A green economy is an economy that aims at 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. The 2011 UNEP Green Economy Report argues "that to be green, an economy must not only be efficient, but also fair. Fairness implies recognizing global and country level equity dimensions, particularly in assuring a Just Transition to an economy that is low-carbon, resource efficient, and socially inclusive."
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 indicators of friendliness to the environment and sustainable development. Many industries are starting to adopt these standards as a way to promote their greening practices in a globalizing economy. Also known as sustainability standards, these standards are special rules that guarantee the products you buy don’t hurt the environment and the people that make them. The number of these standards has grown recently and they can now help build a new, greener economy. They: focus on economic sectors like forestry, farming, mining or fishing among others; concentrate on environmental factors like protecting water sources and biodiversity, or reducing greenhouse gas emissions; support social protections and workers’ rights; and home in on specific parts of production processes.
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 environmental movement, peace movement, Green politics, green anarchism and anti-globalization movement have used the term to describe very different ideas, all external to mainstream economics.
The use of the term is further ambiguated by the political distinction of Green parties which are formally organized and claim the capitalised 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. The UNEP 2011 Green Economy Report informs that "based on existing studies, the annual financing demand to green the global economy was estimated to be in the range US$1.05 to US$2.59 trillion. To place this demand in perspective, it is about one-tenth of total global investment per year, as measured by global Gross Capital Formation."
- 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 international experts consulted bi-yearly. The Roadmap represents a comprehensive and multidisciplinary effort to clarify and frame the concept of "green economy". It highlights the role of business in bringing solutions to 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
- Life cycle approach
- Resource efficiency and decoupling
- Education and skills
- Governance and partnership
- Integrated policy and decision-making
Green finance is:
- "The financing of public and private green investment through blockchain. Green investment include but is not limited to environmental goods and services (such as in water management or protection of biodiversity and landscapes), prevention, minimization and compensation of damages to the environment and to the climate, components of the financial system that deal specifically with green investments, such as Green Climate Fund or financial instruments for green investments approved by a recognised international green blockchain supervisory body (e.g Fintech Corporation of London, Green Finance International Committee…)."
- "It also comprises any project, policies, framework or system participating in the protection and application of inherent moral values (e.g abolition of crime against humanity, slavery, children labour….)."
Measuring economic output and progress is done through the use of economic index indicators. Green indices emerged from the need to measure human ecological impact, efficiency sectors like transport, energy, buildings and tourism, as well as the investment flows targeted to areas like renewable energy and cleantech innovation.
- 2010 - 2018 Global Green Economy Index™ (GGEI), published by consultancy Dual Citizen LLC is in its 6th edition. It measures the green economic performance and perceptions of it in 130 countries along four main dimensions of leadership & climate change, efficiency sectors, markets & investment and the environment.
- 2009 - 2012 Green City Index A global study commissioned by Siemens
- 2009 - 2013 Circles of Sustainability project scored 5 cities in 5 separate countries.
Ecological footprint measurements are a way to gauge anthropogenic impact and are another standard used by municipal governments.
Green energy issues
The market failure to respond to environmental protection and climate protection needs can be attributed to high external costs and high initial costs for research, development, and marketing of green energy sources and green products. 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 experts 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.
In the United States, it seemed as though the nuclear industry was coming to an end by the mid-1990s. Until 2013, there had been no new nuclear power facilities built since 1977. One reason was due to the economic reliance on fossil fuel-based energy sources. Additionally, there was a public fear of nuclear energy due to the Three Mile Island accident and the Chernobyl disaster. The Bush administration passed the 2005 Energy Bill that granted the nuclear industry around 10 million dollars to encourage research and development efforts. With the increasing threat of climate change, nuclear energy has been highlighted as an option to work to decarbonize the atmosphere and reverse climate change. Nuclear power forces environmentalists and citizens around the world to weigh the pro and cons of using nuclear power as a renewable energy source. The controversial nature of nuclear power has the potential to split the green economy movement into two branches— anti-nuclear and pro-nuclear.
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.
- Carbon fee and dividend
- Circular economy
- Ecology of contexts
- Embodied energy
- Embodied water
- Energy accounting
- Energy economics
- Energy policy
- Environmental economics
- Environmental ethics
- Free-market environmentalism
- Green accounting
- Green recovery
- Human ecology
- Industrial ecology
- International Journal of Green Economics
- ISO 14000
- Market governance mechanism
- Natural resource economics
- Outline of green politics
- Pigovian tax
- Purple economy
- Renewable energy commercialization
- Restoration economy
- Social ecology
- Sustainable design
- World energy consumption
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