The New Green Economy

The new Green Economy

The global financial crisis that began in 2007, and is still resonant today, is considered by many economists as the worst financial crisis since the Great Depression of the 1930s. One of the key lessons we can draw from this experience is that running economies the way we’ve always done, doing business as usual, is clearly no an option. The new Green Economy is therefore a proposal for an alternative and far more sustainable way of doing business. 

A green economy is described as one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In other words, we can think of a green economy as an economic environment that achieves low carbon emissions, resource efficiency and at the same time is socially inclusive.

Tragedy of the Commons

The dilemma we face between today’s conventional ‘brown’ economy and a proposed new Green Economy is best illustrated through an influential article written by Garrett Hardin, The Tragedy of the Commons, in 1968. He describes a common grass land in which several farmers allow their cattle to graze. In order to increase individual wealth, it is in the interest of each farmer to enlarge their herd and continue to graze on the same piece of land. But after the threshold of a certain number of cattle is exceeded, the quality of the land begins to decrease with every added cow.

Since no-one is individually responsible for the land however, and no fee is charged for grazing, each farmer continues to maximize profits by increasing the size of their herd. The problem however remains in that the quality of the land continues to degrade with the increasing pressure of the growing herds and soon there is not enough grass to feed the cows. The farmers who increase their cattle all benefit at first but, in the end, livelihood is lost and everybody loses in this scenario.

Environmental economists identify the main problem in this dilemma as...