The concept of a green economy has recently become far more mainstream and is increasingly spoken of by heads of state and finance ministers the world over. This transition has no doubt been aided by the widespread disillusionment with the prevailing economic model and a sense of fatigue emanating from the many concurrent crises and market failures experienced during the last decade, in particular the financial and economic crisis of 2008.
During the last two decades huge investments have been made into property and fossil fuels with relatively little capital injected into renewable energy, energy efficiency, public transportation, sustainable agriculture, ecosystem and biodiversity protection and land and water conservation.
Most economic growth and development strategies encourage rapid accumulation of physical and financial capital at the expense of natural capital. By depleting the world’s stock of natural wealth – often irreversibly – this pattern of development and growth has had detrimental impacts on the wellbeing of current generations and presents tremendous risks and challenges for the future. The recent multiple crises are symptomatic of this pattern.
There is some hope out there, however, with increasing evidence of a new way forward and a new economic model which does not deliver material wealth only at the expense of growing environmental risks, ecological scarcities and social inequalities – a green economy.
The transition to this green economy has sound economic and social justification. There is now substantial evidence to demonstrate that the greening of economies neither inhibits wealth creation nor employment opportunities, on the contrary many green sectors provide significant opportunities for investment, growth and jobs. Nor is it true that a green economy is a luxury only wealthy countries can afford, or worse, a ruse to restrain development and perpetuate poverty in developing countries. In actual fact numerous examples of greening transitions can be found in the developing world which should be replicated elsewhere.
UNEP defines a green economy as one that results in “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities” (UNEP 2010). In its simplest expression, a green economy is low-carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment are driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.
These investments need to be catalysed and supported by targeted public expenditure, policy reforms and regulation changes. Development should maintain, enhance and, where necessary, rebuild natural capital as a critical economic asset and as a source of public benefits. The key aim for a transition to a green economy is to enable economic growth and investment while increasing environmental quality and social inclusiveness.
(Based on UNEP report: Towards a Green Economy)