Why a Green Economy?

UNEP defines 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 is low carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment should be 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.

Since the United Nations Conference on Environment and Development of 1992 (also known as the Rio Conference), the development community has focused its efforts on achieving sustainable development, but the economy in general and businesses in particular have continued to follow a ‘business as usual’ path which has led to increased poverty, degradation of natural resources and ecosystems, loss of biodiversity and ecosystem services, and global warming despite overall growth in gross domestic product (GDP), mainly because of the huge negative externalities that this growth model created. However, the many concurrent crises and market failures of the first decade of the new millennium, particularly the economic recession of 2008?2009 and rising food prices have resulted in widespread disillusionment with the prevailing economic paradigm. On the other hand, increasing evidence points towards an alternative paradigm where increased wealth would not lead to higher environmental risks, ecological degradation, or social disparities. 

The green economy approach is an effort to focus sustainable development and poverty reduction efforts on transforming economic activities and economies. Important components of the approach include the use of economic instruments, the creation of an investment-friendly environment, and directing public and private investment towards building natural capital stocks. 
Green economy could be an overarching goal for both developed and developing countries in making future development more sustainable. While the concern of the industrialized economies is how to reduce environmental risks and keep the economy green, the concern of the developing economies is how growth can be promoted without degrading the natural resource base and with respect for the principles of low-carbon economy. For the mountain regions, particularly those of the developing economies where millions of people live in a fragile environment and depend mainly on natural resources for their living, the challenge is how to sustainably manage the ecosystems, strengthen resilience to climate change and economic pressures, and promote low-carbon based economic growth and social justice.