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Green economy: Entering a ‘Green’ or a ‘Grey’ Area?

Monday, 20 February 2012
by Stavrianna Kaisari, Researcher, MSc. Kings College London
Green economy: Entering a ‘Green’ or a ‘Grey’ Area?
The Earth has enough for everyone’s needs, but not for some people’s greed.”(Mahatma Gandhi)

Twenty years ago, more than 100 heads of states met in Rio de Janeiro to address urgent problems for environmental protection and socio-economic development and set an action plan for sustainable development. In a few months’ time, a great number of heads of states will once again meet in Rio to determine the next steps for environmental protection and socio-economic development. In the wake of worsening financial and environmental crises, the challenges ahead seem overwhelming.

The main target for the upcoming conference is not only to renew commitments to sustainable development and review the progress to date, but also to address new problems and emerging challenges. The core themes for Rio+20 – as defined by the United Nations[1]- are the following two: (i) Green Economy for sustainable development and poverty eradication and (ii) institutional framework for sustainable development.

The Green Economy Concept ….. An Alternative Paradigm?

It is evident that Green Economy represents a key approach to the way forward for sustainable development. It is thus interesting to assess the growing debate around Green Economy and argue whether it can be a useful way of framing policy discussions and policymaking.

The initial step is to define what Green Economy actually means. At this very beginning the first obstacle arises; despite the fact that there is an ongoing debate on Green Economy, it is still hard to clearly define the term. It seems that - similarly to sustainability - Green Economy is vague and ambiguous, carrying various meanings and overtones.

In February 2011, the United Nations Environment Programme (UNEP)[2] launched a 631-page Green Economy report, presenting the new ‘Green Economy’ paradigm. According to the report, Green Economy can be defined as an economy which results in “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”. Based on the report, the new model provides opportunities for employment and wealth creation and it can be a key catalyst for poverty eradication, not only in developed but developing countries as well.

But what is the exact rationale for the new development paradigm? The Green Economy agenda may vary; nonetheless, it is mainly presented as a viable way to turn crises - like the current financial, ecological and food crisis - into opportunities for growth. The growth measures are various and can range from market mechanisms (taxes, subsidies and tradable permit schemes) to technical specifications for the use of resources, green public procurement etc.

Seeing crises – from natural disasters to terror attacks and chemical emergencies -  as business opportunities is compatible with the current capitalist system. As Naomi Klein explains in ‘The Shock Doctrine’[3], the “various crisis events are central to the creation of openings required for incursions of corporate capital investment”. In times of financial recession, Green Economy charts the course for a new era, creating markets for environmental services and pricing ecological resources. At this point, it is worth mentioning that these markets are not negligible; on the contrary, they are fast growing and profitable. According to Bloomberg New Energy Finance[4], the value of emission rights traded throughout the world in 2010 reached $120bn. Evidently, carbon trading has already become a ‘big business’.

The new green model that promises ‘green’ profits has many powerful supporters - the Obama administration is an indicative example. In light of Rio+20, it is promoted as the alternative development path; a way to create a win-win solution for both the economy and the environment, creating synergies among economic, environmental and social aspects of development.

…Or a ‘Green-Washing’ Approach?

Green Economy may indeed offer a new perspective on the development sector, stressing the need for a ‘greening’ trend. Nevertheless, I would argue that there are some dangerous pitfalls and traps, at least in the ways that the notion is ‘handled’ by governments and large organisations. Some very important questions can be raised about who controls and benefits from Green Economy, or - following social constructivists - who dominates the Green Economy discourse.
Historically, the development discourse has been formed under conditions of unequal power[5]; ‘development’ initiatives have been almost exclusively related to the European civilisation. Europeans created an ontology that favored their own culture, according to which they were the ‘superior’ amongst the races while native people were ‘backward’ in need for guidance and ‘progress’[6]. The stages that society passed through on its way to ‘development’ –colonialism, modernisation, industrialisation, urbanisation, technicalisation etc. - have been based on a ‘northern’[7] way of thinking, resulting in concrete practices for its benefit[8].

But is that the case for Green economy as well? Does this concept reduce or intensify inequalities between North and South?

Green economy is founded upon a neo-liberal ideology, which constructs environment as a source of inputs and a destination of outputs. Nature is constructed as a provider of valuable services — from clean water to carbon sequestration – which in many cases remain unrecognised in human societies. As Jean-Chistophe Vie stated: “it is time to recognise that nature is the largest company working for the benefit of 100 percent of humankind-and it’s doing it for free”[9].

According to the Green Economy model, if humans attribute monetary values to the natural, non-human world, the real value of ecosystem services would become visible. Based on this perspective, the creation of markets for natural resources and environmental services is being supported and promoted[10].  

This construction of nature seems homogenised with the northern way of thinking[11]. The separation of Humans from Non-Humans and of Society from Nature is based on the Cartesian dichotomies that are central to the ‘northern’ mindset. Good and Evil, Mind and Body, Men and Women, Rich and Poor, Civilised and Barbarians are defined in contradiction, with one being almost diametrically opposed to the other. Moreover, in many cases one notion of each pair is often deemed superior to the other. Monetarisation and market-led approaches (such as putting price tags to ecosystem services) are also defining features of the ‘northern’ civilisation. Even if these constructions end up acquiring a reality of their own, they are ‘still human products’[12].

But then if nature and the environment are social constructs, how can they be ‘correctly valued? As Rolston[13] highlights, even if there is some magic way to value nature ‘per se’, people in other cultures might not agree with this valuing; “they too will project greenness onto trees; they might, nevertheless, value them in other ways, perhaps as natural classics, perhaps as the abode of spirits, perhaps as cellulose for technology”.

A striking example is the distinct ways in which water is valued by neoclassical economics and indigenous cultures, due to different frames of reference. Checcio and Colby[14] explain that, for the Shoshone and Bannock Indian tribes, water is not only important for irrigation, fisheries and livestock but also constitutes an integral part of religious ceremonies. Likewise, indigenous people of the Murray-Darling Basin of south-eastern Australia value water in non-monetary values; clean water is valuable for purposes as “ceremonies, religious places, dreamtime stories, burial places, habitat for clan totem beings, and sources of foods and tool[15]. These non-monetary values do not follow the norms of accountants, brokers, bankers and ecological scientists since they are hard - if not impossible - to be categorised based on the Euro -American perspective[16]. Nevertheless, they can be still valid in terms of indigenous people’s own principles and needs[17].

The fact that the Green Economy discourse is North-dominated raises questions about who benefits from the Green Economy concept.  

Focusing on the Payment of Environmental Service (PES) – a core component of the Green Economy paradigm – the idea is that such schemes would be applied in cases where the rural poor are providers of environmental payments (fishermen, farmers, forest dwellers etc). Compensating them for actions that protect ecosystems would serve both poverty eradication and conservation efforts. Nevertheless, critics fear that a market-based tool like PES does not always favor distribution of benefits towards landless individuals and the ‘poorest of the poor’[18].

Lee and Mahanty[19] present a set of challenges regarding PES- some of which are presented here.  First of all, a key question is whether poor people can act as providers of ecosystems services. In some cases, poor people are excluded from participation in PES programs. For instance, hydrologically sensitive areas, even if populated by poor people, may have few downstream users and therefore low potential to be included in PES schemes[20]. Also, transaction costs might prevent poor people from participating in PES schemes. As Picard et al.[21] highlight - from a transaction cost perspective – it is much more efficient to target to major industrial actors or large-holders, than smallholders. Likewise, some PES programs involve important investment costs, unaffordable for poor populations. Pagiola et al.[22] describe how farmers in Nicaragua, wanting to participate in a PES scheme, might have to sacrifice about 70% of their current net income. Finally, even if there are good market opportunities for the poor, there may be barriers because of low awareness and technical knowledge[23].

Evidently, for the sake of efficiency, it is likely that some of the program benefits may go to large land holders, private companies or intermediates, instead of poor rural populations. This might also mean that a private company will end up deciding for the use of natural resources, excluding the local population from its territory rights[24]. In this way indigenous communities might lose control of their natural resource, livelihoods and cultural heritage[25]. The Indigenous Nationalities of the Ecuadorian Amazonian express this exact fear, with the following declaration: “we reject the negotiations on our forest because they try to take away our freedom to manage our resources[26].

ETC group[27] - or Action Group on Erosion, Technology and Concentration – in its 60-page report also warns about convergence of private power over natural and biological resources, stressing the dangers from the uncontrolled release of privately held technologies into communities that are not prepared for the associated impacts. The report suggests that large corporations use the idea of Green Economy as a pretext, forming networks in order to exploit biomass and gain control of local natural resources. The report emphasises the risk of new green oligopolies, using the example of DuPont – one of the leading companies that control the global seed, pesticide and agricultural biotechnology market - which is now activating in the energy and food market, as well as in plant-based materials. Other powerful players are Monsanto, Syngenta, Dow, BASF, Unilever and the U.S. government, all focusing their investments on converting plant biomass into profitable products.

Apart from serious equity concerns, there are also reasons to doubt the effectiveness of Green Economy techniques as a conservation strategy, which is after all the main target of the new green paradigm. First of all, and as McAfee[28] explains, knowledge of ecosystem functions is still very limited; hence, it is very hard to estimate how much carbon is stored or released, or how much water is conserved or consumed as the result of PES schemes.

In my opinion however- and in that of many others – a very worrying aspect of the Green Economy paradigm is that it constructs different environments in different locations as equitable and substitutable. For instance, carbon trading is based on the assumption that environmental offsets in different locations are equivalent. Therefore, carbon production in one location can offset against its storage in a tropical forest at a very distant location. But how can industrially emitted CO2 be equivalent to carbon captured and stored in forests for millennia?[29] Even more absurd offsets may be promoted as ‘environmental solutions’. As Sullivan reveals, the Optimum Population Trust (Opt) organisation suggests that carbon emissions by consumers in the ‘northern’ world can be offset by their paying for reduced fertility through contraception in the South.[30] Presenting human life as equivalent to carbon emissions is at least debatable.

Conclusions

As we move towards the Rio+20 conferences, in times of financial crisis and high uncertainty, the concept of the Green Economy has emerged into the global policy debate as an alternative development path. Although the term has no clear definition, the main idea is that it will enhance current economic growth and bring new opportunities for green investment, without exposing future generations to environmental risks. This paradigm is also believed to target against poverty, rewarding poor rural populations for the environmental services they provide.

Despite the ‘green’ enthusiasm from many states and corporations, there are also concerns, raised by several developing countries and non-governmental organisations (NGOs). Bolivia is one of the countries that rejected the green economy concept, as formulated in the draft document to be adopted in June, in Rion+20. The head of the Bolivian delegation Rene Ollegano stated that “the role of the forest is not for carbon stocks[31]; thus expressing Bolivia’s firm stand against the Green Economy mechanisms. Other developing countries have also expressed their objections regarding the new paradigm, with China noticing that a UN definition of the Green Economy would not take into consideration the problems faced by developing countries[32] and India emphasising the need for national authorities to be able to take their own decisions[33].

Various NGOs have also rejected the Green Economy model. For instance, the participants of the workshop on REDD and Biocultural Protocols - organised by the Indigenous Peoples Biocultural Climate Change Assessment (IPCCA) from Ecuador, Panama, India, Nicaragua, Peru and Samoa - opposed to the Green Economy concept, stressing that “life cannot be negotiated or sold on a stock market[34]. Also, many NGOs stress the need for transparency and public consultation in the relevant decision making process. Indicative is the document  “Occupy Rio - the Road to Rio+20”,prepared by various organisations (Alliance for Democracy, Council of Canadians, Earth Law Center, Food and Water Watch, Institute for Agriculture and Trade policy and International Indian Treaty Council) that calls for immediate action against the “false” green economy[35].

It is evident that, based on the development experience of the last decades, there are emerging concerns that a “business as usual” model will reinforce North-South inequities instead of resolving them. The main question is whether the current economic model - that has created the environmental crisis - can solve the problems it created. Although the Green Economy model is a new tool and, therefore, its potentials to “re-launch” growth are not yet fully explored, it should not escape our attention the fact that our global system is dominated by unequal power relations and profit driven.  Even if the Green Economy model would have been feasible in an ideal – probably utopian - world of equity and democracy, is that the world we are living in?


Endnotes

  1. United Nations Environment Programme (UNEP) Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradicatio, 2011. [Online] Available at: http://www.unep.org/greeneconomy/Portals/88/documents/ger/ger_final_dec_2011/ [Accessed 06 February 2012].
  2. United Nations (UN) Rio+20. United Nations Conference on Sustainable Development. Objectives and Themes, 2012. [Online] Available at: http://www.uncsd2012.org/rio20/  [Accessed 05 February 2012].
  3. Naomi Klein cited by Sullivan, S. “Green capitalism, and the cultural poverty of constructing nature as service provider” 3 Radical Anthropology (2009), p.18.
  4. Bloomberg New Energy Finance. Carbon Markets, 2012 [Online] Available at: http://bnef.com/markets/carbon/ [Accessed 05 February 2012].
  5. Escobar, A., Encountering Development: the making and unmaking of the third world. Chichester, West Succex: Princeton University Press,1995, pp. 3-20.
  6. McMichael, P., Development and social change: a global perspective. 3rd Edition: Sage Publications, 2004, pp.3.
  7. Even though the terms “northerners”’ and “westerners” carry a long history of colonialism and imperialism their use is almost inevitable, due to lack of alternative definitions.
  8. Escobar, A. op.cit, pp. 3-20.
  9. Jean-Chistophe Vie (2009) cited by Sullivan, S., op. cit., p.19.
  10. Sullivan, S., op.cit., p. 18-27.
  11. Ibid.
  12. Berger and Luckmann cited by Calhoun, G., Gerteis, J., Moody, J., Pfaff, S. and Virk, E. Contemporary Sociological Theory. Blackwell Publishing Ltd., 2002, p.29.
  13. Rolston, H. Nature For Real: Is Nature A Social Construct? In: T.D.J Chappell ed. The Philosophy of the Environment. Edinburgh: University of Edinburgh Press, 1997, p41.
  14. Checcio and Colby (1993) cited by Steenstra, A., “A Case Study of Accommodating Indigenous Cultural Values in Water Resource Management: Privatization and Co-Management”, XXI (2) Indigenous Policy Journal (2009), p. 5.
  15. Steenstra, A. op. cit., p. 9.
  16. Burton (1991) cited by Steenstra, A.  op.cit., p.5.  
  17. Thrupp, L.A. “Legitimising Local Knowledge: From Displacement to Empowerment for Third World People”, 6 (3) Agriculture and Human Values (1989), p. 13-24.
  18. Lee, E and Mahanty, S., Payments for Environmental Services and Poverty Reduction: Risks and Opportunities. Issues Paper, 2009, p.11 [Online] Available at: http://www.rightsandresources.org/documents/files/doc_1125.pdf [Accessed 05 February 2012].
  19. Ibid., p.8-22.
  20. Pagiola et al. (2004) cited by Lee, E and Mahanty, S. op.cit., p.9.
  21. Picard, R., Bille, R. and Sembres, T. Upscaling Payments for Environmental Services (PES): Critical Issues. 3 (3) Tropical Conservation Science, 2010, p. 249-261.
  22. Pagiola et al. (2004) cited by Lee, E and Mahanty, S op.cit., p.12.
  23. Landell-Mills and Porras (2002) cited by Lee, E and Mahanty, S. op.cit., p12.
  24. Ribeiro, S. The true colors of green economy. America Latina em Movimento. 2011. [Online] Available at: http://alainet.org/active/51658&lang=pt [Accessed 05 February 2012].
  25. Naido, A. Fighting for a Real Green Economy. Blue Planet Project Council of Canadians. 2012.  [Online] Available at: http://canadians.org/blog/?p=13019 [Accessed 05 February 2012].
  26. Sullivan, S., op.cit., p. 25.
  27. ETC Group Who will control the Green Economy, 2011 [Online] Available at: http://www.etcgroup.org/upload/publication/pdf_file/ETC_wwctge_14dec2011_4web.pdf  [Accessed 05 February 2012].
  28. McAfee, K (2011) Green Economy and Sustainable Development: Bringing Back the Social Dimension. IN: UNRISD conference. 10–11 October 2011Geneva. p.9.
  29. Sullivan, S., op.cit., p. 18-27.
  30. Sullivan, S. The environmentality of ‘Earth Incorporated’: on contemporary primitive accumulation and the financialisation of environmental conservation, 2010. In: An Environmental History of Neoliberalism, Lund University, 6-8 May 2010, p7.
  31. The Mercury Forests are not for carbon stocks, 2012 [Online] Available at: http://www.iol.co.za/mercury/forests-are-not-for-carbon-stocks-1.1191232. [Accessed 06 February 2012].
  32. Keating, D (2012) Push for sustainability indicators at Rio talks. European Voice, 2012 [Online] Available at: http://www.europeanvoice.com/article/imported/push-for-sustainability-indicators-at-rio-talks/73428.aspx [Accessed 05 February 2012].
  33. Ling, C.Y. and Iyer, S. Developing Countries Raise Concerns On “Green Economy” as Rio+20 Begins. South-North Development Monitor (SUNS). 2010.  
  34. See the Declaration of members of the Indigenous People’s Biocultural Climate Change Assessment Initiative (IPCCA) [Online] Available at: http://thewrongkindofgreen.wordpress.com/2011/11/26/indigenous-groups-reject-redd-a-false-solution-that-breads-a-new-form-of-climate-racism/ [Accessed 05 February 2012].
  35. See the document “Occupy Rio- the Road to Rio+20”. [Online] Available at: http://www.iatp.org/files/The%20Road%20to%20Rio%20+20.pdf. [Accessed 05 February 2012].


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