Gaps in Greening the Economy

A new report by the United Nations Environment Programme recently noted that the road to achieving a low carbon, resource efficient green economy is possible by just investing two per cent of global GDP into ten key sectors – namely Agriculture, Buildings, Cities, Fisheries, Forests, Industry, Renewable energy, Tourism, Transport, Waste Management and Water. The report asserts that doing so can help  eradicate poverty and promote long-term sustainable development in developing countries.

This report builds on growing calls to streamline environmental concerns with economic needs, in particular means of incentivising businesses to partake in environmental initiatives. The 2008 Financial Crisis precipitated these efforts as politicians perceived greening the economy as a viable means of killing two birds with one stone – i.e. creating jobs in light of a deteriorating economy worldwide while doing their part to mitigate climate change. Discussions on the potential of green economies have been a hot topic in various international meetings such as the World Economic Forum, UNESCAP and the G20. National policies supporting calls for a green economy are steadily underway, as seen in the United States, European Union, Singapore and the United Arab Emirates (UAE). Developing countries have also included aspects of a green economy in their national and regional reports/plans.

While these initiatives are commendable, their full implementation would take longer, regardless of a country’s level of development. Even in  developed/industrialising countries, the issue of costs is significant. For instance, a recent report suggests that switching to renewable energy sources does not create more jobs but rather costs more jobs. In addition, UAE’s ambitious carbon-free city project, Masdar City, has experienced some delays in completing its construction while proposed cap-and-trade policies in Australia and the US have continued to face legislative difficulties. The sustainability of such initiatives is also important and must avoid falling into a green washing trap, where stakeholders such as businesses and policymakers have only made incremental changes that suit their comfort levels and justified their actions with “green” as a pre-fix to their existing activities. Governments must therefore ensure funds are committed to continue existing green projects in the medium and long term, and ensure that green economy can gradueally wean off a dependence on subsidies.

In developing countries, a possible area of concern in the near future would be the extent to which heavily populated regions, such as megacities would be able to balance changes needed for a green economy vis-a-vis existing circumstances, such as growing populations, slum areas, high vulnerability to environmental risks and lack of transparency. In rural regions, it has yet to be seen whether such green economy initiatives would be accessed by poor and remote communities effectively, and bypassing any instances of corruption and inefficiencies.

It is nevertheless encouraging to see that the momentum for a green economy is growing. While sound regional and national policies would be able to set the tone for a country’s sustainability, local efforts and capacities are essential to see the process through.