Innovation holds key to green growth

Following a recent meeting between Asian Development Bank president Takehiko Nakao and Chinese Finance Minister Lou Jiwei , the bank has pledged its support for green and inclusive growth in China by providing US$4.21 billion in the next two years for urban development, water supply and sanitation, and transport projects aligned with the current 12th five-year plan.

The announcement comes as the "green growth" approach is receiving growing support at the expense of an alternative "green economy" paradigm, which is increasingly viewed as politically unacceptable, largely because it will probably mean lower standards of living for many in the developing world.

Green growth, by contrast, implies rising consumption of resources, food and energy - and thus higher standards of living. However, implicit in this approach is that developing countries must also introduce fundamental changes in patterns of consumption, technology and agriculture to ensure a sustainable future for their growing populations.

The importance of sustainability for economic growth was illustrated during the 2011 intense floods in Thailand, which disrupted the country's car industry, with knock-on effects for international supply chains. And in Asia, this year, there have been several examples of severe air pollution in cities spreading over hundreds of kilometres. This disrupted both economic activity and affected the health of millions, underlining the urgency of speeding up measures to protect the atmosphere.

Despite its popularity, green growth also poses extraordinary challenges, nowhere more so than in China. One example is choosing appropriate policies, which can be controversial. China, for instance, is promoting online shopping and local delivery centres "on every street corner". However, critics question whether the global shipping of consumer goods will not massively increase air pollution emissions.

It is clear that for more people to enjoy better standards of well-being, while promoting sustainability, enhanced innovation is needed to reduce consumption of physical materials and damage to sensitive ecologies and resources. Some small states and cities in the developing world are showing the way, with world-class, low-emission transport, low-energy housing, agriculture with low energy and minimal water use, and bio-energy.