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Green Economy
The concept of green economy has emerged as a new potential development paradigm. It can be defined as an economy that results in improved human well-being and social equity while significantly reducing environmental risks and ecological scarcities. Simply put, a green economy can be described as one that promotes a triple bottom line: low carbon growth, resource efficiency, and socially inclusive development. The transition to a green economy involves bringing long-term social benefits into short-term activities aimed at mitigating ecological stresses. It is often benchmarked against the orthodox “brown” economy, which is emphasized on the acceleration of production of economic value. The brown economy paradigm defines and measures economic wealth in terms of gross domestic product (GDP) above other goals, which often creates overexploitation and pollution of natural resources. This type of economic growth has resulted in high social and economic costs, especially for the poor, who depend on these resources for their livelihoods.
The persistence of poverty and environment degradation can be traced to a series of market failures that make the prevailing brown economic model far less effective. While these failures are known, little progress has been made to address them. Pollution, for example, is not valued and priced. A green economy attempts to remedy these failures.
A green economy is one that results from rethinking the GDP-based definition and framing of growth and emphasizes the need to improve the ecological efficiency of economic growth that would enable countries to continue growing economically, which is necessary for poverty reduction without compromising environmental sustainability. It seeks to enhance resource efficiency where material inputs are converted into outputs with less impact to ecosystems. Moreover, it concerns social development where marginalized stakeholders are brought into focus, and growth is fueled by less carbon inputs.
Green Economic Policies
Enhancing resource efficiency can be accomplished through a variety of institutional reforms and regulations, taxation, and spending-based policies. These policies are grouped as follows:
- Resource efficiency: the adoption of processes or technologies aimed at reducing the amount of natural resources required to produce a particular good or service. This could be accomplished through demand-side and supply side management, building retrofits, ecolabeling, smart grids, energy and water auditing, and other approaches.
- Reusing: the transformation of waste into a usable entity, such as energy that could be use to power the same process over again.
- Recycling: the use of byproducts to manufacture a secondary product.
- Green transportation: expansion of access to mass transportation, alternative fuels, public transit systems, electric vehicles, carpooling, dedicated bus lanes, dedicated bikeways, and others.
- Green economic mechanisms: financial products such as green taxation (such as carbon and energy taxes, fuel charges, and congestion pricing), green subsidy reforms, investment in green infrastructure, payment for environmental services, feed-in tariffs, full-cost pricing, full-variable pricing, differential taxes, and ecolabeling.
- Renewable energy: production of energy from solar, wind, geothermal, biogas, and other renewable resources.
- Waste management: options for recycling, municipal solid waste management, water reclamation, grey water and rainwater systems, and stormwater management.
- Land management: activities such as reforestation, habitat conservation, urban green spaces, soil and slope stabilization, and organic agriculture.
In general, a green economy is one that calls for the redesign and reinvention of the manner in which humans produce, consume, and use resources.
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