RIO+20 AND THE GREEN ECONOMY: DEFINITIONS AND IMPLICATIONS
One of the main themes of next years' conference is: "a green economy in the context of sustainable development and poverty eradication". However – there are many wondering what this means. Controversial and relatively vague in its definition, the green economy is being touted as the new approach to sustainability. What follows is a brief synopsis of the generally accepted understanding of the term, as well as various opinions about its implications.
The term 'green economy' originated in 1989, and was a term that applied to environmental economics – a branch of economics that deals with the economic effect of environmental policies. At the time, the term was not widely known or used. Since then, the meaning and implications of the term has evolved as other issues have been added to its scope. Today, UNEP defines the green economy as: "one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive".
Seen as a worldwide response to the major challenges that have arisen in the past decade – namely the climate change, food and economic crises, the green economy attempts to analysze a way to enable economic growth while protecting ecosystems and contributing to poverty alleviation. In practice, a green economy is one in which public and private entities make investments in resource efficiency, ecosystem services, reducing pollution and carbon emissions, etc – thus making environmentally friendly products and service drivers of growth in terms of income and employment. These investments must be made in concert with legislative reforms and governmental expenditure that enables these growth nodes. Natural capital should be maintained or rebuilt in view of its public benefit – particularly with regard to the poor whose livelihoods depend on ecosystem services.
The idea that economic growth and environmental stewardship can be complimentary strategies is gaining ground worldwide. In London, the low carbon and environmental goods and services sector showed 4% growth during the 2009 / 2010 financial year – with 160 000 people employed across 9000 companies. Carbon finance is worth an estimated £6bn to the London economy and involves almost 23 000 people. According to UNEP, there was a 32% rise in green energy investments worldwide in 2010 – with a record US$211 billion being pumped into renewables. Of note is the fact that for the first time, developing economies overtook developed ones with regard to financial ( take out financial) new investment spending. Although China was the world leader in spending, emerging economies showed strong signs of growth.
However, estimates indicate that a substantial increase in investment is still needed in order to make the transition to the green economy. According to UNEPs Green Economy Report, a $1.3 trillion (2% of the worlds GDP) investment is proposed as the target for green investments – with three fifths of this sum invested in energy efficiency and the remainder in sectors such as agriculture and fisheries, water, tourism and waste management.
Despite the encouraging steps towards a more environmentally friendly approach to business, many are worried that the idea of the 'green economy' will fail to be pro poor. Issues such as developing countries having to attempt to be competitive in a global economy that sees industrialised nations being subsidised, and the implications that imposing new conditionalities on developing countries for aid and loans, may hinder growth in many developing economies. Another aspect that could further tilt the beneficiaries of the green economy towards industrialised countries lays in the fact that most (but not all) intellectual property rights for climate mitigating technology sits in industrialised countries – thus opening up the possibility of widening discrepancies in technological capacities.
Despite worries that the green economy could boil down to a repackaged 'green capitalism', there is also hope. As one climate policy specialist noted: 'RIO+20 is a precious chance for decision-makers to take stock of where the world went wrong in the last 20 years and plan intelligently for the next 20. Hopefully RIO+20 will deliver a jolt of political will to the global environmental agenda, as well as a smart plan to get the planet back on track'.