The concept of a green economy has gained currency in the recent past as the world has been searching for solutions to multiple global challenges. But this concept and its relationships with other related concepts have not been clearly articulated. This has invited repeated questions on exactly what is meant by a green economy even from people who have, in principle, embraced the concept. The lack of clarity has also brought into question whether this is yet another device to limit the space for developing countries to achieve development and poverty reduction (Fulai, 2010). As such, some countries such as Egypt and Argentina are still in the debate on the definition. Its relationship with sustainable development is incoherent; is it a new thing or a paradigm change from sustainable development? These are some of the questions that form the basis for critique of the concept. 

According to Gilbert and Miller (2011), green economy initiative prioritizes economic growth over social justice and ecology; at best, it hopes to harmonize them. It argues that the green shift is both necessary for humanity and profitable for businesses.  Green economy concept claim that it will:

• Reduce the human ecological footprint 50 percent by 2050;
• Develop renewable energy sources;
• Be an engine of economic growth;
• Prove vital for the elimination of world poverty through green job generation;
• Ensure social justice;
• Make up the huge shortfall in climate funds to poor countries;
• And save the environment.

All at once! The critique of the green economy concept emanates from the observation that it is impractical to achieve all the goals simultaneously. In addition to woefully insufficient government aid and World Bank loans, countries and landowners would get income from carbon credits through REDD for forest preservation, land use, land-use change and forestry (LULUCF) for land uses, and payment for ecosystem services (PES) for other ecosystem services. Understanding the value of our environment, even in dollar terms, is not the same as having global commons (air, water, land, forest) become commodities sold as carbon credits. Carbon trading is very different from the “green accounting” of environmental impacts recommended by The Economics of Ecosystems and Biodiversity[1] (TEEB).

Despite good intentions, the details of the green economy Initiative are full of loopholes fought for by various interests. Both LULUCF and REDD have such problems: REDD payment to “forest landholders” ignores indigenous peoples, peasants and others who cannot prove legal title to the land. The current text permits logging, gives credits for wood products, defines monoculture tree plantations as “forest”, and exempts draining peatlands and climate-caused forest fires from REDD accounting. REDD must specifically include the free prior and informed consent of forest dwellers, peasants and indigenous peoples as specified in the U.N. Declaration on the Rights of Indigenous Peoples. Already, such people have been evicted by security forces in numerous places. LULUCF defines inhabited savannah as “marginal”, allowing bio-char, ethanol plantations, and GMO mega-projects, and ignoring the rights of local people who practice dryland farming. This allows land grabs and dispossession, which are already happening on a grand scale (Gilbert and Miller, 2011). The question is; will such like initiatives that infringe on the rights of vulnerable groups pass for the green economy?

Some skeptics of the green economy concept, such as Bolivia and Venezuela, go to the extreme. They claim that the green economy is equivalent to ‘green capitalism’ which intends to transform nature into commodities to be traded under the mercantilist model leaving environment sustainability aside. Green capitalism proponents argue that because fossil fuels and most other natural resources are limited and dwindling, the economy will inevitably run up against shortages. As resources become scarcer and therefore more expensive, all businesses will have to figure out how to do more with less. The upside, green capitalism tells us, is that using fewer resources—energy, raw materials, water—is good not only for the planet but also for profits. The less a company spends on inputs and the more efficiently it runs its operations, the heftier its margins will be; being ecologically prudent might be a way to boost the bottom line (Rogers, 2010). As such the concern is not for the environment and social welfare per se but the economic gains to corporates.

A detailed read on the criticism of green economy is the 10 Theses of a critique of the Green Economy.

Although the critique of green economy has some basis, my personal opinion is that the concept is pertinent if we are to achieve sustainable development goals. I appreciate that green capitalism also present some pertinent social issues. I believe that some of the issues could be addressed to make the concept less controversial.

***************************************************************************************** 

[1] The Economics of Ecosystems and Biodiversity (TEEB) study is an international initiative to draw attention to the global economic benefits of biodiversity Its objective is to highlight the growing cost of biodiversity loss and ecosystem degradation and to draw together expertise from the fields of science, economics and policy to enable practical actions

The concept of the green economy is not an entirely new concept. However, the contemporary description of the concept was authored by the London Environmental Economics Centre in 1989. Efforts to transition countries to green economies have been relatively slow probably because of the business case of investing in the environment has never been elucidated with clarity. Nevertheless, the financial crises of 2007/2008 have made many countries realize that the current development paradigm is flawed. Silvica presents brief green economy cases in Bolivia, Ecuador, Jamaica, and Kenya.

The case of the governments of Bolivia and Ecuador is relevant in this regard, with their proposal to promote recognition of the rights of nature, i.e. the right to respect for its existence, and for the conservation and regeneration of its life cycles, structure, functions and evolutionary processes as a whole. Countries should be urged to implement precautionary and restrictive measures for activities that could lead to the extinction of species, the destruction of ecosystems or the permanent alteration of natural cycles.

 Ecuador also considers the criterion of “living well” (el Buen Vivir) as an alternative to the concept of “development”. This constitutes a new paradigm that could replace the dominant model which is based on infinite economic growth and has led to the over-exploitation of natural resources while generating poverty and inequity and excluding a great portion of the population. The “living well” model is in the process of being constructed. It draws on the ancestral knowledge of indigenous nations peoples and, which mandate living in harmony with self, nature, and others, and calls for the construction of States that are democratic, inclusive, plurinational and intercultural.

Jamaica has prepared its “Vision 2030 Jamaica – National Development Plan”. This is the first time that Jamaica has had a long-term development plan that provides a strategic roadmap to make it a developed country by 2030. The plan contemplates a major transformation—from a developing middle-income country to one that offers its citizens a world-class quality of life and standard of life in critical areas such as education, health, nutrition, basic services, access to environmental goods and services, civic involvement and social order. The country has also developed a local planning framework for sustainable development that is implemented as part of the local government component of the country’s reform process.

The industries in Africa are also greening up. UNEP (2011) report the use of outdated technology, smaller-scale plants, and inadequate operating practices are factors causing energy efficiency loss in production processes. There is a huge potential for improving efficiency in the production and use of energy, which could bring economic gains, improved competitiveness, and reduced greenhouse gas emissions. Industrial policies geared towards leapfrogging and the adoption of modern, yet adapted, technologies can contribute to greening industrialization in this context. The experience in electricity-intensive industrial sectors such as the aluminum industry demonstrates the possibilities for efficiency gains in Africa. African aluminum smelters use on average, 14 337 kilowatt-hours (kWh/t) per ton of aluminum produced compared to 15 613 kWh/t in North America, or a world average of 15,268 kWh/t. With large capacity plants in South Africa and Mozambique, Africa has the most efficient smelters in the world due to new production facilities that have the latest technologies in the field (International Energy Agency, 2007).

Kenya has also been recognized in its advancement of the green economy concept through its Feed-in Tariffs (FIT) in the energy sector (UNEP, 2011). A feed-in tariff (FIT) is a policy instrument that makes it mandatory for energy companies or “utilities” responsible for operating the national grid to purchase electricity from renewable energy sources at a pre-determined price that is sufficiently attractive to stimulate new investment in the renewables sector. This, in turn, ensures that those who produce electricity from identified renewable energy sources such as solar, wind and other renewable sources have a guaranteed market and an attractive return on investment for the electricity they produce (Ministry of Energy, 2008). In January 2010, Kenya revised the FIT policy, which resulted in the addition of three renewable energy sources: geothermal, biogas, and solar energy resource generated electricity. In addition, the revised policy extended the period of the power purchase agreements from 15 to 20 years and increased the fixed tariffs per kilowatt-hour for pre-existing wind and biomass under the FIT.

Kenya has taken various steps as a country to transition towards a green economy. In efforts to consolidate, scale-up and embed green growth in development goals, the country has developed a Green Economy Strategy and Implementation Plan (GESIP) . The plan provides a policy framework that facilitates the transition to a green economy. The plan includes five areas that are pertinent in the green economy; sustainable infrastructure; resilience; sustainable natural resource management; resource efficiency; and sustainable livelihoods and social inclusion.

UNDP presents case studies for green economy in mainly Middle East countries in various sectors including water, agriculture, energy, business, industry, ecosystems, technologies and waste management. Implementing green economy principles can enhance the achievement of sustainable development goals.

It is generally accepted that the environment needs not to be treated differently from mainstream economics. More and more countries are integrating environmental issues into the development of macroeconomic plans through the principles green economy. Silvica describes the influence of Green Economy concepts on two global environmental governance frameworks; the Montreal Protocol and the Rio +20.

The Montreal Protocol

Since the concept requires some degree of paradigm shifts, there is a need for commitments by the governments at the international level. Multilateral Environmental Agreements (MEA) have not yet achieved their desired objectives. But the influence of MEAs in achieving and adapting the concept of the green economy can be illustrated by the Montreal Protocol. The Montreal Protocol is recognized worldwide as the most successful multilateral environmental agreement, and it also has the distinction of enjoying universal membership. This MEA has contributed not only to protecting the ozone layer in the stratosphere but has brought economic, environmental and social benefits. It has contributed to the greening of the Article 5 economies (developing countries) and to the greening of non-Article 5 (developed) economies with technology transfer and creation of institutional and sectoral capacities through the Multilateral Fund of the Montreal Protocol, as well as through independent funding and parallel efforts by governments and the private sector.

Since going into effect in 1987, the implementation of the Montreal Protocol has reduced by 97% the production and consumption of around 100 industrial chemical compounds known to deplete the ozone layer. Since substances that deplete the ozone layer are also greenhouse gases (GHGs), the Protocol has had the additional advantage of reducing GHG emission by around 11 billion (11,000,000,000) tons of CO2e (GtCO2e/yr). This shows the role of Multilateral environmental agreement if the green economy is an achievable goal.

Rio +20

Though the concept of a green economy has been around for a number of years, it was officially placed on the table when the United Nations General Assembly resolved to hold its Conference on Sustainable Development in Rio de Janeiro, Brazil, in 2012, defining the objective of the Conference in terms of:  “Securing renewed political commitment for sustainable development, assessing the progress to date and the remaining gaps in the implementation of the outcomes of the major summits on sustainable development, and addressing new and emerging challenges”.

Under the General Assembly’s resolution, the products of the conference would include a specific policy document, and the conference would, among other things, focus on the following two issues:

• Green Economy  in the context of sustainable development and poverty eradication; and
• The institutional framework for sustainable development.

It is essential to note that the concept of a “green economy” is not a substitute for “sustainable development”. Rather, it is a path to sustainable development, though the path differs according to different countries, depending on their particular situation, conditions, and perspectives (UNEP, 2011). There are a number of sustainable development initiatives in the world that may already be considered “green economy” initiatives. Though they range rather broadly in scope, they have some common elements. The concept of the green economy is a major agenda in the Rio + 20 meeting to be held later in 2012. This is expected to give the concept a major impetus in the global arena as governments may commit to the concept as they did to the relatively successful Agenda 21 in 1992.

Green Economy has been identified as a key approach in achieving sustainable development. While the concept makes sense, the next logical step would be to identify ways of achieving it. UNEP (now UN Environment) offers a  three-part framework that aims at achieving a green economy. These outline the pernicious sectors that are to be looked at if the green economy is to be achieved. They include;

• Part I—Investing in Natural Capital—is divided into four areas: Agriculture, Forests, Fisheries, and Water
• Part II—Investing in Energy and Resource Efficiency—identifies seven sectors: Manufacturing, Waste, Transport, Renewable Energy, Buildings, Tourism, and Cities
• Part III—Supporting the transition to a global green economy— describes three means to the stated ends: Modeling, Enabling Conditions, and Finance

The U.N. calls for investing two percent of world GDP, US$ 1.3 trillion, each year until 2050, for economic development intended to achieve the Millennium Development Goals (MDGs) (Now Sustainable Development Goals) and eliminate poverty. The funds are to come mostly from private capital (Gilbert and Miller, 2011). For the concept to be achieved there is a need for investment in capital. However, it is noted that Green Economy initiatives will not be profitable for the first five to ten years. Additionally, support from governments in policy and regulatory frameworks including the removal of harmful subsidies. Although green economic growth is increasing rapidly, the environmental crisis demands a bigger and faster shift. The report identifies two major challenges: one is that Green Economy is based on the idea of economic growth on a finite planet, so there is a need to decouple (separate) this growth from an increasing carbon and environmental footprint, and to reduce waste generation. And secondly, it requires a shift in values. We must “re-think and redefine traditional measures of wealth, prosperity and well-being”, replacing the Gross Domestic Product (GDP) with Indicators of Well-being.

The green economy, far from requiring barriers or restrictions of any type, generates opportunities, since it represents:

• A reconciliation of the growth of economic and trade activity with sustainable resource management and stronger environmental protection;
• Investment in agricultural technologies that permit more sustainable use of the soil and natural resources in general;
• Lower carbon emissions;
• Promoting, disseminating and investing in renewable forms of energy;
• Environmentally sustainable waste management;
• Proper management of chemical products;
• Promotion of sustainable consumption and production patterns, with the developed countries taking the lead in implementing measures;
• Promoting sustainable social housing by using clean technologies in construction, and creating industrial job opportunities.

Other possible instruments that can contribute to sustainable development in the framework of the green growth concept—the framework for discussion among the Organization for Economic Cooperation and Development (OECD) countries is this strategy—are sustainable public procurement; the creation of respectable green jobs (especially for women and young people); the elimination of perverse subsidies; “green” taxes; sustainable infrastructure; sustainable farm production; renewable energy and energy efficiency; sustainable land-use policies; the promotion of science, research, development and innovation in sustainable technologies and industries with high growth potential; and, in particular, the promotion of a low-carbon economy.

UNEP (2011) reckons a transition to a green economy presents both challenges and opportunities. But is the concept of green growth relevant in all economies in different stages of development? For developed countries, a green economy fuelled by green growth requires radical changes in behavior and shifting public opinion. It requires strong and clear signals not only from the government but also from individuals – citizens and consumers – to prioritize environmental and social sustainability. The greatest challenge thus lies with changing behaviors and transforming institutions to enable the adoption of sustainable patterns of production and consumption. Public policy changes at all levels – local, regional, national, and international – are necessary to make private and civic action easier and more attractive. This is necessary as it is known the production and consumption levels of the North are a great concern for the environment.

Indeed, the green economy can also be successfully pursued in the developing world, including in Africa. It can lead to economic growth which is socially-inclusive and environmentally-sustainable in the medium to long term. Africa’s level of development means that it can take a very different development path from other regions – a strategic advantage that Africa ought to exploit. Africa can leap-frog dirty and inefficient technologies and products, thus skipping the most polluting and less sustainable production and consumption processes (as they can learn from the mistakes of developed countries). These technologies should harness indigenous and local knowledge, and include a mix of low-tech solutions (e.g. cleaner, more efficient burning stoves), medium-tech solutions (e.g. green infrastructure), and high-tech solutions such as solar and wind energy technology. Conversely, Africa needs to avoid technological lock-ins where polluting technologies are used, as they are cheaper in the short term.

Certain components are required to ensure the successful implementation of green economy policies in the longer term. Good governance and adequate institutional and human capacities are essential to realizing the effective implementation of policies. Strong political support would provide much-needed policy and financial leverage, and help create confidence in the green economy issue. Furthermore, the engagement of business groups would help generate additional resources and facilitate markets for specific interventions in the green economy. Improving budgetary allocation, fighting corruption and inefficient use of public resources, will necessarily play a key role in the transition. Public participation and wide buy-in of the concept is also necessary. The green economy agenda will struggle in the absence of meaningful participation by the people, as citizens, and as consumers. In this respect, it is extremely important to strengthen governance in order to improve accountability, participation, and transparency in decision-making.

The green economy is a relatively common concept in environmental management. Simply put, the ‘green’ economy can be considered synonymous to a ‘sustainable’ economy. However, the Green Economy concept often carries a more distinctive meaning, one that focuses specifically on the fundamental changes that are required to ensure that economic systems are made more sustainable. Ecological economics, industrial ecology and environmental/resource economics are the three closely related disciplines to the notion of the Green Economy (Ciocoiu, 2011). Green is synonymous with nature while the economy is the system to which a country’s/ region trade, industry, and money are organized. Simply put, the concept implies an active integration of environmental consideration in economic models.

In 2008, the United Nations Environment Programme (UNEP[1]) now called (UN Environment) launched a Green Economy Initiative that did culminate in the publication later in 2010 of a major Green Economy Report. In this report UNEP defines the green economy as “the process of reconfiguring businesses and infrastructure to deliver better returns on natural, human and economic capital investments, while at the same time reducing greenhouse gas emissions, extracting and using less natural resources, creating less waste and reducing social disparities.” (UNEP, 2010, p.5) Green economy purposes are human welfare improvement and reduction of environmental risks over the long term.

UNEP (2010) has provided some of the fundamental elements defining and explaining the core principles and concepts underlying a green economy. The main tenets of this green economy initiative are:

1. investing in natural capital
2. decarbonizing the economy
3. creating green jobs.

The sectors analyzed in the UNEP report are agriculture, cities, forests, renewable energy, transport, water, buildings, fisheries, industry, tourism, and waste management.

Green Economy Coalition (GEC), on the other hand, defines green economy in terms of an economy adhering to the following blocks; 1) low-carbon energy, infrastructure, and transport; 2) sustainable systems of food production, water and sanitation, and waste; 3) ways of protecting and sustainably using biodiversity; 4) green jobs, decent work, sustainable lifestyles and livelihoods that ensure social justice and equity, and set real measures for progress and wellbeing; 5) investment in green sectors, 6) environmental ‘accounting’ and the introduction of new business models and 7) policy reform (GEC, 2012). Whatever the definition, it is clear that green economy ascribes to the principles of sustainable development, equity and poverty alleviation, the resilience of ecosystems, inclusiveness and environmental limits.

The nexus between development, poverty and environmental degradation is hard to define. Africa and other developing countries need to develop, but it is increasingly clear that business as usual in Africa and around the world is no longer an option. We are living beyond the carrying capacity of our planet. According to the Living Planet Report (2010), August 21 of 2010 was earth overshoot day. This implied we exhausted our ecological budget for the year. Today, it is estimated that we use the equivalent of 1.5 planets to provide us with resources and absorb our waste. If current trends in population growth and consumption patterns continue, by 2030, we would need two planets to support us. Even if most of this capacity is used by people outside of Africa, overshooting the earth’s carrying capacity tends to have a disproportionate impact on the poor, who are the least equipped to deal with the associated challenge (UNEP, 2011). This means that the vulnerable are the most affected by environmental degradation despite contributing little to environmental degradation.  

A new approach to economic growth is thus necessary. We need to find ways of integrating environmental sustainability with economic growth and welfare by decoupling growth from environmental over-exploitation and social inequities and inequalities. “Environmental sustainability”, “sustainable consumption and production”, “green growth”, “climate-resilient, low emission strategies “, “inclusive growth” and “decent jobs” can be seen as ways to reconcile the demands for economic growth with the increasing scarcity of natural resources, and the challenges of poverty. This will require a significant transformation of the socio-economic system as we know it. The 2008/2009 global financial and economic crisis presented an unprecedented opportunity to bring about the necessary transformations, thus lending even more momentum to these concepts. The idea of a Green New Deal was thus put forward by several institutions (Green New Deal, 2008). Using the economic recovery packages as leverage, the green new deal focuses on ways to bring the world back on track from a combination of economic, environmental and social crises. The call has been heard by many governments: the Obama administration, for instance, included in the stimulus package significant spending on environmentally-friendly projects aimed at creating “green-collar jobs” and saving energy, and longer-term measures to safeguard the environment.

Silvica believes that the green economy concept is getting foothold in many parts of the world. Governments are acknowledging the importance of a healthy environment for a sustained economic growth.

[1] At its biennial meeting in February 2011, the U.N. Environmental Programme (UNEP) formally presented their “Green Economy Report” with detailed recommendations. U.N. General Secretary Ban Ki-Moon urged governments and business leaders to abandon Business-As-Usual (BAU), which he called “a global suicide pact”, in favor of massive investment of public and private funds in “sustainable development”. Implicit in the Report is the admission that earlier efforts have failed to meet the needs of the poor, and to stop the dangerous plundering that destroys the health of our living planet.