Is green rural transformation possible in developing countries?

Green transformation offers the promise of attaining increased productivity, higher incomes and wealth creation through structural change while simultaneously reducing overexploitation of natural resources and environmental degradation. This promise, however, does not materialize automatically. The key question addressed by this article is how a green transformation can be successful as an alternative to a more conventional growth-oriented development strategy. The analysis of policies and case study evidence shows that it must satisfy two important criteria. First, to be relevant to low and middle-income economies, green growth must be compatible with the most important development goal, which is poverty alleviation, and second, it must be accompanied by policies that address the key structural features of natural resource use and poverty in these countries. These criteria are especially relevant for green rural transformation in poor countries. Improving the efficiency and sustainability of primary production for economy-wide gains entails resource-enhancing technological change in primary production activities, strong forward and backward linkages between the resource-based primary production sector and the rest of the economy, and substantial knowledge spillovers in primary production and across resource-based activities. Controlling land use expansion by commercial primary product activities requires a combination of environmental regulations to control deforestation, regional policies that encourage agglomeration economies, and market-based incentives to reduce forest loss and degradation. Targeting research, extension, marketing services, and land tenure arrangements to improve the livelihoods of the rural poor in remote land-abundant regions also show promise. Facilitating greater dissemination and adoption of renewable energy and improved energy efficiency technologies in rural areas also depends on overcoming key obstacles, such as the lack of long-term financing schemes, poor private sector participation, inadequate institutional structure, lack of coordination between local and national governments, and the weak purchasing power of rural communities.