Reviewed by Aug 27, 2020| Updated on
Green economics is one of the approaches in economics to facilitate a harmonious interaction between humans and nature. Green economics focuses on the interconnected relationship between humans and their external environment. All the economic decisions should be based on our natural ecosystem and the ecology surrounding us.
Understanding Green Economics
The theory of Green Economics is broad-based because it is a holistic approach to promote ecological balance between humans and the ecosystem surrounding humans. The theory considers the economy to be a component of the broad ecosystem, which includes humans and their external environment.
The holistic approach makes green economics socially inclusive and efficient. Green economics is defined by the United Nations Environment Programme (UNEP) as one which is resource-efficient, generates low carbon emissions, and inclusive in nature.
Green economists use a broad approach to design economic models. They make optimum use of natural resources with a goal to conserve natural resources. The green economists believe that the health of an economy depends on the conservation and existence of a healthy environment. The environment plays a significant role in the well being of an economy.
The theory of green economics advocates the positive co-existence of humans with nature. The theory advocates the use of renewable energy sources and green technologies.
Green economics is also studied in connection with ecological economics. It places a measurable economic value on natural resources and a complete accounting of environmental costs incurred by various entities, such as individuals, industry, government and so on.
The International Chamber of Commerce (ICC) has stated in their book "Guidebook To The Green Economy", a green economy is one "in which economic growth and environmental responsibility work together in a mutually reinforcing fashion while supporting progress and social development".
Green economics emphasises on balance between human and their external environment. However, critics of green economics state that green economics limits market entry to companies who have technological access for green solutions. Economic growth generally advances upon the use of non-renewable technologies and energy sources.