Climate Action 2011-2012

64 climateactionprogramme.org
overly dependent on the institutions and thinking that
brought us the problems. Against this rather bleak picture,
the Green Economy Coalition offers an alternative vision:
a green economy that delivers prosperity for all within one
planet limits.
For us the green economy has two transformative ideas:
• It is an economy that restores and protects the natural
world.
• It is an economy that explicitly pursues well-being
for all.
In order to meet this vision of an economy that better
meets the needs of people and of the planet, we have
identified five themes for change, all of which are critical
for accelerating the transition. For example, any policy
aimed at directing financial flows in order to green
economic sectors and reduce environmental impact, will
also need to consider its impact on society within a broader
economic governance framework.
Greening high-impact sectors. We know that food,
housing, transport, energy, cities and infrastructure create
between them 70-80 per cent of environmental impacts.
Therefore, investing in greening these sectors is critical for a
green economy.
Improving societal well-being – investing in people.
More social dialogue enables greater societal representation
in economic governance. Policies for a green economy must
take distribution and equity considerations into account
and help to build the capacity of civil society to engage.
Managing natural capital – investing in natural systems.
A green economy develops the ability to help manage ‘natural
capital’, investing and building governance and sustainable
markets for ecosystems services and resources.
Influencing financial flows. We know that the changes
in our economic sectors and improvements in our natural
system management will require changes in financial flows,
new private sector markets and investment, subsidy reform,
taxation reform, and public sector financing.
Improving governance and measurement. The
transformative component of this agenda appears to be
redefining the purpose of our economy so that it is explicitly
about making ‘prosperity for all within one planet’s limits’.
This means setting new measures of economic performance,
such as well-being and ecological efficiency alongside
measures of GDP.
The soluTions
Reform of price signals. The price mechanism is central
to the market economy, and key to determining the flows
of finance. In many cases, prices provide accurate and
necessary signals, which can usefully influence decisions
in the world economy. However, there are numerous
instances in which prices fail to provide the market with
the necessary signals and incentives. This is a crucial
underlying factor in the current pressures on the global
atmosphere – both of which are often regarded as free
goods no-one need pay for.
The lack of proper payments systems for the atmosphere
and most ecosystems creates a situation in which companies
and investors have little incentive to invest in the crucial
underpinnings of the world green economy.
World governments have a major influence on prices, and
market transactions, in their national contexts. There is a
need now to reform two of those influences – taxation and
subsidies. Policies for consideration include the following:
• Tax the unsustainable sourcing of commodities, such as
timber, palm oil, and soy. This could be combined with
increased support for reliable sustainability certification
schemes.
• Phase out environmentally harmful government subsidies,
for example on fossil fuels.
• Introduce procedures to carry out carbon and biodiversity
impact analyses of government spending options.
• Bring in environmental and resource-efficiency tax measures.
• Introduce new subsidies to encourage the uptake of
renewable energy – such as feed-in-tariffs.
Creation of new investment funds. If they have not done
so already, governments should introduce green investment
banks to help fund their national transitions to a green
economy. These would invest principally in combating
ecosystem deterioration and climate change, and stimulating
new green industries and essential sectors in food, housing,
transport and energy, and in the process creating many
thousands of new green jobs.
Governments should introduce
green investment banks to help
fund their national transitions
to a green economy.
These funds should not only operate in partnership with
the private sector, providing additional funding where
necessary, but also with key stakeholders from civil society
who provide a critical perspective on the implications of
investments on a societal and environmental level.
New sources of funding. Negotiations about setting up a
Global Green Fund to combat climate change have been
protracted and difficult. Against this background it may be
difficult to open up the possibility of expanding the remit
of the Fund to include investment in, and the incentivising
of, maintaining and restoring ecosystems. Alternatively,
finance for ecosystems might be better dealt with by a
separate fund.
The key issue in all this, however, is mobilising new
sources of finance. The world community needs to ensure
that finance secures the future of the atmosphere, major
ecosystems and the money for what we call ‘managing
natural capital’ and new investment for ‘greening economic
sectors’ – particularly food, housing, transport, energy
and infrastructure.