Turkey Green Growth Policy Paper: Towards a Greener Economy

3. Towards a Working Definition of Green Growth in Turkey

As discussed in the introductory Chapter of this report, green growth is a relatively new concept, and several definitions have been put forward by various organizations¹⁷. However one of the early and enduring definitions by OECD (2011) (“Green growth means fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies. To do this, it must catalyze investment and innovation, which will underpin sustained growth and give rise to new economic opportunities”) emphasizes the importance of natural assets in economic production and well-being, and therefore the need to use environmental assets efficiently. The World Bank further emphasizes the fact that ‘inclusive’ Green growth policies should aim to “foster sustainable development by reconciling the need for environmental sustainability for economic growth and social improvement” which emphasizes the social and distributional aspects of sustainable development (e.g. poverty alleviation and welfare).

While the overall framework which ties green growth to sustainable development outcomes along its three dimensions (economic, environmental, and social) is consistent with Turkey’s pronouncements and strategic documents, from the review undertaken and the views of decision makers, the country is looking to achieve faster output growth, a healthier environment, and more jobs. These ambitious goals imply a green-growth focus underpinned by the following elements:

1. 
   Investments and resources are allocated by taking into account the full social costs and benefits of environmental resources (both resource use and sinks) – (correcting policy and market failures and increasing social welfare). This means that Turkey would need to accelerate the pace of implementation of the main EU Directives (for water, waste, and air pollution) and introduce economic and fiscal instruments that would prevent the inefficient use of water, energy, and land resources, internalize the social cost of pollution, and recover the cost of consumption of environmental services such as water, wastewater and solid waste.
   
2. 
   Faster growth is accompanied by more effective environmental protection, and efficient use of natural resources, using different policy instruments - (to produce higher social welfare). Turkey is aiming to continue to maintain high economic growth (8%-9%), which is important for employment and poverty reduction. However, unless this growth is accompanied by an adequate increase in environmental protection, it would result in increased use of environmental resources, which in turn would lead to lower social welfare.
   
3. 
   Employment and Innovation policy targets green investments by using revenues from taxing pollution and inefficient use of natural resources to reduce other distorting taxes (including displacing other tax revenues that would have been needed otherwise for debt service payments).
   
4. 
   Accelerated economic growth in key sectors should be socially inclusive and enhance the welfare of lower income (or other vulnerable) groups. The distributional impacts of green growth should be oriented such that more vulnerable groups (for example, those that rely on the sustainable management of natural resources or that are negatively affected by volatile prices) are not made worse off from a welfare standpoint and whose livelihoods are enhanced and made more secure through policy.
   

A working definition of green growth for Turkey would be: Green growth for Turkey means the implementation of environmental policies in strategic sectors, aimed at achieving Turkish and EU standards (as reflected in the main EU Environmental Directives), with special emphasis given to resource efficiency, clean production and consumption, and reduced emissions intensity, together with policies that foster employment and innovation in environment-related sectors, and are socially inclusive and welfare improving. A key assumption is that these policies will accompany ongoing growth-enhancing economic policies that increase the level of investment and its efficiency, achieve stronger employment generation and higher labor productivity, manage capital inflows, and other measures to enhance competitiveness and mitigate risks.¹⁸ This Policy Paper provides an important building block of green growth, and an opportunity to better integrate environmental sustainability considerations into the mainstream economic growth and competitiveness agenda of Turkey.

Box 3.1 Example definitions of Green Growth
“Green Growth aims at making job creation and GDP growth compatible with or driven by actions to protect the environment.”
“Green Growth can be seen as a way to pursue economic growth and development, while preventing environmental degradation, biodiversity loss, and unsustainable natural resource use.”
“Green growth is about maximizing economic growth and development while avoiding unsustainable pressure on the quality and quantity of natural assets. It is also about harnessing the growth potential that arises from transiting towards a green economy.”
“Green Growth is the process of reconfiguring businesses and infrastructure to deliver better returns on natural, human and economic capital investments, while at the same time reducing greenhouse gas emissions, extracting and using less natural resource, creating less waste, and reducing social disparities.”
“Green Growth goes hand-in-hand with ecological sustainability. In practical terms, in a green economy investing in ecological resources and services, such as a stable climate, bio-diversity and clean air and water, there can be an opportunity for profit, employment and growth rather than cost and burden on the economy.”
“Green growth is the means by which the current economy can make the transition to a sustainable economy while reducing pollution and greenhouse gas emissions, minimizing waste and inefficient use of natural resources, maintaining biodiversity, and strengthening energy security.”
“Green Growth is a strategy for promoting economic growth with the goal of adding an ecological quality to existing economic processes and creating additional jobs and income opportunities with a minimal environmental burden. This primarily means seeking a relative or absolute decoupling of economic growth and environmental degradation, depending on the local context. It is also essential to take into account the risks involved with future changes in the environment, e.g. by adapting to climate change and international obligations within the framework of an environmentally qualitative policy.”
Source: Fay, M. (2011) Green Growth Knowledge Platform, presentation made to World Bank’s Europe and Central Asia Regional Management Team (October).