What is the Green Economy?

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By Michael Street

The laws of physics will not change, so the rules of economy must – Oliver Greenfield, Convenor, Green Economy Coalition

It is becoming increasingly clear that a global green economy is the only viable route to a sustainable future and is arguably the most important issue of our times. This was made clear at the United Nations Rio+20 ‘Earth Summit’ in June 2012 where the green economy emerged as the main theme. Yet of all the critical issues surrounding our future it is one of the least understood. It occupies a similar position as globalisation did 20 years ago, an abstract, complex and controversial concept. How is it valued? What is it worth? Who measures it? How can it help solve the world’s multiple crises?

Some see the green economy as a luxury in our economically troubled times. Others say it is an opportunistic manipulation by global capitalism to ‘monetise’and control the planet’s dwindling natural resources. Yet more and more see it as man’s most powerful idea that will save the planet, an idea whose time has come.

There are many definitions. The United Nations Environment Program has developed a working definition of a 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, UNEP adds, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive.

On a more concrete level one factor of the evolving global green economy is that it strives to account for the externalities or ‘hidden costs’ – ecological, social and economic – of growth measured by Gross Domestic Product, a flawed accounting system which tells us nothing about sustainability. The green economy is based on long-term projections and uses different measurements from established systems. It is transparent, creates a level playing field for all stakeholders and is our surest route to sustainability and resilience.

By contrast, the dominant ‘brown’ economy, while bringing enormous benefits to humanity over the past 200 years, does not account for externalities such as global warming, resource depletion, environmental degradation, rising sea levels, biodiversity loss, pollution, inequality, insecurity, economic volatility etc. The global brown economy is high carbon, resource intensive, environmentally degrading and socially divisive. It is short-term, speculative, opaque, irresponsible and unsustainable, which means it cannot last. We have now reached a point where the hidden costs of growth measured by GDP are beginning to outweigh the benefits and diminishing returns are setting in.

With the world lurching from one crisis to the next and the time between crises getting shorter, it is clear that a rapid and sustained expansion of the global green economy is essential if we are to avoid a ‘perfect storm’ of converging crises in water, food and energy in possibly less than 20 years. Hidden costs can no longer be ignored. Worse case scenarios must always be considered.

Africa is at the heart of this great controversy. Africa is where the perfect storm will hit first and hardest. Africa is where the brown economy is least developed. Africa is where the development and growth of the green economy can be easier, quicker and cheaper than the ‘browner’ economies of the advanced and emerging countries.What is more, Africa is rising and this time is different.

In the past 50 years Africa has experienced hope followed by disillusion, decline, rebirth, stagnation and finally in the last decade long-awaited growth. After 50 years of independence the final frontier is opening up to the world and ready for business. Africa is where best-case scenarios can now be considered, but only if Africa leads the world onto greener paths of production and consumption. The big question is whether business-as-usual will continue expanding the brown economy in Africa, or will unusual-business expand the green?

So small is the green economy, compared with the brown, that UNEP says it is ‘a journey rather than a destination’. If so, we are just at the beginning of the greatest adventure since our ancestors walked out of Africa 100,000 years ago. The good news is that millions are already on the journey. In Africa their numbers are expanding rapidly. They are individuals, couples, families, companies, organisations and institutions. They are the green explorers in Africa.

About the Author: Michael Street’s connections with Africa began 40 years ago. In the 1970s and 1980s he worked in a number of African and Asian countries as a ‘brown’ development expert on various agro-industrial projects. He first visited Ethiopia in 1975. During the 1990s and early 2000s he travelled extensively in Ethiopia and lectured widely on the country’s history and ecology. Since 2001 he has been based in Sicily where he is establishing two small biosphere reserves as part of an initiative to understand and expand Sicily’s green economy.