2. Green Economy – EYE Proyect. Platform

Objectives

To enable readers to clearly understand the green economy.
To enable them to learn the difference between the concepts of green growth, green economy and sustainable development.
To provide information about different principles of green economy.
To be able to develop a solution proposal for possible constraints in terms of achieving the green economy goal.

Content

The Evolution of the Green Economy

«The combined forces of global economic recession, human-induced environmental change, and stark social inequalities have led to international calls for a radical transformation of current development practices and a transition to a «green economy» in the aftermath of the global financial crisis of 2008–9. (Davies 2013, 1285). However, Pearce et al (1989)’s Blueprint for a Green Economy for the UK Department of the Environment was the first to mention the concept.

The green economy’s conceptual foundation acknowledges that the separation of economic development and environmental policy is false (Barbier 2013). «Green new deals» are regarded as the first spark necessary for an economy to embark on the green transition route when the green economy is viewed in a hierarchical structure. The United States, China, and South Korea labelled stimulus packages ‘Green New Deals’ in the immediate aftermath of the crisis (Zysman et al. 2012); the rationale was that green fiscal stimulus provided a boost to the economy while also laying the groundwork for more sustainable and stable growth in the future (Bowen et al. 2009). Green growth has been promoted as a more appealing alternative to «brown» growth when it comes to economic recovery (van der Ploeg and Withagen 2013). Temporary interventions, despite being «one-off» policies, can offer long-term growth if the inputs’ sustainability is ensured (Acemoglu et al., 2012).

The green economy became a broader policy framework from 2009. The United Nations Conference on Sustainable Development in 2012 featured a global spotlight on the green economy. There was a lot of optimism in the structuring that Rio+20 would make enough headway to get the notion the political and financial support it needed, or at the very least gain a more prominent place in worldwide policy debates (Damon and Sterner 2012; Martinelli and Midttun 2012; Sierra 2012; Zysman et al. 2012).

Source: Ten Brink et al. (2012)

The important point here is that the green economy should exist together with other sustainable development concepts. The Ecosystem and Biodiversity Economics (TEEB) green economy report defines a clearer hierarchy, represented schematically in Figure 1 (Ten Brink et al. 2012).

Green Economy Definitions

Despite there being many definitions on the Green Economy, the most accepted definition is made by OECD (2011) as follows: Green Economy (Green Growth) means fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies. To do this, it must catalyse investment and innovation which will underpin sustained growth and give rise to new economic opportunities. Borel-Saladin and Turok (2013) look at the UNEP, OECD, and World Bank definitions of the Green Economy. They come to the conclusion that the green economy provides the instruments required to modify economic activity in order to create healthier environments and more inclusive economies. Green economy definitions have been criticized for being too close to existing systems, missing potential growth limits, oversimplification, misplaced optimism, and model flaws. It can be also defined as a “low-carbon, resource-efficient, and socially inclusive economy that attempts to reduce environmental hazards, manage ecological scarcities, and achieve sustainable development while minimizing environmental harm. Essentially, a green economy is motivated by a goal to increase employment and income through investments that ensure that infrastructure and assets allow for lower carbon emissions and pollution, increased energy and resource efficiency, and biodiversity conservation”.

Principles of Green Economy

According to the Green Economy Coalition (2018), there are 9 principles of green economy as follows:

1. The principle of Sustainability. One strategy to accomplish sustainability is to have a green, just, and inclusive economy.

It is one of the tools for ensuring long-term development, not a replacement.
It recognizes its reliance on a healthy environment and tries to improve everyone’s well-being.
It considers all three dimensions (environmental, social, and economic) and creates policy combinations that integrate and optimize all three.

2. The principle of Justice. Equality is promoted via a green, fair, and inclusive economy.

It promotes gender equality inside and between countries, as well as between generations.
Respects human rights and diversity of culture
It encourages gender equality and values each person’s knowledge, skills, experience, and participation.
Indigenous peoples’ rights to their lands, territories, and resources are respected.

3. The principle of Dignity is the third principle. A really prosperous and well-being economy is one that is green, fair, and inclusive.

Helps to alleviate poverty.
Ensures that all countries have high levels of human development.
It ensures food security as well as universal access to key services such as basic health, education, sanitation, water, and energy.
It produces new, respectable green jobs and careers while transforming traditional jobs by increasing capacity and skills. It also respects employee rights and actively develops new, decent green jobs and careers.
It ensures a smooth transition.
Accepts free work as a contribution.
Women’s self-empowerment and education are promoted.
If supplied in a sustainable manner, it supports the right to development.

4. The Principle of a Healthy Planet. A green, just, and inclusive economy preserves biodiversity, invests in natural systems, and recovers the degraded.

Recognizes the importance of productivity to ecosystems and biodiversity.
It does not violate, disturb, or surpass ecological boundaries and is devoted to working within them, including pollution reduction, ecosystem protection, biodiversity integrity, and other natural resources such as air, water, soil, and bio-geochemical cycles.
Before allocating resources between conflicting users, it ensures that environmental integrity is preserved.
It guarantees that natural resources, such as water, natural gas, oil, and mineral resources, are used efficiently and rationally without risking future generations’ aspirations.
It encourages tolerance for a variety of lifestyles.
The precautionary principle is applied.
Before new technologies and inventions are launched, they are assessed for their potential impact.
It assesses the environmental consequences of economic policies and seeks for the least harmful and most beneficial outcomes for the environment and people.
It promotes the restoration of ecological and social equilibrium.

5. Policy on Inclusion. In decision-making processes, a green, fair, and inclusive economy is inclusive and participative.

Transparency, strong science, and visible participation of all important parties underpin it.
It promotes good governance at all levels, from the local to the international.
At all levels, it empowers citizens and fosters full and effective voluntary engagement.
It is attentive to ethical considerations, respects cultural values, and is accepting of religious views and lifestyle choices.
Enhances social awareness, knowledge, and skills
It is transparent, inclusive, and participatory, giving young and elderly, men and women, low-skilled employees, indigenous peoples, ethnic minorities, and local communities more possibilities and advocacy.

6. The principle of Good governance and accountability is number six. A responsible economy is one that is green, just, and inclusive.

It establishes a framework for structuring markets and production in collaboration with all parties involved.
In national and international accounts, the corporation reports on its long-term development in environmental, social, and economic measures.
Transparency is provided.
It encourages international cooperation and establishes a framework for international accountability.
It promotes policy coherence at the global level and equitable international collaboration.
It promotes shared but distinct responsibilities.
It abides by international human rights and environmental conventions.

7. The principle of Resilience is a concept that has been around for a long time. Economic, social, and environmental resilience are all aided by a green, just, and inclusive economy.

It encourages the creation of social and environmental protection measures, as well as the preparation for and adaptability to harsh weather and disasters.
It establishes a universal social safety net.
It advocates a wide range of green economy models that are relevant to many cultural, social, and environmental contexts.
It considers local knowledge and facilitates the interchange of different knowledge systems.
It builds on and expands local capabilities and talents.
Supports local economies and livelihoods that are sustainable and varied.
It promotes systems thinking by understanding the interconnection and interwoven nature of these systems, as well as the cultural and ethical values that underpin them.

8. Principle of Efficiency and Sufficiency. Ensures a sustainable economy that is green, fair, and inclusive, as well as sustainable consumption and production.

It aims to make sure that prices represent true costs, such as social and environmental externalities.
The polluter pays principle is implemented.
It promotes lifetime management by aiming for zero emissions, zero waste, resource efficiency, and water efficiency.
Gives green energy and renewable resources a priority.
Its goal is to completely isolate production and consumption from harmful social and environmental consequences.
Provides sustainable lifestyles that contribute to a great societal shift.
Encourages social, economic, and environmental change.
Within a worldwide legal framework, it grants fair access to intellectual property.

9. The principle of Generation. An economy that is green, fair, and inclusive invests in the now and the future.

Intergenerational and intergenerational fairness are ensured.
In the long run, it encourages resource conservation and improved quality of life.
It influences and controls the financial industry to ensure that it invests in a green, equitable, and inclusive economy and that the global monetary system remains stable.
It places a premium on making long-term, scientifically sound decisions over making quick decisions.
It advocates for children’s education to be egalitarian at all levels and to be sustainable.

Policies to address green economy constraints

There are various constraints that countries face at the point of reaching the green economy goal. In the report titled «Towards Green Growth: A Summary for Policy Makers» published by OECD in 2011, the following policies are suggested against the said constraints:

Green Economy Constraints	Policy Options
Inadequate infrastructure	Public-Private partnership Public investments Tariffs Transfers
Low human and social capital and poor institutional quality	Subsidy reform-removal Growing and stabilizing government revenue
Incomplete property rights, subsidies	Review and reform or remove
Regulatory uncertainty	Set targets Create independent governance systems
Information externalities and split	Labelling incentives Voluntary approaches Subsidies Technology and performance standards
Environmental externalities	Tradable permits Subsidies Taxes
Low returns to R&D	R&D subsidies and tax incentives Focus on general-purpose technologies
Network effects	Strengthen competition in network industries Subsidies or loan guarantees for new network projects
Barriers to competition	Reform regulation Reduce government monopoly

As seen in the table, there are still many constraints and obstacles for many countries in terms of achieving the green economy goal. Against these constraints, especially the implementation of regulatory public policies and cooperation with the private sector while doing this stand out as the most effective policies.

References

Davies A R 2013 Cleantech clusters: transformational assemblages for a just, green economy or just business as usual? Global Environmental Change 23 1285–95.

Pearce D W, Markandya A and Barbier E B 1989 Blueprint for a green economy Earthscan, London.

Barbier E B 2013 The green economy post-Rio+20 Science 33 887–8.

Zysman J, Huberty M, Behrens A, Colijn B, Tol R S, Ferrer J N, Aglietta M and Hourcade J-C 2012 Green growth Intereconomics 47 140–64.

Bowen A, Fankhauser S, Stern N and Zenghelis D 2009 An outline of the case for a ’green’ stimulus Grantham Research Institute on Climate Change and the Environment, London (http://eprints.lse.ac.uk/24345/1/An_outline_of_the_case_ for_a_green_stimulus.pdf)

van der Ploeg R and Withagen C 2013 Green growth, green paradox and the global economic crisis Environmental Innovation and Societal Transitions 6 116–19.

Acemoglu D, Aghion P, Bursztyn L and Hemous D 2012 The environment and directed technical change American Economic Review 102 131–66.

Damon M and Sterner T 2012 Policy instruments for sustainable development at Rio+20 The Journal of Environment & Development 21 143–51.

Martinelli A and Midttun A 2012 Introduction: towards green growth and multilevel governance Energy Policy 48 1–4.

Sierra K 2012 Twenty years later: will green growth be the game-changer needed for sustainable development? (www. brookings.edu/~/media/research/files/reports/2012/6/rio20/ rio20_sierra.pdf)

Zysman J, Huberty M, Behrens A, Colijn B, Tol R S, Ferrer J N, Aglietta M and Hourcade J-C 2012 Green growth Intereconomics 47 140–64.

Brink P, Mazza L, Badura T, Kettunen M and Withana S 2012 Nature and its role in the transition to a green economy The Economics of Ecosystems & Biodiversity and the Institute for European Environmental Policy, Geneva and London.

Borel-Saladin J M and Turok I N 2013 The green economy: incremental change or transformation? Environmental Policy and Governance 23 209–20.