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We’ll be hearing a lot about the green economy over the coming weeks as the largest ever United Nations event rolls into Brazil. The Rio +20 conference next week is expected to attract more than 50,000 people, featuring heads of government from at least 100 countries, including Australia. This is a big shindig.
The original Earth Summit, held 20 years ago in Rio de Janeiro, prompted the world to focus on the environmental degradation of the planet and saw governments commit to ecologically sustainable development. At Rio +20, the entire event is about the "green economy", with green growth being touted as the solution to global economic woes. A green economy, according the UN, is one that wastes less stuff, pollutes less and is more socially inclusive.
So does this largest-ever-UN-conference indicate that finally the environment and economy are on an equal footing? Or has the environment merely been hijacked by an economic agenda? It’d be nice to think it’s the former, but I have my doubts.
For so long the environment and the economy have been pitched as incompatible bedfellows. Only recently have governments woken up to the fact that a strong economy inherently rests on a healthy environment.
“Our dilemma is not choosing between green and growth. It’s marrying the two,” said British Deputy Prime Minister Nick Clegg in a recent speech. “Go green and you help hard-pressed families with their bills. Go green and you build up the businesses that will be generating jobs and wealth for years to come.”
Experience shows governments that ignore the environment do so at their peril.
The results of ignoring the environment? Higher costs, lower output and fewer jobs. Bad news all around. The lesson: damage the environment, damage the economy
In China, environmental costs are estimated to be rising to 6 per cent of GDP, or $100 billion, per year. Massive economic growth has occurred, but at a severe cost that has resulted in many of China’s rivers being so polluted they can’t even be used to water crops.
"The depletion, deterioration and exhaustion of resources and the worsening ecological environment have become bottlenecks and grave impediments to the nation’s economic and social development," said Zhou Shengxian, China’s Minister of the Environment.
Fishing industries catch more than the sea can bear. Fisherman are travelling further, using more fuel, on ever larger boats to catch fewer and smaller fish.
The results of ignoring the environment? Higher costs, lower output and fewer jobs. Bad news all around. The lesson: damage the environment, damage the economy.
Protecting the environment is at its core an economic issue – a conclusion even the Tories in London have reached. Indeed, there are few major economic issues in this country right now that are not linked to the environment and resources.
Currently, many of Australia’s hottest policy debates are about how we use the environment. Tax reform debates are all related to our resources and environment – taxing "bads" (pollution – carbon price; use of non-renewable resources – mining tax, fossil fuel subsidies) rather than "goods" (clean energy, labour).
In some parts of the world the green economy has landed front and centre in government policy making. South Korea, for example, has instigated a five-year plan based on a strategy for green growth. It aims for 2 per cent of GDP to be invested in green programs and projects like train infrastructure, low-emissions urban development and even a green steel-making strategy.
For many countries, green growth is becoming an important driver to navigate through an otherwise bleak economic outlook. The British government estimates that low carbon and environmental industries are already worth a staggering $5 trillion globally – more than three times Australia’s GDP.
The Europeans take this seriously, having reduced their greenhouse pollution by 10 per cent while growing the economy by more than 40 per cent since 1990, even including their present trauma.
But are ‘green’ and ‘growth’ actually compatible? I would go so far as to say if Rio +20 stops at the point of promoting economic growth through green policies, it will have failed. When the environment is exploited as a means to an economic end we get the dire ecological results we have witnessed in the 20 years since the first Rio conference.
But there are signs that we are starting to learn from our mistakes.
For 50 years, nations have relied on the UN system of national accounts, otherwise known as the GDP, to track economic progress. But in March this year the United Nations adopted a new System of Environmental and Economic Accounting. This aims to collect, integrate and analyse environmental information, painting a fuller picture of the costs and benefits of our impact on the natural world – and our economies.
When we focus only on the GDP, we’re driving the car with nothing but a speedometer – we know how fast we’re travelling, but we have no idea where we’re going, if we’re overheating or if there is fuel in the tank.
Green growth can be good growth, as long as it delivers on the promise of wasting less, polluting less, increasing social equity and strengthening the environment that underpins our economy.
At Rio +20, our Prime Minister and other heads of state should adopt these new national accounts, if only to finally get a grasp of how we’re tracking as a nation beyond the narrow focus of the GDP.