Climate Risk & ESG Risk

The 5 Principles of Green Economy

Sunny Samanta

29th Aug'22
The 5 Principles of Green Economy | OpenGrowth

There was a universal agreement that the current economic system is no longer appropriate due to its extremely detrimental social and environmental repercussions.

Governments, businesses, and society are becoming aware of the planetary boundaries that are running out of room. This is brought on by the extraction of natural resources like water, soil, forests, and others, not just because of greenhouse gases and global warming.

As a concept, the green business and economy is described as "an alternative vision for growth and development; one that may provide growth and improvements in people's lives in ways consistent with sustainable development" (World Resources Institute).

 

What is a Green Economy?

A green economy is defined as the process of developing social and environmental sustainability through the encouragement of public and private investment in infrastructure. The green economy is significant because it promotes low digital carbon footprint, sustainable economic growth and guarantees that natural resources will continue to support our continued well-being by providing resources and environmental services.

So, in order to comprehend and model economies, green economists typically use a broad and all-encompassing perspective, giving equal consideration to the natural resources that support the economy as they do to its operation.

Generally speaking, those who support this economic theory are worried about the state of the environment and think that steps should be taken to conserve the environment and promote harmonious coexistence between humans and nature. These economists support environmental protection by arguing that the environment is crucial to the economy and that the health of any successful economy is largely determined by the health of the environment that it is a vital component of.

Green Economy

 

5 Principles of Green Economy

According to a paper titled Principles, Priorities, and Pathways for Inclusive Green Economies, which was published on July 16th, 2019 at the UN High-Level Forum on Sustainable Development in New York, below mentioned are the five core principles of the green economy-

 

1. The Wellbeing Principle

 All individuals may generate and enjoy prosperity thanks to the green economy.

 

  • The green economy is focused on people. Its goal is to produce real, shared wealth.

  • It emphasizes accumulating wealth that will promote wellbeing. This wealth spans the entire spectrum of human, social, physical, and natural capital, not just financial wealth.

  • It places a high value on investments in and access to the infrastructure, know-how, and education required for everyone to flourish.

  • It provides opportunities for ethical and sustainable businesses, jobs, and livelihoods.

  • Although it is based on individual decisions, it is built on communal action for public goods.

 

2. The Justice Principle

Equity between generations and within them is encouraged by the green economy.

 

  • The green economy is non-discriminatory and inclusive. It resists elite capture, evenly distributes expenses and benefits, and especially promotes the empowerment of women.

  • In addition to providing enough room for wildlife and wilderness, it encourages the equitable distribution of opportunity and outcome, decreasing gaps between individuals.

  • It adopts a long-term outlook on the economy, generating wealth and resilience that serve the needs of present and future citizens while also responding quickly to address the multifaceted poverty and injustice that exist now.

  • It is founded on social justice and solidarity, and it upholds the rights of workers, minorities, indigenous peoples, and human beings in general as well as the right to sustainable development.

  • It supports social enterprises, sustainable livelihoods, and the empowerment of MSMEs.

  • It aims for a quick and equitable transition and pays for it, leaving no one behind, empowering marginalized groups to act as change agents, and advancing social protection and reskilling.

 

3. The Planetary Boundaries Principle

The green economy protects, restores, and funds the environment.

 

  • An inclusive green economy celebrates all of nature's many values, including the economic values of producing goods and services, the social values of culture, and the ecological values of all life.

  • It applies the precautionary principle to prevent the loss of important natural capital and the violation of ecological boundaries while acknowledging the limited substitutability of natural capital with other capital.

  • It makes investments in the preservation, expansion, and restoration of the earth's soil, water, air, and natural systems.

  • It is creative in how it manages natural systems, guided by their characteristics like circularity, and in line with the lives of the local community that depend on biodiversity and natural systems.

 

4. The Efficiency and Sufficiency Principle

The goal of the green economy is to promote sustainable production and consumption.

 

  • Low-carbon, resource-conserving, varied, and circular economies are inclusive. It accepts fresh approaches to economic growth that tackle the problem of achieving wealth within the confines of the planet.

  • It acknowledges that if we are to stay within the limits of the earth, there must be a substantial worldwide change to limit the consumption of natural resources to physically sustainable levels.

  • It acknowledges both inappropriate "peaks" of consumption as well as a "social floor" of consumption of fundamental goods and services that are necessary to maintain people's wellness and dignity.

  • Through "polluter pay" and/or reward-based mechanisms that go to those who produce inclusive green results, it matches prices, subsidies, and incentives with the real costs to society.

 

5. The Good Governance Principle

Institutions that are incorporated, accountable, and strong serve as the green economy's compass.

 

  • An inclusive green economy is grounded on evidence; its institutions and norms are cross-disciplinary, utilizing both reliable science and economics as well as local expertise for adaptive strategy.

  • It is backed by institutions with the necessary resources to fulfill their various duties in an effective, efficient, and accountable manner. These institutions are integrated, collaborative, and cohesive across sectors and governance levels.

  • Leadership is only as good as the quality of its people and how they interact with society, and must be free from entrenched interests in all institutions - public, private, and civil society. In order for enlightened leadership to be supported by societal demand, it must be responsive and responsive to the needs and aspirations of the people.

  • While upholding robust, uniform, centralized standards, procedures, and compliance systems, it encourages decentralized decision-making for local economies and the management of natural systems.

  • It creates a financial system that is designed to promote sustainability and well-being and to safely advance societal goals.


 

Green Economy VS Circular Economy

Perhaps some of us have also heard of the term "circular economy" in addition to "green economy." Although both have the same goal—improving economic growth while achieving social and environmental objectives—the Green Economy has a different emphasis than the Circular Economy.

The fundamental idea behind the green economy is to promote economic growth while taking into account the sustainability of the ecological balance and the availability of current natural resources.

The Circular Economy, on the other hand, is more concerned with maintaining a closed cycle of resources. Therefore, the circular economy seeks to replace linear production and consumption patterns (use and discard) with circular or sustainable ones. The aim of balancing social, economic, and environmental objectives binds them together.

As a social enterprise engaged in ecological waste management, Waste4Change supports the development of the circular economy through the provision of two services: in-house recycling and digital extended producer responsibility.

Green economy vs Circular economy

What Commercial Prospects Result From The Shift to a Green Economy?

The green economy benefits society, industry, and the environment. The concept of "green economy" is undermined by the notion that development, growth, and well-being may be attained by sustainable practices. Sustainable development does not take the place of green growth. Instead, it offers a realistic and adaptable strategy for achieving tangible and verifiable progress along its economic and environmental pillars, taking into account the social repercussions of the growth momentum of greening economies. Green growth initiatives seek to ensure that natural resources can sustainably realize their full economic potential.

 

What Impact Can Green Technology Have on the Economy?

The term "green technology" covers a broad range of innovations and methods, including sustainable agriculture, wildlife conservation, and alternative energy and fuel sources. In general, green technologies aim to reduce how bad human activity is for the environment. Even though detractors can argue that green technology is less effective than non-green options, this can assist sustainable economic activity.

 

Examples of Green Economy Practices

What does the green economy look like in the context of a country once we've covered a few fundamental notions about it?

It goes without saying that the process of implementing the Green Economy system is drawn out and difficult. Nevertheless, a few nations can act as role models because of their steadfast dedication to putting into practice a theory of green growth or a low-carbon economic plan.

Finding examples of large-scale initiatives that have succeeded in boosting productivity or development in long-lasting ways is not all that difficult.

 

A. National strategy and five-year plan for green growth have been adopted by South Korea for the years 2009 to 2013, allocating 2% of its GDP to investments in a variety of green industries, such as renewable energy. The Global Green Growth Institute (GGGI), which strives to assist nations (particularly developing nations) in creating green growth strategies, was also established by the government.

B. China surpasses all other nations in its investment in renewable energy. This is seen in the country's 64 percent increase in total installed wind capacity in 2010.

China now has 130 gigawatts of solar energy capacity, making it the world's largest solar energy producer. Even China's own 2020 objective for solar energy capacity was met, according to the IEA.

C. Brazil's Curitiba is regarded as the country's sustainable city, and this state is well renowned for its urban growth. The world's greenest city encourages sustainable living. 400 square kilometers of it are covered in forests. It provides a range of initiatives to encourage people to recycle their waste.
 

Conclusion

The global status quo is being transformed by the green economy on a universal scale. A significant change in the government's priorities will be necessary. Although accepting this transition is difficult, it is essential if the Sustainable Development Goals are to be met.

It takes a long-term view of the economy, emphasizing on how resources are used to benefit society and how efficiency and resource sufficiency can be leveraged to foster wealth, resilience, and wellbeing for present and future generations of people while staying within the ecological bounds of the planet. A green economy has inclusive and non-discriminatory behaviours, from environmental activities to investments in well-being.

Environmentalists have cited this economic theory as the only means of preserving mankind. When the globe is colored green, it appears different and is more sustainable, inclusive, and capable of fending against the demon of global warming.

 

Frequently asked questions

1. How many guiding principles support the green economy?

The global labor movement supports the 10 principles to advance a green economy that is inclusive and socially just.

 

2. What are some instances of the green economy?

People's daily lives can be used as examples of the green economy. People are making contributions to the green economy in a variety of ways, including by building up plant-based dwellings, growing their own food, and using bicycles to get around.

 

3. What nation has a green economy?

In the 2016 GGEI, Sweden once again ranked highest, followed by the other "Nordics," Switzerland, Germany, and Austria. Despite these impressive results, the GGEI pinpointed areas where these nations might further strengthen their environmental performance.

 

4. How can the green economy be cultivated?

The following five tactics can be used by local governments of any size to expand the green economy:

Green purchasing and resource efficiency, local production and use, waste stream management, green infrastructure, and green economic development are all examples of green practices.

 

5. What are the five guiding principles of the green economy?

Public involvement, social dialogue, informed consent, openness, and accountability are prioritized in civil life. The global status quo is being transformed by the green economy on a universal scale.
 

6. What Economic Impact Did the Green Revolution Have?

A succession of inventions, collectively known as the "Green Revolution", significantly enhanced agricultural productivity and efficiency on a global scale. Due to the significant increase in the global population, there has been an increase in pollution and the use of natural resources.

 

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A lone wolf by definition, a writer by heart, and a lost star with ambitions to light up the dark both inside and around me, sometimes by immersing myself into books or video games or traveling with a backpack to an uncertain destination believing that life is all about the choices we make and we don't.

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