“Brown economy”

Jonathon Porrit defines capital as,

                 “A stock of anything that can generate a flow of benefits which are valued by humans.”

In an economy, there are five different types of capital; these are natural, manufactured, human, social, and financial. Amongst these, natural and human capital is a precondition for manufactured and social capital.

Natural Capital

Natural or environmental or ecological capital is the flow of resources in the form of matter and energy eventually generating goods and services. Natural capital categorizes into three types-

1. Resources: Both renewable and non-renewable. Renewable energy is derived from nature and that can replenish with time constantly like solar, biomass, wind, etc. Non-renewable energy is not reparable and these are limited as well. For example, coal, oil, and natural gas.
2. Sinks: A system that absorbs pollution, for instance, trees capturing carbon dioxide from the atmosphere and neutralizing or recycling waste like a biodegradable waste to soil nutrients by microorganisms.
3. Services: Maintaining a climatic balance, soil binding, fresh air, food, oxygen, and hydrologic cycles are some services of nature.

Nature and natural resources are obvious in the human economy, and we cannot sustain ourselves without these. Undeniably, with time market economy has capitalized resources to generate wealth and improve welfare for communities. However, every action has an equal reaction. Conventional economy safeguards economic improvement but disregarding the environment leads to various negative externalities including environmental risks and ecological scarcities. The market economy fails to identify the true cost and future loss of producing goods and services. The macro indicator Gross Domestic Product (GDP) alone cannot determine a country’s economic status. It’s crucial to recognize the monetary value of the environmental loss that is happening every day.

Are the earth’s natural resources getting a satisfactory time to recover? It’s a blessing that natural resources are recoverable and can restore. But everything needs time! Time to regenerate! Time to recover! Time to restore! Time to stand again and produce goods!

The haphazard consumption of biomass than the earth’s capacity to generate is the major threat of natural resources degradation. Another flaw in the current economy is the absence of costs and losses of destroying the natural ecosystem and resources.

Brown Economy

The brown economy is a fossil fuel-based economy that uses materials and energy from the environment and disposes of pollutants as a byproduct. However, the brown economy is largely responsible for greenhouse gas (GHG) emissions, climate change, air pollution, water pollution, soil pollution, and many more.

Green Economy

On the contrary, a green economy is an earth-friendly economy that ensures the optimum use of natural resources with green technology and considers all the environmental impacts along with economic growth.

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

-United Nations Environment Programme (UNEP)

 

Rio+20, 1992 and Green Economy

In Rio+20 Unites Nations Conference on Sustainable Development (UNCSD), 2012, the green economy is considered a global concern and it is one of the themes to be handled. A green economy can be a footstep in green trading at a larger scale.

It needs a new beginning in the trading system to promote the green economy on a larger scale. In Rio+20, the importance of transition in technology was highlighted in agenda 21, and a green economy can assist in this large-scale transfer in both developed and developing countries. The adoption of strategies and modification in policies can bring more strength to this new starting. A green economy not only can progress global trade governance but also domestic trade environment. Meanwhile, it can also promise substantial trading and lessens many problems like eradicating poverty. Agriculture, fishery, tourism, energy, and manufacturing sectors has the greatest potential for a green trading system. It is good news for developing countries that Green Climate Fund agreed to support and finance to develop a new green scope with export potential.

Traditional to Green Business

“Transition from overconsumption to appropriate consumption is the basis for a sustainable society.”

-Chiras 1992

 

However, the major challenges will be in the industrial businesses on how to convert production based on wants, not greed. If countries transfer from the conventional economic model to the green economic model, both primary and secondary business can play an important role and effort for a sustainable society.

“The World is big enough for everyone’s needs, but it is too small for the greed of one man.”

-Mahatma Gandhi

 

In the supply chain, companies generate what has demanded by consumers. Do you agree that consumers can play a crucial role in green business?

A company stays in the competitive marketplace as consumers and clients bring money to them. So, consumers’ demands, attitudes, values, desires, and behaviors have enormous importance on the sustainability of an economy, society, and environment. It is a positive sign that human beings are more conscious about their food and consumption habits; it is one kind of warning to businesses who are not still planning to shift to green business, there is a chance of bankruptcy.

Why generate false images of needs? Each day, the fascinating advertisements are creating false needs which never need to live a wealthier, healthier, and happier life. The profit-seeking company should cut down the diversity and quantity of products to sell. Though it can be frightening as it can affect profits and competitiveness in the market.

Thread towards Sustainability

A country’s affluence is directly dependent on its economic welfare, meanwhile, economic welfare depends on the availability of raw materials for industrial use. If the economy is on the system of flow through the economy as the use of raw resources and produces goods and wastes as well; this economy not going to be sustained long as resources also cannot regenerate.

In the UNCED meeting of Rio 1992, the term eco-efficiency was introduced to hatch a new view in the production system. The core notion of eco-efficiency is to produce more with fewer input resources like energy and materials that resulting in less waste, cost, and environmental pollution. 

Cradle to Cradle (C2C) thinking, a simple way of thinking that gets inspired by nature. In 2002, architect W. Mc Donough and chemist M. Braungart developed this concept. The core principle is to close the loops by inputting waste or bi-products into the system. There is no space for wastes in C2C thinking. Moreover, the second principle is to use renewables like solar and phase out fossil fuels. Last, not least give prioritize to collaborating biodiversity in design thinking. C2C thinking with eco-efficiency can make the production system more sustainable. What is your opinion?

Danial Chiras in 1992 stated in his book Lessons from Nature that producing more with less is simply just a step towards sustainability and it is not enough. Rather than we have to do less and demand less. That should be the fundamental pledge to bring a change in society and the environment. Further, we must learn to be satisfied and keep ourselves happy with what is basic needs. Can we change our demands, be happy with less, and be a merchant of nature?

Green Goods and Services

Cradle to cradle approach and closed-loop production system is going to be a crucial part of transmission in the green company. At the same time considering the whole life cycle of the product and services including, resources extraction, manufacturing, transmission, use, and afterlife assists to make a product and service green as it generates a sense to identify the scopes where ecological impacts can be diminished. For sure, now the company is aware of the demands of green products and the niche of green products as well. However, this can lead to greenwashing. Again, the generation of false image and making profits. The customers should make them more selective about the products and the companies that are generating all these. Eco-labeling is the way that products are proven to be green and environment friendly. Some of the companies tagged their products as eco-friendly without fulfilling all requirements and consumers should keep them more sensible of these company’s goods. Besides, companies planning to convert their business into green ones should be more conscious about the impacts of their activities. Like biodegradable materials can be a perfect choice for environmentally conscious consumers, but the fate of the biodegradable materials should not be in landfills rather than in composting plants.

The Significance of Green Business

The green business is also known as a sustainable business that intense to lessen the negative impacts on the global and local environment rather try to create positive impacts and strives to fulfill the triple bottom line of sustainability. The green business also accounts for policies of environmental concerns and policies that are affecting human rights as well. Green businesses are updating their policies, goals, objectives, principles, and strategies to be more sustainable and raise positive impacts on the environment. However, no matter what the reason is! Businesses can help in solving environmental and social problems altogether or just can promise to produce goods with less footprint.

Green business is a combination of green values and green practices where green businesses consisting green policies and principles. Green policies include environmental policy, business strategy, and management while principles combine vision and mission. Besides, green practices are about sustainable manufacturing processes and the generation of green goods.

A company releasing toxic chemicals but it claimed itself a green business by assembling rooftop solar panels. Do you consider that company running a green business? A company generates products from renewable resources but generates false demands and attracts consumers to purchase. Is that company holding a green business?

Environmental auditing and impact assessments are fair but not adequate to declare a company sustainably. David Brower, the former director of the Sierra Club advised three things that make a company greener and sustainable. These are noted as,

1. CEO of any company should be able to abstain from environmentally destructive activities even when there is a chance to face loss.
2. Every investment decision should consider environmental profits and losses along with business profits by environmental impact statement.
3. Environmental impact statements should also be obligatory for all takeovers subsequently they often lean towards being environmentally destructive.

A green image can create a good impression of sale to environmental enthusiasts. Moreover, besides boosting customers, taking into consideration of environment can deduct costs including transportation, waste management, and resources consumption. Rather, a company can save money instead.

A Case Study in Finland about Programming Green Economy

Let’s go through a short brief about Finland and its economy. Finland is a country with 390,903 square kilometers, 5.4 million population of which 30% live in the rural area, 86% forest coverage, and 7.6% is farmland. About 42% of all the enterprises that are operating are located in rural areas and 93% are declared as micro-sized having less than 10 employees. The forest sector contributes 20% of all Finland exports and three-quarters of it comes from privately owned forests. In the 2016 “The Finland We Want by 2050” framework, the Finnish National Commission adopted eight objectives for sustainable development and prioritizes equal well-being, society for all, sustainable work, sustainable society, carbo-neutral society, resource-efficient economy, lifestyles considering carrying capacity of nature and taking decisions respecting nature. Moreover, all the progress will be monitored by using 39 indicators.

The Finnish Government prioritized the value of ecosystem services and highlighted it as a vital part of economic sectors regarding the green economy. The economic sectors are forest, agriculture, fisheries, tourism, water, food, game, and renewable energy. Moreover, textile industry, life and health style businesses, cosmetics and pharmaceuticals.

Further, the reports claimed that policy coherence and extensive cooperation between stakeholders and policy sectors are crucial to promoting a green economy. Besides, the finished government also believes that continuous systematic assessments of ecosystem services can assist to make greener decisions and formulating future policies in terms of different economic sectors. Finnish sustainable development is intense to cooperate sustainable management at the local level to interlink between different types of rural business enterprises considering all kinds of present and future challenges in a locality.