Green economy

1. INTRODUCTION

1.1. Background

The concept of green economy has been generally accepted in

2009, when the United Nations Environment Programme (UNEP)

Environmental Management Group discussed how the United Nations

could provide a more coherent and effective support for

countries to help them in the transition toward a “green

economy” (EMG/SOM.15/02). Since then the term “green economy” is

increasingly used, without having been properly defined or given

any common understanding of the conceptual issues underlying the

term.

There is no unique definition of the green economy, but the term

itself underscores the economic dimensions of sustainability or,

in terms of the recent UNEP report on the Green Economy, it

responds to the “growing recognition that achieving

sustainability rests almost entirely on getting the economy

right”. It also emphasizes the crucial point that economic

growth and environmental stewardship can be complementary

strategies, challenging the still common view that there are

significant tradeoffs between these two objectives – in other

words, that the synergies prevail over the tradeoffs(UNEP,

2009).

This is reflected in UNEP’s definition of a green economy as

“one that results in improved human wellbeing and social equity,

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while significantly reducing environmental risks and ecological

scarcities” (United Nations. 2010).

In his contribution, Khor raises several concerns and risks in

the use of this concept from the perspective of developing

countries. In particular, he underscores the need to identify

and deal with the tradeoffs that may be involved at different

stages of development and with different environment endowments

and challenges. Furthermore, in linking the concepts of the

green economy and sustainable development, he underscores the

need to respect fully the principles agreed upon at the 1992

United Nations Conference on Environment and Development (UNCED)

and, particularly, the principle of common but differentiated

responsibilities. This requires, in his view, a three pronged

approach in which: the developed countries have to take the lead

in changing their production and consumption patterns;

developing countries maintain their development goals but do so

while adopting sustainable practices; and developed countries

commit to enable and support the developing countries’

sustainable development through finance, technology transfer and

appropriate reforms to the global economic and financial

structures.

At its most basic level, the green economy is the clean energy

economy, consisting primarily of four sectors: renewable energy

(e.g. solar, wind, geothermal); green building and energy

efficiency technology; energy-efficient infrastructure and

transportation; and recycling and waste-to-energy.( Kate Gordon

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and Jeremy Hays, 2008 ).The green economy is not just about the

ability to produce clean energy, but also technologies that

allow cleaner production processes, as well as the growing

market for products which consume less energy, from fluorescent

light bulbs to organic and locally produced food. Thus, it might

include products, processes, and services that reduce

environmental impact or improve natural resource use (United

Nations. 2010).

2. Green Technologies The Tool of Green Economy

2.1. Definition And Concept of Green Technology

The green technology definition: in simple words, it means the

technology which is environmentally friendly, developed and used

in such a way so that it doesn’t disturb our environment and

conserves natural resources. You may also hear green technology

being referred to as environmental technology and clean

technology. These Technologies are the main tool for the

development of green economy without these technologies green

economies are impossible to grow.

http://www.govtech.com/gt/268814

Green technology, an environmentally friendly technology is

developed and used in a way that protects the environment and

conserves natural resources. And these technologies can lead

as to develop green economy. A part of the renewable energy

branch of the environmental technology movement, the green

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technology importance cannot be ignored (Oxford University

Press, 2010).

2.2. SECTORS OF GREEN TECHNOLOGY

• Agriculture: Organic agriculture

• Energy: Renewable energy technology& Efficiency technology

• Water and waste management: Recycling technology, Sewage

treatment and solid, waste management &Water purification

• Building: Sustainable building material and building

performance technology

• Transportation: Rail transport &Electric vehicle

2.3. ENERGIES FROM GREEN TECHNOLOGY

Solar Energy: Energy from the sun’s rays. This form of energy

can be converted into other forms of energy such as heat and

electricity.

Solar Panel: A device used to convert the energy from the sun

directly into electricity.

Wind Power: Energy that is generated from the conversion of

moving air. The turning of blades or a turbine (usually on a

mounted tower) powers a generator that turns mechanical power

into electricity.

Wind Turbine: A rotating machine that turns the energy from the

wind into mechanical energy.

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Waterpower: (also known as hydropower). Energy that is

generated through the force of water moving the turbines. This

can termed as Hydro Electric Power (HEP)

Geothermal Energy: Geothermal is power that comes from the heat

deep within the Earth’s interior. Steam or hot water is taken

from the earth’s core to generate energy. The word Geo = earth,

and thermal = heat. The power is literally beneath our feet

(Oxford University Press, 2010).

Biomass Energy: A renewable energy that is made from organic

materials such as wood and wood waste, decaying plants or

animals, landfill gas, and biogas (such as ethanol and

biodiesel). With the right technology, biomass has the potential

to replace fossil fuels. Biodiesel: Fuel that is made from

biomass—such as soybeans, vegetable oils, animal fat, or canola—

that is combined with alcohol.

http://www.green-technology.org/what.htm

3. LITERATURE AND DISCUSSIONS.

3.1. Elements of Green Economy

The green economy embraces a vision that tries to steer

economic development in the direction of sustainability.

According to the current understanding of the green economy

concept, there are five main elements which support the

transition to a more sustainable pattern of production and

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consumption. The following table shows about the majored

elements of green economy.

Table 1:-elements of green economy

Generation and use of

renewable energy

Refers to any source of usable

and renewable energy intended

to replace fossil fuel sources

without the undesired

consequences of greenhouse gas

emissions and other pollutants6

derived from fossil fuel

combustion

Energy efficiency Seeks to adopt means and a

more efficient technology that

uses less energy to provide

the same level of energy

service

Waste minimization and

management

Considers different approaches

from prevention, minimization,

reduction, reuse, recycling,

waste conversion and disposal

in order to ensure that the

use of materials and waste

generation remains within the

regenerative and absorptive

capacities of the Planet

Preservation and sustainable

use of existing natural

resources

Recognizes the importance and

economic value of natural

resources, such as

freshwaters, forests, soils,

coral reefs and ecosystem

services provided by

functional and healthy

ecosystems

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Preservation and sustainable

use of existing natural

resources

Recognizes the importance and

economic value of natural

resources, such as

freshwaters, forests, soils,

coral reefs and ecosystem

services provided by

functional and healthy

ecosystems

Green job creation Promotes decent jobs that

offer adequate wages, safe

working conditions, job

security, reasonable career

prospects and workers’ rights

Sources: - (Oxford University Press, 2010), (United Nations.

2010)..

Being referred to as also “low-carbon7

has a strong commitment in the use of renewable energy

resources, such as wind, hydropower, biofuel, photovoltaic,

solar thermal, solid waste and bagasse; economy”, the green

economy:

Seeks management approaches and new technologies that

increase energy efficiency in all economic sectors. For

example, climate-friendly management could seek not only

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reducing greenhouse gas emissions but also compensating

unavoidable emissions with increased carbon sequestration.

aims to reduce waste and improve waste-energy conversion;

takes action to preserve the natural capital or to make a

sustainable use of it;

boosts employment through the creation of green jobs.

These five elements of change can be implemented in all economic

sectors: the primary sector which transform natural resources

into primary products and includes agriculture, forestry,

fishing, and all mining and quarrying industries; the secondary

sector which takes the output of the primary sector and

manufactures finished goods; and the tertiary sector that

provides information and services. For all sectors, the aim is

to establish –to the extent possible closed or semi-closed

nutrient and energy cycles and at least, minimize waste and

boost recycling.

Therefore, the transition and reconversion to a green economy is

expected to create an employment shift. In all economic sectors,

alternative green jobs can be created, some employment will be

substituted, certain jobs may be eliminated without direct

replacement, many existing jobs will simply be redefined and

profiles will be greened. Still, concerns persist about possible

job losses during a green economy transition and the need to

address costs for workers, including investment in job

retraining and social protection (United Nations, 2010)..

3.2. Benefits of Green Economy

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One of the main benefits of adopting a green economy is its

potential to alleviate the environmental impact caused by

pollution; a benefit that would be felt globally and locally. On

a global scale, it can contribute to the fight against global

warming, desertification, and the loss of biodiversity. On a

local and regional level, adjusting to a green economy could

lead to significant improvements in air, water and soil quality

(COSBEY, A. (2012)

Besides the environmental aspects, a green economy also has a

great potential to lead to economic growth. Cos bey asserts

that, with the shifting of an economy, new markets are created

in areas such as biofuels and renewable energy sources. And such

new markets would bring international advantages having the

potential to be funded entirely through exports, or an increase

in domestic sales fueled by increasingly tighter environmental

regulations (Cosbey, n.d, p.41)

Emerging countries in particular can gain from a shift to a

green economy as it can provide an opportunity to create more

economic and social advantages. For example, by investing in

alternative energy sources, access to energy services can be

improved and infrastructure can become more energy efficient.

This can also lead to the decrease of energy importation and

potentially save money. It can also improve resource efficiency

as agricultural production will become cleaner and, due to these

sustainable agricultural techniques, food security will be

improved. (Lefèvre, 2013, p.156-157)  Additionally, new

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environmental friendly technologies that emerge as a result of a

green economy will help protect and improve agricultural

production. Eventually it is hoped that by embracing a green

economy, emerging countries will be able to open a new market

segment for the production and exportation of green products and

service (Yu, vice (2009a). Investing in a green economy and

renewable energy sources will not only lead to the creation of

new employment but also to benefits in population and

environmental health, whilst also improving energy security in

the long run.

However, it is important to keep in mind that transitioning to a

green economy will not be an easy process, since many countries

lack technology and need to guarantee the well-being of their

citizens during any transition. Such a transition also does not

happen overnight; UNEP’s Green Economy Report illustrates that

initially the reallocation of investments towards the transition

might slow down economic development during the first years

until natural resources are restored, but that in the long term

it will lead to faster economic development. (Ocampo, n.d, p. 6)

There are also difficult decisions to be made by governments,

especially those of emerging countries with millions of people

who do not have regular access to energy, in choosing between

immediately alleviating their energy issues or investing in

expensive renewable energy sources that require infrastructure

and time to implement. The trade-offs must be examined

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carefully. However, once costs and long-term benefits are taken

into consideration, several solutions provided by a green

economy are seen as being more attractive. (Bapna and Talberth,

2011)

It is necessary to understand that transitioning to a green

economy is not a magic cure for global warming and the world

economy. It is a gradual process and one not free of risks or

costs.

4. Principles for a Green Economy

1. Equitable distribution of wealth: - Promote the

equitable distribution of wealth within nations and

among nations, to reduce disparities between rich and

poor, and achieve social and economic justice, within a

sustainable and fair share of the world’s resources and

leaving sufficient space for wildlife and wilderness.

2. Economic equity and fairness: - Guided by the principle

of common but differentiated responsibilities, create

economic partnerships that would transfer substantial

financial and technological assistance to less

developed countries, to help minimize the gap between

the developed and developing world and support the

environmental sustainability of both.

3. Intergenerational Equity: - Environmental resources and

ecosystems must be carefully managed and safeguarded so

as to enhance the value of environmental assets for

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future generations, thereby equitably meeting their

needs and allowing them to flourish. Precautionary

Approach Science should be utilized to enhance social

and environmental outcomes, through the identification

of environmental risk. Scientific uncertainty of

environmental impacts shall not lead to avoidance of

measures to prevent environmental degradation The

‘burden of proof’ should lie with those claiming that

there’ll not be significant environmental impacts.

4. The Right to Development:- Human development in harmony

with the environment is fundamental to the achievement

of sustainable development, so that individuals and

societies are empowered t achieve positive social and

environmental outcomes.

5. The Right to Development: - Human development in

harmony with the environment is fundamental to the

achievement of sustainable development, so that

individuals and societies are empowered to achieve

positive social and environmental outcomes.

6. Internalization of Externalities:-Building true social

and environmental value should be the central goal of

policy. To this end, market prices must reflect real

social and environmental costs and benefits, so that

that the polluter bears the cost of pollution. Tax

regime and regulatory frameworks should be used to

‘tilt the playing field’, making ‘good’ things cheap

and ‘bad’ things very expensive.

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7. International Cooperation: - The application of

environmental standards within nation States must be

undertaken in a cooperative manner with the

international community, based on an understanding of

the possible impact on the development potential of

other States. Environmental measures relating to trade

should avoid unfair protectionism, but overall should

ensure that trade supports sustainable resource use,

environmental protection and progressive labor

standards, promoting a ‘race to the top’ rather than

the bottom.

8. International liability:- Acknowledging that actions

within national boundaries can cause environmental

impacts beyond national jurisdictions, requiring

cooperation in the development of international law

that allows for independent judicial remedies in such

cases

9. Information, participation and accountability:- All

citizens should have access to information concerning

the environment, as well as the opportunity to

participate in decision-making processes. To ensure

that environmental issues are handled with the

participation of all concerned citizens, institutions

at all levels (national and international) must be

democratic and accountable, and make use of tools that

enable civil society to hold them to account. In this

regard, the access to justice by citizens for redress

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and remedy in environmental matters is a cornerstone of

enhancing accountability.

10. Sustainable Consumption and Production:-Introduce

sustainable production and consumption with sustainable

and equitable resource use. Reduce and eliminate

unsustainable patterns of production and consumption,

i.e. reduce, reuse, and recycle the materials used,

acknowledge the scarcity of the Earth resources and

implement activities accordingly.

11. Strategic, coordinated and integrated planning to

deliver sustainable development, the green economy and

poverty alleviation:- An integrated approach must be

adopted at all levels to expedite the achievement of

socio-economic and environmental sustainability

through strategic planning with civil society and

stakeholders, and across all relevant government

departments.

12. Just Transition: –there will be costs in making the

transition to a low carbon, green economy in the

pursuit of sustainable development. Some States and

actors are better able to bear those costs than others

and are more resilient to transitional changes. In the

process of change, the most vulnerable must be

supported and protected –developing countries must have

access to appropriate financial and technical

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assistance, citizens and communities must also have

access to new skills and jobs.

13. Redefine Wellbeing: –GDP is an inadequate tool for

measuring social wellbeing and environmental integrity.

Many socially and environmentally damaging activities

enhance GDP –such as fossil fuel exploitation and

financial speculation. Human wellbeing and quality of

life, and environmental health should be the guiding

objectives of economic development.

14. Gender Equality: –gender equality and equity are

prerequisites to the transition to a green economy and

the achievement of sustainable development. Women have

a vital role to play as agents of change for

environmental management and development –their actions

must be rewarded accordingly and their skills enhanced.

15. Safeguard biodiversity and prevent pollution of any

part of the environment: –protect and restore

biodiversity and natural habitats as integral to

development and human wellbeing, and develop a system

of governance that protects the resilience of

ecosystems to prevent irreversible damage.

5. The Challenges for Green Economy Adaptation

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The “green economy” has become a topic of growing discussion in

light of the environmental crisis. It is for example the subject

of a major initiative by UNEP,. It has also become a rather

controversial term, perhaps because it has become the subject of

a multilateral negotiating process, with in the Rio-Plus-20

framework. The “green economy” is not a concept that has yet to

enjoy widespread agreement (among economists or

environmentalists) or an international consensus. It is an

extremely complex concept and it is unlikely there can be a

consensus on its meaning, use and usefulness and policy

implications, in the short term. A “green economy” gives the

impression of an economy that is environmentally-friendly,

sensitive to the need to conserve natural resources, minimize

pollution and emissions that damage the environment in the

production process, and produces products and services the

existence and consumption of which do not harm the environment.

Among the difficult questions are whether the attainment of such

an economy constrains other aspects (including economic growth

of poor countries, and social development goals such as poverty

eradication and job creation); how to identify and deal with the

trade-offs; what are the appropriate combinations between these

aspects and at different stages of development as well as stages

in the state of the environment; what is the role of the state

in regulation and investments and defining frameworks; how

compatible is a green economy with the free market and what is

the appropriate way to address the role of the private sector;

how to build an economy that is more environmentally-friendly,17

and how to handle the transition from the present to the greener

economy?

6. How can a Green Economy Contribute to Sustainable Development

in Africa?

6.1. Inclusive Growth and Poverty Eradication

Despite remarkable rates of economic growth in recent years, the

African continent still faces challenges of persistent poverty

and low human development. In 2010, six of the world’s ten

fastest-growing economies were in Africa and seven African

countries are expected to be in the top 10 over the next five

years (The Economist, 2011).

This notwithstanding, the level and speed of lifting a vast

majority of the African people from poverty remain low, in

comparison to progress achieved in other world regions.

Achieving inclusive growth and making economic growth more

responsive to poverty eradication objectives are among the

priority concerns that a green economy must address.

6.2. Employment creation

Employment creation continues to be a major challenge for

sustainable development in Africa. Even with the high rates of

economic growth, employment creation has been limited,

especially among the youth and women. This reveals a weak

correlation between economic growth and employment creation in

Africa. Studies have pointed to the fact that economic growth in

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the last decades has been led by capital-intensive enclave

sectors, with a low employment elasticity of output growth (ECA

and AUC 2010). Economic transformation in Africa must address

the fundamental challenges of employment.

A closer look at employment in Africa indicates that natural

resource-based sectors such as agriculture, the mineral sector,

forestry and fisheries continue to remain the largest job

providers. Together, these sectors account for 80 per cent of

employment. Tourism, which relies primarily on the continent’s

natural and cultural wealth, employs 6.3 million people (World

Travel & Tourism Council, 2006). A green economy should maintain

and enhance the natural capital that will constitute an

important source of jobs, income and livelihoods for the vast

majority of the African people.

6.3. Food security

Food security is one of the most pressing needs of the African

population. In sub-Saharan Africa, 33 to 35 per cent of the

population is malnourished, especially in rural areas. Soil

productivity is decreasing due to environmental degradation,

which is caused by poor soil and water management, inappropriate

fertilizer use; decline in the use and length of fallow periods;

over grazing and logging; and population pressures that push

farmers to less favorable lands. In addition, an important share

of the harvest is lost due to pests, diseases and poor handling

and storage. All these are being exacerbated by the effects of

climate change. Capacity-building, education and knowledge

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transfer are essential for improving food security and enhancing

sustainability (Blackburn, R.S. (2009).

The green economy has the potential to render positive returns

on sustainable agriculture, provided that not only the short-

term revenues of agriculture, but also the social and

environmental costs which will lead to decreasing revenues in

the long run, are taken into account. This cost-benefit analysis

can only be performed in constant dialogue with the communities

themselves (Mwaniki, 2006). Farmers can adopt sustainable

farming methods, which will counter environmental degradation

and increase production and, hence, food security in the long

run. There is growing evidence for the positive effects of

sustainable farming on production and food security, and there

is already a series of successful experiences of the adoption of

sustainable farming practices across the continent. These are

discussed in greater detail in the section on agriculture below

(Mwaniki, 2006).

6.4. Resource scarcities and environmental risks

African economies are highly dependent on natural resources

which, in many countries, form the basis of economic activity.

While the exploitation of such resources generates economic

benefits in the short term, resource depletion decreases the

potential for economic growth and development in the long term.

Studies have shown that when GDP growth is adjusted to account

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for the loss of natural capital, growth is often very low, and

in some cases even negative(Arrow et al., 2004)..

When resource depletion is taken into consideration, national

savings reveal a negative trend in a number of African

countries. On average, the genuine wealth growth in sub-Saharan

Africa is estimated to be negative (Arrow et al., 2004).

Adjusted net savings measures are defined as net national

savings plus education expenditure, minus energy depletion,

mineral depletion, net forest depletion and carbon dioxide and

particulate emissions damage from carbon dioxide and particulate

emissions. It gives an indication of the net saving rate when

national accounting frameworks account for resource depletion

and environmental degradation. This indicates that short-term

gains provided by resource extraction do not necessarily

translate into overall gains in terms of savings to support

future economic growth (The Economist 2011).

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7. How can the Forest Sector Contribute to a Green Economy?

The forest sector contributes already largely to the Green

Economy, but could play an even more significant role if

governments and others seize the opportunity to use wood based

products for green construction and furniture wherever possible

and take measures to support the wider adoption of modern wood

energy.

To promote those opportunities, the UNECE Committee on Forests

and the Forest Industry (COFFI) and the FAO European Forestry

Commission (EFC) decided to take action and prepared the Action

Plan for the Forest Sector in a Green Economy. The Action Plan

was developed on the basis of an open consultation with member

States and stakeholders and consolidated by the secretariat (FAO,

2009).

In a green economy, the forest sector makes a maximum

contribution to human well-being, through the supply of marketed

and un marketed forest goods and services, and the creation of

revenue and livelihoods, while conserving forest biodiversity,

and maintaining and developing forest ecosystem services on a

sustainable basis, all within the context of a changing climate.

A green economy opens up additional opportunities for growth and

employment in the forest sector."

"In a green economy, the forest sector protects the welfare of

all stakeholders, including forest dependent indigenous peoples, 22

forest owners, forest industry and the forestry workforce, uses

all resources wisely and economically, and contributes to the

mitigation of climate change through both sequestration and

substitution, while providing tools for climate change adaptation

of societies.” (FAO, 2009).

"In a green economy, forest sector governance systems take into

full account all of the ecosystem services provided by the

forest, compensating suppliers for providing them whenever

feasible. Progress is monitored in a transparent way, and

policies adjusted to reach the goals which will be agreed at the

national, regional or local levels. The forest sector learns from

other parts of the emerging green economy and shares its own

experience with them, to mutual benefit (FAO, 2009).

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8. A Typology of Green Economy Policies

Most publications use a short set of intuitive policy ‘types’ or

‘categories’ under which a variety of specific policy measures

can be grouped. However, there is little consistency among the

various categories or types proposed across publications. This

highlights that, whilst the types of policy measures being

proposed often overlap, there is little consistency in how these

measures are being grouped and categorized. In general, it can

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be seen that four main ‘approaches’ to categorization are used,

based on:

(i) The desired outcome or pathway;

(ii) The ‘type ‘of policy measure;

(iii) The target sectors or types of ‘capital’; or

(iv) A mixed approach adopting a combination of these. The

scope of policy measures also varies between

publications, with some authors focusing on the

interface between economy and environment, whilst others

take a broader approach incorporating a range of

complementary social policies. This broader approach

aligns more adequately with emerging definitions and

principles for green economy which integrate a strong

social component (i.e. the ‘inclusive green economy’).

For the purposes of this paper, a typology of green economy

policies has been developed which draws upon the categories used

in recent publications by a number of leading international

organizations and experts .This typology of green economy

policies is set out in Table 2 below and proposes six categories

that cover the breadth of green economy and complementary policy

measures addressing all three dimensions of sustainable

development and using an intuitive format based around “6 Is”:

Internalizing; Incentivizing; Institutions; Investment;

Information; and Inclusion5.Within these six categories, Table 2

also outlines a consolidated list of 20 green economy and

complementary policy sub‐categories that were identified through24

the desktop review of green economy publications. In many cases,

this involved intuitively grouping specific and related policy

measures together to streamline and avoid duplication (for

example “taxes, charges and fees” are grouped together). This

typology enables us to explore the range of policy measures and

most common instruments that are being proposed by practitioners

and experts to transition towards greener economies.

Table 1: – Typology of green economy policy measures

Policy Category Policy Sub‐Categories

Internalizing

(externalities)

1. Taxes, charges, fees,

levies on ‘bad’(i.e.

pollution, resource use or

proxy)

2. Cap‐and‐trade permit or

certificate systems

Incentivizing 3. Investment incentives –

low‐interest loans; micro‐

financing; tax exemptions

etc.

4. Subsidies, feed‐in tariffs

and other direct support for

‘goods’

5. Removing policy‐induced

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distortions and perverse

incentives (e.g. harmful

subsidies)

6. Leveraging finance – PPPs,

long‐term guarantees, phased

out support, removal of

barriers to FDI,

lower administrative burden,

credit guarantees

Institutions 7. Regulations – norms,

standards, info disclosure,

labeling, prohibitions, fines

and enforcement, mandatory

targets

8. Property right and access

right laws, including IPR

9. Governance & institutional

capacities – accountability,

transparency, enforcement,

anticorruption

Source: UNEP, (2011)

9. Developing Countries’ Green Economy Development Strategies26

The third macroeconomic dimension highlighted by Ocampo comes

from recognizing that economic growth is nothing else but a

process of structural change: one in which some activities

expand, based on new technological knowledge, while others

contract. In this “structuralist” view, those changes are not

just a byproduct of growth but their prime mover: development is

nothing other than the capacity of an economy constantly to

generate new dynamic activities. This view is essential because

the transition to the green economy involves no less than a

technological revolution, and will have deep impacts on

production structures as well as on consumption patterns (The

Economist 2011).

These structural transformations have two types of implications.

Since new technologies are largely going to originate in the

industrial countries, there are a series of international issues

related to how these technologies are disseminated, what changes

in trade patterns they will generate and what mechanisms will be

put in place by the international community to guarantee that

this process will benefit all countries. These issues are dealt

with in later sections. Here we will concentrate on a second set

of issues that relate to the domestic policy response by

developing countries.

10. Ethiopia’s Policy toward Green Economy

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The transition to a green economy will have a large beneficial

impact. It will transform current economic development practices

and will touch most sectors. Ethiopia has the domestic potential

to contribute to the global effort to mitigate climate change by

reducing around 250 Mt CO2eemissions a year in 2030 as compared

to conventional development practices, 60% less than estimated

for a business as usual approach and near-zero net emissions.

Given the projected population growth to nearly 130 million,

emissions on a per capita basis would fall from 1.8 Mt CO2 in

2010 to 1.1 in 2030 a decrease of nearly 40% while GDP per

capita would reach middle-income level before 2025 (Addis Ababa

City, (2009). The highest emission reduction impact is

concentrated in agriculture and forestry. Under business as

usual assumptions, agriculture and forestry would contribute

around 45% and 25% respectively to projected greenhouse gas

emission levels and, together, account for about 80% of the

total emission reduction potential identified (Ethiopia’s

Climate- Economy Strategy, (2013).

The most powerful initiative overall is the use of more

efficient stoves to reduce the burning of fuel wood for cooking,

with the potential to reduce forestry-related emissions by a

rate of 50 Mt CO2 emissions a year in 2030. In agriculture,

higher livestock productivity has the potential to reduce 45 Mt

CO2 emissions a year in 2030. In the industry sector, the

highest potentials f or reducing emissions have been identified

in modernizing cement production to achieve higher efficiency

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(16 Mt CO2) and in generating electric power from renewable

sources (already planned before the green economy effort and

therefore part of the business-as-usual scenario), possibly

including exports of hydroelectric power, which could translate

into emission reduction potential of an additional 19 Mt CO2ea

year in 2030(Ethiopia’s Climate- Economy Strategy, (2013).

The transport and buildings sectors contribute emission

reductions totaling around 15 Mt  CO2e a year in 2030 from a

combination of efficiency improvements in the use of fuel and

electric power for vehicles, lighting, and home appliances along

with more efficient urban waste management (Addis Ababa City,

(2009).

The green growth path will have a measurable impact on around

two-thirds of the economy by 2030:- Adopting green economy

practices on this large a scale will unlock economic growth,

create jobs for the growing population, and deliver wider socio-

economic benefits. Most green economy initiatives directly

support new business opportunities for the private sector. As an

example, one prioritized initiative to improve agricultural

efficiency is the increased use of professional farmer

cooperatives, which creates jobs across the value chain in

supplying inputs, aggregating production, and marketing. Such

cooperatives can capitalize on the impact of related initiatives

to increase crop and livestock productivity. In dairy farming,

for example, cross-bred cows produce two to five times more milk

29

than pure-bred indigenous cattle. Increasing the share of cross-

bred cattle could thus dramatically increase marketable dairy

yields with a lower cattle population raising incomes while

reducing livestock-related emissions.

Green economy initiatives will create macroeconomic benefits:-By

establishing a more secure electric power supply, an essential

prerequisite for sustainable economic development, and

increasing energy efficiencies in the transport, industry, and

buildings sectors, Ethiopia can reduce its cur-rent dependency

on fossil fuel imports by about one-third. This effect alone

could improve the balance of payments by several billion dollars

in 2030. Furthermore, low carbon emissions can be marketed as a

competitive advantage for Ethiopia’s exports. Finally, the

decision to commit to sustain-able economic development opens

the door to international environmental support, such as the

Clean Development Mechanism carbon credits. Such support could

complement Ethiopia’s own green growth budget and other sources

of funds that have already been earmarked for development

(Environmental Protection Authority, (2014).

The green economy strategy also entails wider socio-economic

benefits. Public health will improve with better water and air

quality. Green growth will accelerate rural development by

reducing soil erosion and increasing soil fertility, hence food

security, and rural employment. Households will benefit from

higher energy efficiency – especially from more efficient

30

cooking/baking and transport. This should increase domestic

savings and thus the capacity to invest in improving labor and

land productivity and to participate more profitably in domestic

and export markets. These tangible benefits for local

communities should stimulate a virtuous cycle of mutually

reinforcing effects in support of green growth.

Share of GDP affected (2030) and examples of economic

impact/benefits from green economyThe plan: To follow a green

growth path that fosters development and sustainability The

Climate-Resilient Green Economy (CRGE) initiative follows a

sectorial approach and has so far identified and prioritized

more than 60 initiatives, which could help the country achieve

its development goals while limiting 2030 GHG emissions to

around today’s 150 Mt CO2 around 250 Mt CO2 less than estimated

under a conventional development path. The green economy plan is

based on four pillars (Environmental Protection Authority,

(2014).

1. Improving crop and livestock production practices for

higher food security and farmer income while reducing

emissions

2. Protecting and reestablishing forests for their economic

and ecosystem services, including as carbon stocks

3. Expanding electricity generation from renewable sources of

energy for domestic and regional markets

4. Leapfrogging to modern and energy efficient technologies in

transport, industrial sectors, and buildings. For more than

31

80% of the abatement potential, abatement costs are less

than USD 15 per t CO2e.

Many of the initiatives offer positive returns on investments,

thus directly promoting economic growth and creating additional

jobs with high value-added. Building the green economy requires

an estimated total expenditure of around USD 150 billion over

the next 20 years.

Summery

At its most basic level, the green economy is the clean energy

economy, consisting primarily of four sectors: renewable energy

(e.g. solar, wind, geothermal); green building and energy

efficiency. Green technology, an environmentally friendly

technology is developed and used in a way that protects the

environment and conserves natural resources

The concept of the green economy has gained currency to a large

extent because it provides a response to the multiple crises

that the world has been facing in recent years – the climate,

food and economic crises – with an alternative paradigm that

offers the promise of growth while protecting the earth’s

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ecosystems and, in turn, contributing to poverty alleviation.

The third macroeconomic dimension highlighted by Ocampo comes

from recognizing that economic growth is nothing else but a

process of structural change: one in which some activities

expand, based on new technological knowledge, while others

contract. In this “structuralist” view, those changes are not

just a byproduct of growth but their prime mover: development is

nothing other than the capacity of an economy constantly to

generate new dynamic activities (Kate Gordon and Jeremy Hays,

2008).

Green economy has similar elements, principles, benefits and

policy orientation in different parts of the world. In

developing world green economy is the manse to sustainable

development. Also green economy is the for poverty reduction.

Ethiopia have great attention towards green economy and to

transform its economy in the stage of middle income level

without affecting the existed environment.

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33

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