A 'green economy' must pull in informal workers, deal with inequality - report

by Samuel Mintz | Thomson Reuters Foundation
Thursday, 27 February 2014 10:54 GMT

Insects and birds fly in a dump yard as a rag picker collects scraps in New Delhi on June 27, 2013. REUTERS/Anindito Mukherjee

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‘Green growth’ driven by big business won’t be sufficient, researchers suggest

LONDON (Thomson Reuters Foundation) – While an increasing number of businesses, national governments, and international institutions are embracing the idea of “green growth,” issues like inequality and the informal economy are being left out of the equation, which threatens the push’s success, according to a “Green Economy Barometer Report” released this week.

“We’re finally seeing that economic leaders are looking at the opportunities of green growth, which is quite a step,” said Emily Benson, one of the organisers of the Green Economy Coalition, which produced the report with the London-based International Institute for Environment and Development (IIED).

But she said a focus only on green growth was too narrow, and would fail to address key problems.

The Green Economy Coalition, which works on environmental sustainability and social equity questions, includes a group of organisations ranging from the World Wildlife Federation to the Institute of Chartered Accountants in England and Wales.

Benson said that the difference between green growth and a green economy was subtle but important.

“Green growth is about resource efficiency, which is a critical part of the transition, no doubt. But all of the evidence suggests that it alone can’t be the only solution. It doesn’t know how to deal with limits, with boundaries. What can seem very rational at the level of the UN or a national level can be irrational level when it comes to ecological limits,” she said.

At the same time, the “green economy is … about redistributing power and natural and financial resources. That requires a very different approach to policy making,” Benson said.

The report states that even the idea of “inclusive green growth,” which has been popularly used by governments and businesses since the Rio+20 gathering in 2012, does not explicitly address the issue of inequality and “assumes that trickle-down economics will improve the living standards of the poorest.”


Another problem with current efforts to build green growth is that they largely ignore informal markets and the informal economy, which can account for a huge amount of economic activity in some countries.

“The problem about most of the top-down green growth movement is that they don’t know how to deal with the informal economy,” said Benson. Often, the result is regulations or practices which mean that “informal traders get marginalised because they can’t afford to participate.”

Even as the economies of many developing countries start to mature, informal economies in many remain large and important. In many countries around the world, informal economies are growing rather than decreasing. And, to the surprise of many, these informal markets are often more green than the formal economy.

“People have a negative connotation of the informal market, but research says that it is actually more efficient and sustainable than its counterparts in many ways,” Benson said.

For example, if groups of waste-pickers are allowed to compete for municipal waste management contracts, the result can be “green, inclusive and productive outcomes,” noted Steve Bass, of IIED, the report’s lead author.

The report recommends quick action on a human, country and global level, including scaling up dialogue, ensuring global policy goals complement rather than contradict each other and, most important, making sure the opportunities presented by a green economy improve people’s lives, Benson said.

“What we’re seeing at the moment is that the politics and financial flows are changing quickly. This is the moment where we have the most opportunity to help shape the way that this global and national architecture is developing. Green growth alone is favoring the very powerful: high-tech companies and powerful nations. The risk is that that doesn’t help poorer people,” she said.

A true green economy, the report noted, could benefit people through better jobs, improved health and improved access to energy, food, education and housing, as well as lower vulnerability to disasters such as floods.

“We’re really excited about the conversation on an international level, but until that translates to a human and a personal level within communities, it’s a hard transition,” Benson said. “That’s why connecting it to equity is so critical, because that’s what’s affecting so many people’s lives. Until we make the choices relevant to people and communities, we’re going to struggle, and that’s why this big international architecture needs to be refined.”

Samuel Mintz is an AlertNet Climate intern.

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