It isn't about gutting the current economy. It's about providing incentive structures for developing green technology.
Businesses don't develop new methods and technologies unless they have a reason to. Sometimes that reason is that an entrepreneur saw that the future would be different and had a product that would advance us towards that new paradigm.
Sometimes external factors, usually the government, create such incentives. For instance, look how much technology has been developed for military purposes. All of those were provided by the government.
And the government can provide non-war incentives. Like carbon credits. That proposal has been the green-technology version of micro-loans, a private-sector way to assist a public-sector problem. Make it make sense to find ways to lower emission so you can sell your credits to another company and businesses will find ways.
The GP said that China has become a leader in green technology. It has because the government realizes (all too well) that it can't keep down the same path forever. For many, standards of living have increased to the point where the cost of living can no longer be met by low-level factory jobs. Those jobs are moving to Vietnam and elsewhere. So China has focused on higher-level jobs.
In the same way, it's realized that its water pollution and other problems like that can only be ignored so long. That they will slap them in the face (like pollution during the Olympics almost did) if they don't start addressing it. The big question will be, as the GP suggested, whether we (US), or other countries that eventually provide green incentives, will be buying Chinese technology and hiring Chinese contractors to pursue such incentives or if we will be on the cutting edge enough to use our own resources. The longer we wait to "jump on the bandwagon," the more likely that scenario is.