Leap of Faith Needed on Green Economy

Posted on 16 June 2012 by admin

By Stephen Leahy

RIO DE JANEIRO, Jun 16 (TerraViva) Delegates in Rio will need to take a leap of faith and agree on concepts like the green economy and sustainable development goals without really knowing what they involve, suggest experts on the sidelines of the Rio+20 Earth Summit.

“The green economy is a black box right now. We don’t know what will make it tick,” said Davinder Lamba, director of the Mazingira Institute, a sustainable development NGO Nairobi, Kenya.

Tim Jackson, professor of sustainable economics, photographed on campus at Guildford University. Credit: University of Surrey

Overcoming the reluctance and opposition to creating green economies will require “transparency and agency”, Lamba said at the Forum on Science, Technology and Innovation for Sustainable Development, a five-day meeting on the sidelines of Rio+20.

By “agency” Lamba means that those at the bottom, the poor and poorest countries, must have a role in shaping what green economies are and how they will work.

Conventional economic terms like capital don’t apply to many of the important aspects of green economies and sustainability and must be questioned.

“We need to be very critical of economic terminology and concepts” in making the transition to greener economies, said Tim Jackson, an economist and professor of sustainable development at the University of Surrey, UK.

Natural capital – the goods and services provided by nature such as clean, water, air and soil – is a very different kind of capital than manufactured goods. If a natural landscape is left alone its capital stocks improve, whereas products like automobiles or computers lose their value over time, Jackson told TerraViva.

The same applies to the term “productivity”, which is considered universally good in economics. “Applying productivity to services like those provided by doctors, teachers, artists makes no sense,” he said.

There is wide recognition that every country is wrong to focus on increasing Gross Domestic Product (GDP) because it ignores environmental and social impacts, said Ronaldo Seroa da Motta, senior researcher at the Research Institute for Applied Economics (IPEA) in Rio de Janeiro.

However, it is very difficult to measure “natural capital” and “social capital” and how to account for changes or flows, da Motta told conference attendees.

One of potential outcomes from the Rio+20 Summit on Sustainable Development here is agreement amongst nations to establish an alternative measure to GDP such as a Genuine Progress Indicator (GPI) to measure what GDP leaves out. A GPI will be zero if the financial costs of crime and pollution equal the financial gains in production of goods and services, all other factors being constant.

“We don’t really know what a Green GDP (like GPI) is at this point. Certainly not enough to make daily decisions,” de Motta said.

Many years ago there was little information or data to support the “Brown GDP” so there is no reason not to continue to pursue a Green GDP, he said.

But doing so requires clarity, openness to diversity of views, honesty about winners and losers and real democracy said Melissa Leach, director of the Pathways to Sustainability Centre at Institute of Development Studies at the University of Sussex in the UK.

The concept of “sustainability” is a social and political term, not a neutral one as many assume. There will always be many different visions of sustainability depending on the context, Leach said. Those visions arise from our worldviews and values which shape our perception of the world.

“We need to challenge the dominant pathways,” both the status quo and the dominant vision for a green economy, she said.

That is why absolute clarity is needed on what the goals of a green economy are, as well as consensus on what the terms involved like “growth”, or “progress” or “prosperity” really mean.

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