The green economy is loosely described as an economic model that results in an improved quality of life for humans, while leaving a reduced footprint on the planet, and restoring natural assets. The idea behind it is for economies to remain fully functional while using far less natural resources, creating far less carbon, and doing far less damage to the natural environment. The theory is that, by doing so, our economies will be more resilient. As an economic model, it's the successor to the linear economy model, and replaces it with a circular approach to production.

People and organizations across the whole economic chain –meaning producers, consumers, distributors, and government- take responsibility for the impact their activities have. Instead of the 'make, use, dispose' of the linear economy model, the green model favors circular flows in which waste is used to help or power other processes. The same approach to economic growth is true for the use of nature as a natural capital: it considers the value and use of nature in all economic activities. The green economy model takes the environmental impact of all human activities into account, and attempts to reduce them where possible, and offset them when not.

So, what does a green economy look like? It is described by these key principles:

Natural capital

Perhaps the most significant aspect of the green economy model is the idea that the natural world has a value that must be accounted for in all economic activities. The things that nature provides us: clean water, air, food, shelter; these are a capital asset, and they must be well managed. We need to understand the value of the things nature provides and to actively choose to preserve and restore natural capital.

One important aspect of the value of nature is the concept of biodiversity. The earth's biological diversity –all living organisms, whether visible, such as plants and animals, or less visible, like the myriad bacteria in the soil and in our digestive systems- is perhaps the most important natural capital asset. Deforestation is a great example: in many places, the trees are seen as a commodity in themselves. But by cutting down the trees, we also lose the soil and the water retention capacity that the forest provides. We lose the shelter for the plants and animals that live in forests, and which in turn provide us food. We lose species.

Deforestation also reduces carbon capture: forests absorb CO2 and release oxygen. This is a key element in the fight against climate change. In a green economy, forests are seen not just for their timber value, but also for their role in maintaining biological diversity, acting as water reservoirs, capturing carbon, and producing oxygen. Mangroves are a perfect example: they exist only in specific tropical estuaries and are a key element in maintaining biodiversity in those delicate and productive ecosystems.

Ecosystem services

• Clean air comes from plants; there are also large areas of urban landscape where the only green is mowed grass, but where trees can sequester CO2 and provide a canopy of shade and shelter for wildlife and our communities
• Water is treated and cleaned by the environment we live in, particularly in wetlands and forests
• Food comes from the ecosystems around us, from farms and fisheries that depend on the biological diversity of the land and sea
• Natural climate regulation – the forests, wetlands and oceans absorb CO2 and regulate climate
• Flood control – the natural absorption of rainfall by soils, forests and wetlands prevents flooding
• Pollination is a key part of our food supply
• Soil formation is essential for growing food
• Biological control – natural systems keep in check the pests and diseases that harm our crops

Taking responsibility

• Understanding the value of natural capital and ecosystem services in all parts of the economic chain
• Reducing the environmental impact of economic activities
• Restoring the natural environment in areas where it has been damaged
• Creating a culture of stewardship and responsibility for the natural environment

Putting it all together: many principles

There are many possible principles for a green economy. The list below represents a consensus among green economy practitioners and advocates. A green economy is guided by principles of:

Stewardship

• Resource stewardship includes sustainable extraction of renewable resources and prudent extraction of non-renewable resources
• Pollution stewardship means ensuring that all forms of pollution are reduced to levels that ecosystems can absorb
• Biodiversity stewardship ensures that the loss of biodiversity is reversed and the extent and health of ecosystems is maintained and restored
• Climate stewardship means reducing greenhouse gas emissions at a sufficient pace to minimise the risks of dangerous climate change

Efficiency and sufficiency

• Improving the energy and resource efficiency of economic activities and infrastructure
• Reducing and closing material cycles to achieve dematerialisation
• Reorienting investment from high-impact sectors to green sectors
• Changing behaviour and consumption patterns to reduce environmental impact

Global wellbeing

• Maintaining and improving the wellbeing of people by ensuring that everyone has access to good quality food, water, shelter, energy and livelihoods
• Ensuring that economic systems are designed to provide opportunities and livelihoods for all people, including the poor
• Reducing the gap between rich and poor people, and between rich and poor countries
• Ensuring that the green economy benefits and opportunities are accessible to developing countries

Justice and equity

• Distributing the benefits of green economic growth equitably
• Ensuring that access to natural capital and ecosystem services is guaranteed to all people
• Recognising and remedying historical injustices in the distribution of natural capital and ecosystem services
• Protecting the rights of indigenous peoples and local communities

Good governance

• Shifting from short-term to long-term thinking in economic decision-making
• Integrating environmental and social costs into economic decision-making
• Ensuring that decision-making is participatory and inclusive
• Creating an enabling environment for green economy transition