Green growth means fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies. To do this, it must catalyse investment and innovation which will underpin sustained growth and give rise to new economic opportunities.

We need green growth because risks to development are rising as growth continues to erode natural capital. If left unchecked, this would mean increased water scarcity, worsening resource bottlenecks, greater pollution, climate change, and unrecoverable biodiversity loss.

These tensions may undermine future growth prospects for at least two reasons:

  • It is becoming increasingly costly to substitute physical capital for natural capital. For instance, if water becomes scarcer or more polluted, you need more infrastructure to transport and purify it.
  • Change does not necessarily follow a smooth, foreseeable trajectory. For example, some fish stocks suddenly collapsed after declining only slowly for years.

If we want to ensure that the progress made in living standards in these past fifty years does not grind to a halt, we have to find new ways of producing and consuming things, and even redefine what we mean by progress and how we measure it.

Major "Green Growtn" principles and instruments

The Concept is based on the following four principles:

  • eco-efficiency principle, promoting maximization of useful characteristics of goods and services and simultaneous minimization of impact on environment in the course of the entire product life cycle;
  • resource saving principle, stipulating managerial decision-making given the necessity of conservation of natural resources.
  • unity principle, stipulating coordinated actions of all the subjects of economic relations of the given process;
  • inter-sector principle involving of representatives of different community sectors into decision-making process.

Based on these principles one could conclude that the "Green Growth" Concept is the first stage of transition to sustainable development both at the country and global levels.

According to the Concept the aforementioned principles are integrated into the strategic planning process of development of the national economies with the help of the use of the following mechanisms:

  • budgeting system reform through introduction of ecological taxes;
  • introduction of models of sustainable production and consumption;
  • "green business" development;
  • formation of sustainable infrastructure.

Sources of green growth

Green growth can open up new sources of growth through:

  • Productivity. Incentives for greater efficiency in the use of resources and natural assets, including enhancing productivity, reducing waste and energy consumption, and making resources available to their highest value use.
  • Innovation. Opportunities for innovation, spurred by policies and framework conditions that allow for new ways of creating value and addressing environmental problems.
  • New markets. Creation of new markets by stimulating demand for green technologies, goods, and services; creating new job opportunities.
  • Confidence. Boosting investor confidence through greater predictability and continuity around how governments deal with major environmental issues.
  • Stability. More balanced macroeconomic conditions, reduced resource price volatility and supporting fiscal consolidation through, for instance, reviewing the composition and efficiency of public spending, and increasing revenues through putting a price on pollution.

Green economy

Green economy is the direction in economic science, in which it is believed that the economy is dependent component of the environment within which it exists and is a part of it. The theory of the green economy is based on three axioms:

  • it is impossible to indefinitely extend the impact in the confined space;
  • it is impossible to demand for satisfaction of infinitely growing needs with limited resources;
  • all on the surface of the Earth is interrelated.

Green economy - is the transition to a system of economic activities related to the production, distribution and consumption of goods and services that result in improved human well-being in the long term, while not exposing future generations to significant environmental risks and ecological scarcities.

By the UNEP is definition, Green Economy is "an economy in which the internalization of the costs associated with environmental degradation, and clean and efficient technologies and sustainable agriculture, are the main drivers of economic growth, job creation and poverty reduction." This is an economy with low greenhouse gas emissions and slow or stable rate of climate change, reducing social tensions, increased efficiency of cross-border cooperation, i.e. it is a high-tech low-carbon or, ideally, carbonless economy. It is designed to create jobs and stimulate economic progress and at the same time reduce the significant risks of climate change and water scarcity.