What Is A Green Economy And How Can It Help India?

We have seen how the global economy has been paralysed even after liberalisation and globalisation. Ecological causes have forced us to look at green economic models. We need corporate environmental responsibility to change.

Picture Credit: Jayanta Kumar Das

The corporate-carbon-consumer axis has been the design of the global economy for the last 20 years following the Earth Summit, 1992. Corporate houses use carbon as a resource, selling products in the market as ‘low-carbon’ and ‘eco-friendly’. This increases the concern regarding usage of carbon.

The developed world and some of the most powerful developing economies stand committed to cutting down on carbon emissions. The great global carbon politics has detracted from the basic meaning of sustainable development. Corporate accession has induced a great carbon market which has created a shift to corporate imperialism. Over the last 20 years, we have witnessed a series of natural disasters despite the global agenda for sustainable development. Therefore, the focus of green economics is to generate jobs by introducing low-carbon emissions for large corporations. And to design better public-private partnerships to use and transfer green renewable technology.

The Nagoya Protocol of Access and Benefit Sharing (ABS) and other emerging environmental regulatory frameworks like Reducing Emissions from Deforestation and Forest Degradation (REDD+) and Payments for Ecosystem Services (PES) are innovative financing systems designed to incentivise conservation and the sustainable use of natural resources. The core of the green economy paradigm is a two-pronged approach;

  • The conservation of common chain resources granting rights to the indigenous people and the local community of the ecosystem and ensuring that they are incentivised.
  • This is ensured by creating a flow of monetary and non-monetary benefits from the commercial and research use of the resources for the community, in the form of genes or carbon stocks.
Picture Credit: Jayanta Kumar Das

The green economy is defined by the United Nations Environment Programme (UNEP) as one that results in “improved human well-being and social equity, while significantly reducing the environmental risks and ecological scarcities” or “a low carbon, resource efficient and socially inclusive economy.”

UNEP in its extended version, defined a green economy as one in which “growth in income and employment should be driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency and prevents the loss of biodiversity and ecosystem services.”

However, the success and failure of a green economy will depend on green governance. While a green economy seeks to be an innovative financing mechanism that will incentivise the conservation and sustainable use of biodiversity, the challenges lie in identifying rights and sharing benefits with communities that are actively involved in conservation and sustainable use. It is vital that it’s not left to the market (green, or otherwise) to devolve rights. Rather, it is critical that a green governance framework is in place that will clarify the rights of communities before embarking on a green economy.

For a green economy to work, it needs to incentivize communities who are effectively engaged in the conservation and sustainable use of biodiversity through traditional ways of life. In fact, the only way a system of incentives can work is by ensuring that the rights of communities who need to be incentivised are clarified through a strong green governance system at the outset.

Putting economic value on nature as the green economy does, without clarity on the right holders and beneficiaries could lead to an elite accession and the exclusion of communities who ultimately are the absolute stewards of nature. There is a paradox when the potential of green profits could lead to the denial of rights for community beneficiaries in a market driven process. Hence, the green economy will further destroy green governance thereby leading to further ecological degradation.

It is important at this stage to transition into a green economy by firmly grounding it in the principles of green governance. One concern is the need to figure out how the public and the private sector can invest in a green economy while ensuring robust green governance. Ironically, while the green economy is being hailed as the economy of the future, this enthusiasm is not matched by an implementation of the principles of green governance. This is not from a lack of frameworks for green governance in law and policy.

The Nagoya Protocol takes the first step to secure green governance in a multilateral environmental agreement by recognising four key rights of communities. They are the rights of communities to:

  • Traditional knowledge associated with genetic resources.
  • Genetic resources.
  • Self-governance through customary laws and community protocols.
  • Benefit from the utilisation of their traditional knowledge and genetic resources by third parties.
Picture Credit: Dimple Dimp

The green economy sees nature as natural capital and its use as the monetary value of biodiversity. The natural capital flow is equivalent to the estimates under the economics of ecosystem and its biodiversity. Effectively, what a green economy does is put an economic value on biodiversity. We must consider the green economy in terms of public goods and services that nature provides, like clean air, water, carbon sink system, pollination, rainfall, food, medicines, etc.

When one overlooks the access of natural benefits and services from the ecosystem and transforms it into other land use for short-term economic gain, the community associated with such ecosystems have to pay a massive economic cost both directly and indirectly. We must consider the provisioning services, the regulating services, habitat and supporting services and cultural services as the gross ecosystem services to estimate the economics of an ecosystem. The green economy specifically relies on the diverse nature of services the ecosystems are providing.

Provisional services comprise of rendering food, raw materials, fresh water and medicinal resources. Regulating services include climate and air quality regulation, carbon sequestration and storage, moderation of extreme events, waste-water treatment, erosion prevention, maintenance of soil fertility, pollination and biological control. Habitat or supporting services comprise of habitats for species and maintenance of genetic diversity. Cultural services include recreation, mental and physical health, tourism, aesthetic appreciation and inspiration for culture, art and design and spiritual experience.

The green economy specifically relies on the diverse nature of services the ecosystem provides.

Picture Credit: Dimple Dimp

Let’s do a cost-benefit analysis of the conversion of mangrove vegetation into a shrimp farm in southern Thailand. The conventional economist estimates the mangrove forests as unprofitable since it assists only around $600 per hectare per year based on the wood for fuel extracted by the community. It suggested transforming this mangrove ecosystem into a shrimp farm with expected profits of around $9,600 per hectare per year. The green economy estimates don’t include only the potential economic profit but it also considers the government subsidies of about $10,000 per hectare for rehabilitation due to salination and leaching of chemicals after five years of exploration.

The approach also considers the monetary value of benefits of the mangrove forest to the local communities in the form of ecosystem services such as wood, fish and coastal protection against storms and cyclones that amount to about $12,000 per hectare per year. After evaluating the gross economic and ecological values in terms of its monetary benefits, it is far better than shrimp farming, not just in terms of the market value of shrimp but also in terms of costs of the ecosystem services it provides. It clearly illustrates that the shrimp farm makes a significant net loss compared to the services provided by the mangrove forest.

The poorest of the poor and the marginalised are the most affected community due to massive destruction of the ecosystem and its biodiversity. Transforming the land use of the ecosystem for short-term economic gain heavily affects the natural capital flow and the biodiversity of the ecosystem. In a recent estimate, if all the forests in India, Brazil and Indonesia were destroyed, the impact on the GDP of the countries would be 16%, 10% & 21% respectively. But the impact on the GDP of the poor by 47%, 89% & 75% respectively.

The United Nations Conference on Sustainable Development, (Rio de Janeiro 2012) draft, ‘The Future We Want’, stresses adopting a ‘green economic’ model. It considers the green economy in the context of sustainable development and poverty alleviation as one of the significant instruments available for achieving sustainable development, recognising that it could provide options for policy formulation but should not be a rigid set of rules. The green economy should work to alleviate poverty, sustain economic growth, enhance social inclusion, improve human welfare, explore employment opportunities and decent work for all, while maintaining the healthy functioning of our earth’s ecosystem. The document affirms that policies for a green economy in the context of sustainable development & poverty eradication should be guided by all the Rio Principles, Agenda 21 and the Johannesburg Plan of Implementation.

Picture Credit: Amrish Kumar Joshi, Gaya, Bihar

The north-east of India has a great potential to harness the green economy. The entire region has an abundant natural capital flow, rich biodiversity and an abundantly rich, diverse, ethnic, tribal community. Each ethnic community extracts diverse ecological benefits for its distinct crafts. They craft distinct products, but they hardly extract the potential profit. They need technical and financial assistance with access to credit and markets. There is an abundant opportunity to develop this region into a sustainable eco-tourism destination. The green economy is in need of a modern global community and a set of robust green governance principles to establish a climate-resilient natural capital flow, so that the poorest of the poor and the marginalised have access to the potential economic and ecological benefits. The green economy is about bridging the gap between robust development and inequitable resource benefit sharing. It will bring the most marginalised sections of society into the mainstream.

It is a paradigm shift for the development-versus-environment dichotomy.

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