Green economy: A pathway towards sustainable development

 

                      Green economy: A pathway towards sustainable development

The recent traction for a green economy concept has no doubt been emerged by widespread disillusionment with our prevailing economic systems, a sense of fatigue arising out from the many concurrent crises and market failures experienced during the very first decade of the new millennium, especially the financial and economic crisis of 2008. But at the same time, the world has seen increasing evidence of a way forward, a new economic paradigm – one in which material wealth is not delivered at the expense of growing environmental risks, ecological scarcities and social disparities.

In response to the growing climate crisis, a wave of green technologies, expertise and energy sources have emerged. As a result, it has now been recognised the emergence of a green economy, one that harnesses human invention to tackle existential issues for the planet, and provide the engine for the economic growth and job creation of tomorrow.

The importance of decarbonisation has been recognised for decades, and much progress has been made. But the green economy is about far more than that. This definition encompasses all the primary and secondary effects of the global commitments made at COP21(21st Conference of Parties) and followed up at COP26 in 2021 to create a much broader and deeper understanding of the Green Economy opportunity.

A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims at sustainable development without degrading the environment. The green economy is an economic model which not only reduces the impact of production and consumption on the environment, but creates a virtuous relationship between economic growth and environmental wellbeing. It’s an economy that meets specific environmental objectives and, in the process, creates additional prosperity and social benefits.

UNEP (United Nation Environment Programme) defines a green economy as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. A green economy is indeed about far more than emission reduction. It also builds our capacity to adapt to climate change, develop circular systems and reduce waste and material consumption. It leads to greater reuse of materials and not just protection but promotion of greater biodiversity. 

But the green economy can and should provide economic and social benefits as well. A green economy is also meant to foster greater prosperity, boost local growth and innovation and foster competitiveness, as well as providing a more just and inclusive society.

The green economy is not a small niche corner of the market, focused on the decarbonisation of polluting industries. It is a vast and expansive ecosystem of activities that permeates all aspects of the economy, and impacts all aspects of the environment.

The research team of Oxford Economists have explored the transition to an environmentally sustainable world by 2050, not only in terms of the costs of climate-change mitigation measures, but from the opportunities that greening the global economy might create. They identified three main types of opportunity:

Ø  First, new competitive opportunities that emerge in the process of industry disruption – as certain businesses move quickly to adopt green measures, their operators can benefit from first mover advantages, patenting new discoveries and establishing dominant market positions.

Ø  Second, new green markets will emerge as demand for renewable energies and green technologies create new markets for green goods and services.

Ø  Third, productivity gains will be made as regions adversely affected by climate change and unsustainable use of natural resources leading to a global economy built on a more sustainable footing.

Oxford Economists projected that these new green activities will create an opportunity worth $10.3 trillion to 2050 Global GDP, or 5.2% of global GDP that year. The lion’s share of the opportunity is in the manufacturing of electric vehicles and the generation of renewable electricity, plus their vast supply chains.

It is believed that the environmental discourse has so far been overly dominated by a focus on risk avoidance, compliance, and costs. Yet, little emphasis has been given to the upside of the green action – the value added to the economy, the jobs new green activities create, the power of sustainable action to drive innovation, new expertise, stronger competitiveness. Given the market fearful of investing in stranded assets in the twilight years of the fossil fuel era, it is expected  that the green economy, powered by renewables, will now start to evolve and grow.

Fundamentally the green growth economy must be built on a vision of stability and inclusivity – these are the rational foundations and can be achieved through incentives, regulation and good governance. Environmental action, as my colleagues working on those priorities will tell you, simply have to work for everyone. 

So many of the new green services, technologies and expertise, are already developing rapidly. The green economy is no longer about relying on renewable energy to simply prolong the productive practices of 30 years ago. The green economy is no longer defined by the avoidance of risks and mitigation of threats. It’s about a once in a century opportunity to build a better future for all.

A green economy is an economy that aims at reducing environmental risks and ecological scarcities, and that aims for sustainable development without degrading the environment1. Green economics is a related field that studies the harmonious interaction between humans and nature and attempts to meet the needs of both simultaneously. Green economists may study topics such as alternative energy sources, sustainable agriculture, wildlife protection, or environmental policies.

In a green economy, growth in income and employment should be 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. The development path should maintain, enhance and, where necessary, rebuild natural capital as a critical economic asset and as a source of public benefits, especially for poor people whose livelihoods and security depend on nature.

Mounting evidence also suggests that transitioning to a green economy has sound economic and social justification. There is a strong case emerging for a redoubling of efforts by both governments as well as the private sector to engage in such an economic transformation. For governments, this would include levelling the playing field for greener products by phasing out antiquated subsidies, reforming policies and providing new incentives, strengthening market infrastructure and market-based mechanisms, redirecting public investment, and greening public procurement. For the private sector, this would involve understanding and sizing the true opportunity represented by green economy transitions across a number of key sectors, and responding to policy reforms and price signals through higher levels of financing and investment.