The term green economy is used a lot, but what exactly is a green economy? The United Nations Environmental Program (UNEP), proposed that it is “financially supporting environmental and climate activities that also help to stimulate economic growth” In essence, it is possible to meet the need for development and at the same time respect the limits of local, regional and global environmental systems.
Currently from an economic point of view, a “green economy” implies using taxes, subsidies and fees in a strategic and systematic way. However in the short term this implies taxing carbon intensive industries, but in the long-term, there is absolutely no way we can handle climate change and other environmental challenges unless we develop new technologies to mitigate carbon emissions. From this it can be implied eco innovation will be one of the cornerstones of the green economy and offer big business opportunities to the first movers in low carbon technology.
Greening an economy isn’t about big companies making big changes, it’s about everybody making small changes everyday. If you and your friends are out for lunch, you don’t consider it at the time but the situation involves a range of decisions and choices that all contribute to larger scale factors impacting sustainability. Your choice of lunch place, how you got there, how the restaurant owners have chosen to run their restaurant, and the government choice of how to regulate aspects relevant to this type of restaurant are all significant to the level of impact on the local environment.
Companies will play a critical role in greening the economy. In order to achieve the transition, corporate practices and decisions must be aligned with broader social and environmental needs and priorities. Also we often defer to companies to provide information that allows consumers to make more sustainable choices. The business case for companies to green their value chain will broadly break down into 2 areas. The first is access to raw materials, this is currently forcing companies to pay particular attention to resource efficiency and recycling through the circular economy. The second is stakeholder requirements and expectations for companies on all related sustainability related issues.
The green economy is and will be a bottom up social collaboration between people and businesses, a more responsive and open value chain that will interact with its customers more readily. Eco design and life cycle thinking will influence all products to ensure resource efficiency and maximum recycling. As the world is in the current economic doldrums, the green economy represents a very real and tangible opportunity to boost economies in a sustainable way.
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