I have come to notice that among the most prominent issues being proposed in the transition to a Green economy is the concept of externalities. This is from the argument that real environmental costs are rarely included in the final pricing of the product; proponents argue that entrenching externalities will have positive impacts on the environment in the long run. The implication of this, however is that these costs will eventually be passed on to the end consumer meaning more cost to bore by the poor.
“Environmental Externalities are the uncompensated environmental effects of production and consumption that affect the consumers utility and enterprise cost outside the market mechanisms” OECD
This argument depicts how most policy advisers are looking at various green economy elements in isolation and are rushing for potential easy to grasp un-examined low hanging fruits, what they are overlooking, however, is the associated social costs this would have in the end. They are not taking into consideration the concerns of those at the base of the pyramid; the poor people/low income earners who we seek to protect. It is therefore a long way off the basic principle of a green economy which is to improve human well being-mostly of those who are in no position to afford basic social security and are lacking the necessary safety nets to cushion them from inflated costs. I perceive it as a quick fix that neglects examination of the impacts on the entire social system.
When such discussions touch on issues like removing subsidies on fuel, or increasing taxation on certain "harmful” economic ventures, it makes the assumption that such an intervention will ultimately benefit the people without perennial consequences on their well being. In reality it has been proven that an increase in energy cost in a country like Kenya will always ends up having a resultant impact on the on cost of majority of the products in market. It will also mean an increase in the cost of doing business; meaning employers might cut down their staff - and the first people to go will always be the low level staff; the poor ones who live in slums.
When we talk of charging for water and other ecosystem services, unless it is a creatively designed and well funded initiative, it does stand to get any buy in from the people. As much as it might, possibly, be of greater benefit in the long run, unless the distribution of benefits is well managed and value proposition well communicated, , we stand to lose buy in from the people who are our key targets.
The other area where our approach to green economy is worrying is that a lot of focus is being put on the well being f the world’s poor. This has made the process look like a one off intervention and a as a moral issue. In other quarters it is being propagated as an obligation that seeks to bind those who “have it” to act in certain ways that constrains them. The wealthy have a an important role ion the entire process as well. We have to repackage the message to focus more on the universal benefits and clearly bring out this model as being of great importance to the financial sector alike. We need them to embrace the shift and move towards the process not because it is a moral issue, but because it makes business sense. So far Green Economy is more of a fiscal, regulatory issue. This would not play out very well in the end; we need the financial systems on our side.
Quick fixes will not work. Those working in this area need to be able to consider all aspect before deciding on models that will make sense, economic sense. In the end it is all that matters.