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Transition to a Green
Economy The Brown Economy T oday’s world is threatened by multiple crises related to climate change, food security, water security and species loss. Add to this, the issues of poverty, inequity, lack of jobs and others. The mounting threat from such issues can be attributed to the ‘brown economy’ development model followed by a majority of the countries.
Brown economy is used to describe economic development that is heavily dependent on the use of fossil fuels and does not consider the implications of the development on the environment. India has seen rapid economic development in the last decade. An average decadal growth rate of 7.2% was observed between 2001 and 2010 as compared to 5.7% during 1991 to 2000. Even though this growth can be termed as remarkable, it has not been inclusive and has been accompanied by depletion of natural resources and deterioration of environmental quality. Despite efforts of the government, poverty remains painfully high. According to the estimates, approximately 270 million people (21.9%) were below the Tendulkar poverty line in 2011-12, a decrease from 407 million (37.2 %) in 2004-05 1. However, the decline in poverty has been offset by population growth. Also the rate of poverty decline has been low. It was recorded at 1.5 % per year between 2004-05 and 2011-122. The aspect of inequality has also come to focus in the recent times. The richest 10% of the population of India held approximately 30% of the income in 2010 as compared to 3.7% held by the poorest section of the society3.The stark inequality in income distribution also affects the resource consumption by different sections of the population. Major proportion of the resources is consumed by the richest. Along with inequality, increasing urbanisation and burgeoning population growth is hampering the ability of our country to utilise its resources more efficiently. India has also witnessed an increase in material consumption 4 and a surge in emissions of greenhouse gases over the last few years. The heavy dependence on fossil fuels has led to increased emissions of carbon-dioxide. It has increased by approximately 49% from 2004-20105. Security of access to energy, water and food has also become a key concern. 97 million people are still without access to improved water sources6 and 17.5% of the population is undernourished7.Continuing on the same path of development will intensify the present conditions. The demand for energy supply is expected to increase by 300-400% in the next two decades 8. Increased emissions of greenhouse gases will only intensify the impacts of climate change on food production, water resources and biodiversity.Green Economy Unravelled In order to achieve a better future, it has become essential to shift towards a new economic paradigm - one where economic development is not attained at the risk of environmental degradation. Such an economy has been termed as ‘Green Economy’ by the United Nations Environment Programme (UNEP). UNEP defines green economy as ‘one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities’. A transition to green economy is essential for sustainable development. Recognising this, the United Nations Conference on Sustainable Development (Rio+20) held in 2012 adopted green economy as a key theme to eradicate poverty and achieve sustainable development. Rio+20 agenda encourages countries to implement green economy policies to ensure sustained, inclusive and equitable development. This transition needs to be supported by regulations and policies, subsidies and incentives, trade and technical assistance. Green Economy – An Inclusive Cost Accounting Regime An important feature of green economies is the direct economic valuation of natural capital and ecological services and a cost accounting regime where externalities such as waste products or pollution are traced and accounted while calculating actual costs of products and services. These negative externalities are internalised within the green economy and reflected in the product/service cost. Brown to Green Economy: Role of Clean Technology Clean technology, also known as environmentally sound technology, climate smart or low carbon technology is one that optimises operational performance and productivity while reducing costs, inputs, energy consumption, waste and pollution. Examples of clean technologies are solar photovoltaics (PVs), electric vehicles (EVs), hybrid vehicles, net zero energy buildings, vertical farming, hydrogen fuel cells etc. Investment in clean technology options creates greener economies by improving the environment, while contributing to economic development. The environmental benefits of adopting clean technologies are obvious. Efficient utilisation of resources reduces virgin resource use. Reduced dependence on fossil fuels results in reduction of emissions of greenhouse gases. Thus clean technologies can play a major role in climate change mitigation. |
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Adoption of Clean Technologies: Global Success Stories Several countries are increasingly promoting the adoption of cleaner technologies. Tunisia is encouraging households to shift to solar-powered heaters. As a result, more than 165,000 households obtained solar water heaters for domestic use between 2005 and 2012. The shift has produced various social, economic and environmental benefits such as savings in terms of fuel subsidies for government, reduced energy costs for households and decreased emissions of greenhouse gases. 3,000 direct and 7,000 indirect jobs were created. Similar programmes are now underway in Egypt, the Former Yugoslav Republic of Macedonia, Montenegro and Morocco. Source: www.unep.org/greeneconomy |
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Shift to a Green Economy Creates New Livelihood Opportunities The potential for creation of employment opportunities across a range of sectors exists in a shift to a low carbon economy. Creation of jobs stems from the emergence of new markets such as waste recycling, renewable energy, energy efficiency, green buildings etc. In Brazil for example, there was 1% growth in the total number of formal jobs in the green building industry over a period of 2 years 9. Over the next two decades, 8 million jobs are expected to be created worldwide in the renewable energy sector alone.Investments in Clean Technology Countries and private firms are investing heavily in the research and development and dissemination of clean technology. Venture investment across all clean technology sectors totalled $6.8 billion during 2013 10. Investment in renewable energy increased to USD 275 billion in 2012, registering a six-fold increase since 200411. Investments in clean technology will encourage further research and innovation and development of new products and technologies.Transition to a green economy requires substantial financial resources. International Energy Agency (IEA) has estimated that a global investment of USD 316 trillion is required to halve the energy related CO 2 emissions by 205012. Realising the potential of clean technologies in facilitating the transition to greener economies, several countries including India are adopting them in various sectors.However, barriers exist for the widespread adoption of clean technologies. Apart from research and investment, transition to a green economy also requires transfer of cleaner technologies, particularly to developing countries. The potential of South-South technology transfer also needs to be fully explored in this regard. q D Varsha Endnotes |