Best Practice Report



Developing effective policy portfolios

Successful green growth policy portfolios recognize winners and losers of a transition to green growth and apply measures that ensure robustness, social acceptability and address competitiveness issues. The analysis shows that accompanying measures that address industrial competitiveness and employment loss impacts are particularly important.

It is important to design policies based on an understanding of resource limits and environmental threats and to achieve development paths that protect and apply natural capital to accelerate and not retard economic and social development. This is explored in the sections on sustainable cities, low-carbon energy, and agriculture and poverty reduction.

Balancing trade-offs between policy objectives such as equity and efficiency is not straightforward. Furthermore, policies in one sector may have unintended consequences on resource use and effectiveness of policy tools in another sector. In Mexico, for example it was found that one of the best ways to address overuse of water was to reduce the subsidy on electricity subsidy for irrigation (OECD, 2013d). This example points to the significance of ensuring consistency and coherence of instruments within and across priority green growth sectors, and with existing policies at national and sub-national levels.

Experience also shows that it is critical to couple consistent and coherent policy instruments across green growth sectors and at national and sub-national levels with strong government and enforcement. Policy portfolios that effectively integrate short and long-term policy objectives across different sectors and governance levels are not created as a one-off design but develop over decades. Green growth policies, therefore, require strong institutions and systems to ensure accountability, including participatory and iterative planning and monitoring processes. Successful policy portfolios are designed in accordance with institutional and governance contexts and particularly in developing countries may include elements that strengthen institutional and governance capacities to manage, enforce, and monitor and evaluate policies. More detail on the effective design of iterative planning processes can be found in Chapter 1: Planning and co-ordination.