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The Green Economy

The Green Economy is inspired by a different mind-set and value system to the modern industrial economy (otherwise known as modern wealth or capitalism).

In their book, Natural Capitalism: Creating the next industrial revolution, Paul Hawken, Amory Lovins and L.Hunter Lovins (2000, p.9) identify some of the fundamental assumptions of a Green economy:

The environment is not a minor factor of production. Think instead of the natural world as a package that contains, provisions and sustains the entire economy.

Future economic development is limited by the availability and functionality of natural capital. In particular, the limiting factor is the health of nature’s life-supporting services for which they are no substitutes or market value.

Population growth, wasteful consumption patterns, and inefficient, misconceived or poorly designed business systems are the primary causes for the loss of natural capital. All three of these must be addressed to achieve a sustainable economy.

Future economic progress can best take place in democratic, market-based systems of production and distribution. Within this context, all forms of capital must be fully valued, including human, manufactured, financial and natural capital.

Human welfare is best served by improving the quality and flow of services delivered, rather than by merely increasing the total dollar flow of goods produced.

Combined, economic and environmental sustainability necessitate action to redress global inequities of income and material well-being. (In other words, the gap between rich and poor must (and can) be radically reduced).

The best long-term environment for commerce is provided by true democratic systems of governance. Such systems are based on the needs of people rather than business. (In other words, the distinction between needs and wants is determined by people rather than hyped-up marketing that converts wants into needs.)

These principles in mind, the Green Economy (or natural capitalism) offers a variety of pathways to help us behave as if all forms of capital are valued. What follows are just four examples of strategies that operate from this perspective (these are explained in further detail in Hawken et al, 2000, p.10-12):

Radical resource productivity:
The cornerstone of natural capitalism [Green Economics], increased resource productivity acknowledges that when we use resources more effectively and efficiently, various benefits unfold:

Radical resource productivity slows down resource depletion at one end of the value chain. It also lowers pollution at the other end, and provides a basis to increase worldwide employment with meaningful jobs. This in turn can result in lower costs for business and society, given we no longer have to pay for the chief causes of ecosystem and social disruption.

In other words, nearly all environmental and social harm is an artefact of the uneconomically wasteful use of human and natural resources. Radical resource productivity can help to halt the degradation of the biosphere, make it more profitable to employ people, and thus safeguard against the loss of vital living systems and social cohesion.

Sustainable design practices frequently explore ways to redesign industrial processes, materials and products to mimic the ways in which the natural world operates. For example, reducing waste from material production can be accomplished by redesigning industrial systems that enable the constant reuse of materials in continuous closed cycles. This not only mimics efficient biological processes of waste minimisation, but it can also lead to the elimination of toxicity.

Service and flow economy:
Hawken et al (2000, p.10) call for a fundamental change in the relationship between producer and consumer, a shift from an economy that promotes the over-consumption of goods to one that facilitates the provision of services and flow. In doing so, the Green Economy can better protect the ecosystem services upon which life depends. For example, instead of buying processed food from the supermarket (invariably riddled with environmental impacts), we employ a gardener who helps us grow food in our own backyard. Instead of buying cheap imports for birthday presents, we offer a massage voucher as a gift instead. This service focus requires a new perception of value. “It calls for a shift from the acquisition of goods as a measure of affluence to an economy where the continuous receipt of quality, utility, and performance promotes well-being” (Ibid, p.11).

Investing in natural capital:
This strategy aims to reverse environmental destruction by reinvesting in on-ground work that helps to sustain, restore and expand nature’s storehouse. The goal is to return health and diversity to the natural world in the interest of producing more abundant ecosystem services and natural resources (Hawken et al, 2000).

Any strategies within a Green Economy are invariably interrelated and interdependent. For example, the four strategies outlined above each generate market benefits and assorted financial and material opportunities. Together, they can also reduce environmental harm, create economic growth, and increase meaningful employment. In short, they offer a route toward a healthy and prosperous economy that values more than financial or manufactured capital. It also values the people and planet that enable such wealth to occur.

Or, as Hawken et al (2000) explain: “Ensuring a perpetual annuity of valuable social and natural processes to serve a growing population is not just a prudent investment but a critical need in the coming decades. Doing so can avert scarcity, perpetuate abundance, and provide a solid basis for social development; it is the basis of responsible stewardship and prosperity for the next century and beyond” (p.10).

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