destruction of human life on earth requires working with those parts of industry
and finance that are willing and keen to make green investments. The division
between high- and low-carbon investors runs right through industry and finance,
as stressed in Chapter 5 by Peter Newell. In some cases it runs right through
individual corporations in which some departments continue to be tied to the fossil
fuel sectors, while others are pioneering new low-carbon technologies. Investments
in the latter can be counted in billions of dollars, euros or pounds. The problem
is that investments in fossil fuel and related industries amount to trillions. Changing
this balance and achieving it rapidly is – in economic terms – the hard core of the
green transformation.
5
Such emphasis on working with business is also worrisome to those concerned
with the distributional consequences of the green transformation. History tells us
that big transformations can entail big increases in inequality. However, history
also tells us that some big transformations happened when the interests of business
and large sections of society coincided (Perez, 2002, 2013). So which is it? As always,
the answer is: it depends. The determinants are politically constructed.
A comparison of China and Vietnam is illuminating. As mentioned earlier, no
two economies have averaged more rapid growth in the nineties and noughties –
and have transformed faster – than China and Vietnam. The point to be added
here is that the Vietnamese system has generated lower inequality than the Chinese
system. Abrami et al. (2008) suggest that this is because of the difference in party
organization. Compared with China, Vietnam’s institutions empower a larger group
of insiders and place more constraints on party leadership, both through vertical
checks and semi-competitive elections. As a result, Vietnam spends a larger propor -
tion of its revenue on transfers and has been able to achieve more equalization
between provinces and individuals.
A comparison of Germany and the UK is also illuminating and directly relevant
for green transformations. In Chapter 6 of this book, Lockwood shows that
different designs of green industrial policy have different consequences. The key
insights are first, that some policy designs have more inclusive outcomes than others
and second, that the more inclusive design in Germany contributed in a decisive
way to the greater momentum of the transformation in that country. The
proposition emerging from this comparison is that transformation and inclusion
reinforce each other. To what extent and how needs further examination.
To conclude, there is no motorway into the green future. Embarking on the
fast track is not about the big push from the centre along a predetermined path.
It is about joining forces to dismantle the old and joining forces to achieve the
new. But joining forces with whom? Stephen Spratt in Chapter 10 of this book
distinguishes between the deep and light green. I would add those who are not
green at all in conviction but can nevertheless support the green cause through
their investments and expertise. Including them in our alliances provides much
needed hope that green transformations can be accelerated, and it provides an
analytical grip on where, when and why accelerations occur – or not.
Green transformation: is there a fast track? 183
and finance that are willing and keen to make green investments. The division
between high- and low-carbon investors runs right through industry and finance,
as stressed in Chapter 5 by Peter Newell. In some cases it runs right through
individual corporations in which some departments continue to be tied to the fossil
fuel sectors, while others are pioneering new low-carbon technologies. Investments
in the latter can be counted in billions of dollars, euros or pounds. The problem
is that investments in fossil fuel and related industries amount to trillions. Changing
this balance and achieving it rapidly is – in economic terms – the hard core of the
green transformation.
5
Such emphasis on working with business is also worrisome to those concerned
with the distributional consequences of the green transformation. History tells us
that big transformations can entail big increases in inequality. However, history
also tells us that some big transformations happened when the interests of business
and large sections of society coincided (Perez, 2002, 2013). So which is it? As always,
the answer is: it depends. The determinants are politically constructed.
A comparison of China and Vietnam is illuminating. As mentioned earlier, no
two economies have averaged more rapid growth in the nineties and noughties –
and have transformed faster – than China and Vietnam. The point to be added
here is that the Vietnamese system has generated lower inequality than the Chinese
system. Abrami et al. (2008) suggest that this is because of the difference in party
organization. Compared with China, Vietnam’s institutions empower a larger group
of insiders and place more constraints on party leadership, both through vertical
checks and semi-competitive elections. As a result, Vietnam spends a larger propor -
tion of its revenue on transfers and has been able to achieve more equalization
between provinces and individuals.
A comparison of Germany and the UK is also illuminating and directly relevant
for green transformations. In Chapter 6 of this book, Lockwood shows that
different designs of green industrial policy have different consequences. The key
insights are first, that some policy designs have more inclusive outcomes than others
and second, that the more inclusive design in Germany contributed in a decisive
way to the greater momentum of the transformation in that country. The
proposition emerging from this comparison is that transformation and inclusion
reinforce each other. To what extent and how needs further examination.
To conclude, there is no motorway into the green future. Embarking on the
fast track is not about the big push from the centre along a predetermined path.
It is about joining forces to dismantle the old and joining forces to achieve the
new. But joining forces with whom? Stephen Spratt in Chapter 10 of this book
distinguishes between the deep and light green. I would add those who are not
green at all in conviction but can nevertheless support the green cause through
their investments and expertise. Including them in our alliances provides much
needed hope that green transformations can be accelerated, and it provides an
analytical grip on where, when and why accelerations occur – or not.
Green transformation: is there a fast track? 183