Green Economics

Over the past five years or so the issue of climate change has moved from a peripheral concern of scientists and environmentalists to being a central issue in global policy making. It was the realization that the way our economy operates is causing pollution on a scale that threatens our very survival that first motivated the development of a green approach to the economy. We are in an era of declining oil supplies and increased competition for those that
remain. This raises concerns about the future of an economy that is entirely dependent on oil and a wider recognition of the importance of using our limited resources wisely. This was the other motivation for the development of green economics. In addition, green economists have been concerned about the way an economic system based on competition has led to widening inequalities between rich and poor on a global as well as a national scale, and the inevitable tension and conflict this inequality generates.

Green economics is a methodology of economics that supports the harmonious interaction between humans and nature and attempts to meet the needs of both simultaneously. Green economic theories encompass a wide range of ideas all dealing with the interconnected relationship between people and the environment. Green economists assert that the basis for all economic decisions should be in some way tied to the ecosystem, and that natural capital, such as water, gold, natural gas, silver, or oil, etc. and ecological services have economic value.

The term green economics is a broad one but it encompasses any theory that views the economy as a component of the environment in which it is based. The United Nations Environment Program(UNEP) defines a green economy as “low carbon, resource efficient, and socially inclusive.” As such, green economists generally take a broad and holistic approach to understanding and modeling economies, paying as much attention to the natural resources that fuel the economy as they do to the way the economy itself functions.

While the idea of an equitable economy powered by renewable energy sources is alluring, green economics has its share of critics. They claim that green economics’ attempts to decouple economic growth from environmental destruction have not been very successful. Most economic growth has occurred on the back of non-renewable technologies and energy sources. Weaning the world, especially developing economies, from them requires effort and has not been an entirely successful endeavor. The emphasis on green jobs as a social justice solution is also fallacious, according to some. The raw material for green energy in several cases comes from rare earth minerals mined in inhospitable conditions by workers who are paid cheaply. An example of this is electric car maker Tesla, whose car batteries are made using raw materials mined from Congo, a region wracked by civil war. Another criticism of green economics is that it is focused on a technological approach to solutions and, consequently, its market is dominated by companies with access to the technology.