Perspectives on the green economy

aksaroya —  17 October 2012 — Leave a comment

By James Bonner, independent sustainability consultant

A central theme in this series of blog posts is the acknowledgement that business, and the wider economy, is inextricably connected to, and dependent on, the natural environment – something that organisations, and their wider stakeholders, are increasingly recognising.

From the impacts and dependencies businesses have on ‘natural capital’, to drivers encouraging reporting and consideration of environmental issues by business, there is a realisation that the economic system (nationally and globally) relies upon the natural environment. Moreover, our economy, and the activities of business that drive it, negatively impact vital environmental resources and systems with likely adverse consequences for  long term economic growth, social development and environmental sustainability. This highlights a difficult, and fundamental, dilemma:

–          Our economic system is reliant on the natural environment.

–          The natural environment is being depleted and degraded, to a point of destruction, by our economic system.

Taking this paradox into account, it is clear that there is a pressing need to fundamentally change our economic approach, and as the WBCSD (World Business Council for Sustainable Development) state in their Vision 2050 project, a requirement that ‘economic growth is decoupled from environmental and material consumption and re-coupled to meeting needs.’ As such, the concept of a ‘green economy’ has been promoted as an alternative economic model, an approach based on the principles of sustainable development theory and ecological economics. The UK Government defines the concept in its 2011 paper ‘Enabling the Transition to a Green Economy: Government and business working together’ through stating: ‘A green economy is not a sub-set of the economy at large – our whole economy needs to be green. A green economy will maximise value and growth across the whole economy, while managing natural assets sustainably.’

Such a theoretical definition of the concept might seem somewhat notional but it does serve to capture the essence of what should be aspired to when determining such a new economic approach. Furthermore, it highlights that our current economic structure, in many senses, does the opposite to this – generating economic growth and development that is not inclusive across society, while exhausting and degrading natural assets. In any case some more applied definitions of a green economy have been offered including UNEP’s (United Nations Environmental Programme) perspective stating that ‘practically speaking, a green economy is one whose growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services’.

Additionally the World Bank, in its substantial report from earlier this year ‘Inclusive Green Growth: The Pathway to Sustainable Development, describes the green economy in terms of ‘growth that is efficient in its use of natural resources, clean in that it minimizes pollution and environmental impacts, and resilient in that it accounts for natural hazards and the role of environmental management and natural capital in preventing physical disasters.’

As these more practical definitions infer, the green economy is/will be based on economic development and business activity which is low in carbon emissions and pollution (e.g. renewable energy and sustainable transport), that increases resource efficiency (e.g.  green buildings and eco-design), can help mitigate environmental impacts (e.g. flood management and urban planning), and will conserve key environmental services (e.g. sustainable agriculture and habitat conservation).

Find out more about the green economy at ACCA’s Accounting for the future online conference.

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