What Is the Meaning of Green Economy?

The United Nations Environment Programme (UNEP) has developed a working definition of the green economy, according to which a green economy is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.

In other words: green economy is one which is low in carbon, is resource efficient and socially inclusive [1].

Green economy is therefore an alternative to today’s dominant economic model, which generates widespread environmental and health risks, encourages wasteful consumption and production, drives ecological and resource scarcities and results in inequality.

In many ways, while in the prevailing economic growth model there is a focus on increasing GDP above all other goals, green economy promotes a triple bottom-line, one that is about sustaining and advancing economic, environmental and social well-being [2].

What exactly does green economy mean?

Over the past ten years, the concept of the green economy has emerged as a key priority for many governments and organizations.

Already about 65 countries have embarked on a path towards a green economy which aims to transform their economies into drivers of sustainability, to face and address some of the major challenges of the twenty-first century – from urbanization and resource scarcity to climate change and food security [2].

It presents an opportunity to advance both sustainability and social equity as functions of a stable and prosperous economic system within our planet’s finite resources and growing capacity. The green economy is a pathway towards achieving the 2030 Agenda for Sustainable Development, which includes overcoming immense global challenges such as eradicating poverty [2].

At the same time, the green economy is not a concept that can or should replace that of sustainable development. However, the relevance of the green economy as far as sustainable development is concerned, is that there is a growing recognition that achieving sustainability relies primarily on getting the economy right.

It is clear that if we continue to rely on growth generated by the “brown economy”, that is an economy which is based on fossil fuels and resource inefficiency and depletion as well as environmental degradation and social marginalization, it is unlikely that it will be possible to transition to a sustainable growth model [3].

Different approaches leading to a common goal of green economy

There are many ways to conceptualize the green economy and so different countries have adopted slightly different approaches. It can be referred to on the basis of different sectors of the economy, such as energy or manufacturing, but it can also be considered on the basis of topics, such as pollution.

It also includes a number of principles, such as the polluter pays principle, or it can also be closely associated with specific policy proposals like economic instruments.

Because the green economy requires us to find a way to maintain living standards while protecting our environment, the concept of resource efficiency emerges as a solution.

It is a solution as it provides a way for cutting resource use in production and consumption activities, which helps limit environmental degradation, while at the same time decreasing costs for businesses. This is an appealing option for the private sector. The salience of resource efficiency can be enhanced through a combination of measures like taxes, subsidies and trading schemes or through regulatory policies, such as setting standards or introducing voluntary approaches [3].