A green economy as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive.

Practically speaking, a green economy is one whose growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services. These investments need to be catalyzed and supported by targeted public expenditure, policy reforms and regulation changes. This development path should maintain, enhance and, where necessary, rebuild natural capital as a critical economic asset and source of public benefits, especially for poor people whose livelihoods and security depend strongly on nature.

So the concept of the “Green Economy,” as well as promoting sustainability and economic growth is also a call to reassess some flaws in current economic models and assumptions. The global recession and struggle for recovery has made green economy a topic of universal debate. What would this type of economy look like, and how could we get there?:

A Green Economy can be thought of as an alternative vision for growth and development; one that can generate growth and improvements in people’s lives in ways consistent with sustainable development. A Green Economy promotes a triple bottom line: sustaining and advancing economic, environmental and social well-being.

The prevailing economic growth model is focused on increasing GDP (Gross Domestic Product) above all other goals. While this system has improved incomes and reduced poverty for hundreds of millions, it comes with significant and potentially irreversible social, environmental and economic costs. Poverty persists for as many as two and a half billion people and the natural wealth of the planet is rapidly being drawn down. In a recent global assessment  approximately 60 percent of the world’s ecosystem services were found to be degraded or used unsustainably. The gap between the rich and poor is also increasing – between 1990 and 2005, income inequality (measured by the gap between the highest and lowest income earners) rose in more than two thirds of countries.

Market and institutional failures allowing the persistence of poverty and environmental degradation are well known to economists, but little progress has been made to address them. For example, there are not sufficient mechanisms to ensure that polluters pay the full cost of their pollution. Indeed just4theplanet has recently been highly critical of the Republicans in the USA on this very issue.

A Green Economy attempts to remedy these problems through a variety of institutional reforms and regulatory, tax, and expenditure-based economic policies and tools.

How does Green Economy differ from previous efforts to promote sustainability – what is new?

In many ways, Green Economy objectives simply support those already articulated for the broader goal of sustainable development. But this new framing responds to two recent developments.

First, there is a deeper appreciation today by many governments ,companies, civil society and the public that we are reaching planetary limits, not just in terms of greenhouse gas emissions but also in our use of water, land, forests and other natural resources. The environmental and social costs of our current economic model are becoming more and more apparent.

Second, and perhaps even more important, the global recession has led to a reconsideration of key tenets of the current economic model – such as the primacy of growth and the belief in light-touch regulation. In openly questioning the strength of the status quo many public- and private-sector leaders are seeking new sources of growth that are environmentally sustainable – for example, employment in high-growth sectors such as clean energy. Past sustainability efforts have not focused sufficiently on fixing the failures of economic policies such as pricing pollution. But we now have a chance to tackle these challenging problems given the policy openings created by the response to the financial crisis. A good example is Korea’s adoption of a national green growth strategy.

Some see marrying sources of new growth with sustainability as the future. Why is China investing in wind? To win tomorrow’s markets, not necessarily to compete in today’s. As the late C. K. Prahalad – a visionary on corporate strategy ?was fond of saying, “we need to move from seeing sustainability as a cost or hindrance to realizing that it’s a key driver of innovation”.

What are some of the concerns and tensions with the concept of a Green Economy?

One question people ask is “can we afford this?” We’re still in the wake of the global financial crisis and many people perceive Green Economy solutions as expensive. The United States is asking itself whether it can afford to put a price on carbon today. Developing countries are concerned that transitioning to a Green Economy will hinder economic growth and the ability to reduce poverty.

Moreover, there will be significant short-term, losses associated with changes in industry and market structure (e.g., a decline of the coal industry and related job losses.) Supporting those actors who will bear the brunt of the transition will be critical to building broad ownership for a Green Economy.

Some countries feel that they are lagging in green technology know-how and therefore will be at a competitive disadvantage in the race for future markets. Others feel that the Green Economy is a pretence for rich countries to erect “green” trade barriers on developing country exports. These are all legitimate concerns that deserve attention.

Ultimately, a hard-nosed economic analysis should inform decisions on what policies and investments to promote today. When the full costs and benefits over time are taken into account however, many Green Economy solutions will be seen as more attractive. Nevertheless, there will still be difficult choices and tradeoffs. For example, should India aggressively promote grid-connected, relatively expensive solar power when hundreds of millions in the country still have no access to electricity? And even where Green Economy solutions make economic sense, they may be politically challenging. The transition to a Green Economy will not be easy.

Transitioning to a Green Economy will require a fundamental shift in thinking about growth and development, production of goods and services, and consumer habits. This transition will not happen solely because of better information on impacts, risks or good economic analysis; ultimately, it is about politics and changing the political economy of how big decisions are made.

The problem is vested interests. Those who benefit from the status quo are either overrepresented in or have greater access to institutions that manage natural resources and protect the environment. U.S. climate legislation, for example, was defeated in no small part by resistance from fossil-fuel based energy advocates.

The most important key to getting the world moving to a green economy is to increase public awareness. Yes we need adopt more diverse and representative economic indicators (not just GDP) and yes we need to open up government decision making to the public, and yes we need to take advantage of political leadership roles – but increasing public awareness will motivate voters and consumers. Emphasising the benefits generated by a green economy, such as new jobs and new markets will encourage people to adopt policies – often unfortunately – not because they are green – but because they believe it is in their interest.