Green Industrial Policy

Policy makers traditionally use industrial policy to enhance productivity, boost competitiveness, and promote economic growth.

This has been particularly important in situations where so-called “market-failures”, or imperfect market conditions, prevent the structural change required to allocate resources in a socially optimal manner.

In such cases, industrial policy can reinforce or counteract the allocative effects of markets towards a better societal outcome. By taking a more “entrepreneurial” approach towards industrial policy, governments can now also proactively channel resources towards economic sectors that foster restructuring, diversification, and technological innovation as vehicles for long-term economic growth.

Green Industrial Policy

Green industrial policy follows this same approach of state-driven structural change while also promoting broader social and environmental goals. By drawing from recent experiences and examples of green industrial policy, governments can operationalize the structural change necessary for economic growth, competitiveness, and new jobs.

At the same time, they can accelerate the shift of carbon-intensive economic and industrial sectors onto greener trajectories, advancing the transition towards a green, more resilient global economy while positioning themselves to tackle the environmental challenges lying ahead. Integrating green industrial policy approaches—and investments in green industries—into economic recovery packages can also help governments to operationalize a “green recovery” from the socio-economic impacts of COVID-19.

The "Trilogy"

Three reports on Green Industrial Policy

To inform policymakers, researchers, and practitioners on the concept of Green Industrial Policies, as well as the policy instruments that are available, UNEP has published a joint report with the German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE), entitled Green Industrial Policy: Concept, Policies, Country Experiences. This report, which was published within the framework of the Partnership for Action on Green Economy (PAGE), makes a case for accelerating structural change towards a Green Economy in developing and developed countries alike. In particular, the report:

Considers the conceptual foundations of Green Industrial Policies;
Demonstrates the economic and social co-benefits of a green transformation;
Analyses the key policies that support structural change and enhance productivity, while taking social and environmental concerns into account; and
Examines case studies from four countries at different levels of income and technological capacity.

The report forms part of a PAGE 'trilogy', which also comprises the Green Industrial Policy and Trade Tool-box and the Practitioner’s Guide to Strategic Industrial Policy.

Green Industrial Policy: Promoting Competitiveness and Structural Transformation

E-Learning Course and Teaching Materials

Building on this trilogy, UNEP, UNIDO, and UNITAR have developed a course on Green Industrial Policy: Promoting Competitiveness and Structural Transformation, which is now available on UNITAR's UN CC:e-Learn platform. The course aims to provide individual users—policymakers, or those otherwise interested or engaged in green industrial policymaking—with the knowledge and tools needed to foster green, structural change.

Meanwhile, a range of didactic instruments offered by the course—including short video lectures, curated readings, podcasts, factsheets, and assessments—can also be freely integrated into existing instructional activities, with this deliberate approach taken to support universities, training institutions, and other learning practitioner’s in advancing learning on green industrial policy at a high technical level.

Green Transformation of Industrial Parks

Regional Policy Assessment

UNEP has also, within the PAGE framework, recently published a report on the Green Transformation of Industrial Parks in China's Jiangsu Province, which provides a national and regional policy perspective on greening industrial parks within Jiangsu Province, China, as well as the progress made and challenges faced in advancing this transformation.