The Economist recently wrote that ‘market failures, co-ordination problems and government subsidies deter businesses from choosing green growth’. This article will explore an alternative way of looking at the concept of the green economy. Crowdsourcing, technological innovation and putting a price on biodiversity could be the three pillars of a green economic model.
Why crowdsourcing is important for the green economy
The green economy could benefit from crowdsourcing by using collective intelligence and money to complete projects with added transparency. As history has shown, unregulated global economic models, which rely on an ‘invisible hand’, end up not benefiting most people. Economic experimentation and competition can only be held on track through regulation. ‘People increasingly want humanity with their technology’, said Caterina Fake, an investor in Kickstarter. Similarly, the world’s first happiness report by the UN found that strong social networks were a major indicator of human happiness. So this need for social belonging and transparent business models could be found through crowdsourcing. As Allister Heath from the City AM said, “the key is to empower consumers to vote with their feet – and then allow the structure of the market to adjust to their free choices, in a bottom-up fashion, rather than (governments) to try and plan what it should look like.”
Technological advancements could reduce the impact on the environment
Technological innovation is the main driver of the green economy. The effect of technology needs to be looked at as neutralising the destructive impact of wealth and population. The more technology is developed to use resources efficiently, the less impact we as a growing population will have on the environment. Economic growth should not be understood as simply using more and more resources, but rather with the efficient utilisation of clever technology. For example, recently a Korean innovator Ryan Jongwoo Choi designed the Pipe Waterwheel, a simple plumbing accessory, which generates hydroelectricity from running tap water. When any standard water pipe is attached to the waterwheels, hydroelectricity accumulates and is stored in removable bulbs attached to the top of the pipe. Einstein once observed that imagination is more important than knowledge, which is especially relevant here – once we start to imagine, design and implement these solutions, the use of vital and finite resources can become ever more efficient.
There are plenty of other renewable technologies that need creative solutions in order to produce more with fewer resources. For example, Tim Worstall noted in his book ‘Chasing Rainbows’ we could get more solar cells from the same amount of raw materials through slicing silicon panels thinner, in doing so we would create resources rather than consume them. Physical growth is often confused with economic growth: economic growth is the growth in value and physical growth is bound by the environment in which you want that growth to happen. Therefore, an on-going debate about growth without prosperity becomes redundant once we realise that economic growth is what we put value to and how imaginative we are, regardless of the physical limits that we have to contend with.
Introducing a biodiversity tax
Although biodiversity is the backbone of the environment, the damage done to ecosystems is often ignored by large companies’ CSR reports. The shadow price of damaging the environment should be converted into a green tax on business (i.e. pricing the externalities that are being used in the companies’ production processes). Once these basic production inputs are being included into the balance sheets, it will be more expensive to degrade the environment. In order for this to happen, a way of measuring the damage done to biodiversity is needed. Income which is received from this tax could be used to fund the green products and services that people would benefit most: electric cars, fuel cells, renewable energy, insulating houses, etc. The tax money could also be used to replace old fossil fuel plants with non- fossil fuel plants.