Building a green economy

The "green economy" concept as a vision for growth and development has emerged in various intergovernmental forums such as the United Nations Environment Programmes (UNEP) Green Economy Initiative, the Organization for Economic Co-operation and Development (OECD) Green Growth Strategy and in discussions among the leaders of G20. In addition, "green economy in the context of sustainable development and poverty eradication (GESDPE)" has been declared as one of the two priority themes for the United Nations Conference on Sustainable Development (Rio+20 Summit) upcoming this month. There are wide varieties of views across the world that is seeking to define and shape this concept into meaningful policy frameworks. This poses a great challenge to a common understanding of the concept. There are also fundamental differences between the developed and developing countries on the understanding of the concept of "green economy" in the context of sustainable development. The rich countries see the green economy through a low carbon lens whereas the developing world prefers to view it through the "right to develop" lens.

To elaborate, the developed world focus of green economy includes increasing resource efficiency, using technologies that reduce carbon footprints ,reduce GHG and pollution emissions, promote energy conservation in buildings and industrial processes, sustainable transport, water conservation, and advanced waste management on the 3Rs (reuse, recycling, reduce) pattern. In developing countries, the focus is more on the need to include existing natural resources based livelihoods, promote green jobs, address concerns relating to food security, livelihood security and poverty alleviation, development of indigenous people and local communities, their cultural heritage and traditional knowledge, including those of ethnic groups, maintenance and improvement of the ecosystem services and enhancement of inter and intra-generational equity.

For developing countries, the two main underlying requirements to make the transition towards a green economy are- access to technologies and financial support. So it is imperative for developed countries to make enabling resources - both financial and technological available to developing countries in an affordable and transparent manner to achieve this transition. However, in a ministerial level consultation on Green Economy and Inclusive Growth involving 54 countries held in India in October last year, the rich nations remained non-committal on financing clean technology transfer and environment protection in the developing world. This certainly does not augur well for the upcoming Rio+20 negotiations.

Further, any movement towards trade barriers or any form of protectionism, unilateral measures or other border trade measures in the name of Green Economy would be disadvantageous to developing countries and would only serve to reinforce the view of 'Green Protectionism'. In January this year the developing nations saw carbon tax imposed by the European Union (EU) on flights using European airports as an example of this. EU has also been considering the idea of carbon border tariffs as one way to prevent European manufacturing industries from relocating to countries like China, where environmental laws are less stringent. Further any efforts to misuse the green economy concept in trying to gain market access under the pretext of environment - such as developed countries demanding elimination of tariffs on their 'environmental' goods, should be discouraged.

It is important to approach the concept of "green economy" as a means to achieve the overarching goal of sustainable development and it should recognize the struggles for basic survival and related priorities of the developing countries and be in tandem with the principles of "common but differentiated responsibility (CBDR)" and "equity". The policy space for developing countries to pursue their own paths to sustainable development should not be restricted through the imposition of additional mandatory and/or legally binding commitments, but should infact be incentivized to change to address the evolving issues.

The Zero Draft of the Rio+20 outcome document mentions that a green economy should be based on the Rio principles, in particular the principle of CBDR, and should be people-centered and inclusive, providing opportunities and benefits for all citizens and all countries. It also stresses that each country should make the appropriate choices with respect to its development level, particular conditions and priorities and it is important to prevent new trade barriers and new aid conditionalities. The need to protect and enhance the natural resource base, increase resource efficiency, promote sustainable consumption and production patterns, and move the world toward low-carbon development is also noted. India has underlined the need for policy space for a green economy according to national circumstances, expressing a positive attitude towards national strategies and experience sharing while clearly disagreeing on defining quantitative targets that may bind national policies.

The vagueness attached to the concept of 'green economy', does raise some concerns for India given that the government of India is focusing on 'inclusive growth' for sustainable development. To give an example-- one of the main ingredients to development is meeting the infrastructure gaps and this may generate some environmental impacts particularly in the earlier phases. With development, environment is also expected to improve and thus it becomes crucial for the "green economy" approach to recognize this interdependency.

Several countries have examples where they have adopted low carbon economic strategies, but the transition to green economy needs to go beyond this and will need lot of effort from policy makers across the globe. These include proper valuationof natural capital, and, in more general terms, a revision of the way in which we measure growth and progress. In context of green economy, a wider indicator of wealth should be developed that goes beyond the traditional measure of GDP and includes the full value of ecosystem goods and services in all economic considerations.

The emerging framework of green economy must have built-in space to take into account and provide for the natural resource endowment of individual countries and should not become a means by which developing countries may be forced to shift away from using their natural endowments.

It is also essential to establish the right and suitable regulatory frameworks and create strong incentives for markets and innovation that will enable the transition to green economy. For example, tax incentives/subsides to promote consumption or production of greener goods and services, and their public procurement could certainly create high and long term demand for these, besides generating employment opportunities (green jobs). These incentives can also be used to promote green investments. An important example in this regard can be seen in India where a number of municipalities have established a rebate in the property tax for users of solar water heaters.

Facilitating innovative collaborations between business, government and civil society (like public private partnerships, business value chain engagements and collaboration with academia and consumers) and their collective action could be another step in the direction. These collaborations can be used to step up education efforts that can bring about the required changes in the mindsets and behavioral aspects needed to drive the required innovations in the direction of a green economy. Their collective action can further help develop the required skills for green jobs and capacity for policy reforms.

A well-designed regulatory framework and its effective enforcement can be a powerful mean to address pollution problems, enhance resource use efficiency and drive green investments that will facilitate the transition to green economy. In addition, multilateral, trans-regional and multi-actor responses, more dedicated efforts towards R&D, investments in capacity-building of all relevant actors (government institutions, the private sector and experts), institutional innovation and strengthening, as well as targeted financial support will be needed for the development of a green economy and poverty reduction to achieve the sustainable development.