What’s behind Green Economy?

These 12 Theses are based on the work Beautiful Green World by Ulrich Brand, the Rosa Luxemburg Foundation contributed to its translation. Ulrich Brand, born in 1967 in Konstanz (Germany), works as a Professor of International Politics at the University of Vienna. His research focuses on international politics and international political economy, with an emphasis on resource and environmental politics (biological diversity, climate change, food, energy and financialization of nature) and socio-ecological transformations. Since January 2011, he is member of the Enquete (Expert) Commission “Growth, Well-Being and Quality of Life” of the German Bundestag.

Here, we present 12 believe sentences that represent the green economy paradigm. If you click on “What’s behind this assumption”, you get background information to understand the broader context. For the full publication with all sources, see here.

01“Green economy stimulates sustainable development”

One main argument is that sustainable development does not take place because of a lacking will of political institutions. With Green Economy, enterprises get new markets, the employees get meaningful work and the countries of the South get opportunities in the “green sectors” of the world market. At the same time society and nature profits from a reduced consumption of resources.

What’s behind this assumption?

02“The crisis is an opportunity for a green economy”

Crises can optimistically be perceived as opportunities to change and restructure the economy. The European Commission in 2010 endorsed a plan for growth based on green technology.

What’s behind this assumption?

03“Green economy reconciles economy with ecology.”

The latest innovation in ecology protection involves the process of including nature into economic calculations as “natural capital” in order to conserve it. Turning away from systems of pollution towards a green investment scenario, as coined by the United Nations, the world should see higher economic growth and lower unemployment.

What’s behind this assumption?

Governments of the economically powerful countries do not question the western model of life and production, holding on to a largely uncontrolled capitalist globalisation. Instead of a win-win situation, Green Economy will create capital-intensive mining and large-scale projects in the area of infrastructure, expensive offshore wind turbines and emissions trading. Access to power is first and foremost for those who have capital and can invest it. Social costs of ecological modernisation remain of secondary importance. This would only be otherwise if the focus were no longer on the modernisation of capitalism but on a fundamental transformation to a solidarity oriented mode of production and life, in which people and nature are no longer just the cheapest possible resources.

After 2007, many countries fell into an authentic debt crisis, trying to generate growth by all means, i.e. relieving enterprises from costs. Instead of implementing sustainable growth approaches, the G20 countries accelerate natural resource consumption for economic growth, producing a faster growth of emissions than of economic growth first time in history. In 2010, there were more emissions than ever before. Competition will still remain as the centre piece of economic activity, as it has done under capitalism, preventing a redistribution of power structures and social opportunities, thus it is doubtful that the environment could profit from it.

Firstly, economic crises can repeat and greatly disturb the economic system in transition. It is hard to predict economic trends in stable times and it is nearly impossible to do so in times of instability. Secondly, it denies the complexity of global economic dependencies and production processes. In the name of green economy, rainforests are cut down to produce green biofuels, governments decline emissions trading due to the costs to indigenous enterprises, companies are offshoring their environmentally friendly production processes. “Green” products (e.g. electric cars) are often produced under ecologically and socially catastrophic conditions: resettlements, often the destruction of nature over large areas, poisonous emissions and the employment of cheap migrant labour. Third, economic growth means an increase of the production of goods and services measured in money. Who produces the products, and under what conditions, plays a secondary role, if at all. Meanwhile, the pressure to grow and connected interests are not questioned. Fourthly, the conditions in which green growth is taking place must be transparent. Under the control of energy corporations who are more interested in large-scale projects like offshore wind farms and monopolistic energy nets? Or as decentralised energy generation under democratic control? And why shouldn’t waste prevention come first? Fifthly, if the destruction of nature gets a price, its destruction ceases only if its protection is cheaper than its destruction. Common goods should therefore be protected according to social-ecological criteria.

04“Green economy creates good jobs”

In the European Union, more jobs can be created in the green economy sector as the Europe-wide CO2 reduction goal has been increased from 20% to 30%. The jobs are predicted to be especially attractive and well paid as they tend to include a higher-skilled labour force.

What’s behind this assumption?

05“Greater efficiency leads to more growth with less resource consumption”

A condition and consequence for green economy could be a sharp increase in resource efficiency: through improved technologies and organisation of production, with every Euro of economic output continually less raw material should be consumed and fewer pollutants emitted. In this way limitless growth is supposed to be feasible despite all.

What’s behind this assumption?

06“Environmental protection and sustainability need a strong state”

Only if regulations are binding for all companies will there be no competitive disadvantage for those companies that produce ecologically. On the other hand, the companies improve their technology through this and become more competitive. The transition to a resource-efficient and sustainable economy and society thus needs strong state involvement on global level.

What’s behind this assumption?

In the case of Germany, more people work in the renewable energy sector than in the conventional energy sector and the employment growth in the green sector is projected to continue in rates of 10%. However, what do concretely such prognoses mean?
Green jobs are not always good jobs from the perspective of working conditions: high performance requirements combined with poor union organisation, limited income prospects, necessary but often absent training opportunities and an increase in subcontracted labour are characteristic. Workers often get in contact with highly toxic materials, e.g. epoxy resin in the production of rotor blades. Further, displacement to detriment of less skilled and older workers is common in the green sector. Thirdly, it will still be corporate managers who decide on the allocation of capital, thus democracy would not reach into corporate decision-making. And, finally, we presently see a trend to poorly paid work contracts without social security benefits, to the flexibilisation of working times and the substitution of fixed salaries by variable salaries. The insecurity tied to flexibilisation and precarisation decreases people’s ability to deal with questions of the future. The relations of domination, between genders and classes and ethnic divisions as well as the position of countries in the world economy have to be called into question. The socially necessary and desirable labours – paid and unpaid – should be organised on the basis of solidarity and democracy.

Decoupling of resource consumption and economic growth sounds good. But so far, a drop of resource consumption in high income countries rather happened due to de-industrialisation and relocation of energy-intensive production to other countries. Thus, an increase in efficiency does not automatically rescue the climate.
In certain circumstances, “dirty” production methods are more profitable for an enterprise. With the premise of efficiency, environmental protection always falls behind what is technically possible and ecologically necessary. As strategy for profit maximisation, environmental protection remains subject to the methods of the markets and the calculations of corporations. Further, the concept of efficiency comes into conflict with the capitalist growth drive. Historically, however, efficiency has increased hand in hand with environmental degradation. This efficiency is on the other hand counter-acted by an increase in consumption, thus not having reduced absolute global resource usage.
An increase in efficiency is of course nevertheless necessary. The task is to achieve efficiency gains, which do not only lead to a relative decoupling, but to an absolute reduction of resource consumption. Alongside a critical questioning of the prospects for efficiency, the many concrete possibilities for sufficiency should also be bolstered.

State regulations can be important in order to guarantee orientation, security for planning and in some cases concrete support to companies and employees, research institutions, associations and the public sphere. International agreements impede free-riding and reinforce learning processes from successful states. Nevertheless there are some questions and doubts.
It is often overlooked that the state does not establish its regulations on the basis of a neutral position but reflects the relations of power in a society. For example, subsidies of non-sustainable economic sectors are powerfully supported. On top, policy in liberal democracies are oriented in a structurally short-term way, to elections. This makes longer-term planning difficult.
On international level, we have experienced the transformation from welfare states to “national competitive states”. While the European Union has decided to become the most competitive region of the world by 2020, a global “war for resources” resulted. Agreements on the protection of the environment are accordingly difficult.
States and international policy can be important for the path to a sustainable mode of production and life based on solidarity. For an orientation to the needs of people and the environment, the relations of power and the dominant orientations in society must change towards a stronger involvement of social movements and deprivatisation of the political sphere.

07“There is hope: Corporations can be the motors of a green economy”

As many of us agree enterprises and consumers are the main actors of today’s economy and they normally act by the script written by the state, through regulations and policies. In this scenario, caught between the public demand and competition, corporations have the potential to become innovators of social change, but why does that happen so rarely?

What’s behind this assumption?

08“Green money facilitates the green economy”

In green economy, so it is promised, capital will be steered away from the “dirty” sectors toward the “green” domains. For this, massive investments in the energy sector and infrastructure and the development of sustainable industrial goods and agriculture are needed.

What’s behind this assumption?

09“Countries like Germany can expand its position as a world-market leader through green technologies.”

The German market share in environmental technology has jumped from 6% to 30% and these as well as the market itself are expected to keep dramatically growing.

What’s behind this assumption?

Governments of the economically powerful countries do not question the western model of life and production, holding on to a largely uncontrolled capitalist globalisation. Instead of a win-win situation, Green Economy will create capital-intensive mining and large-scale projects in the area of infrastructure, expensive offshore wind turbines and emissions trading. Access to power is first and foremost for those who have capital and can invest it. Social costs of ecological modernisation remain of secondary importance. This would only be otherwise if the focus were no longer on the modernisation of capitalism but on a fundamental transformation to a solidarity oriented mode of production and life, in which people and nature are no longer just the cheapest possible resources.

The increasing investments toward the new sectors must be placed in the broader context of the financialisation of the economy since the 1980s. That means an increase of speculation and “the growing role of financial subjects – of financial markets, financial actors and institutions”. Institutional investors increased investments in raw-material markets from 13 billion Euros to 170 – 205 billion Euros from 2003 to 2008, and the World Bank estimated the absolute value of the global carbon market in 2011 to be 124 billion US dollars.
“Green” investments involve not only renewable energy and building refurbishment, but also landgrabbing for the cultivation of oil palms or corn for biofuels, the mega-project Desertec (total investment estimates of 400 billion Euros), hydroelectric plants, dams or high-voltage transmission lines throughout Europe.
Praising strategies of the green economy, one must be conscious of the fact that seeking valorisation possibilities exerts economic and social power, making it hard for small farmers to stand up to it.

Firstly environmental technology must be clearly defined. Electric cars are yet count even if they do not question the principle of auto-mobility. Locating the production, is not just technologies at stake, but also wage levels and the availability of resources. The production of solar panels moving to China shows how profit comes before welfare. Further, competition produces not only innovation but also losers. Societies and people in countries with less innovation are forced into the position of resource suppliers for the GreenTech industries, cementing Germany’s dominance. Environmental protection is to be put at the service of Germany’s or Europe’s leadership role – not the other way round. Development of new technologies are a central component of global competitiveness, hindering cooperative circulation and access to the cleanest technology of the day. However, under competition, big and controlled capital-intensive technologies are favoured over soft and locally adapted technologies and non-technological orientations such as sufficiency (from which German exporters can hardly earn anything). Finally, specific raw materials are necessary for the production of high-technologies. This aggravates geo-economic and geopolitical competition for resources, which can lead to conflicts. The most recent agreement on raw materials between Germany and Kazakhstan shows that German technological leadership is also promoted through cooperation with authoritarian governments.

10“Consumer power forces enterprises to protect the environment”

Consumers can decide about market changes! Scientists praise a cultural shift towards “post-material values” and “consumers sovereignty” forces enterprises to “cleaner” products.

What’s behind this assumption?

11“Green economy creates opportunities for development for the South”

If economic growth and investments are less dependent on the destruction of environmental goods and the sacrifice of environmental quality, the United Nations Environmental Program argues, then the rich and poor countries can equally achieve a more sustainable development.

What’s behind this assumption?

12“The green economy fights poverty”

The United Nations state officially that “Environmental destruction and poverty can be dealt with simultaneously by the applications of green agricultural methods”. Sustainable forestry and ecological agriculture are especially significant for subsistence economy, on which depends the livelihood of 1.3 trillion people.

What’s behind this assumption?

Individual behaviour, responsibility and the learning processes connected to them are important, also in consumption. The latest cell phone, regular air travel, etc. the reflection of constructed needs is worth a lot.
However, sticking at the mobile phone example: corporations determine research, social and ecological conditions of production procedures, what components are assembled in it. The campaigns for better production conditions are countless, but the change is little so far. This is not least due to a long production chain with many suppliers firms spanning the entire globe, making it cost-intensive to trace and control. Further, responsible consumption is often equated with self-denial. Why? Simply because sustainably produced goods are expensive. Poor people have to forego buying sustainably produced goods – unless they get a higher wage. However, this too is not to happen, because it would endanger the “competitive capacity” of the international competitive position of each country. Finally, consumers cannot always choose. If local rail service is cut back, one has to switch to cars; if daily work becomes denser, less time is left for preparing meals; if industrially produced and extensively packaged food is cheaper, significant parts of the population have less choice than others.
Socio-ecological transformation needs a different kind of distribution, another mode of production.

Even the UNEP senses that things are not that simple. Impressive economic growth in the South lifted millions of people out of poverty: based on non-sustainable modes of production. Countries such as China have achieved their enormous growth rates by competing in the world market with lower wages and ecologically poor conditions – also in the production of solar panels. Structural adjustments of the 1980s gave many African and Latin American countries the status of raw-material suppliers to the North. With green economy, “sustainable” biofuels from corn, soya or palm oil will be be added to this supply stream. Further, the extraction of raw material lead to severe conflicts – for example coltan in the People’s Republic of Congo, extracted for electronics like mobile phones and laptops. As if this would not be enough, distribution of profit in extracting countries is an extremely complex issue. In cooperation with corporations from the North, they usually go to the middle & upper strata, while local population bears the negative ecological consequences. Despite all achievements in the areas of health and education, social inequality is increasing – and growing social inequality fosters non-ecological behaviour. And here it becomes tricky: the argument of missing environmental standards can be used to justify export barriers and at the same time insist on import of “cleaner technologies” – based on open market agreements. And finally, the strong state support for research and development in high-income countries leads to a growing technology gap among North and South.
Freeing the weaker regions and countries from their dependency and strengthening alternative modes of production – this is not part of green economy strategies.

Poverty eradication is a complex issue, revealing contradictory UN policy.
International trade agreements subvert local opportunities such as access to education, equal income and small scale agriculture. Corporations control the agriculture and food sectors in development. Under the label of green technology, genetically modified seeds are introduced, people are expropriated, small farmers lose their land and sink to the level of day labourers on big plantations where plants for biofuels are cultivated. [The list of suffering is long: Indigenous peoples have been driven from their land (allegedly because their mode of economy is designated as non-sustainable). Nature reserves are established in which absolutely no further interference in natural processes is to occur – and in some of these areas people must consequently leave their land (instead of being allowed, for example, to carry out a sustainable economy).]
The reduction of poverty is thus a question of political and economic relations of power, located at institutions that don’t act responsibly. As an example, Germany signed 50 contracts for the extraction of raw materials at a total volume of 4.5 billion Euros with Kazakhstan, ignoring the human rights situation. In December 2011, oil workers protested against the non-payment of wages in the western Kazakh city of Zhanaosen. At least 16 people lost their lives by state intervention.