Green Growth

It is now becoming imperative for governments across the region to institute legislation and polices to encourage the greening of businesses. Resource scarcity, climate change and population growth pressures are compounding existing challenges to economic growth and poverty alleviation across the region. The questions posed by the recent financial crisis highlight the pressures governments face, namely; how can businesses harness eco-efficiency as a driver of economic growth and environmental sustainability and how can the environment and eco-efficiency be presented as a business opportunity, rather than an extra burden and cost? The power of the markets can be harnessed to find lasting solutions to the environmental problems caused by globalization. Technology and innovation can contribute to de-linking economic development from environmental degradation by increasing eco-efficiencies in production and by increasing resource productivity in the future. Significant reductions in energy and materials intensity, pollution, green house gas emissions and water pollution will demand more efficient ways of converting energy and cleaner manufacturing processes. This will need to be accompanied by major organizational and behavioral changes.

The current economic system is being driven by the strive for economic efficiency in the use of resources, based on a market price that does not reflect the full costs of the processing of inputs (e.g. natural resources) and outputs (e.g. wastes, effluents, and emissions). Thus, there is a need to pursue ecological efficiency by internalizing the ecological costs of the use of natural resources into the prices of goods, making them subject to the workings of the market forces. As long as the environmental and social costs remain outside the workings of market transactions, then economic distortions that have pushed the Earth into an ecological deficit will persist. As the ecological deficit continues to deepen, the frequency and intensity of natural disasters have the potential to increase.

Governments must take the lead and encourage the greening of business throughout all levels of the economy, in order to:

Greening business will involve multiple stakeholders as well as the business community. To avoid further unsustainable patterns of consumption and production from becoming entrenched through the globalization process, the help and cooperation of the private sector working in conjunction with governments is of primary importance.Multinational Corporations (MNCs) as well as small and medium enterprises (SMEs) will need to improve the efficiency of their business practices if they wish to remain competitive in the future. Business leaders need to think a little more outside the box. There are a plethora of ways to make money while being sustainable and contributing to development. Concepts such as bottom of the pyramid (BoP) are becoming more widespread. This approach argues that there are opportunities for corporations to source from or sell to disadvantaged people in ways that generate wealth, improve their quality of life while being simultaneously profitable. If policy makers are to find sustainable solutions to the problems caused by globalization then it is vital to engage businesses.The active cooperation of local communities and civil society - harnessing support through public awareness campaigns - can also foster more inclusive economic and social development based on indigenous knowledge and traditional livelihoods.

Natural capital is both ecosystem goods (raw materials) that enterprises transform into value for humanity everyday (trees, fish, agricultural products, water and minerals) coupled with ecosystem services that make the Earth habitable; including cleansing the water and air, pollinating agricultural crops and storing nutrients in soils. Transforming business practices to restore, rather than destroy investment in natural capital is key to long-term environmental sustainability.

Human capital refers to people's skills, education, health and family stability. By supporting policies which encourage investment in human capital governments can start to move away from their existing growth models based primarily on reinvestment in physical capital.From the government perspective reinvesting in human and natural capital is a crucial public policy strategy for ensuring sustained prosperity and well being for members of society.

Social capital describes circumstances in which individuals and organisations can use membership in groups and networks to secure benefits. Connections within and between networks reinforce the belief that these social networks have a value and can be used as a platform for further social progress. In this light, natural capital and social capital are closely related, and policies that build or destroy one often build or destroy the other as well, especially in the long run. Building and preserving social capital, not only allow people to prosper or at least survive, but also allow people to invest in natural capital rather than simply consume it.

The current capitalistic model in Asia and the Pacific region is designed around exports. Countries invested heavily in production, and as foreign reserves began to increase, further capital was invested towards improving production capabilities. Now, as demand is falling, an opportunity has arisen to begin reinvesting more heavily in natural and social capital. It is up to governments to support this reinvestment by correcting price signals to the market. Green tax and budget reform, in combination with other complimentary policy mixes, can provide governments with the tools to do so.

The whole systems approach can be defined as a way of viewing all parts of a system or process at once and analyzing how they interact and feed into each other. It is an approach to problem solving that views problems as parts of an overall system, rather than focusing on just one area. This holistic view encompasses all aspects of a system or process and can encourage creative and innovative solutions to individual problems.Resource productivity, a component of eco-efficiency, is fundamental to greening business. If the production processes use fewer materials and less energy and water to produce the same amount of output, then in today's context of volatile energy and commodity prices the companies will be more resilient to change and therefore competitive. Eco-efficiency concepts should be applied to national, economy-wide development planning to de-link economic growth from negative environmental impacts and to improve the sustainability of economic growth patterns.

The practice of a Circular Economy can potentially cover the whole life cycle of products . Circular economy concepts generally focus on production, such as cleaner production, eco industrial park development and integrated resource-based planning.A Circular Economy can be viewed as an economy which balances economic development with environmental and resource protection. It places emphasis on the most efficient use and recycling of resources, and environmental protection. A Circular Economy works towards low consumption of energy, low emissions of pollutants and high efficiency.

Placing complementary industries in close proximity can produce considerable cost reductions for all participants because they can encourage the use of waste from one industrial operation as raw materials for another. It involves applying Cleaner Production in companies, eco-industrial park development and integrated resource-based planning for development in industry, as well in agriculture and urban areas.