On the Economic Foundations of Green Growth Discourses : The Case of Climate Change Mitigation and Macroeconomic Dynamics in Economic Modeling

‘Greening' economic growth discourses are increasingly replacing the catchword of ‘sustainable development' within national and international policy circles. The core of the argument is that the growth of modern economies may be sustained or even augmented, while policy intervention simultaneously ensures sustained environmental stewardship and improved social outcomes. But how well are these claims scientifically grounded or supported by economic theory, evidence, and applied modeling? We address this question with reference to the economic modeling of climate mitigation policies. We argue that orthodox economic equilibrium and optimization thinking offers, in effect, little support to and insufficiently meaningful interpretations of green growth claims. There are several exciting strands of new economic thinking that are emerging, offering a more robust and empirically validated understanding of the potential for green growth paths. Nonoptimizing simulation models are arguably in a better position to capture socioeconomic system dynamics and the role of macroeconomic policies for sustainability governance. An important caveat, nevertheless, is that when judged against the evidence, greening growth remains to some extent an oxymoron as to date there has been little evidence of substantial decoupling of GDP from carbon-intensive energy use on a wide scale. Moreover, although the rhetoric on ‘greening the economy' actively supports the need for policy intervention, the macroeconomic reasoning behind this, remains ambiguous. We finally suggest that, although focusing on the dichotomy between growth and the environment is clearly important, the quality of growth and beyond growth dimensions are at least as important for delivering improved macroeconomic governance for sustainability