On the Concept of Green Growth and the Role of Policy and Public Finance

This article aims to identify the current discussion on green growth, and focuses on the role of public finance in promoting a transition towards green growth. Terms such as “green economy” and “green growth” have become popular in international policy discourse as ways of describing recent efforts to improve the environmental performance of the economy. In this article, the definitions offered by several international institutions are compared and some commonalities are identified. The rationale behind green growth can be explained within the framework of the growth theory. Investment is indispensable to the practical promotion of green growth activities. Using Vietnam as a case study, we identify the critical factors for encouraging and enabling green investment. However, further theoretical background should be developed. In particular, pricing on environmental goods and services is a critical challenge for both the theoretical and the practical development of green growth. Further theoretical and practical study on green growth may improve the discussion on the growth theory as well as the development of policies that promote investment in green growth. To deepen the discussion, further case studies need to be collected and analyzed.