Article 11: Green economy

Article 10: Inclusive growth and NITI Aayog
December 18, 2018
Article 12: Consumer Rights
December 25, 2018

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Article 11- Green economy

Contents

  1. Concept of Green economy
  2. Green accounting
  3. Green GDP
  4. Green Skilling
  5. Green Public Procurement
  6. Quiz

Concept of Green economy

  • The green economy is defined as an economy that aims at reducing environmental risks and ecological scarcities
  • It  aims for sustainable development without degrading the environment.
  • The 2011 UNEP Green Economy Report says “that to be green, an economy must not only be efficient, but also fair”.  Fairness implies socially inclusive.
  • The United Nations system views green economy as a means for achieving sustainable development and eradicating poverty.

Main sectors:

  1. Renewable energy
  2. Green buildings
  3. Sustainable transport
  4. Water management
  5. Waste management
  6. Land management

Green accounting

  • The term Environmental accounting was used for the first time in the year 1980s by Professor Peter Wood.
  • Environmental accounting or green accounting is a new branch of accounting that aims at accounting for the Environment and its well-being.
  • It deals with most important factors-
  1. People,
  2. Profitability and
  3. The planet and
  4. Deals with the costs and the advantages or benefits an environment brings to a business concern.

Objectives of green accounting:

  1. To assess environmental costs and benefits to a concern.
  2. To segregate and categorize various Environmental costs.
  3. To Link Physical Resources with Environmental Accounts monetarily.

The Importance of Green accounting:

  1. Changes in the environment have a negative bearing on not just the Environment but on the economy as a whole.
  2. The Gross domestic product of a country can be affected by the environmental and climatic change.
  3. People become more aware and conscious of Environmental issues, the need for sufficient and appropriate corporate disclosures is growing all the more.
  4. Exploitation of natural resources in sustainable way
  5. Changes in the global climatic factors

Steps that are already being taken by India – CSR

  • The government of India through the new Companies Act of 2013 made Corporate Social responsibility (CSR) mandatory for Companies who fall within any of the 3 categories mentioned below:
    1. Companies having net worth of INR 500 crore
    2. Companies having turnover of INR 1000 crore or
    3. Companies having net profit of INR 5 crore
  • It has to spend at least 2% of its average net profits of the last 3 years on CSR activities.
  • In addition to these Companies in India also have to disclose particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo.

 

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Green GDP

  • Green GDP is a term used generally for expressing GDP after adjusting for environmental damage.
  • Green GDP means that it accounts the monetized loss of biodiversity, costs caused by climate change.
  • It’s a measure of how a country is prepared for sustainable economic development.

Measuring ‘green GDP’ of States by India:

  • The government will begin a five-year exercise to compute district-level data of the country’s environmental wealth starting from 2018.
  • The numbers will eventually be used to calculate every State’s ‘green’ Gross Domestic Product (GDP).
  • The metric will help with a range of policy decisions, such as compensation to be paid during land acquisition, calculation of funds required for climate mitigation, and so on.

Green skilling

  • The government has launched a ‘green skilling’ programme.
  • Youth, particularly school dropouts, would be trained in a range of ‘green jobs’— as operators of scientific instruments used to measure environmental quality, as field staff in nature parks, and as tourist guides etc.

Green Public Procurement

  • Green Public Procurement (GPP) may be simply defined as “Public procurement for a better environment“.
  • It is a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.

Importance of GPP:

  1. Influencing the market by promoting and using GPP, public authorities can provide industry with real incentives for developing green materials, technologies and products.
  2. It is a strong stimulus for eco-innovation.
  3. Conservation of Environment

Green Public Procurement that will ensure that procurement decisions take the following key factors into account when evaluating goods and services:

  • Economic: The need to achieve better value for money with the financial resources available
  • Environmental: The product, service or work requirements should include environmental performances following environmentally friendly production methods, higher energy efficiency as well as maximum use of renewable energy, lower generation of waste and emissions and avoiding use of non-biodegradable and toxic substances.
  • Social: reduction of poverty and inequality: promoting security and social inclusion; improving working conditions and employee welfare; promoting gender balance.

Quiz

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