What is IGE?
Inclusive green economy
Define green economy
A low carbon, resource-efficient and socially inclusive economy
Define divestment.
The selling off of investments
Economies worldwide need to decouple resource use for economic growth from environmental degradation.
True or false?
True.
Consumers are important in the transition to IGE. Why?
Lifestyle choice shapes consumption, i.e. the demand for goods / services.
Name the 3 components of the REDuse framework and give examples.
- Refuse: discourage harmful choices to the environment, e.g. refusing plastic bags
- Effuse: encourage positive choices to the environment, e.g. walking instead of driving
- Diffuse: seek a multiplier effect among communities, e.g. car pool
There have been encouraging trends in the energy and financial sectors. What has this shown?
Changing attitudes; going green can be a driver of growth.
Economic policy plays a key role in incentivising sustainable business. Name 5 financial incentives through which this can be achieved.
- Financial regulation
- Carbon taxation
- Green procurement
- Standards and quotas
- Subsidies
Incentives for green investment influence supply / demand for products and services and shape investment decisions.
- What is financial regulation?
- How does it affect supply / demand for goods?
- What is the associated challenge?
- The imposition of laws / regulations on the financial sector
- It lowers the information cost for lenders / borrowers (so they can make better investment decisions)
- It provokes strong lobbying (pisses off the financial sector)
Incentives for green investment influence supply / demand for products and services and shape investment decisions.
- What is carbon taxation?
- How does it affect supply / demand for goods?
- What is the associated challenge?
- A tax on CO2 emissions
- It raises the cost of brown business, encouraging businesses to become greener
- It provokes concern over rising prices (which ultimately fall on the consumer)
Incentives for green investment influence supply / demand for products and services and shape investment decisions.
- What is green procurement?
- How does it affect supply / demand for goods?
- What is the associated challenge
- When the government / opts for / favours ecologically sound materials for goods / services (only support sustainable businesses)
- Creates demand for sustainable products
- Increases public expenditure initially
Incentives for green investment influence supply / demand for products and services and shape investment decisions.
- What are standards / quotas?
- How do they affect supply / demand for goods?
- What are the associated challenges?
- Regulations on how businesses can operate
- Signals the phase-out of old tech
- Provokes opposition by incumbent industries
Incentives for green investment influence supply / demand for products and services and shape investment decisions.
- What are subsidies?
- How do they affect supply / demand for goods?
- What are the associated challenges?
- A sum of money granted by the state to keep the price of a good / service low
- Reduces supply costs of green products
- Creates a sense of entitlement over time
The rationale for a green economy is that social / environmental concerns must take priority over economic growth.
True or false?
False: environmental and social concerns do not need to downplay economic growth (basically it is possible to have all of these things)
Investment into social / environmental causes does not drive economic growth.
True or false?
False: it boosts economic growth.
Higher income equality is associated with sustainable growth.
What implication does this have for IGE?
That targeted economic policy to promote social inclusion will help to sustain growth.
How might a pro-poor tax reform benefit economic growth?
Give 7 steps.
- Tax reform causes rise in HHI
- This creates greater macroeconomic demand
- Which creates more business opportunity
- This creates jobs
- HHI rises further
- There is reduced pressure for the youth to enter the workforce, leading to a longer education
- This creates higher skilled workers
How might air pollution control benefit economic growth?
Give 3 steps.
- Cleaner air means less respiratory stress
- Leading to less sick leave
- Resulting in higher economic output
How might sustainable forest management benefit economic growth?
Give 2 steps.
- Improved carbon storage generates carbon credits
2. Trading these credits creates revenue
‘Economic growth is not an end in itself…living in a large economy is of little use if the environment and inequality compromise our health and social cohesion.’
Amen.
IGE stresses that GDP is the most important measure of economic progress.
True or false?
False.
What are the problems with using GDP to evaluate economic progress?
Give 3 reasons.
- It does not tell us if growth is fair (does everyone in society reap the benefits?)
- It does not tell us how green growth is (how much pressure is it putting on the environment?)
- Unpaid activities like housework / childcare are not taken into account, which greatly affect the functioning of the economy
Basically, GDP does not give us the full picture
Name two attempts to create a global standard for sustainable development.
- The Green Economy Progress Index (GEPI) from PAGE
2. The Better Life Index from OECD
What is the ultimate goal of IGE?
To move towards a state of high human development with low ecological impact
