Things You Need to Know About the Green Economy

There was a general consensus that the economic system we are using now is no longer suitable due to the massive and significant negative impacts in both social and environmental contexts.

Governments, companies, as well as societies, are realizing the planetary boundaries that are reaching their limit. This is not only due to greenhouse gasses and global warming, but also because of the extraction of natural resources such as water, soil, forests, and others.

What is Green Economy and Why? 

The concept of Green Economy has been discussed in the past decades. One of its momenta is the publication of a report entitled Limits to Growth in 1982 by the Club of Rome.

Green Economy itself can be defined as “an alternative vision for growth and development; one that can generate growth and improvements in people’s lives in ways consistent with sustainable development” (World Resources Institute).

Meanwhile, defined Green Economy as “one that provides prosperity for all within the ecological limits of the planet”

Contoh ilustrasi dari konsep Ekonomi Hijau. Sumber:
An example illustration of the Green Economy. Source:

It is important to note that the concept and definition of Green Economy itself are still debatable, and each definition might differ for different parties or organizations. Sometimes these perspectives overlap and might even contradict each other.

The United Nations Environment Programme (UNEP) for example, defined Green Economy as “one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.

In its simplest expression, a green economy can be thought of as one which is a low carbon, resource-efficient and socially inclusive”

On another hand, the civil society movement that were embodied in People’s Summit at Rio+20 sees the “Green Economy” as a mere facet of the current financial phase of capitalism, which also makes use of old and new mechanisms, such as the concentration of ownership of new technologies, carbon and biodiversity markets, land grabbing, and others.

Principles of Green Economy

Based on a report entitled Principles, Priorities, and Pathways for Inclusive Green Economies”, launched on July 16th 2019 at the UN High Level Forum on Sustainable Development in New York, there are five basic principles of Green Economy, which are:

  • The Wellbeing Principle: Enables all people to create and enjoy prosperity.
  • The Justice Principle:  Promotes equity within and between generations
  • The Planetary Boundaries Principle: Safeguards, restores and invests in nature
  • The Efficiency and Sufficiency Principle: Geared to support sustainable consumption as well as sustainable production
  • The Good Governance Principle: Guided by integrated, accountable and resilient institutions
Lima Prinsip Ekonomi Hijau. Sumber:
The Five Principles of Green Economy. Source:

Examples of Green Economy Practices 

After discussing several basic concepts regarding Green Economy, so what does this terms look like if it is applied in the context of a country?

The transition to the Green Economy system is obviously a lengthy and complicated process. Even so, several countries can serve as role models thanks to their strong commitment to implementing a green growth concept or a low-carbon economic strategy.

It’s not that hard to find some of the success stories of large-scale programs capable of increasing development or productivity in ways that are sustainable.

There are some examples from several countries:

a. South Korea has adopted a national strategy and a five-year plan for green growth for the period 2009–2013, allocating 2 percent of its gross domestic product to invest in several green sectors such as renewable energy. The government has also launched the Global Green Growth Institute (GGGI) which aims to help countries (especially developing countries) develop green growth strategies.

b. China becomes the country that invests in renewable energy more than any other country. This can be seen from how its total installed wind capacity grew 64 percent in 2010.

Moreover, China becomes the country with the biggest solar energy capacity in the world, which is at 130 gigawatts. The IEA even notes that China met its own 2020 target for solar energy capacity additions three years early

Ladang panel surya yang terletak di Qinghai, Cina. Sumber: Getty Images
The solar farms in Qinghai, China. Source: Getty Images

Green Economy vs Circular Economy

Besides the term Green Economy, perhaps some of us have also heard about the term Circular Economy. Even though both share a common purpose — which is to boost economic growth while fulfilling social and environmental purposes — but the green one has a different focus compared to Circular Economy.

The underlying concept of Green Economy is to encourage economic growth while taking into accounts the availability of existing natural resources as well as the ecological balance in order for it to be sustainable.

On the other hand, Circular Economy focuses more on keeping resources in a closed cycle. In other words, the Circular Economy aims to change the linear production and consumption patterns (use and discard) into ones that are circular or within a loop.

Konsep Ekonomi Melingkar (Circular Economy). Sumber:
A diagram of the concept of Circular Economy. Source: 

As a social entrepreneur in responsible waste management, Waste4Change supports the realization of Circular Economy through a service called Extended Producer Responsibility, the service is then divided into In-House Recycling and Digital EPR.

Furthermore, Waste4Change also supports the Indonesia Circular Economy Forum (ICEF) that has just been held last November by  Greneeration Foundation.

Read the article in Indonesian version in here.

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