From Brown to Green Economy: Way to Sustainable Development

The concept of green economy is increasingly find its way from the ivory tower of environmental economics to minstream policy discourse mainly due to widespread disillusion with the present economic paradigm which delivers material wealth at the expense of natural capital.  Policy makers are increasingly linking the present crisis of food security, water stress, land degradation, loss of biodiversity, climate change and economic recession to the need for evolving a more resource-efficient and less-carbon intensive growth path.

Successful green investments in clean energy, energy efficiency, green building, organic farming, recyclying & waste development have burst the myth of an inescapable trade-off between environment protection and economic progress.  Green economy has been recognized to have the potential to create employment and alleviate poverty, whilst protecting and maintaining natural capital.

UNEP defines Green Economy as one that results in increased human well-being and social equity while significantly reducing environmental scarcities & rsiks.  The older concept of Sustainable Development requires us to be able to meet the needs of the present generation without compromising nature’s capability to meet the needs of future generations.  While Green Economy is not a replacement for Sustianable Development, there is increasing recognition that sustainable development is not possible without greening the economy.

Green Economy is not a luxury affordable only to the developed world.  On the other hand it challenges the industrialised countries to reduce their ecological footprint without compromising their quality of life.  To the developing countries it poses the challenge to deliver improved services without drastically increasing their environmental foorprint.

The roots of the current environmental dilemma lie in the reconceptualisation of a mechanistic and reductionist world-view during the modern Scientific Age which sanctioned domination & exploitation of nature, as against an organic and systemic world-view of pre-modern times which emphasized ecology and resource conservation.  The image of earth as a living organism and nuturing mother served as a cultural constraint because one does not readily slay a mother or dig into her interiors for precious metals.  However the modern mechanistic world-view with its reductionist approach failed to understand that economy is just one aspect of a whole ecological and social fabric.  Thus the various Revolutions of the Scientific Age like Industrial Revolution, Technological Revolution, Green Revolution, Blue Revolution, etc coupled with an economic system which is largely alienated from an ecological & social context have resulted in a world challenged with recource depletion and social inequity.

The substantial economic progress during the last few decades has been achieved at the expense of natural capital.  The Millenium Ecosystem Assessment says that over 60% of global ecosystems have been degraded having lost their innate functional capacity in terms of regulation and provision.  Around 80% of commercial fish stock has been overexploited, water stress is affecting over 35% of agricultural land, land degradation is increasing with large countries like India & China losing top soil 30-40 times more than their natural replenishment levels.  Climate change is expected to  further reduce agricultural productivity by more than 30% due to changing monsoon patterns, g, glacier retreats, droughts etc.  Ecological scarcities are affecting entire economic sectors which are the bedrock of human supply chain aand critical livelihood sources for the poor.

A fundamental premise of Green Economy is that earth’s ecosystems like forests, agriculture, freshwater, wetlands, mangroves which provide critical regulation, provision and cultural services should be valued and incorporated into economic  activities.  Hitherto in the Brown Economy these vital ecosystem services have been not been valued and not incorporated in National Accounting Systems.  Valuation & Payment for Ecosystem Services (PES) is therefore an imperative part of Green Economy.

According to UNEP Report on Green Economy, 2011, the benefits of environmental sustainability outweighs the cost of investing in protecting ecosystems offering a double-dividend win-win strategy of growth with environmental sustianability or even a triple dividend win-win-win strategy when poverty alleviation is added.  One key finding of the Report is that transition to green economy creates ‘green jobs’, which after an initial period involving investment in re-skilling & re-education of people, offsets the loss of ‘.brown jobs’.  The Report says that green economy can reduce persistent poverty through sustianable forestry, sustainable fishing, ecological farming, etc. Green economy can reduce energy demand by 40%, water demand by at least 20%, offset  climate change effects, and reduce  biodiversity loss and land degradation.

Transition to green economy requires enabling national policies and support for national innovation systems.  Current policies, peverse subsidies and national accounting systems are insensitive to social & environmental costs and drive capital misallocation at the cost of natural capital  .For example current price and production subsidies for fossil fuels exceeded 600 billion US dollars in 2008, and this huge subsidisation affects transition to renewable energy systems.  Changes are needed in fiscal policy to include green taxes, feed-in tariffs to support infant green industries for renewable energy, energy efficiency, etc. and target public investment to key green sectors like forestry, agriculture, eco-tourism, mass transport systems, rural assets like water conservation, land development, etc.  Government support is required to create national innovation systems where R&D teams will innovate and disseminate green technologies like energy-saving technologies to SMEs or green building practices to construction firms or sustainable farming practices to farmers.

Given the level of integration of the global economy and given that most green technologies are developed in industrialized countries, global institutional arrangements must be generated to promote international collaboration for research in developing green technology, and for capacity-building and technology transfer to developing countries.  A flexible IPRs regimen which balances the public goods character of knowledge with incentives needed to induce price investments into innovations should be worked out to ensure broader room for compulsory licensing and for allowing innovators to use patented knowledge to generate new knowledge.




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