The green economy is defined as an economy that
results in reducing environmental risks and ecological scarcities, and that
aims for sustainable development without degrading
the environment. It is closely related with ecological economics, but has a more
politically applied focus.
A feature distinguishing it from prior economic regimes is
the direct valuation of natural capital and ecological services as having economic value (see
The Economics of
Ecosystems and Biodiversity and Bank of Natural Capital) and a full cost accounting regime in which costs
externalized onto society via ecosystems are reliably traced back to, and
accounted for as liabilities of, the entity that does the harm or neglects an
asset.
Green Sticker and ecolabel
practices have emerged as consumer facing measurements of friendliness to the
environment and sustainable development. Many industries are starting to adopt
these standards as a viable way to promote their greening practices in a globalizing
economy. Green economy and the related field of ecological economics share many
of their perspectives with feminist economics, including the focus on
sustainability, nature, justice and care values.[
"Green" economists and economics
"Green economics" is loosely defined as any theory
of economics by which an economy is considered to be component of the ecosystem
in which it resides (after Lynn Margulis). A holistic approach to the subject is
typical, such that economic ideas are commingled with any number of other
subjects, depending on the particular theorist. Proponents of feminism, postmodernism,
the ecology movement, peace
movement, Green politics, green
anarchism and anti-globalization movement have used the term to
describe very different ideas, all external to some equally ill-defined
"mainstream" economics.
The use of the term is further ambiguated by the political
distinction of Green parties which are formally organized and claim
the capital-G "Green" term as a unique and distinguishing mark. It is
thus preferable to refer to a loose school of "'green economists"'
who generally advocate shifts towards a green economy, biomimicry
and a fuller accounting for biodiversity. (see The Economics of
Ecosystems and Biodiversity especially for current authoritative
international work towards these goals and Bank of Natural Capital for a
layperson's presentation of these.)
Some economists view green economics as a branch or subfield
of more established schools. For instance, it is regarded as classical economics where the traditional land
is generalized to natural capital and has some attributes in common
with labor and physical capital (since natural capital assets like rivers
directly substitute for man-made ones such as canals). Or, it is
viewed as Marxist economics with nature represented as a
form of Lumpenproletariat, an exploited base of non-human
workers providing surplus value to the human economy, or as a branch of
neoclassical economics in which the price
of life for developing vs. developed nations is held steady at a ratio
reflecting a balance of power and that of non-human life is very low.
An increasing commitment by the UNEP (and national
governments such as the UK) to the ideas of natural
capital and full cost accounting under the banner 'green
economy' could blur distinctions between the schools and redefine them all as
variations of "green economics". As of 2010 the Bretton Woods institutions (notably the World Bank
and International Monetary Fund (via its
"Green Fund" initiative) responsible for global monetary
policy have stated a clear intention to move towards biodiversity
valuation and a more official and universal biodiversity finance. Taking these into
account targeting not less but radically zero emission and waste is what is
promoted by the Zero Emissions Research and
Initiatives.
Definition
Karl Burkart defines a green economy as based on six main
sectors:
- Renewable energy
- Green buildings
- Sustainable transport
- Water management
- Waste management
- Land management
The International Chamber of Commerce
(ICC) representing global business defines green economy as “an economy in
which economic growth and environmental responsibility work together in a
mutually reinforcing fashion while supporting progress on social development”.
In 2012, the ICC published the Green Economy Roadmap,
containing contributions from experts from around the globe brought together in
a two-year consultation process. The Roadmap represents a comprehensive and
multidisciplinary effort to clarify and frame the concept of “green economy”.
It highlights the essential role of business in bringing solutions to common
global challenges. It sets out the following 10 conditions which relate to
business/intra-industry and collaborative action for a transition towards a
green economy:
- Open and competitive markets
- Metrics, accounting, and reporting
- Finance and investment
- Awareness
- Life cycle approach
- Resource efficiency and decoupling
- Employment
- Education and skills
- Governance and partnership
- Integrated policy and decision-making
Measurement
The Global Green Economy Index™ (GGEI), measures selected
national economies as judged by expert practitioners and third party indicators
and datasets. The 2014 GGEI will measure four primary dimensions defining a
national green economy as follows:
- Leadership and the extent to which national leaders are champions for green issues and addressing climate change on the local and international stage
- Sectors and domestic policies supporting the greening of buildings, transportation, tourism and energy sectors in home market
- Markets and investment and the perceived and actual opportunities for cleantech investment and the climate for innovation and commercialization of green products and services in each country
- Environment and natural capital and the extent to which countries protect their environmental assets and use natural capital efficiently
Other issues
Green economy includes green
energy generation based on renewable
energy to substitute for fossil fuels and energy conservation for efficient energy use.
Because the market
failure related to environmental and climate protection as a result of external
costs, high future commercial rates and associated high initial costs for
research, development, and marketing of green
energy sources and green products prevents firms from being voluntarily
interested in reducing environment-unfriendly activities (Reinhardt, 1999; King
and Lenox, 2002; Wagner, 203; Wagner, et al., 2005), the green economy may need
government subsidies as market incentives to motivate firms to invest and
produce green products and services. The German Renewable Energy Act,
legislations of many other member states of the European Union
and the American Recovery and
Reinvestment Act of 2009, all provide such market incentives. However,
other writers, including Amory Lovins, Hunter
Lovins, and Paul Hawken, authors of Natural
Capitalism: Creating the Next Industrial Revolution, and Jay Conrad Levinson and Shel
Horowitz, authors of Guerrilla Marketing Goes Green, argue that
green strategies can be highly profitable for corporations that understand the
business case for sustainability and can market green products and services
beyond the traditional green consumer.
Criticisms
A number of organisations and individuals have criticised
aspects of the 'Green Economy', particularly the mainstream conceptions of it
based on using price mechanisms to
protect nature, arguing that this will extend corporate control into new
areas from forestry to water. The research organisation ETC Group argues that
the corporate emphasis on bio-economy "will spur even greater convergence
of corporate power and unleash the most massive resource grab in more than 500
years." Venezuelan professor Edgardo Lander says that the UNEP's report, Towards
a Green Economy, while well-intentioned "ignores the fact that the
capacity of existing political systems to establish regulations and
restrictions to the free operation of the markets – even when a large majority
of the population call for them – is seriously limited by the political and
financial power of the corporations." Ulrich Hoffmann, in a paper for UNCTAD also says
that the focus on Green Economy and "green growth" in particular,
"based on an evolutionary (and often reductionist) approach will not be
sufficient to cope with the complexities of climate change" and "may
rather give much false hope and excuses to do nothing really fundamental that
can bring about a U-turn of global greenhouse gas emissions. Clive Spash, an
ecological economist, has criticised the use of economic growth to address
environmental losses, and argued that the Green Economy, as advocated by the
UN, is not a new approach at all and is actually a diversion from the real
drivers of environmental crisis. He has also criticised the UN's project on the
economics of ecosystems and biodiversity (TEEB), and the basis for valuing
ecosystems services in monetary terms.
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