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26 GREEN ECONOMY Challenges and opportunities The necessarily systemic character of the transition to a green economy Alexandre d'Avignon Luiz Caruso In the UNEP publication, biodiversity, as an example of a public good, would not be valued properly in neoclassical economics. Nor can neoclassical economics properly value environmental services, which contribute to human welfare and family livelihoods and could provide a source of new skilled jobs. Estimating the economic value of ecosystem services is essential for the identification of natural capital. This is one of the dimensions that would support the transition to a green economy, stimulating a change in conventional economic indicators and leading them to account for the loss of natural capital as negative and not positive components of national accounts. Is the correct valuation of these services associated with favorable conditions sufficient conditions for this transition? How can one assign new parameters to a green economy, if the essential discussion of equity and local participation is kept on the sidelines? The voracious consumption of energy and natural resources characteristic of industrialized countries shows that this is not a development model that respects the biosphere, its principles and pace of regeneration. The legacy left by development based on fossil fuels has brought to the forefront global issues such as climate change and ozone layer destruction, revealing economic options that were imposed, causing the abandonment of innovations that could have been stimulated by national innovation systems, which would involve R&D, legal framework of incentives and patent system. An important example would be the intensive use of biomass through the BTL (Biomass to Liquid) or BTG (Biomass to Gas) at a growth rate appropriate to the regenerative capacity of natural resources. Energy from solar and photovoltaic sources, wind power, hydrogen, more efficient batteries were not adequately exploited due to current technological route, causing the abandonment in the past of other options. It is worth recalling that Rudolf Diesel patented his engine to work with vegetable oils, in this case of peanuts, and even before his presentation at the Paris World Fair in 1898, there were manufactures of vehicles with electric motors. The latter have proliferated in public transport with trams, which were later replaced by internal combustion vehicles in several cities. If there had not been an imposition by specific economic sectors, these technologies could have persisted and received a share of investments from national innovation systems. In this case, the options nowadays in terms of development of technologies considered as alternatives would have been much more promising, comprehensive and widespread. Nº 8 • June 2011 This short historical account raises other issues related to the green economy. Could the problems generated by the economy practiced today be overcome by adopting the recommendations proposed by UNEP, during the next 20 years, as indicated by the scenario options displayed in “Towards a Green Economy: Pathways to Sustainable Development and Eradication Poverty”? Shouldn’t
27 GREEN ECONOMY Challenges and opportunities The necessarily systemic character of the transition to a green economy Alexandre d'Avignon Luiz Caruso the economic model proposed have been adopted years ago due to the global issues we face today such as global warming? Isn’t it now too late? In addition to the balanced access to natural and energy resources by the planet’s population, there is a need for the development of technologies based on regional vocations and not the imposition of a technological pathway derived from economies of scale and short-term profits. The technologies relating to the burning of liquid or solid fossil fuels in thermodynamic cycles generally capable of using no more than 30% of energy supplied, rather than more elegant alternatives, such as the manufacture of polymers, is an example of the imposition of a single pathway, dominated by large global organizations. Cogeneration of power and fixed systems integrated to generate electricity and heat, for example, are much more efficient and would provide yields up to 50% in automobile engines. Temporal equity is another important element to be taken into account, since it brings us to the origin of the concept of sustainable development contained in “Our Common Future”, a publication resulting from the 1987 Brundtland Report. This book provides as one definition of the concept: “Development that seeks to meet the needs of the present generation without compromising the ability of future generations to meet their own needs.” This means enabling people, now and in the future, to achieve a satisfactory level of social and economic development and human and cultural accomplishment, making, at the same time, reasonable use of land resources with preservation of species and habitats. The latter element does not appear explicitly in the green economy concept proposed by UNEP, but it does appear when it proposes to prevent loss or depletion of environmental services and biodiversity. Nº 8 • June 2011 The United Nations´ Framework Convention on Climate Change (UNFCCC), while incorporating concepts such as the precautionary principle and of common but differentiated responsibilities, also promotes another concept related to an international economy favorable and conducive to sustainable growth and development, particularly in developing countries. This perception of international cooperation is essential for a structural transformation in the economy. The creation of national innovation systems that are integrated with international systems, promote environmentally sound technologies aimed at conserving biodiversity and ecosystem services and reversing the planet´s degradation and is patents free, is increasingly imperative. Market mechanisms or governmental regulations lack the necessary vitality to drive the radical transformations required to implement a planet-level management that harmonizes the interaction between human activities and the biotic and a-biotic environments. These mechanisms do not provide adequate information or, as in the case of market-defined prices, or do not have enough information, especially in the case of governments. Moreover, these mechanisms do not seem feasible to keep pace with the urgent needs of reversing degradation,
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