Bright Spots of Green Growth are Everywhere
Service sector growth—more than rising incomes—accompanied increases in forest area

August 1, 2022. Most nations claim to want both a strong economy and a clean environment. Is it possible to have both?

As it turns out, exceptional levels of economic growth and forest growth have gone hand-in-hand in dozens of places around the world. In my new paper in Global Environmental Change with Oyut Amarjargal, we identify the top 100 “bright spots of green growth” globally, using satellite data on nighttime lights and forest area from 1990-2015.

To be clear, regions of exceptional economic growth and environmental improvement are the exception rather than the rule. But knowing where and why green growth occurred is still important, because…

  • Knowing that economic growth and environmental improvement can be compatible should increase public support for pro-environmental policies.

  • Knowing where green growth occurred gives these places positive publicity to attract businesses, investment, citizens, or visitors.

  • Knowing why green growth occurred can help other regions get there too.

 

With this why in mind, it turned out that what most “bright spots of green growth” had in common was an increasing share of people employed in the service sector—more than rising incomes, plantation forestry, or protected areas. This suggests that transitioning economies from agriculture and industry to services may lead to not just economic growth, but also environmental improvement.

Finding bright spots

We started our analysis by identifying geographic grid cells that were exceptional in both economic growth (i.e., they were above the 95th percentile in their world region in nighttime light gain) and one aspect of environmental improvement (i.e., they were above the 95th percentile in their region in forest area gain). We then grouped these cells into clusters, and called the clusters with the most exceptional cells “bright spots.”

Because different methodological choices led to different results, we used two distinct approaches, each of which used different nighttime light data; forest area data; time period; and clustering technique. With each approach, we identified the top five bright spots in each of ten world regions, for a total of 100 global bright spots of green growth (see maps below).

Some of the bright spots we identified, like Costa Rica and Morocco, already cultivate a green image. Others, like Texas and Oklahoma, don’t. One benefit of a systematic analysis is that it is immune to pre-conceived notions of where green growth is happening.  A surprising finding was the presence of many bright spots at the peripheries of big cities, where urban expansion onto agricultural land was accompanied by an increase in trees.

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Explaining green growth

We compared the attributes of bright spots with four non-mutually exclusive theories of green growth—the Environmental Kuznets Curve (EKC) theory, eco-industry, sectoral shift, and public policy. The theory that fits best is sectoral shift (see figure below).          

The Environmental Kuznets Curve (EKC) theory holds that rising national income is initially associated with environmental deterioration, but that environmental quality improves after some per-capita income threshold is surpassed. However, most of the bright spots we identified were poorer, not richer, than the regional average.

Economic growth may be driven by industries that actively improve the environment, or at least are compatible with environmental improvement (termed “eco-industries”). Plantation forestry is one such industry, but fewer than half of bright spots had plantation forestry above the regional average.

Pro-environmental public policies have been the most studied factor contributing to place-specific green growth. Protected areas are one of the most common forest-protection policies, but most bright spots had less, not more, protected land than their regional average.

Finally, growth in relatively environmentally benign economic sectors may attract labor and investment away from more intensive polluting or extractive industries, in a process termed “tertiarization.” And indeed, more than two-thirds of the bright spots had service sector employment that increased faster than the regional average.

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The service sector as a path to environmental improvement

Of the four theories we tested, service sector growth was by far the most broadly associated with exceptional growth in nighttime lights and forest area. Our paper puts forward the hypothesis that service sector growth leads to environmental improvement. But we leave for future work to test whether this relationship is causal or merely correlational, and to better understand why it occurs.

There are two ways service-sector growth might lead to increased forest area. First, the service sector growth could be attracting labor and investment away from the agricultural sector, taking pressure off of land and allowing natural habitats to recover. Second, a shift of employment into services could be accompanied by a shift toward pro-environmental preferences. Workers in the service sector may be more inclined to vote for more forests as a matter of public policy, or to put their money toward more-forested neighborhoods and recreation areas.

Strengths and limitations of our study

Our analysis is the first empirical study of the relationship between economic growth and environmental improvement that is both global and spatial. Furthermore, unlike previous attempts to identify and highlight specific regions of green growth, our analysis is systematic—a previous study lamented that a “well-known weakness” of analyses of sustainability transitions is that “they celebrate the particular and focus on highly idiosyncratic case stories of specific places.”

Nevertheless, our study has some caveats and limitations. For one thing, forests are just one aspect of environmental quality. We did not study, for example, changes in greenhouse gas emissions or water quality. We also did not explore the extent to which the processes responsible for the emergence of local bright spots of green growth can be replicated or scaled up.

Our paper offers 100 positive examples that can be emulated by other places seeking both economic growth and environmental improvement. And it hypothesizes a path toward environmental improvement—service-sector employment—that is compatible with the desires of many people in many places.