Green economy sets the course for a more sustainable system

10 October, 2023

The green economy can be defined as an economic model that seeks to promote sustainable development and the responsible use of resources, thereby minimising the environmental impact of economic activities and the associated carbon emissions.

We can say that the Green Economy is therefore a balancing strategy. It presents a framework in which economic activities are developed in a way that respects the natural environment, based on the idea of balancing economic growth and environmental sustainability.

Green Economy is a balancing strategy based on economic growth and environmental sustainability

In contrast to other traditional economic models, which have historically prioritised short-term growth without fully considering environmental consequences, the Green Economy advocates the incorporation of ecological and social values into economic decision-making.

It is important to note that this is an economic theory which, like any other, has its supporters and detractors. In any case, its influence on other traditional economic models is unquestionable, as the climate issue is already present in all of them in some form or another.

Goals of the green economy

The term “green” is often associated with the protection and conservation of the environment, and as the name suggests, the Green Economy has these goals at its core. However, they are not the only ones, as this framework does not forego economic development and growth. We could say that it does not go all in on green, but it does aim to include that colour in the equation.

The transformation to a Green Economy implies changes in production and consumption patterns to address the economic and environmental crisis

This implies a necessary balance between economic, social and environmental factors with the ultimate aim of generating wealth without compromising the future of the next generations and the planet.

It is a paradigm shift in the prevailing economic models based on the following objectives:

• Sustainability, applying a principle of protection and preventing environmental risks, reducing pollution and halting the degradation of ecosystems.
• Equity, as a way to combat scarcity, one of the main threats of climate change. Economic growth must benefit all people and respect human rights.
• The efficient use of resources, allowing for the maintenance of the highest level of human well-being with the minimum negative environmental impact. Waste generation should be avoided as far as possible and natural resources should be optimised.

Advantages

The transformation to a Green Economy implies changes in production and consumption patterns to address the current economic and environmental crisis. Therefore, its advocates see it as the only alternative capable of generating economic, social and environmental benefits, as opposed to other models that place some of these benefits above the rest.

Based on these three main blocks of benefits, we can identify some advantages of the Green Economy as follows:

• Reduction of water, air and soil pollution. Consequently, it improves the health of people, animals and plants.
• Reducing global warming, which implies curbing the scarcity of resources, forced migrations, loss of biodiversity and deforestation, among other major problems of our time.
• Maintaining economic growth, as climate risk has a direct impact on current production models. In addition, the Green Economy promotes new business models and jobs in biofuels, renewable energies, vegan products, waste recovery, sustainable agriculture and many more.
• Promotion of innovation in the search for green products and services that potentially increase quality employment, social and economic stability, the creation of new companies and institutions, etc.

Main trends

Any measure aimed at sustainable economic development can be considered part of a Green Economy, but there are some major global trends that represent the growing interest in sustainable economic development.

One of the best examples of these trends is the circular economy, the production and consumption model that proposes a constant flow in which products and services can be used continuously.

The Green Economy represents an evolution in the way we address economic and environmental challenges

As opposed to the linear model (extraction – production – consumption – waste), the circular economy proposes that waste goes back to the beginning of the chain to re-enter the production system. The circular economy starts with lower consumption through renting, repairing, reusing, recycling or the so-called collaborative economy (sharing goods and services by sharing costs); but it also relies on innovation to develop new biodegradable products or new circular business models.

Another paradigmatic example, as well as one of the pillars of the Green Economy, is the energy transition. The energy sector is crucial for social welfare and economic development, yet it has traditionally had a high environmental impact. Accordingly, the transition that has been taking place in recent years towards an energy model that prioritises electricity generation with renewables, energy efficiency, green fuels, vectors such as hydrogen and carbon capture is of paramount importance.

The Green Economy represents an evolution in the way we understand and address economic and environmental challenges that seems unstoppable. By taking a holistic approach that considers the interconnections between economy, environment and society, this perspective holds out hope for a more sustainable and equitable system that we must explore for a better future for all.