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This chapter documents and explains the wholesale expansion of policy financing under Lee Myung-bak. The expansion was part of Lee's decision to extend and intensify the balanced growth developmental strategy initiated by his predecessor, albeit under a new banner: “Green Growth.” The Lee administration's internationally admired Green Growth initiative necessitated the aggressive expansion of policy lending by the nation's policy finance institutions (PFIs). By the end of Lee's reign, state-owned PFIs would account for fully one-quarter of all loans in the Korean financial system. Between 2008 and 2012, large volumes of these loans were channeled to local firms in strategic industries, typically on a performance-linked basis. The chapter concludes by considering the future of such financial activism under current President Park Geun-hye.

By introducing natural capital into the production function, the greening of growth involves a rebalancing of production factors and a redistribution of income. These distributional mechanisms have been relatively little studied by environmental economists, whereas in practice they are one of the main difficulties of the transition to a green economy. The paradox is that pollution is a factor of production that produces its own limitations on the very conditions for the reproduction of production factors. It is this retroactive effect that we need to examine. Simply noting the decline in production is not enough for implementing a policy: we need to determine who will actually suffer the consequences and what should be done to improve the situation.

Chapter 8 focuses on the United States. Although significant national green policy legislation is not at the national level, local policy-industry feedback spirals have occurred in California and Colorado, creating political viability for green policy experimentation. In California, we trace a feedback spiral from early policy moves to reduce particulate pollution; through AB32, a major package of emissions reduction legislation; to the defeat of Proposition 23’s challenge. California suggests that green spirals sometimes emerge quite slowly and unintentionally from tangentially related early moves. We note that venture capital has recently been critical but may not be an effective long-term model. In Colorado, we examine Amendment 37, a green policy package that assembled a surprisingly broad support coalition. Colorado suggests that green spirals can happen quite swiftly if supporters can find ways to activate latent partnerships between different interest groups that can derive tangible benefits from initial regulation.

The concept of environmental justice came relatively recently to the Republic of Korea (henceforth, South Korea), developing out of mainstream environmentalism, which began in the 1980s. Unlike environmentalism in Europe and the US, which initially focused on the preservation of ecosystems, however, South Korea’s early environmentalism was concerned with the impact of pollution on human health. This initial recognition of the importance of the environment for humans made it easy to begin to think about environmental justice issues. In 1999, a landmark moment for environmental justice in South Korea occurred with the first Environmental Justice Forum, organised by the Citizens Movement for Environmental Justice, now one of the largest and fastest-growing environmental organisations in the country. The Forum reported that rural regions frequently experienced environmental injustice in the form of a lack of sanitation and improved drinking water, as well as the increased siting of contaminating facilities in or near their communities. This chapter outlines the current substantive, distributional and procedural aspects of environmental justice in South Korea.

The first of a set of cases, this examination of the history of Danish energy policy shows that a classic green spiral effect has led over time to the decoupling of emissions and economic growth. This spiral begins with Denmark’s response to the oil crisis of the 1970s, which led to energy security policies that shifted commercial and industrial infrastructure toward high energy efficiency, developed a thriving wind energy industry, and encouraged a broad grass-roots constituency that benefited from wind generation. These shifts in interest fed back into policymaking. Ultimately, policy-industry feedback over time has led to a paradigmatic shift in Denmark’s energy industry and policy. Denmark’s energy industry now sees its own interests as invested in, not threatened by, green policy. For example, DONG Energy is pulling back from investment in coal power and expects to derive future growth from low-carbon investments and green regulation.

Problems in housing markets trigged the crisis of 2007-08. Housing policies which treated housing in relation to macro-economic trends and finance failed in many countries. Housing has been used as a tool for labour mobility, to shift unemployed people to areas of labour demand, and to generate higher levels of home ownership to stabilize society. A reassessment of the assumptions embedded in these objectives is overdue. Needed are policies for housing which maintain and even increase the positive agglomeration effects of cities and metropolitan regions. Making the transition calls for a political strategy based on green growth, social change and ageing, and risk reduction.