Structural Reform and a Green Recovery from Economic Shocks

The APEC Economic Policy Report 2022 on “Structural Reform and a Green Recovery from Economic Shocks” prepared by a Sapere team led by Veronica Jacobsen, seeks to begin a discussion among APEC members about how structural reform policies, which are aimed at improving the conditions for growth, could also be used as an effective response to the COVID-19 shock and provide for the greening of APEC economies. These policies should continue to be useful in the longer term as APEC members seek to formulate responses to future economic shocks and environmental challenges including climate change, waste and pollution (air, water and soil), deforestation, public health issues, natural resource depletion and uncertain energy security. In the vital area of climate change, the region as a whole is responsible for massive emissions, even as many APEC members, particularly developing members, are among the most exposed to the effects of climate change.

The report identifies pricing as an important component of green reforms, but notes that it alone is insufficient to drive rapid and transformative change in the economy. It suggests a framework for the implementation of green structural reforms, which includes three types of measures: (1) market-based instruments that better reflect the true costs of environmental externalities and public goods, (2) well-designed regulatory systems that improve the functioning of markets and create spaces for innovation and the emergence of novel industries aligned with better with environmental objectives, and (3) complementary enabling instruments on innovation, public procurement, investments and skills, among others. This combination of measures promotes a higher rate of success in achieving a green transformation.

Green recovery is an urgent issue, not just an option: APEC Report

2022 APEC Economic Policy Report