An economic model for a better world.

In this our series on the New Economies, today we want to speak to you about the economic model that may very well be the best answer to the upcoming global crisis: the green economy.

This economic model aims to stop ecosystem destruction and environmental damage while providing a sustainable model that does not hurt the environment. The green economy aims for fairness as well, striving for equity for all human beings (as well as the planet). The ideals of the green economy are resource efficiency, social inclusion for all, and impact-less carbon emissions worldwide. A tall order.

What is innovative about this economic model is that it takes resources, the environment and people into account; but it also ascribes economic value to the world’s natural capital and ecosystem services.

Natural capital

Natural capital is the planet’s capital of soil, air, water, geology and all living beings. It distinguishes itself from financial capital in that humankind depends on this capital to survive and to thrive.

The reason natural capital is an issue is that it’s become painfully obvious that we need to maintain it. For example, deforestation leads first to landslides and then desertification; trees are also the planet’s lungs, responsible for scrubbing CO2 from the air. Therefore, trees protect towns and cities from disaster, their surrounding farmlands from drying out and the planet from pollution.

However, trees also benefit global economies in ways that most wouldn’t consider. Forests are major components of their own ecosystems. These systems host thousands of species of animal and plant life that are crucial to certain sectors. Take mangrove forests. They’re nurseries and habitats for fish, mollusks, crabs and bird species: the fish that comes from mangrove forests supports $200 of the $250 billion current global fish market.

Ecosystem services

Ecosystem services are the series of direct and indirect benefits that we draw from the ecosystems. They are divided in four different categories:

• Provisioning services derived directly from ecosystems: food, water, genetic resources and medicine.
• Regulating services that properly functioning ecosystems provide to the surrounding areas and the planet at large: climate regulation, natural disaster prevention and protection, water purification (and waste management), pollination for biodiversity and natural pest control.
• Habitat services: ecosystem variety is the key to healthy genetic pools worldwide.
• Cultural services are the benefits that humankind derives from having access to these ecosystems: wellness, spiritual and aesthetic values and intellectual enrichment.

Taking responsibility

Overexploitation of the world’s natural capital and the destruction of our ecosystems are damaging to the economy. It’s possible to take two assets of our planet into consideration in an economic model: if we do, we create a plan that will gravitate naturally towards stewardship of the planet. Organizations like the United Nations, International Monetary Fund and the Organization for Economic Growth and Development are aware of this and are making urgent global recommendations towards sustainability and green recovery. Their message is clear:

• We are responsible towards our planet, we must stop damaging it;
• We must take the right actions towards our planet and its natural systems, to ensure a healthy future for humankind and society; and
• There are ways to do this that will benefit the economy worldwide.

Putting it all together: many principles

There are many global alliances and plans underway that implement aspects of the green economy. They all have the following principles in common: stewardship of the planet, efficiency and sufficiency, global wellbeing, justice and equity and good governance.

Stewardship of the planet

• Nurturing the planet’s natural capital an ecosystems;
• Preserving this capital; and
• Investing in the future administration of this capital for sustainability, circular economic maintenance and growth.

Efficiency and sufficiency

• Creating prosperity within the planet’s boundaries;
• Limiting consumption of natural resources to what is viable; and
• Recognizing the bare minimums that society needs and the optimal goals in consumption of certain goods.

Global wellbeing

• Centering on people and aiming to benefit everyone and not just the few;

  

• Growing wealth (not just financial wealth) for everyone;
• Creating opportunities to work in green, decent employment (and the creation of these companies and jobs); and
• Engaging in collective action but understanding individual choices.

Justice and equity between humankind’s generations

• Including everyone and not discriminating;
• Promoting solidarity and social justice and strengthening the bonds between people, institutions and societies;
• Leaving nobody behind in creating a fast shared transition to this system;
• Aiming to the equitable distribution of opportunities and their outcomes; and
• Promoting medium and small enterprises worldwide.

Good governance

• Enabling institutions to use evidenced-based science and economics to adapt strategies to the local level;

  

• Having institutions that are integrate with each other, collaborate and make sense on every level of society;
• Opening the floor to public scrutiny, opinion, transparency, communication and empowering society to have a say in these institutions;
• Allowing decision-making from the bottom up at the local economy,  but also at the natural capital management level in order to protect every area equally; and
• Building a financial system that provides wellbeing and sustainability, serving the needs of the many and not those of the few.

Sustainability as socioeconomic drive

The principles of the green economy are those that drive the UN’s Sustainable Development Goals. Like we mentioned, it is the belief of global organizations that the only way for humankind to thrive and prosper is if we take a series of steps that will ensure the equal, sustainable and proper use of the planet’s resources.