What is a Green Economy?

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  • Written By: Solomon Branch
  • Edited By: Jenn Walker
  • Last Modified Date: 18 October 2019
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A green economy is essentially an economy whose aim is to create a sense of social unity and equality while keeping in mind the impact on the environment. Its main goals are to uphold these values while maintaining economic growth by investing in eco-sustainable practices. This is done through governmental means, such as legislation, creation of policy and private and public funding. A strong emphasis is put on helping those people who rely on nature to earn a living and who don’t have a lot of other resources or wealth.

There are several schools of thought as to what constitutes a green economy, but most include an overall holistic approach. Many other movements or ideologies are often included within the definition of a green economy, largely depending on which particular green economist is providing that definition. Some of the more common themes have to do with social justice, politics and renewable energy sources. The underlying theme of all schools of thought, however, is the harmonious interaction with nature and economic growth.


Some green economists have defined it as being part of other branches of economics, such as neoclassical or Marxist economics. These economists typically substitute one traditional definition or classification for a more nature-oriented one. One example would be listing nature as part of the proletariat that, in Marxist economics, is exploited for use to provide value to the overall economic community. The belief is that a green economy is easier to implement if it is already part of an established school of thought.

The main challenge in defining and streamlining a green economy is the lack of a central structure and ideology. There are many schools of thought that, while similar, do not entirely agree on how to approach the issue. Another key challenge is simple economics; many businesses require incentives to invest in green economic trends, as it not typically as lucrative as traditional economic investments. Some countries, such as Germany, the European Union and the US, passed legislation that includes these incentives, but growth is slow.

Another of the challenges in creating a green economy is the legislation that has passed in some arenas conflicts with that made in others. This is mainly seen in international trade, as different countries and organizations, such as the United Nations, have written policies that conflict somehow with another country’s or organization’s rules, making the initiatives difficult to implement. Despite the fact the formal concept of a green economy has been around for several decades, it still faces many challenges to being fully realized and defined.


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