Governments in countries across the world increasingly adopt the “green growth” discourse to underline their ambition for the greening of their economies. The central tenet of this narrative is the economic opportunities rather than challenges arising from the pursuit of environmental sustainability. Our paper synthesises insights from 113 recent scientific articles, dealing with both environmental issues and economic growth, as well as innovation. Our ambition is exploratory in attempting to take stock of heterogeneous contributions across the spectrum of social science. The articles have been reviewed with a focus on six themes, derived from current discussions in economic geography and transition studies: skills, technology, physical resources, markets, institutions and policies. Four major implications emerge from the review. First, green growth requires competences that allow for handling complex, non-routine situations – in both the private and the public sector. Second, technological progress should be directed towards greener technologies, to avoid investments funds being channelled to brown technologies for short-term returns. Third, our knowledge of the opportunities for achieving green growth must base upon a joint assessment of market failures, structural system failures and transformational system failures. Finally, greater attention should be devoted to the geography of green growth processes at different scales.

Introduction

The purpose of this paper is to synthesise insights on green growth with an explicit account of drivers and barriers of innovation and the geographic context of green growth. Governments in countries across the world increasingly adopt the “green growth” discourse to underline and promote their ambition for the greening of their economies. The central tenet of this narrative is the economic opportunities rather than challenges arising from the pursuit of environmental sustainability. While definitions of green growth abound, we here follow the often cited OECD (2011, p. 9) definition of green growth as “fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies”. Consequently, green growth is suggested to be a key element in achieving sustainable development: on the one hand, protecting the environment, while on the other hand allowing economic growth. This arguably makes the concept more attractive to politicians and other decision makers than traditional environmental protection approaches, which were often assumed to lead to economic slowdown. Especially in the last ten years, that is since the onset of the Financial Crisis, the need of a policy-driven stimulation of demand has become stringent. However, the increase in unemployment has left little room for unleashing private demand, leading authorities to look for unexpressed demand in areas of the economy where the market would not automatically function. The well-being deriving from a preserved environment cannot be easily attained through market transactions, also due to “tragedy of the commons” features of environmental goods, i.e. the discrepancy between individual and common interests. Consequently, environmental sustainability constitutes an area where unsatisfied demand can be looked for.