What makes a green economy a fair one too?

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Guest blog post by Kate Raworth

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Kate Raworth is a Visiting Fellow in Economics at IIED. Her research focuses on rethinking economics in the faces of extreme social inequalities and planetary boundaries. She blogs at www.kateraworth.com and tweets @KateRaworth

Ask any country’s leaders about their nation’s strategy for the next decade, and chances are, its colour will be green. ‘Green economy’ and ‘green growth’ policies are moving to centre stage in a surprising number of countries, including many low- and middle-income ones. From Vietnam and Barbados to Ethiopia and Mozambique, there’s a new focus on combining environmental sustainability with economic growth – particularly by cutting or curbing greenhouse gas emissions, while ensuring a rising GDP.

For the sake of ecological integrity, that’s good news – but what about social justice? Green policies to transform key sectors – ranging from energy and transport to infrastructure and agriculture – bring many implications for women and men in vulnerable and low-income communities. And it would be dangerous to assume that they will automatically bring benefits. Indeed, without care, green policies could well do the opposite.

As DFID’s Chief Economist, Stefan Dercon, pointed out in a 2012 paper, ill- designed green policies could impose significant costs on people living in poverty – such as through rising energy prices, lost employment, and restricted forest access – while anticipated gains of ‘green’ jobs and infrastructure may not reach them.

To date there has been far too little focus on the social consequences of the boom in green policy-making. And that’s why CAFOD along with IIED set out to explore the principles and practices that can help to secure social justice in the green economy.

We looked across low- and middle- income countries at a wide range of policy initiatives which aimed to promote environmental and social goals together, in order to see what insights they might offer.

We found there are four broad approaches to addressing social concerns in green policy-making – and the different social outcomes they produce are stark:

1. Green policies with no social analysis or action – such as granting land to powerful actors for carbon-offsetting, while restricting forest access for traditional users. These approaches tend to exacerbate existing social inequalities, and disproportionately affect marginalized groups, including women and ethnic minorities.

2. Green policies with social safeguards – such as providing cash transfers to a community facing increased costs of energy. These policies are designed to ‘do no harm’ by adding on compensation for anticipated social costs. Such safeguards can provide important transitional protection, but they are unlikely to lead to long-term poverty reduction.

3. Policy co-benefits for green and social goals – such as creating jobs in environmental restoration and urban renewal, or providing sustainable and affordable energy, water and housing. Co-designing policies to address green and social objectives goals together in this way can generate lasting social gains, especially with the participation of the target social groups.

4. Social transformation addressing the structural drivers of social deprivation while also greening the economy – such as through land rights reform or securing the right to decent work in ‘green’ jobs. This puts integrated policy-making at the heart of a shared and lasting national prosperity, and often requires a change in rules and the legal regime.

These four approaches to green policy-making clearly lead to very different consequences for people living in poverty. For advocates of social justice, that begs a critical question: what are the key factors that shift policy design away from no social analysis or mere add-on compensation, and move it towards achieving co-benefits and social transformation?

Drawing on the successes and failures, lessons and setbacks, of over 40 case studies in more than 20 countries, we came up with ten guidelines for green and just policy-making – and these are set out in full in our new briefing. But to give you a taster, here are three of them:

  1. Embrace holistic approaches to planning and monitoring both poverty and the environment. Rather than focus on tackling income poverty alone, take a multi-dimensional perspective, promoting the well-being of vulnerable groups by promoting their health, education, work, living standards, security, empowerment and resilience. And rather than focus on abating greenhouse gases alone, consider the implications of whole ecosystem integrity, and respect for planetary boundaries.
  2. Be aware of the bias and limits of economic methodologies and market instruments. Economic valuation tools and cost-benefit analyses are increasingly used in designing policies. But they risk overlooking and undervaluing social and cultural goods and services, distributional impacts, and long-term values. Likewise, market-based policy instruments (such as cash transfers) may provide critical safeguards, but they can only be effective if institutional capacity and procedural justice are in place. 
  3. Promote poor people’s empowerment and address elite power. Ensure policies and services are co-designed with the participation, knowledge and practice of communities to ensure they meet local needs and interests. Support the smart devolution of natural resource governance to community scale, while promoting equitable governance within the community. And be strategic in recognizing and addressing the influence of powerful elites and interests – overt and covert – in blocking, capturing, or even unlocking the gains of green policy-making.

So there’s three of the ten guidelines – the full set is presented in our newly published briefing.

Let us know: do you agree with this set of ten? What should be added or changed?

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