving eco-efficiency. Eco-efficiency is concerned with both producing and consuming goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological pressures and resource intensity to a level at least in line with the earth’s carrying capacity. Improving eco-efficiency requires the internalization of environmental costs into the price structure and also requires long-term approach. In countries that lack the necessary financial and technical capacity, this will require support through international and regional cooperation. Finally, this paper notes that instead of being the long-term goal of national development, the Green Growth Initiative, along with Inclusive Growth Initiative, should be an important “strategy” to achieve the ultimate, long-term goal of sustainable development. Keywords: green growth, environmental sustainability, carrying capacity, environmental pressure, Asia and the Pacific

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<Table of Contents>

1. Introduction 2. Limited Ecological Carrying Capacity, but Increasing Environmental Pressure

2.1. Some Key Concepts 2.2. Limited Ecological Carrying Capacity 2.3. Increasing Environmental Pressure 2.4. Ecological Footprinting: A Comparison of Carrying Capacity and Environmental Pressure 2.5. On the Relationship between Income and Environmental Sustainability

3. Shifting Towards Green Growth in Asia and the Pacific 3.1. Green Growth in the Framework of Sustainable Development 3.2. Two Principles of Green Growth

3.3. Three Strategies for Green Growth

4. The Green Growth Initiative of the Republic of Korea 4.1. Brief background to the ROK’s economic performance and environmental sustainability 4.2. The ROK’s Green Growth Initiative

5. Concluding Remarks

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1. Introduction Asia and the Pacific, a vast region covering 40 per cent of the world land area and home to some 60 per cent of the world’s population, has been experiencing the fastest economic growth anywhere in the world. The fast economic growth in the region has been in large part due to the outward industrialization of the countries relying on foreign direct investment (FDI) and exports. The rapid economic growth has enabled the reduction of poverty and advance of social welfare in many parts of the region. Figure 1-1 presents the poverty headcount ratio at US$2 a day (ppp, % of population) for UNIDO’s emerging and developing member countries in Asia and the Pacific.1 2

As can be seen in the figure, the UNIDO countries in this region have seen progress against poverty during the period 1990s-2000s. The People’s Republic of China (PRC), Vietnam, Indonesia, Pakistan, and Sri Lanka in particular have been successful in reducing the percentage of people living below the global poverty line of US$ 2 per day. However, many people living in the Asia-Pacific region are still below the global poverty line.

Figure 1.2. illustrates the level of human development, as measured by UNDP’s Human Development Index (HDR), which is a composite measure of life expectancy, literacy, education, and standard of living. As can be seen in the figure, many countries in the Asia-Pacific region have seen their human development level increase between 1990 and 2011 but, with the exception of a few countries such as the Republic of Korea, Palau, and Malaysia, the level of human development of many developing countries in the region is below the world average. Indeed, the average level of HDR in the region is lower than that of the world in 2011. Thus, the need for continued economic growth is enormous, given the continuing high poverty levels and low human development levels. However, the rapid economic growth has placed enormous pressure on the ecological carrying capacity of the region. Unless economic growth is properly checked, the ecological carrying capacity for future generations will be seriously compromised. This is especially so because the carrying capacity is relatively more limited in the Asia-Pacific region than in other regions of the world. Therefore, the challenge is to achieve economic growth which is environmentally sustainable. For environmental sustainability to be obtained, economic growth should not entail an increase in the overall use of natural resources and environmental services. The link between economic growth and the use of natural resources and environmental services needs to be broken. This requires the region to embrace the new paradigm of environmentally sustainable economic growth or Green Growth.

1 This report focuses only on 39 emerging and developing member countries of UNIDO located in Asia and the Pacific. Thus, developed countries such as Japan, New Zealand, and Singapore are not included. 2 The figure is drawn with the data for the most recent years in the 2000s and the earliest years in the 1990s for which data are available.

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The purpose of this paper is to provide reasons for the urgency of shifting the current form of economic growth toward Green Growth and to explain how such Green Growth can be achieved. This paper also summarizes the experience of the Republic of Korea, which adopted Green Growth as national development agenda in 2008. The paper is organized as follows. Section 2 will provide evidence that the current form of economic growth in Asia and the Pacific (and the World) is environmentally unsustainable. Section 2 will also examine whether the current growth paradigm can result in environmental sustainability as income becomes higher. Section 3 will discuss how the region can embrace the new paradigm of Green Growth. It will be emphasized that Green Growth comes through creating synergy between the environment and the economy. Section 3 will also provide policies and strategies required to achieve Green Growth in the region. Section 4 will review the Green Growth policy of the Republic of Korea. Concluding remarks are offered in Section 5. 2. Limited Ecological Carrying Capacity, but Increasing Environmental Pressure 2.1. Some Key Concepts At the outset, it is worth defining some concepts that are going to be used throughout this paper. Environmental sustainability refers to the capacity of a development process to ensure that natural resources are not depleted faster than they can be regenerated and that the ecological systems remain viable. In other words, environmental sustainability can be formulated as “living within the ecological capacity of the biosphere” (as IUCN/UNEP/WWF pointed out in Caring for the Earth, 1991). Therefore, in order to ensure environmentally sustainable economic growth, environmental pressure should remain within the limit of the ecological carrying capacity. Hence, in order to improve the environmental sustainability of economic growth, we need to

● reduce environmental pressure of humanity or/and ● increase ecological carrying capacity.

Environmental pressure is defined here as the “actual load” (the actual rates of resource harvesting and waste generation) that is imposed on the environment by people. This changes not only with (1) population, but also with (2) per capita consumption (amount and pattern) and (3) production pattern (i.e., technology with which goods and services are produced). On the other hand, ecological carrying capacity is defined here as the “maximum load" (the maximum rates of resource harvesting and waste generation) that can safely be imposed on the environment by people so that it can be sustained indefinitely in a given space. That is, carrying capacity is the “sustainable limit” to environmental pressures. It is largely determined by the natural resource endowment and hence tends to remain

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constant over time. However, it can be increased by protecting, conserving, and restoring ecosystems and biodiversity. It is also noted that the term “ecological carrying capacity” is used here interchangeably with “environmental carrying capacity” or “carrying capacity”. To repeat briefly, environmental pressure is demand for biological products and services, while carrying capacity is the maximum supply of biological products and services that can be provided by the natural environment so that renewable resources are not depleted faster than they can be regenerated and ecological systems remain viable. Therefore, in order to ensure that economic growth is environmentally sustainable, consumption of biological products and services should not exceed the maximum supply of biological products and services (the ability of nature to absorb waste and emissions). Overshoot reduces the ability of the natural environment to provide environmental goods and services to support humanity and hence may permanently reduce the ecological carrying capacity. Figure 2.1 summarizes how environmental sustainability is related with environmental pressure and ecological carrying capacity. Environmental sustainability of a country is secured only when environmental pressure is within ecological carrying capacity. In turn, the ecological carrying capacity is heavily determined by the endowed natural resources, while the environmental pressure of humanity is closely related to population, amount (and pattern) of consumption per capita, and production technology. 2.2. Limited Ecological Carrying Capacity As noted above, a country (or region)’s carrying capacity is largely determined by the natural resource endowments, which can be measured with various variables such as land area, forest area, etc. Figures 2.2, 2.3, and 2.4 illustrate land area per capita, arable land area per capita, and total forest area per capita, respectively, for the 39 emerging and developing member countries of UNIDO located in the Asia-Pacific region. 1

Those countries with no data available are also included with “n.a.” so that each figure maintains the same set of countries. For the purpose of comparison, weighted average values for the world and the countries in the region are also shown as solid and dotted lines, respectively.

As illustrated in Figure 2.2, the countries in the Asia-Pacific region, on average, have smaller land area per capita than the entire world: as of 2009, the region’s land area per capita was 0.0062 km2, while the world average was 0.0192 km2 (i.e. the region’s average population density was 163 persons per one square kilometer, while the world’s population density was 52 persons per one square kilometer). In particular, the countries which have extremely limited land area per capita (and hence extremely limited carrying capacity per capita) are Bangladesh (0.0009 km2), Maldives (0.0010 km2), Republic of Korea (0.0020 km2), India (0.0026 km2), and Sri Lanka (0.0030 km2). Among the 35 countries for which data are available, only six countries, namely Mongolia, Papua New Guinea, Bhutan, Solomon Islands, Vanuatu, and Lao PDR, enjoy far greater land area per capita than the world average.

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Figures 2.3 and 2.4 also show that countries in the Asia-Pacific region, on average, have smaller arable land area per capita and total forest area per capita than the world. Figure 2.6 also shows that many countries in the Asia-Pacific region have limited fresh water resources. This implies that most emerging and developing countries in the Asia-Pacific region, on average, have more limited carrying capacity than countries in other regions of the world. 2.3. Increasing Environmental Pressure As noted above, environmental pressure changes not only with (1) population, but also with (2) per capita consumption, and (3) production pattern. As shown in Figure 2.6, the region’s population has been growing more rapidly than the world average. In particular, countries such as Solomon Islands, Pakistan, Afghanistan, Papua New Guinea, Vanuatu, Marshall islands, the Philippines, Malaysia, Iran, and Nepal, have seen very rapidly growing population, as compared to the world average. GDP per capita values for the 39 emerging and developing member countries of UNIDO located in the Asia-Pacific region are shown in Figure 2.7. As seen in the figure, the emerging and developing countries in the Asia-Pacific region, on average, have smaller GDP per capita than the entire world: as of 2009 in 2005 constant US dollars, the region’s GDP per capita was US$ 1,580, while the world average was US$ 5,368. Thus, assuming that the emerging and developing UNIDO member states in the Asia-Pacific region have the same production pattern as elsewhere in the world, the region’s individual on average is imposing environmental pressure which is less than one third of the world average. Among the 39 countries, only Republic of Korea and Palau have GDP per capita greater than the world average. However, the region’s environmental pressure is increasing more rapidly than elsewhere, as the region’s economic growth is the fastest anywhere in the world. Figure 2.8 shows that the weighted real GDP for the Asia-Pacific UNIDO member countries was 3.8 times greater in 2009 than in 1990, while that for the world was 1.6 times greater in 2009 than in 1990. In particular, countries such as People’s Republic of China (6.6 times), Vanuatu (4.5 times), and Viet Nam (3.9 times) saw the fastest growth rates. Thus, most countries in the Asia-Pacific region have increasingly been imposing greater environmental pressure. Such dramatic economic growth has been in large part due to the outward-oriented industrialization policies of the countries in the region, supported by expanding exports and inward FDI. Figure 2.9 shows that the region’s merchandise exports grew by 8.8 times while the world’s exports grew by 3.6 percent between 1990 and 2009. In particular, countries such as Cambodia, Viet Nam, Myanmar, People’s Republic of China, and Lao PDR saw the fastest growth rates. As is also shown in Figure 2.8, FDI stocks in the region’s emerging and developing countries have increased dramatically: the region’s FDI stock was 20.1 times larger in 2010 than in 1990, while the total FDI stock of the world’s developing countries as a whole was larger by 9.2 times in 2010 than in 1990. In

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particular, countries such as Mongolia, Lao PDR, Cambodia, Afghanistan, Tonga, India, Bhutan, Viet Nam, Maldives, Myanmar, People’s Republic of China, and Republic of Korea saw their FDI stocks increase faster than the region’s average. Such fast economic growth and industrialization have caused increasing use of energy and increasing emission of greenhouse gases such as CO2. As shown in Figure 2.11, the energy use per capita in the region’s emerging and developing countries is still lower than the world average. However, the energy use per capita in some countries such as Republic of Korea, Iran, and Malaysia is already greater than the world average and that in People’s Republic of China is close to the average. Also, in terms of energy use per US$ 1,000 amount of GDP, the region’s average is greater than the world average, suggesting that energy efficiency of the emerging and developing countries in the Asia-Pacific region is lower than the world average. In particular, countries such as Nepal, Mongolia, People’s Republic of China, Iran, Viet Nam, and Indonesia have energy efficiency levels noticeably lower than the average for the region and the world (Figure 2.12). As shown in Figures 2.13 and 2.14, the regional averages of CO2 emissions per capita and per US$ 1,000 amount of GDP are still lower in the Asia-Pacific region than in the world, but the CO2 emissions per capita of Pakistan, Republic of Korea, Malaysia, Iran, and People’s Republic of China are greater than the average and the CO2 emissions per US$ 1,000 amount of GDP of Micronesia, People’s Republic of China, Pakistan, Iran, Maldives, Malaysia, Sri Lanka, India, Vanuatu, and Indonesia are greater than the world average. Besides, because of the large size of population of some Asia-Pacific countries such as People’s Republic of China and India, the total CO2 emissions in the region are no smaller than in other regions of the world, as seen in Figure 2.13. Also, CO2 emissions in the region are expected to increase very rapidly if the current pattern of rapid economic growth continues. 2.4. Ecological Footprinting: A Comparison of Carrying Capacity and Environmental Pressure The fact that the Asia-Pacific region has more limited carrying capacity than the world average and is increasingly imposing greater environmental pressure may imply that the region is more likely to face environmental unsustainability than other regions of the world. However, this does not necessarily lead to the conclusion that the region is currently experiencing environmentally unsustainable economic growth. Therefore, we need a more comprehensive measure by which we can compare the carrying capacity with the environmental pressure. Global Footprint Network (http://www.footprintnetwork.org) provides useful information on whether the ecological pressure of humanity’s activities (Footprint) is within the carrying capacity of a country (or of the earth). A country’s Footprint is defined as the total area required to produce the food and fiber that it consumes, absorb the waste from its energy consumption, and provide space for its infrastructure. Thus, ‘Ecological Footprint’ is an indicator of human pressure on the biosphere. In contrast, a country’s

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‘Biocapacity’ (Biological Capacity) in Footprinting analysis is defined as the total usable biological production capacity in a given year of a biologically productive area of a country. Thus, the term Biocapacity is used here for the annual regenerative and absorptive capabilities of nature and has much in common with the biological carrying capacity, the term used in this paper. When humanity’s Footprint is not within the Biocapacity, it is experiencing Ecological Deficit (i.e., its Footprint is unsustainable). It should be noted, however, that the Ecological Footprint methodology does not capture all of humanity’s pressures on the environment. For example, non-renewable resources, toxic pollutions, and species extinction are not incorporated into the Footprint model. Nonetheless, Footprinting offers useful information on whether the current form of economic growth is sustainable in the sense that humanity’s use of natural resources is within the limit of the regenerative and absorptive capacity of a country (or the earth). Global Footprint Network suggests that as of 2007, the global Ecological Footprint was 2.9 global hectares per person (a global hectare is 1 hectare of biologically productive space with world average productivity) while the Earth’s Biocapacity was 1.8 global hectares per person. Thus, the report concludes that humanity’s Ecological Footprint exceeds global Biocapacity by 0.9 global hectares per person, or 50 per cent. This overshoot is possible because humanity can liquidate its ecological capital (i.e. natural resources) rather than living off annual yields, but only for a limited time. Figure 2.16 illustrates per capita Footprints for the UNIDO’s emerging and developing member countries in the Asia-Pacific region. Weighted average values for the world and the countries in the region are also shown as solid and dotted lines, respectively. The Asia-Pacific region has smaller per capita Footprints (1.6 hectares) than the world average (2.7 hectares). At an individual country level, however, per capita Footprints of eight UNIDO member countries exceed the world average. Mongolia has the highest per capita Footprint in the region, at 5.5 hectares per person. Solomon Islands (5.3 hectares), Republic of Korea (4.9 hectares), Malaysia (4.9 hectares), Nepal (3.5 hectares), and Vanuatu (2.9 hectares) take the following places. People’s Republic of China, with the largest population in the world, has 2.2 hectares of per capita Footprint, which is the same as the average per capita Footprint of the region. When it is translated to the total value, however, People’s Republic of China alone causes 16.4% (3.0 billion hectares) of the world’s total Footprint, while it has approximately 11 % (1.3 billion hectares) of world’s total Biocapacity. Therefore, People’s Republic of China, which is already running a large total Ecological Deficit, is expected to run even greater unaccounted Ecological Deficits as it continues its fast growth, unless its current growth pattern changes. Figure 2.17 shows Asia-Pacific countries’ Biocapacities per capita. As seen in the figure, the carrying capacity of the Asia-Pacific region (0.8 hectares) is quite smaller than that of the entire earth (1.8 hectares). The countries with the smallest per capita Biocapacity are Republic of Korea (0.3 hectares), Bangladesh (0.4 hectares), Pakistan (0.4 hectares), Sri

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Lanka (0.4 hectares), India (0.5 hectares), Afghanistan (0.5 hectares), Nepal (0.5 hectares), DPRK (0.6 hectares), the Philippines (0.7 hectares), Iran (0.8 hectares), Viet Nam (0.9 hectares), Cambodia (0.9 hectares), and People’s Republic of China (1.0 hectares), while the countries with the largest Biocapacity per capita are Mongolia (15.1 hectares), Papua New Guinea (3.8 hectares), and Vanuatu (2.8 hectares). Figure 2.18 shows which countries are running Ecological Deficits. The figure shows that the Asia-Pacific region is running smaller amounts of Ecological Deficit per capita (0.8 hectares) than the world average (0.9 hectares). The countries with the largest per capita ecological deficit are Republic of Korea (4.5 hectares), Nepal (3.0 hectares), Solomon Islands (2.7 hectares), Malaysia (2.3 hectares), and Iran (1.9 hectares). Among the 23 Asia-Pacific countries for which data are available, 17 countries are experiencing ecological deficits. To summarize, the Asia-Pacific region has smaller per capita Footprints than the world average. However, the carrying capacity of the Asia-Pacific region is smaller than that of the entire earth. Thus, the Asia-Pacific region is running similar amounts of ecological footprint deficit, as compared to the world average. However, most of the emerging and developing member countries of UNIDO in the region are already experiencing ecological deficits. In short, even though humanity in the Asia-Pacific region, compared with the global average, is still placing smaller environmental pressure on the planet, the region is already experiencing ecological deficit. This implies that if the current form of economic growth continues in the Asia-Pacific region, the region’s ecological Footprints will increasingly exceed the regenerative capacity of the region, at a scale greater than the global average. It is also useful to examine the time trend of Footprints and ecological deficits for the world and the individual countries of interest. Figure 2.19 traces the world's average per person Ecological Footprint and per person Biocapacity for the period 1961-2007. This figure shows that the average Footprint in the world has increased from about 2.4 hectares per person in 1961 to about 2.7 hectares per person in 2007. On the other hand, per capita Biocapacity has declined from 3.7 hectares per person in 1961 to about 1.8 hectares per person in 2007. Per capita Biocapacity has declined, mainly due to the fact that the world population has increased from some 3 billion to 6.7 billion during the period. As a consequence, in the mid-1980s humanity’s collective Ecological Footprint breached the carrying capacity of the earth for the first time, and this has remained unsustainable ever since. Figure 2.19 also traces the per capita Ecological Footprints and per capita Biocapacities of People’s Republic of China, India, Pakistan, Republic of Korea, and Democratic People’s Republic of Korea (DPRK), respectively, over the same period. The figures show that the ecological deficits of all of these countries are widening over time. Specifically, People’s Republic of China has moved from using about 0.8 times its domestic Biocapacity in 1961 to over two times the Biocapacity of People’s Republic of China in 2007; India has moved from using about 1.2 times its domestic Biocapacity in 1961 to almost twice its Biocapacity in 2007; Pakistan has moved from using a little

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more than its domestic Biocapacity in 1961 to almost twice its Biocapacity in 2007; Republic of Korea has moved from using a little more than its domestic Biocapacity in 1961 to more than seven times its Biocapacity in 2007. This makes the Republic of Korea’s Footprint one of the most rapidly growing Footprints among all nations in the world. Finally, starting in the 1960s, the Democratic People’s Republic of Korea (DPRK) carried an increasing ecological deficit. When its main sources of imports closed around 1990, the country’s Footprint declined sharply, but it is still running an ecological deficit. To summarize, when comparing the current Ecological Footprint with the capacity of the region’s life-supporting ecosystems, it must be concluded that we no longer live within the ecological limits of the earth. In particular, with the fastest economic growth rate in the world, the region is likely to run higher ecological deficits if it continues the current pattern of economic growth. Thus, the region’s ecosystems, which are already suffering from overuse, will be suffering even more if the region continues down the path of unsustainable exploitation and consumption. 2.5. On the Relationship between Income and Environmental Sustainability Having concluded that the region’s economic growth has not been environmentally sustainable, this sub-section discusses the question of whether there is any chance that the countries in the region in its current form of economic growth will be able to achieve environmental sustainability in the foreseeable future. For this purpose, this section will examine empirically the relationship between income and the environment. It is important to examine the relationship between income and the environment because, on referring to the Environmental Kuznets Curve (EKC), one may argue that the environmental situation in the region will eventually improve as the region’s economy keeps growing. The EKC is the empirical pattern that at relatively low levels of income per capita, the pollution level initially increases with rising income but then reaches a maximum and falls thereafter. For example, the air in London, Tokyo, and New York was far more polluted in the 1960s than it is today. The same pattern has been observed in other major cities in many advanced countries. Thus, the EKC shows that the relationship between economic growth and pollution is an inverse U shape.3

Many studies have attempted to explain the EKC theoretically. 4

3 This pattern is described as the EKC, following the original Kuznets curve, which was an inverted U-shaped relationship between average income and inequality. The earlier studies on the empirical pattern of the EKC include Grossman and Krueger (1991, 1994) and World Bank (1992).

It is worth noting, however, that the EKC explains the relationship between ‘pollution’ and income levels, while pollution represents only part of the environmental problem. Nonetheless, in part due to its name of ‘Environmental’ Kuznets Curve, some policy makers and academics alike seem to believe that the environment as a whole tends to improve ultimately as income rises. For example, referring to the EKC, Brock and Taylor (2004a) state that

4 They include Selden and Song (1994), Stokey (1998), Andreoni and Levinson (2001), and Brock and Taylor (2004a), among others. See Chapter 2 of Copeland and Taylor (2003) and Brock and Taylor (2004b) for a comprehensive review.

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“there is a tendency for the environment to at first worsen at low levels of income but then improve at higher incomes. (p.3)” The Ecological Footprints data presented in the previous section are used to examine the relationship between income and overall eco-efficiency. As noted in Section 2, a country’s Footprint is defined as the total area required to produce the food and fiber that it consumes, absorb the waste from its energy consumption, and provide space for its infrastructure. Therefore, Ecological Footprint divided by GDP (and population) can be understood as overall eco-efficiency of a country. Figure 2.20 shows simple scatter plots of total Ecological Footprints divided by GDP (i.e. Footprints per one unit of GDP) against GDP per capita (in 2007 value of purchasing power parity). The names of UNIDO’s emerging and developing member states in the Asia-Pacific region are shown in the figure. The relationship seems negative and this implies that as income grows, the use of the environment to produce one US dollar value of goods and services becomes smaller. By looking at this diagram, one may conclude that economic growth will improve the environmental quality. Indeed, this kind of diagram has often been misleading as to the relationship between income and environmental sustainability. Figure 2.21 shows a scatter plot of Ecological Footprint per capita against GDP per capita. The figure strongly suggests that high-income countries produce higher Ecological Footprints per capita than low-income countries. Because both variables are divided by population, this result implies that larger economies produce larger Ecological Footprints, and hence the economic growth of most countries has been accompanied by greater environmental pressure. Thus, when considering Figures 2.20 and 2.21 simultaneously, it must be concluded that eco-efficiency of the economy may improve as income grows, but not to an extent great enough to reduce the total use of natural resources. In other words, high-income countries tend to produce higher Ecological Footprints per capita than low-income countries and hence economic growth seems to have a “detrimental” impact on the environment. Figures 2.22 and 2.23 illustrate similar scatter plots for energy use. Specifically, Figure 2.20 shows a negative relationship between energy use per US$1,000 GDP and GDP per capita, implying that countries with high income tend to have greater energy efficiency. However, Figure 2.23 shows that energy use per capita tends to be greater in countries with high income per capita. Therefore, unless the Asia-Pacific region (and the world) changes the current growth paradigm, it will increasingly impose a greater ecological footprint on the environment and use greater amounts of energy as it continues its growth. One positive side is that, as can be seen in Figure 2.23, there are some countries that maintain smaller use of energy with a high level of income per capita, suggesting that other countries can also improve their energy efficiency (and eco-efficiency in a broader sense).

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3. Shifting Towards Green Growth in Asia and the Pacific 3.1. Green Growth in the Framework of Sustainable Development The Asia-Pacific region has been experiencing one of the fastest economic growth rates in the world and this has been placing enormous environmental pressure on the region (and the entire planet). Referring to the relationship between ecological pressure per unit of GDP and income per capita or the relationship between energy use per unit of GDP and income per capita, one may hope that the region’s environmental sustainability will ultimately improve as economic growth continues and income rises in the countries of the region. The previous section, however, has revealed that ecological pressure per capita and energy use per capita tend to be greater in high-income countries than in low-income countries. Nonetheless, as shown in Figures 1.1 and 1.2, there are still many people suffering from poverty and a low level of human development in the Asia-Pacific region and hence it needs to continue its fast economic growth. Therefore, the region needs to shift from its old growth paradigm to a new paradigm of Green Growth so that it can continue its fast economic growth while preserving the environmental sustainability of the region. Indeed, Green Growth is an integral strategy toward achieving the ultimate goal of sustainable development, which was first suggested in a report known as the “Brundtland Report” submitted by the World Commission on Environment and Development in 1987. The report highlighted three fundamental components of sustainable development: economic growth, environmental protection, and social equity. Following the recommendations of the report, the UN General Assembly decided to establish the United Nations Conference on Environment and Development (UNCED). The first UNCED, known as the Rio Summit, was held in June 1992 in Rio de Janeiro and an important agreement was reached in the Climate Change Convention, which in turn led to the Kyoto Protocol. The Rio Summit also produced the Rio Declaration consisting of 27 principles intended to guide future sustainable development around the world. However, as seen in Section 2, the world’s ecological footprint has been rapidly increasing, thus degrading environmental sustainability. On the other hand, even though the region’s rapid growth rates have contributed to a remarkable decline in the incidence of poverty, they have also been accompanied by rising income inequalities (Ali, 2007). Specifically, Figure 3.1 illustrates that income inequality measured by the Gini coefficient in the two largest countries in the Asia-Pacific region, People’s Republic of China and India, has been increasing during the period of economic reforms (People’s Republic of China since the early 1980s, and India since the early 1990s). The rise in inequality has been far greater for People’s Republic of China than for India: the Gini coefficient in India rose from 30.8% in 1993 to 33.4% in 2005, while that in People’s Republic of China rose from 35.5% to 41.5% during the same period.

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Thus, the UN’s approach toward achieving sustainable development has not met with much success. This is in large part due to the fact that the three pillars of sustainable development have been thought of separately and in many cases policies on economic growth and environmental sustainability have not been designed and implemented synthetically. Also, the three pillars of sustainable development have been often viewed as contradictory or environmental sustainability and social equity have been viewed as residual outcomes of economic growth. Accordingly, in many countries, economic growth was taken up as the first goal and environmental protection and social development were dealt with as secondary goals. The three pillars of sustainable development are not necessarily contradictory and should not be thought of separately. However, achieving the three goals with one policy measure is not plausible in most cases, but achieving two goals with one policy measure is not implausible. Indeed, in recent years, a concept of Inclusive Growth has been promoted in countries such as India and People’s Republic of China and in international organizations such as the World Bank and Asian Development Bank.5

The idea of Inclusive Growth is that win-win policies and strategies can be designed and implemented so as to produce socially equitable growth which can lead to economic growth that allows all segments of the population to contribute to and benefit from economic growth.

The Green Growth concept has also been promoted in countries such as the Republic of Korea and in international organizations such as UNESCAP and OECD. Similarly to Inclusive Growth, the idea of Green Growth is to design and implement policies and strategies to produce some win-win outcome of economic growth which is consistent with environmental sustainability. Under the Green Growth paradigm, the economy as a whole needs to shift its growth paradigm in such a way that it produces “more goods and services with less energy and raw materials while discharging less pollutants and waste”. Figure 3.2 illustrates the Green Growth and Inclusive Growth strategies under the broader paradigm of sustainable development. 3.2. Two Principles of Green Growth (1) Creation of Synergy between Growth and Environmental Sustainability Many economic policy planners and businesses alike in the region tend to believe that investment in the environment is a sunken cost and a burden on the economy and businesses. However, the environment and the economy can be integrated to create synergy in both public and private sectors. Synergy to be created in the public sector

5 See, for example, Ali and Zhuang (2007) and Zhuang (2010) for discussion on the concept of Inclusive Growth and its implications for countries in Asia. See also Lee et al. (2011) for a comparison of Inclusive Growth-related policies of People’s Republic of China and India.

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Despite awareness of the need to protect the environment, the major reasons why Governments have not adopted proactive environmental policies are the concerns that: allocating scarce financial resources to environmental protection is a burden and cost; and strengthening environmental regulations will damage industrial competitiveness. These conventional concerns are based on a static negative view on the environment and the economy. What is needed is a dynamic and synergistic view such that investment for the environment is regarded not as a burden on the economy but as a driver of economic growth and employment. The fact that the environment requires a higher degree of investment means that the environment industry has a greater potential for promoting economic growth as well as creating employment opportunities. For example, many countries in Asia and the Pacific require a massive investment in environmental infrastructure such as wastewater treatment plants. People’s Republic of China and South-East Asian countries are planning for large investments in environmental infrastructure. These investments will contribute to their economic growth and employment. Therefore, the environment should be considered as a growth driver, not as a burden on growth. Another example of a possible synergy between the environment and the economy is the case of “double government failure” where policies are economically and environmentally flawed. There are many instances of double government failure. One notable example is the extensive use of subsidies that encourage the use of coal, electricity, pesticides, and irrigation and promote expansion of grazing and timber extraction on public lands. Such subsidies are common in Asia and the Pacific. Relatively low taxes on products such as detergents, fertilizers, batteries, pesticides, and large-size cars are another example of government failure. In this case, removing such subsidies and/or the implementation of environmental taxes can yield both economic and environmental benefits. It should also be noted that because of the ‘public good’ nature of environmental benefits, there are many instances of “double market failure” where the present business practices yield both environmental externality and economic inefficiency. For example, private investments in research and development that contribute to upgrading the environment remain sub-optimal in general. In this case, the introduction of new incentives is required for the private sector to introduce changes in methods, processes, or products, including systems of resource and waste management. Conventional economic thinking theorizes that strict environmental regulation would affect industrial competitiveness negatively. Many empirical studies, however, find little statistical evidence of adverse effects on competitiveness due to environmental regulation (for example, Jaffe et al. 1995). Instead, such researchers as Porter (1991) and Porter and van der Linde (1995) argue that environmental regulation can reduce production costs and stimulate competitiveness. This view, known as the “Porter Hypothesis”, argues that the regulations spur environmental innovations that strengthen the competitive position of firms and can offset the cost of regulatory compliance.

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In fact, environmental regulations and incentives can pressure firms to upgrade their technology and quality and provide new innovations in areas of important consumer and social concern. Thus, technological innovation stimulated by environmental regulations can result in new products or new business opportunities and thus have positive effects on both the environment and the economy. Environmental regulation coupled with government research and development support and other incentive measures will be more likely to motivate firms to exploit win-win opportunities. There are a number of real-world examples where a new environmental initiative turned out to be profitable for a given firm or industry. 6

Thus, the upgrading of environmental regulation has to be regarded as an opportunity for spurring technological innovation and for creating an environmental market and industry.

Synergy to be created in the private sector

Private businesses also tend to regard the environment, in many cases, as an extra cost. However, as the economy grows and income rises, the demand for environmentally friendly and resource-saving goods and services increases. In fact, the environment industry is growing rapidly and it is now a major industrial sector in its own right. This recent trend provides the private sector with a good business opportunity. A firm that innovates new “green products” and new “green technologies” before others do so will be in a position to enjoy a competitive advantage. Some firms are actively exploiting new opportunities and are even promoting environmental marketing. The environment should no longer be seen as an extra cost but rather as a new business opportunity. In sum, there is substantial evidence that so long as the correct policies are put in place, growth and business activities need not be constrained, and indeed can be enhanced, by protection and improvement of the environment. Thus, we can have a “win-win” outcome as a result – growth increases and environmental quality is improved as well. (2) Improving Eco-efficiency Improving eco-efficiency is one of the most crucial concepts required for Green Growth. The term “eco-efficiency” was coined by the World Business Council for Sustainable Development (WBCSD) in its 1992 publication "Changing Course". It is based on the concept of creating greater value with less impact. WBCSD suggests that in its simplest terms it means creating more goods and services with ever less use of resources, waste and pollution (WBCSD, 2000). It focuses on business opportunities and allows companies to become more environmentally responsible and more profitable (WBCSD, 2000, p.4). However, to most business people and policy makers, improving eco-efficiency is to reduce “relative” environmental impact per unit of production or GDP. However, the real concern needs to be reduction of (or at least maintaining the current level of) the

6 See Moore and Miller (1994) and Annandale et al. (2005) for such examples.

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“absolute” size of environmental pressure per person or per country in order to ensure that environmental pressure is within the carrying capacity. Total environmental pressure can be decreased by (1) lowering population, (2) reducing the amount of and changing the pattern of consumption of goods and services, and (3) improving the technology with which goods and services are produced. Therefore, improving eco-efficiency needs to address (2) and (3) of the above mentioned ways to reduce environmental pressure. That is, to reduce environmental pressure and hence to improve the environmental sustainability of economic growth, we need to improve the eco-efficiency of consumption and production. It should be noted that the term “eco-efficiency” is used here in its broadest sense, to be applied not only to production activities but also to consumption levels and patterns. That is, this eco-efficiency is different from the one widely promoted by the World Business Council on Sustainable Development (WBCSD). In contrast to this, eco-efficiency is used here not simply as a business concept but rather as a concept also valid for activities related with consumers and the entire society.7

As summarized in Figure 3.3, eco-efficiency is concerned with producing and consuming goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological pressures and resource intensity to a level at least in line with the earth’s carrying capacity. Specifically, it is concerned with two broad objectives:

(1) Achieving high-quality life in terms of consumption mainly through a focus on ‘qualitative sufficiencies’ rather than from ‘quantitative sufficiencies’.

(2) Creating more value added with less use of materials and energy and with reduced emissions.

It is worth noting that conventional economics tends to focus on how output can be maximized using a fixed amount of inputs and on how consumers’ utility can be maximized using a fixed amount of goods and services. In this process of production and consumption, the question of volume of waste and pollutants emitted is not adequately considered. However, eco-efficiency in production is concerned with how output can be maximized using a fixed amount of inputs while minimizing waste and pollutants. Similarly, eco-efficiency in consumption is concerned with how consumers’ utility can be maximized using a fixed amount of goods and services while minimizing waste and pollutants. The natural ecosystems of the Asia-Pacific region (and the earth) will not cope with the future if most people in the region follow the lifestyle seen today in Europe or North America. In any society, once a lifestyle is established, it is quite difficult to change it. Thus, it is all the more important for the countries in the Asia-Pacific region to adopt an eco-efficient way of consuming early in the course of their economic growth, and hence the eco-efficiency of consumption must also be the core focus of policy options.

7 As a matter of fact, there is a wide variety of terminology referring to eco-efficiency. The term “eco-efficiency” used here is an overarching general concept, with variants residing under this umbrella.

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For eco-efficiency in consumption to be accomplished, consumers need to change and improve their consumption pattern, which amounts to opting for a different way of living that can offer a better quality of life and more welfare for all, while limiting the use of resources and pollution to acceptable levels. “A sustainable society …. could focus on mindfully increasing the quality of life rather than mindlessly expanding material consumption……” (Meadows et. al., 2004, Limits to Growth: The 30-Year Update). The consumption pattern can be changed in such a way that consumers enjoy greater satisfaction while consuming a smaller amount of “environmentally harmful” goods and services, which can be translated into greater eco-efficiency in the use of natural resources. Examples are the use of public transport instead of passenger cars, more renewable energy than fossil energy, and the like. On the other hand, success in achieving the second objective depends on how the business sector improves the efficiency of production systems that convert energy and resources into goods and services and the handling of waste and pollutants. This requires not only incremental efficiency improvements in existing practices and habits but also creativity and innovation in the search for new ways of doing things. WWF’s Living Planet Report 2004 concludes that in order to leave enough ecological space for the 5.5 billion people not living in OECD countries to achieve good living standards, without incurring any further environmental insecurities, there must be at least a ten-fold reduction in the use of energy and materials. The first objective is related with consumers, while the second is with firms. Therefore, policies to promote eco-efficiency should address both producers and consumers, as it requires an integrated effort to address consumption and production patterns. Specifically, the Government takes much of the responsibility for ensuring that the external costs of resources are internalized into the respective prices, that perverse subsidies are eliminated, and that those who avoid pollution and use fewer resources are rewarded. Thus, eco-efficiency calls for the entire society, including consumers, firms, and the Government, to work together to achieve greater welfare with less use of materials and energy and with reduced emissions. To summarize, environmental sustainability is related not just with pollution but rather with more fundamental measures such as eco-efficiency, which cannot be changed unless a society changes the way it produces and consumes. In other words, for the environment to be sustainable, a society needs not only to limit the level of pollution but also to improve more fundamental measures such as eco-efficiency of society as a whole. 3.3. Three Strategies for Green Growth Improving eco-efficiency requires the internalization of environmental costs into the price structure and also requires long-term approach. In countries that lack the necessary financial and technical capacity, this will require support through international and regional cooperation.

(1) Internalization of environmental costs into pricing mechanisms

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One of the fundamental reasons for environmental problems is that the environment is regarded as a free good, and pricing mechanisms do not reflect environmental costs. Under such circumstances, people end up abusing the environment. If environmental costs could be fully reflected and internalized into the market price structure, then people would no longer abuse the environment. Internalization of environmental costs into pricing mechanisms would allow the market to determine the appropriate level of use at the established price and ensure that users and producers pay the full costs of their use of environmental resources. This is the most efficient and effective tool for improving the eco-efficiency of the way people consume natural resources and generate waste. Thus, it is urgent that policy makers devise a system where the price of protecting the environment is duly reflected in the price structure of the market. Internalizing environmental costs can be effected through economic instruments, such as charges, levies, and green tax reform. It can also be achieved by the removal of environmentally harmful subsidies. For example, environmental regulation coupled with Government’s R&D support and other measures will be more likely to motivate firms to exploit win-win opportunities. Policies motivating individuals to take environmentally-friendly choices into account for consumption are also crucial in promoting eco-efficiency. The social cost of traffic jams and proliferations of private passenger cars must be reviewed and the eco-efficiency of railroads vis-à-vis highways and public transport vis-à-vis private cars must be duly taken into consideration in public policies. For example, public transport can be encouraged by making transport pricing reflect the full environmental costs of roads.

(2) Resource allocation in the long-term perspective

The benefits of environmental protection often materialize only in the long run, while there are many pressing economic and social needs demanding resource allocations. Investment in environmental research and development often can only be done in the long run and lacks commercial viability. This is why environmental research and development must often be supported by public funds, as in the case of renewable energy. Government and the public sector need to bridge the gap between long-term social benefit and short-term commercial benefit in order to promote the active participation of the private sector in the area of environmental research and development.

(3) International cooperation for Green Growth

Not only developed countries but also developing countries and economies in transition need to actively take part in, and benefit from, shifting to more eco-efficient production and consumption patterns. In order to facilitate the upgrading of environmental regulations and standards, there should be international harmonization and coordination

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to create a level playing field, so that the countries concerned do not have to worry about losing their national competitiveness. As many developing countries in the early stages of economic development lack the financial resources and technological capacity to initiate pollution control and eco-efficiency measures, the international community needs to provide support for developing countries to pursue Green Growth. For global environmental issues, such as climate change and ozone depletion, support for their participation is even more critical. Rapid diffusion of clean technologies and eco-efficient production patterns into developing countries is vital in order to ensure global sustainability. Regional environmental technology partnerships and innovative financing mechanisms are necessary to support the promotion of the Green Growth paradigm in the region. 4. Lessons from the Green Growth Initiative of the Republic of Korea 4.1. Brief background to ROK’s economic performance and environmental sustainability As seen from the discussion above, the Republic of Korea is one of the countries which have extremely limited environmental carrying capacity per capita. For instance, with only 0.0020 km2 of land area per capita, ROK is the third most crowded country in the Asia-Pacific region, following Bangladesh (0.0009 km2) and Maldives (0.0010 km2) (Figure 2.2). Also, ROK has the second smallest arable land area per capita in the region and the fifth smallest volume of freshwater resources per capita in the region (Figures 2.3 and 2.5). Despite such extremely limited natural resources, over the past fifty years since 1960 ROK has been transformed from one of the poorest countries in the world to a leading industrial nation. This remarkable accomplishment was indeed an economic miracle as such fast economic growth was unprecedented (Harvie and Lee, 2003). The exceptionally fast economic growth of ROK has been in large part due to the outward industrialization of the countries relying on exports. In the course of rapid industrialization, however, ROK has increasingly imposed the greatest pressure on the environment. For instance, in 2008 ROK’s energy use, not only per capita but also per unit of GDP, was far greater than that of any other emerging/developing country in the Asia-Pacific region (Figures 2.11 and 2.12). Indeed, the 2006 OECD Environment Performance Review of Korea noted that “Korea is one of the few OECD countries which have not improved its energy intensity (energy use per unit of GDP) relative to 1990.” Following Pakistan, ROK was also the country which produced the second largest CO2 emissions per capita in 2007 (Figure 2.13). In terms of ecological footprinting of the Global Footprint Network, ROK is imposing the third largest ecological footprint per capita in the Asia-Pacific region, while it also has

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the smallest biocapacity per capita in the region (Figures 2.16 and 2.17). This has led ROK to run the greatest ecological deficit in the region (Figure 2.18). 4.2. ROK’s Green Growth Initiative On August 15, 2008, at a national address marking the 60th anniversary of the founding of ROK, President Lee Myung-bak declared “Low Carbon Green Growth” to be the new vision to lead the country’s development for the next 60 years. In order to ensure effective implementation of this new vision, the ROK Government launched the Presidential Committee on Green Growth (PCGG) in February 2009.8

The Committee coordinates and evaluates the green growth policies of various ministries, as well as undertaking consultations with various participants from the private sector. It is co-chaired by the Prime Minister and an appointed Chairman from the private sector.

The ROK Government has also created an institutional framework for the Green Growth Initiative. In 2009, Korea enacted a “Framework Act on Low Carbon Green Growth”. The “Framework Act” represents a milestone in the national development strategy and the legal foundation of the nation’s Green Growth policies, approaching Green Growth in a comprehensive and systematic manner. The ROK Government has also released a National Strategy for Green Growth and Five-Year Plan for Green Growth. The National Strategy for Green Growth envisages three main objectives and ten policy directions. As shown in Figure 4.1, the three objectives include:

(1) Mitigation of climate change and strengthening of the country’s energy independence,

(2) Creation of new growth engines, and (3) Improvement in the quality of people’s lives and enhancement of ROK’s

international standing. The ten policy directions include:

(1) Effective mitigation of greenhouse gas emissions, (2) Reduction in the use of fossil fuels and enhancement of energy independence, (3) Strengthening the capacity to adapt to climate change, (4) Development of green technologies, (5) “Greening” of existing industries and promotion of green industries, (6) Advancement of the industrial structure to increase the role of services, (7) Engineering a structural basis for the green economy, (8) Greening land and water and building a green transport infrastructure, (9) Bringing the green revolution into our daily lives, and (10) Becoming a role model for the international community as a green growth

leader.

8 The PCGG replaced the Presidential Committee on Sustainable Development, which had been established in September 2000 by President Kim Dae-jung’s administration.

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As a response to the deepening recession, the ROK Government launched a Green New Deal in January 2009, announcing an economic stimulus package equivalent to US$ 38.1 billion, of which 80 per cent was allocated to more efficient use of resources such as freshwater, waste, energy-efficient buildings, renewable energies, low-carbon vehicles, and the rail network. This Green New Deal was the most extensive among comparable packages from other G20 Governments (UNEP, 2010). In July 2009, the ROK Government announced a Five-Year Plan for Green Growth to serve as a medium-term plan for implementing the National Strategy for Green Growth over the period 2009-2013. With total funding of US$ 83.6 billion, representing 2 per cent of GDP, this Five-Year Plan was intended to turn the strategy into concrete and operational policy initiatives towards achieving green growth. By extending the Green New Deal into a full five-year development plan, ROK has committed itself to moving away from the traditional "brown economy" growth-at-any-cost model to a "green economy" model where long-term prosperity and sustainability are the key objectives (UNEP, 2010). Among other targets, ROK set its mitigation goal at a 30% reduction in greenhouse gases relative to Business As Usual (BAU) by 2020, the highest level advised by IPCC for the non-Annex 1 countries. With the world’s largest shipbuilding industry and fifth largest steel production, this is quite an aggressive target for ROK. The ROK Government is also preparing to introduce the Emission Trading Scheme in 2015. Furthermore, ROK is making a special effort to facilitate investment in green technology to develop clean energy sources. In particular, the Korean Government has identified 10 key green technologies for R&D support. These are the following:

(1) Rechargeable batteries, (2) LEDs, (3) green IT, (4) high-efficiency photovoltaic cells, (5) green cars, (6) smart grid, (7) advanced nuclear power, (8) fuel cells, (9) carbon capture and storage, and (10) CCS and water treatment.

In response to the Government’s Green Growth Initiative, Korean companies are expanding their investment in green businesses. Korea’s 30 business groups invested in green businesses 2.4 trillion won in 2008, 5.4 trillion won in 2009, and 7.3 trillion won in 2010 (PCGG, 2011). These figures represent an investment increasing by 74.5% annually over the period. Freshwater scarcity has long been a critical challenge facing ROK. The ROK Government has launched the Four Major Rivers Restoration Project for the period 2009 to 2012, in order to achieve five key objectives: (i) securing sufficient water resources

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against water scarcity, (ii) implementing comprehensive flood control measures, (iii) improving water quality whilst restoring the river-basin ecosystems, (iv) creating multipurpose spaces for local residents, and (v) promoting regional development centered on rivers, leading to the creation of 340 thousand jobs (Government of Korea, 2009). ROK has also promoted Green Growth in the international community. In 2005, the “Seoul Initiative Network on Green Growth” was proposed by the ROK Government and adopted at the fifth Ministerial Conference on Environment and Development of the United Nations Economic and Social Commission for Asia and the Pacific. In addition, ROK chaired the 2009 OECD Ministerial Council Meeting that adopted the “Green Growth Declaration”. Since then, ROK has been working with OECD to spread the Green Growth agenda throughout the international community. In 2008, ROK launched the East Asia Climate Partnership (EACP) to help developing countries with their efforts towards climate change mitigation and adaptation. Through the EACP, ROK focuses on sharing its experience and know-how on Green Growth with developing countries. ROK is committed to providing USD 200 million to help developing countries cope with climate change from 2008 to 2012. In 2010, ROK also established the Global Green Growth Institute (GGGI), which focuses on systematic theoretical studies on Green Growth and aims to help developing countries implement their own Green Growth models, taking into account their different economic and social circumstances. GGGI is a globally represented non-profit organization run by an international Board of Directors. GGGI opened its first foreign branch in Copenhagen in May 2011 and plans to establish several regional branches around the globe by 2012 in order to build a global network and further develop into an international organization based on an intergovernmental treaty. The ROK Government is hoping that Green Growth will help the country enhance its contribution to the development of the global community; based on its contribution, the ROK Government hopes to serve as a role model committed to the acknowledgement of responsibility for the planet (ROK Presidential Committee on Green Growth, 2011). 5. Concluding Remarks Asia and the Pacific has been experiencing the fastest economic growth anywhere in the world. This rapid economic growth has enabled the reduction of poverty and advance of social welfare in many parts of the region. However, this has placed enormous pressure on the ecological carrying capacity of the region. Unless economic growth is properly checked, the ecological carrying capacity for future generations will be seriously compromised. This is especially so because the carrying capacity is relatively more limited in the Asia-Pacific region than in other regions of the world. Nonetheless, the need for continued economic growth is enormous, given the continuing high poverty levels.

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This requires the region to embrace the new paradigm of environmentally sustainable economic growth or Green Growth. There is no single set of strategies and policies for Green Growth that would fit in all developing countries, as different countries have different cultural and environmental background and operate contrasting socio-economic systems. Even though there is no single set of Green-Growth-related strategies and policies that would be suitable for all countries, there are some important policy issues that are common to all countries at all times. One such issue is that economic policy planners and businesses alike in the region need to believe that there are policies and strategies that can create synergy between economic growth and environmental sustainability. The other crucial concept required for Green Growth is improving eco-efficiency. Eco-efficiency is concerned with both producing and consuming goods and services that satisfy human needs and bring quality of life while progressively reducing ecological pressure and resource intensity to a level at least in line with the Earth’s carrying capacity. Improving eco-efficiency requires internalization of environmental costs into the price structure and also demands a long-term approach. In countries that lack the necessary financial and technical capacity, this will require support through international and regional cooperation. Lastly, it is emphasized that the three pillars of sustainable development should not be thought of separately or viewed as contradictory. Indeed, in recent years, the concepts of not only Green Growth but also Inclusive Growth have been promoted in some countries and by various international organizations. The idea of these two initiatives is that win-win policies and strategies can be designed and implemented so as to produce both socially equitable growth and environmentally sustainable growth. Therefore, instead of merely being the long-term goal of national development, the Green Growth Initiative, along with the Inclusive Growth Initiative, should constitute an important “strategy” to achieve the ultimate, long-term goal of sustainable development, as illustrated by Figure 3.2.

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References Ali, I (2007), “Inequality and the Imperative for Inclusive Growth in Asia,” Asian Development Review, 24, 1-16, Asian Development Bank. Ali, I. and J. Zhuang (2007), “Inclusive Growth toward a Prosperous Asia: Policy Implications”, ERD Working Paper Series No.97, Asian Development Bank, Manila. Andreoni, J. and A. Levinson (2001), “The Simple Analytics of the Environmental Kuznets Curve”, Journal of Public Economics, 80, 269-86. Annandale D., A. Fry, W. Halal, and P. King (2005), Asian Environment Outlook 2005 – Making Profits, Protecting Our Planet: Corporate Responsibility for Environmental Performance in Asia and the Pacific, Asian Development Bank. Asia-Pacific Forum for Environment and Development (APFED) (2005), Paradigm Shifts Towards Sustainability for Asia and the Pacific – Turning Challenges into Opportunities, The APFED Final Report. Brock, W. A. and M. S. Taylor (2004a), “The Green Solow Model”, NBER Working Paper No. 10557, June. Brock, W. A. and M. S. Taylor (2004b), “Economic Growth and the Environment: A Review of Theory and Empirics”, in S. Durlauf and P. Aghion eds. Handbook of Economic Growth, North Holland. Copeland, B. R. and M. S. Taylor (2003), Trade and the Environment: Theory and Evidence, Princeton, New Jersey, United States: Princeton University Press. Esty, D. C., M. A. Levy, T. Srebotnjak, and A. d Sherbinin (2005), 2005 Environmental Sustainability Index: Benchmarking National Environmental Stewardship, New Haven, Connecticut, United States Yale Center for Environmental Law and Policy. Food and Agriculture Organization of the United Nations (FAO) (2004). Towards a Food-Secure Asia and Pacific: Regional Strategic Framework for Asia and the Pacific (second edition), Bangkok, FAO Regional Office for Asia and the Pacific. Government of Korea, (2009), Restoration of Four Rivers, Seoul. Grossman, G. M. and A. B. Krueger (1991), “Environmental Impacts of a North American Free Trade Agreement”, NBER Working Paper No. 3914, Cambridge: National Bureau of Economic Research. Also in P. Garber ed. (1993) The US-Mexico Free Trade Agreement, Cambridge, M.A.: MIT Press. Grossman, G. M. and A. B. Krueger (1994), “Economic Growth and the Environment”, Quarterly Journal of Economics, 110, 353-377.

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Harvie, Charles and Hyun-Hoon Lee (2003), Korea’s Economic Miracle – Fading or Reviving?, Palgrave Macmillan, London, UK. IUCN/UNEP/WWF (1991) Caring for the Earth - A Strategy for Sustainable Living. Gland, Switzerland. Jones, R. S. and B. Yoo (2011), “Korea’s Green Growth Strategy: Mitigating Climate Change and Developing New Engines”, Economics Department Working Papers No. 798, OECD: Paris. Juzhong, Z. ed. (2010) Poverty, Inequality, and Inclusive Growth in Asia: Measurement, Policy Issues, and Country Studies, Anthem Press and Asian Development Bank. Jaffe, A., S. Peterson, P. Portney, and R. Stavins (1995), “Environmental Regulation and the Competitiveness of US Manufacturing: What Does the Evidence Tell Us”, Journal of Economic Literature, XXXIII, 132-163. Lee, H. H., R. K Chung and C. M. Koo (2005), “On the Relationship between Economic Growth and Environmental Sustainability,” paper presented at Eminent Environmental Economists Symposium, the 5th Ministerial Conference on Environment and Development for Asia and the Pacific, Seoul, March. Lee, H. H., M. Lee, and D. Park (2011), “Growth Policy/Strategy and Inequality in Developing Asia” paper to be presented at Forum on Equalizing Opportunities for Inclusive Growth, December 7-8, Asian Development Bank, Manila. Meadows, D. H., J. Randers, and D. L. Meadows (2004), Limits to Growth: The 30-Year Update, Chelsea Green Publishing Company. Moore, C., and A. Miller (1994), Green Gold: Japan, Germany, the United States, and the Race for Environmental Technology, Boston, Massachusetts, United States: Beacon Press. Porter, M. (1991), “America’s Green Strategy,” Scientific American, 28, 1-28. Porter, M. and C. van der Linde (1995), “Toward a New Conception of the Environment-Competitiveness Relationship,” Journal of Economic Perspectives, 9, 97-118. Ravallion, M. (2009), “A Comparative Perspective on Poverty Reduction in Brazil, China and India”, Policy Research Working Paper No. 5080, World Bank. Rees, W. E. (1996), “Revisiting Carrying Capacity: Area-Based Indicators of Sustainability,” Population and Environment, Vol 3, No 3, Vancouver, Canada: Human Sciences Press.

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ROK’s Presidential Committee on Green Growth (2011), Green Growth Korea, Seoul. Seldon, T. and D. Song (1994), “Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?” Journal of Environmental Economics and Management, 27, 147-162. Stokey, N. (1998), “Are There Limits to Growth?” International Economic Review, 39(1), 1-31. United Nations Environmental Program (2010), Overview of the Republic of Korea’s National Strategy for Green Growth, UNEP. World Bank (1992), World Development Report 1992: Development and the Environment. World Business Council on Sustainable Development (WBCSD) (2000), Eco-Efficiency: Creating More Value with Less Impact, WBCSD. World Business Council for Sustainable Development (WBCSD) (1992), Changing Course, WBCSD. World Commission on Environment and Development (Brundtland Commission), Our Common Future, Oxford, New York: Oxford University Press, 1987. World Wildlife Fund (WWF) International (2004), Living Planet Report 2004, Gland, Switzerland, 2005 (www.panda.org)

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Figure 1.1. Poverty Headcount Ratio at US$2 a Day (PPP, % of Population, 1990s, 2000s)

-20 0 20 40 60 80 100

VanuatuTuvaluTonga

Solomon IslandsSamoa

Papua New GuineaPalau

MyanmarMarshall Islands

Korea, Rep.Korea, Dem. Rep.

KiribatiFiji

AfghanistanMalaysia

IranThailandMaldivesSri Lanka

ChinaVietnam

PhilippinesMongolia

BhutanIndonesiaCambodia

PakistanLao PDR

Timor-LesteIndia

NepalBangladesh

Poverty headcount ratio at US$2 a day (1990s, 2000s)

2000s

1990s

% of population

n.a.

Note: Drawn with the data for most recent years in the 2000s and the earliest years in the 1990s for which data are available. The following are the specific years: Bangladesh (1992, 2005); Bhutan (na, 2003); Cambodia (1994, 2007); China (1990, 2005); India (1994, 2005); Indonesia (1990, 2009); Iran (1990, 2005); Lao PDR (1992, 2008); Malaysia (1992, 2009); Maldives (na, 2004); Mongolia (1995, 2005); Nepal (1996, 2004); Pakistan (1991, 2006); Philippines (1991, 2006); Sri Lanka (1991, 2007); Thailand (1992, 2004); Timor-Leste (na, 2007); and Vietnam (1993, 2008). Source: World Bank, World Development Indicators

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Figure 1.2. Human Development Indicators (1990, 2011)

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Korea, Dem. Rep.Marshall Islands

NauruTuvalu

AfghanistanNepal

Papua New …Myanmar

Timor-LesteBangladesh

PakistanSolomon Islands

BhutanCambodiaLao PDR

IndiaViet Nam

Asia PacificIndonesia

VanuatuKiribati

MicronesiaPhilippines

MongoliaMaldivesThailand

WorldChina

FijiSamoa

Sri LankaTonga

IranMalaysia

PalauKorea, Rep.

HDR (1990, 2011)

1990

2011

World (2011)

Asia Pacific (2011)

n.a.

percentage Note: All data are for the years of 1990 and 2011, except for Cambodia (1995, 2011). Source: United Nations Development Program, Human Development Indicators.

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Figure 2.1. Determinants of Environmental Sustainability Source: UNESCAP, State of Environment, 2005, Bangkok Figure 2.2. Land Area Per Capita (2009)

0 0.1 0.2 0.3 0.4 0.5 0.6

Cook IslandsNauru

NiueTokelau

BangladeshMaldives

Korea, Rep.India

Sri LankaTuvalu

PhilippinesMarshall Islands

VietnamPakistan

NepalKorea, Dem. Rep.

Asia PacificMicronesia

TongaChina

ThailandIndonesia

KiribatiMalaysia

CambodiaTimor-Leste

MyanmarSamoaWorld

AfghanistanFiji

IranPalau

Lao PDRVanuatu

Solomon IslandsBhutan

Papua New GuineaMongolia

sq. km per capita

Land area per capita (2009)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators

Ecological CarryingCapacity

Population

Technology

Consumption

Natural Resources

EnvironmentalPressure

Eco-efficiency

Eco-efficiencyEnvironmentalSustainability

Ecological CarryingCapacity

Population

Technology

Consumption

Natural Resources

EnvironmentalPressure

Eco-efficiency

Eco-efficiencyEnvironmentalSustainability

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Figure 2.3. Arable Land Area Per Capita (2009)

0 0.1 0.2 0.3 0.4 0.5 0.6

Cook IslandsNauru

NiueTokelau

MaldivesKorea, Rep.Bangladesh

NepalChina

Sri LankaVietnam

PhilippinesKorea, Dem. …

PakistanAsia Pacific

BhutanPapua New …

Solomon IslandsIndia

PalauMicronesia

IndonesiaTuvalu

Marshall IslandsTimor-Leste

WorldAfghanistan

Lao PDRMyanmar

IranTonga

MalaysiaThailand

FijiCambodia

KiribatiSamoa

MongoliaVanuatu

Hectares per capita

Arable and permanent crop land area per capita (2009)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators Figure 2.4. Total Forest Area Per Capita (2009)

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5

Cook IslandsNauru

NiueTokelau

MaldivesBangladesh

PakistanAfghanistan

IndiaPhilippines

TongaSri Lanka

TuvaluNepal

KiribatiKorea, Rep.

IranChina

Asia PacificVietnam

Marshall IslandsKorea, Dem. Rep.

ThailandIndonesia

MicronesiaWorld

MyanmarTimor-Leste

CambodiaMalaysia

SamoaFiji

VanuatuPalau

Lao PDRMongolia

Solomon IslandsPapua New Guinea

Bhutan

Hectares per capita

Total forest area per capita (2009)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators

32

Figure 2.5 Freshwater Resources Per Capita

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000

Cook IslandsKiribati

Marshall IslandsMicronesia

NauruNiue

PalauSamoa

TokelauTonga

TuvaluVanuatuMaldivesPakistan

BangladeshIndia

Korea, Rep.Afghanistan

IranChina

Sri LankaKorea, Dem. Rep.

Asia PacificThailandVietnam

PhilippinesWorldNepal

Timor-LesteIndonesiaCambodiaMongoliaMyanmarMalaysiaLao PDR

FijiSolomon Islands

BhutanPapua New …

cubic meters

Renewable internal freshwater resources per capita (2007)

n.a.

Asia Pacific

World

Source: World Bank, World Development Indicators Figure 2.6. Population Growth (1980 - 2010)

0 0.5 1 1.5 2 2.5 3 3.5 4

Cook IslandsNauru

NiueTokelau

TongaSamoaTuvalu

Korea, Rep.China

FijiSri Lanka

Korea, Dem. Rep.Palau

MicronesiaMyanmar

WorldTimor-Leste

ThailandAsia Pacific

IndonesiaVietnam

KiribatiCambodia

IndiaMongolia

BangladeshLao PDRBhutan

NepalIran

MalaysiaPhilippines

Marshall IslandsMaldivesVanuatu

Papua New …Afghanistan

PakistanSolomon Islands

Percentage

Population Growth (2010/1970)

Asia Pacific

World

n.a.

Source: World Bank, World Development Indicators

33

Figure 2.7. GDP Per Capita (2009)

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

AfghanistanCook IslandsKorea, Dem. …

MyanmarNauru

NiueTokelau

NepalTimor-Leste

LaosCambodia

BangladeshPakistanVietnam

Papua New …Mongolia

KiribatiIndia

IndonesiaSolomon Islands

Sri LankaBhutan

PhilippinesAsia Pacific

VanuatuSamoa

MicronesiaTonga

IranFiji

ChinaMarshall Islands

ThailandMaldives

TuvaluMalaysia

WorldPalau

Korea, Rep.

Thousand U.S dollar

GDP per capita (2009)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators Figure 2.8 Change in Real GDP (1990 – 2009)

0 1 2 3 4 5 6 7

AfghanistanCambodia

Cook IslandsKorea, Dem. Rep.

MaldivesMyanmar

NauruNiue

PalauTimor-Leste

TokelauMarshall Islands

MicronesiaFiji

TongaKiribati

WorldSolomon Islands

SamoaMongolia

PhilippinesPapua New Guinea

ThailandPakistan

IranNepal

IndonesiaSri Lanka

Korea, Rep.Bangladesh

MalaysiaIndia

Lao PDRTuvalu

BhutanAsia Pacific

VietnamVanuatu

China

Constant 2000 us$

Change in GDP (1990 - 2009)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators

34

Figure 2.9 Change in Merchandise Exports (1990 – 2009)

0 5 10 15 20 25 30 35 40 45 50

Cook IslandsMarshall Islands

MicronesiaNauru

NiuePalau

Timor-LesteTokelau

TongaKorea, Dem. …

SamoaFiji

TuvaluMaldives

Solomon IslandsAfghanistan

MongoliaVanuatuPakistan

WorldPapua New …

Sri LankaNepal

IranIndonesia

PhilippinesKiribati

MalaysiaKorea, Rep.

ThailandBhutan

Asia PacificBangladesh

IndiaLao PDR

ChinaMyanmar

VietnamCambodia

Ratio

Merchandise exports (1990 - 2009)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators Figure 2.10. Change in Inward FDI Stock (1990 – 2000)

0 50 100 150 200 250 300 350 400 450

KiribatiMarshall Islands

MicronesiaNauru

NiuePalau

Solomon IslandsTimor-Leste

TokelauTuvalu

VanuatuPapua New …

Korea, Dem. …Cook Islands

PhilippinesSamoa

Sri LankaFiji

WorldMalaysiaPakistan

BangladeshIran

IndonesiaThailand

NepalAsia PacificKorea, Rep.

ChinaMyanmarMaldivesVietnam

BhutanIndia

TongaAfghanistan

CambodiaLao PDR

Mongolia

Currennt U.S $

FDI inward stock growth (1990 -2010)

World

Asia Pacific

n.a.

Source: United Nations Conference on Trade and Development, UNCTADSTAT Online database

35

Figure 2.11. Energy Use Per Capita (2007 or 2008)

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000

AfghanistanCook Islands

Lao PDRMicronesia

NauruNiue

PalauPapua New Guinea

TokelauTuvalu

Timor-LesteKiribati

Solomon IslandsVanuatu

BangladeshSamoa

MyanmarNepal

BhutanCambodia

Sri LankaPhilippines

PakistanIndia

TongaMarshall Islands

FijiVietnam

Korea, Dem. Rep.IndonesiaMaldives

Asia PacificMongoliaThailand

ChinaWorld

MalaysiaIran

Korea, Rep.

kg of oil

Energy use per capita (2007 or 2008)

World

Asia Pacific

n.a.

Note: 2007 data are used for Bhutan, Fiji, Kiribati, Maldives, Marshall Islands, Samoa, Solomon Islands, Tonga, and Vanuatu. 2008 data are use for other countries. Source: World Bank, World Development Indicators Figure 2.12. Energy Use Per US$ 1,000 Amount of GDP (2007 or 2008)

0 0.2 0.4 0.6 0.8 1 1.2 1.4

Cook IslandsKorea, Dem. Rep.Marshall Islands

MongoliaMyanmar

NepalTimor-Leste

TongaVietnam

AfghanistanTuvaluNauru

Lao PDRKiribati

Solomon IslandsSamoa

CambodiaBhutan

PhilippinesBangladeshPapua New …

ThailandPalau

Asia PacificFiji

NiueKorea, Rep.

TokelauWorld

IndonesiaVanuatu

IndiaSri LankaMalaysiaMaldives

IranPakistan

ChinaMicronesia

kg per 2005 ppp $ of gdp

CO2 emissions per US$ 1,000 GDP (2007)

World

Asia Pacific

n.a.

Note: 2007 data are used for Bhutan, Fiji, Kiribati, Maldives, Marshall Islands, Samoa, Solomon Islands, Tonga, and Vanuatu. 2008 data are use for other countries. Source: World Bank, World Development Indicators

36

Figure 2.13. CO2 Emissions Per Capita (2007)

0 2 4 6 8 10

Cook IslandsMyanmar

NepalTimor-Leste

TongaVietnam

AfghanistanNauru

ThailandLao PDR

MongoliaBangladesh

CambodiaKiribatiSamoaTuvaluPalau

Solomon IslandsPapua New …

BhutanPhilippines

NiueVanuatu

IndiaIndonesia

TokelauFiji

Marshall IslandsAsia Pacific

Korea, Dem. Rep.Maldives

MicronesiaSri Lanka

WorldChina

IranMalaysia

Korea, Rep.Pakistan

metric tons per capita

CO2 Emmision per capita (2007)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators Figure 2.14. CO2 Emission Per US$ 1,000 Amount of GDP (2007)

0 0.2 0.4 0.6 0.8 1 1.2 1.4

Cook IslandsKorea, Dem. Rep.Marshall Islands

MongoliaMyanmar

NepalTimor-Leste

TongaVietnam

AfghanistanTuvaluNauru

Lao PDRKiribati

Solomon IslandsSamoa

CambodiaBhutan

PhilippinesBangladeshPapua New …

ThailandPalau

Asia PacificFiji

NiueKorea, Rep.

TokelauWorld

IndonesiaVanuatu

IndiaSri LankaMalaysiaMaldives

IranPakistan

ChinaMicronesia

kg per 2005 ppp $ of gdp

CO2 emissions per US$ 1,000 GDP (2007)

World

Asia Pacific

n.a.

Source: World Bank, World Development Indicators

37

Figure 2.15. Emissions of CO2 per capita, 2005

Source: World Bank (2010), World Development Report 2010, Washington D.C. Figure 2.16. Per Capita Ecological Footprint

0 1 2 3 4 5 6

BhutanCook Islands

FijiKiribati

MaldivesMarshall Islands

MicronesiaNauru

NiuePalau

SamoaTokelau

TongaTuvalu

Timor-LesteBangladeshAfghanistan

PakistanIndia

CambodiaIndonesiaSri LankaLao PDR

PhilippinesKorea, Dem. Rep.

VietnamAsia Pacific

MyanmarPapua New …

ChinaThailand

IranWorld

VanuatuNepal

MalaysiaKorea, Rep.

Solomon IslandsMongolia

global hectares per capita

Per capita Ecological Footprint (2010)

World

Asia Pacific

n.a.

Source: Global Footprint Network (http://www.footprintnetwork.org)

38

Figure 2.17. Per Capita Biocapacity

0 2 4 6 8 10 12 14 16

BhutanCook Islands

FijiKiribati

MaldivesMarshall Islands

MicronesiaNauru

NiuePalau

SamoaTokelau

TongaTuvalu

Korea, Rep.Bangladesh

PakistanSri Lanka

IndiaAfghanistan

NepalKorea, Dem. Rep.

PhilippinesAsia Pacific

IranVietnam

CambodiaChina

ThailandTimor-Leste

IndonesiaLao PDR

WorldMyanmarMalaysia

Solomon IslandsVanuatu

Papua New …Mongolia

global hectares per capita

Per capita Biocapacity (2010)

World

Asia Pacific

n.a.

Source: Global Footprint Network (http://www.footprintnetwork.org) Figure 2.18. Per Capita Ecological Deficit

-5 -3 -1 1 3 5 7 9

BhutanCook Islands

FijiKiribati

MaldivesMarshall Islands

MicronesiaNauru

NiuePalau

SamoaTokelau

TongaTuvalu

Korea, Rep.Nepal

Solomon IslandsMalaysia

IranChina

ThailandWorld

Asia PacificSri Lanka

Korea, Dem. Rep.Philippines

VietnamIndia

PakistanBangladesh

CambodiaVanuatu

AfghanistanIndonesiaMyanmar

Lao PDRTimor-Leste

Papua New GuineaMongolia

global hectares per capita

Per capita Ecological Deficit (2010)

World

Asia Pacific

n.a.

Source: Global Footprint Network, (http://www.footprintnetwork.org)

39

Figure 2.19. Footprints and Biocapacities of the World and Selected Countries

(A) World

(B)China

40

(C) India

(D) Pakistan

41

(E)Republic of Korea

(F) Democratic Peoples Republic of Korea (DPRK)

42

<Figure 2.20> Total Ecological Footprints per one unit of GDP vs. GDP per capita

Afghanistan

BangladeshCambodia

Indonesia

Iran

ROK

Laos

Malaysia

Mongolia

Nepal

Pakistan

PNG

PhilippinesSri Lanka Thailand

Timor Vietnam

-23

-22

-21

-20

-19

6 7 8 9 10 11log_gdppc

footprint_gdp Fitted values

Footprint_gdp = -16.85 - 0.55 log_gdppc; R-squared = 0.802 (82.8) (24.0) <Figure 2.21> Ecological Footprints per capita vs. GDP per capita

AfghanistanBangladesh

Cambodia

China

India

Indonesia

Iran

ROK

Laos

MalaysiaMongolia

Nepal

Pakistan

PNG

PhilippinesSri Lanka

Thailand

Timor

Vietnam

-10

12

3

6 7 8 9 10 11log_gdppc

footprint_capita Fitted values

Footprint_capita = -3.06 + 0.45 log_gdppc; R-squared = 0.724 (15.0) (19.4)

43

<Figure 2.22> Energy Use per US$ 1,000 of GDP vs. GDP per capita

Bangladesh

Cambodia

China

IndiaIndonesia

Iran

LaosNepal

PNG Philippines

Timor

45

67

6 7 8 9 10 11log_gdppc

energy_gdp Fitted values

Energy_gdp = 6.49 - 0.14 gdp_capita; R-squared = 0.126 (19.40) (3.85) Note: Both variables are in logs. Energy use is energy use (kg of oil equivalent) per US$ 1,000 GDP. Source: World Bank, World Development Indicators <Figure 2.23> Energy Use per capita vs. GDP per capita

Bangladesh

Cambodia

China

India

Indonesia

Iran

Laos

Nepal

PNG

Philippines

Timor

56

78

9

6 7 8 9 10 11log_gdppc

energy_capita Fitted values

Energy_capita = 4.31 + 0.32 gdp_capita; R-squared = 0.188 (7.39) (4.92) Note: Both variables are in logs. Source: World Bank, World Development Indicators

44

Figure 3.1. Gini Coefficients of China and India (%, 1981 - 2005)

20

25

30

35

40

45

1981 1993 2005

perce

ntag

e

China

India

Note: Higher Gini coefficients indicate greater income inequality. Source: Ravallion (2009)

45

Figure 3.2. Green Growth and Inclusive Growth in the Framework of Sustainable Development

Figure 3.3. Flows of Production and Consumption Source: UNESCAP, State of Environment, 2005, Bangkok

Inclusive Growth Green Growth

Wastes and Pollutants

Consumers’UtilityInputs Output

Wastes and Pollutants

Production Consumption

Wastes and Pollutants

Consumers’UtilityInputs Output

Wastes and Pollutants

Production Consumption

46

Figure 4.1. The Republic of Korea’s National Strategy for Green Growth

Source: ROK’s Presidential Committee on Green Growth Website (http://wsw.greengrowth.go.kr/english)

47

Source: ROK’s Presidential Committee on Green Growth Website (http://wsw.greengrowth.go.kr/english)