Tuesday, February 17, 2015

Green Economy: Externalities and the challenges of quick fixes

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.

Tuesday, January 13, 2015

Green Economy Primer: A Kenyan's authoritative examination

I think everyone has it wrong.

Almost every local article I have read that has attempted to define the concept of a green economy has been laced with indecisiveness and a pinch of incomprehension on the basics of what it is. Many have tried to contextualize it to the local situation but all am getting is negligence driven by failure of a deeper understanding of the issue. You cannot define Green Economy without making reference to macro-economic aspects which are explicitly integral to it. This does not, however, neglect the locally driven initiatives which can be classified as elements of a green economy; what it means is that they cannot be referred to as green economy projects as doing so will imply its disassociation from the essential economy wide integrating element that this concept should be linked with.

Matters green economy are mainly investment related and driven by the national government through its planning, environment and treasury ministries. It is therefore safe to say that this is mainly a fiscal issue.

 Green Economy is a model, a process and not an end goal; making reference to projects as “green economy projects” is thus a symptom of the misconception that it continues to be associated with. For instance in a green economy Booklet  published by National environment and Management authority on Green Economy and the Kenyan scenario, the writer asks the question “does Kenya have a Green Economy?”. This question models green economy as a product that can be owned/acquired, it does not accommodate the line of thought that considers green economy as a process. I would rather the writer had asked “Has Kenya adopted a green Economy?” Because Green Economy is a shift in the way business is done, it is about addressing structural inefficiencies and changing the “business as usual model.”  

From my research on a number of existing literature on this topic, I am convinced that the reason for this confusion is driven by the crafters of this term who have failed to get consensus on how to unanimously define it. The term Green Economy traces its prominence to the Rio +20 conference of 2012. It was after this conference that most high profiled development organizations accelerated their efforts of promoting the development and adoption of economic strategies based around this model; although even up to now the model is not clear despite its rich history and origin. http://sustainabledevelopment.un.org/index.php?menu=1446

Particular definitions from a number of institutions are as follows:

UNEP defines Green Economy (GE) as an economy that results in improved human well being and social equity while reducing environmental risks and ecological scarcities.

OECD on the other hand makes reference to green growth (the institution almost makes a deliberate effort to avoid use of the term Green Economy and prefers to use Green Growth) For them Green growth means fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies.

World Banks’ focus is also on green growth but with a lot of references to the economy. It defines it as growth that is efficient in its use of natural resources, clean in that it minimizes pollution and environmental impacts, and resilient in that it accounts for natural hazards and the role of environmental management and natural capital in preventing physical disasters. And this growth needs to be inclusive.”

The AFDB also uses green growth and defines it as the promotion and maximization of opportunities from economic growth through building resilience, managing natural assets efficiently and sustainably, including enhancing agricultural productivity and promoting sustainable infrastructure

It is clear that the other challenge facing this issue is the lack of international agreement on whether focus should be on green growth or green economy or how the interplay between the two should be. The one document that has made an attempt at clarifying this difference is a scoping paper done by the Green Growth Knowledge Platform. Although it does not explicitly differentiate the two, the document implies that the difference between Green Economy and Green Growth is the aspect of social equity and wellbeing. This is so because this issue is not captured in the various definitions of Green Growth. It is why several organizations are pushing for it to be referred to as inclusive green growth so that this element is captured.

On the positive side, the different definitions are not very diverse; several key elements come out about the broader concept of green economy, these include efficiency, clean production and maximization of outputs without severe consequences on the environment. The other elements include efficiency in the economic and production system including issues of green procurement, structural reforms and social inclusivity. The Kenya Green Economy assessment report refers to this model as essentially being a low-carbon, resource-efficient and socially-inclusive economy.

Afrcan Development Bank. 2014. Green Growth In Africa: Supporting Africa’s Transition to Green Growth-Snapshot of the AfDB’s Activities
The World Bank. 2012. Inclusive Green growth: the pathways to sustainable development

Thursday, December 11, 2014

Rebuttal: 14 seater Matatus should be phased out

When someone like Kwame argues against something I hold dearly, most of the time I end up changing position because he always makes a strong case. So when I recently saw an article he had written arguing pro government decision to revoke the ban on registration of 14 seater matatus, I was intellectually excited; I could not wait to delve in and read his argument. I had not seen anyone in the mainstream media argue this direction, everyone was picking on the president for making a bad choice, albeit popular in some quarters.

I was therefore anxious for someone to argue contrary and actually make sense. So when I saw Kwame’s article I jumped in eager to know his point of view. Three paragraphs Later, I was still waiting for Mr. kwame to make a convincing point,... any sort of point. I have never been more disappointed! Frustrated, I turned to twitter and the following transpired( I think I need to apologize);

  1.  That the justification for enacting the policy was weak-What exactly was weak? He never said
  2. Asset value of the existing vehicle got eroded( or would be eroded)
  3. Public service vehicles registered in the country form only four percent of the total registered vehicles.-I think to Mr. Kwame this is an insignificant value which does not significantly impact on the traffic )
  4.  Choosing to only ban the 14 seater vans was a biased move

And what exactly is my argument;

First of all, I have to admit I do not have empirical evidence as to whether the 14 seaters significantly impact on the traffic or not. What I have however, is my experience as a daily commuter on these Nairobi streets (I don’t own a car) and common knowledge that one bus carrying an equivalent of three Nissans (or their about) would occupy less space, hence less congestion in the long run.

Secondly, there is no policy (with direct implications on the economy) that would favor everyone with the same weight. Be it subsidies, regulations or direct monetary policies, someone somewhere would definitely be hurt. So When Mr. Kwame argues about how owners of the vehicle were being implicated negatively, I thought that was a bit farfetched.

Thirdly, I am currently working on the National Green Economy strategy (Ps. I have been at an event where Mr. Kwame was speaking on this topic), and one of our key aims is to see the transport sector made more efficient, less polluting and well regulated. Having numerous low capacity vehicles on our streets is explicitly bad for us. The county government of Nairobi is already planning on setting up MRTs, it would therefore be counterproductive to encourage small vans on our highways with such a vision.

I loved the fact that the president revoked the ban on Matatu graphiti, that was an impressive move worth my accolades. I am however strongly against the revoking of the ban on registration of small vans, it does not align itself with the vision of this country.

Congestion, increased emissions, difficulty regulating and most of all their poor design ( quite uncomfortable) are the main reasons I am against the revocation of this policy. The president was himself on that particular day not using a 14 seater, he used on of the bigger (25+) matatus.?

Monday, August 25, 2014

Green Economy strategy Kenya-Sneak Peak

This more of an executive brief...the type you write for government officials and bigwigs who don't have a lot of time in their hand. I have basically reduced an 87 pager into a two pager...

The Overall Goal of the Kenyan Green Economy Strategy and Implementation Plan (GESIP) is to ensure Green Economy aspects are mainstreamed(I dont really get this word...) into economic, resource and social development. It is premised on importance and value that comes with integrating green aspects into our macro and micro economic engagements through promotion of new markets, increasing resource efficiency, and balancing of systemic risks and threats. The plan has four inherently connected objectives that touch on strengthening the human and natural environment, they include; ensuring the country develops the needed infrastructural base for a low carbon development pathway, sustainable management of natural resources for food security, building resilience against the impacts of climate change and managing resources efficiently for them to contribute to development of the country.

The strategy makes a case for a green economy for both the global and local scene while carefully outlining its imperatives, including, but not limited to impacts of high population growth, traditional economic development patterns, unsustainable consumption patterns, and ineffective technology transfer. It looks at the Environmental, Economic and Social Opportunities that will exist if we chose the Green Economy model; these have been highlighted as increased savings, job creation, reduction of environmental damage, and enhanced social and gender equity.  It also takes an analytic look at the existing national policy and strategic frameworks that can serve as a basis of a Kenyan Green Economy.

This plan does not shy away from highlighting the barriers that the plan will face, ranging from financial, technological to regulatory. They include:               
1.       Regulatory framework is not currently designed to attract green investments.
2.       Few standards for green technologies, goods or services
3.      Economic policy framework in Kenya needs to account for the intrinsic value of its natural resources.   
4.      lack of knowledge regarding the costs and performance characteristics of available green technologies
5.      Need for increased funding to effect the transition to a green economy

The strategy pays special recognition to the building blocks of a green growth strategy identified earlier on to include Creation with Less Resources & Less Pollution, harnessing Renewable Energy sources and reducing Fossil Fuel use, and investing in Natural Capital & Ecosystem Services. These building blocks played a major role in the development of the four Major Focus Areas( herein reffered to as pillars) of the GESIP which form the main body of the plan; these four pillars are critically analyzed with a special focus on the current policy framework relevant to them as well as outlining future actions plans of the country.
They include:

 sustainable infrastructure development:  
Key sectors being looked at under this pillar include Energy which has a National Energy Policy 2012, the Feed-in-Tariffs (FiT) policy for wind, biomass, small hydro, geothermal, biogas and solar; Transport sector that has the Roads 2000 programme; Building and manufacturing; water/ sanitation/irrigation which has National Water Services Strategy (2007-2015), National Irrigation Policy and Legal Framework-under development and public health.

Natural resource management
The GESIP identifies key sectors here as agriculture, forestry, water resource management, fisheries, land use, fossil fuel extraction and mining. It also suggests several measures that would be essential in the green economy scenario, these include; promotion of Agro-forestry, sustainable water management, education and capacity building, addressing livestock scenario in the ASAls and investing and promotion of Research and Development.

Building resilience to climate change
It has looked at three key components of resilience building; Human capital, Gender Equity (National Gender and Development Policy), Disaster Risk Management (National Policy for Disaster Management), Education and Ecosystems Management.

Promoting resource efficiency-
This is mainly about avoiding waste and maximizing the benefits of resources. Key sectors include Manufacturing and Industry-National Industrialization Policy Framework (2012-2030), Agriculture -Agricultural Sector Coordination Unit (ASCU), The Agricultural Sector Development Strategy (ASDS) 2010-2020, mining (Mining and Mineral Policy) tourism and buildings-National Urban Development Policy (NUDP)

The document also outlines an implementation plan whose main components have been identified as mainstreaming green economy principles in government decision making process and actions, strengthening enabling conditions through fiscal instruments, regulations and standards, strong and well coordinated institutional mechanisms, innovative financing approaches and promoting buy-in from all relevant stakeholders.

Monday, February 17, 2014

Voices for youth Vs Voices of Youth

Should we participate for the sake of participation or should it be because we have something very key to say? Are the issues we are raising any different from what the older generation is raising? Do we need to be involved if what we are raising similar to what is being raised by them?

The recent clamor for youth participation can almost be compared to the fight for women involvement in influencing development during the 19th century. Young people are coming out in large numbers with demands of being engaged, being consulted and most of all being granted opportunities to influence the decision making process. We are aggressively calling on our leaders to listen to our views on the various aspects of development.

 Does this mean we do not trust our leaders, our parents and our community elders to curve out a good future for us, or that we do not think they are in a position to speak on our issues on our behalf?  
Among the arguments we are putting forward to justify our need for involvement is that we come bearing fresh ideas. We have an honest desire to see change since we are at an age where idealism means so much for us. Our lifestyles also dispose us to creativity and we are therefore very likely to provide innovative approaches to tackling old problems. Such thinking would probably be countered by the argument that experience is much more important and that we have not been through enough to discern what really matters in development. That as youth we are just forcing to be included when in real sense all the knowledge we have has been impacted on us by them, the older generation,  through mentorship as well as in school. Experience they say is the best teacher and that although the new broom might sweep better, the old broom knows all the corners; and that youth is no guarantee for innovation.

Do fresh ideas and innovativeness trump experience? 

We also say that the mere fact that we are huge in numbers give us enough leverage to champion for space in the negotiating table. Africa for instance is experiencing a youth bulge and according to UNFPA 43% of the world’s population is below 25. As much as this might be true, you realize that development is no democracy; development is about results, effectiveness and efficiency.  I personally think using our numbers is not a basis for reasonable argument; I feel like this might set precedence for abuse of minority.

But most of all we are fond of arguing based on the premise that since we are young, the future automatically belongs to us and therefore we should be involved in planning for it. Well as much as their might be some truth in this statement, we will still need to offer credible reasons as to what value we are going to offer and that we actually understand issues. This argument also totally shows our lack of trust in our elders.

You will agree that some of the issues we raise to justify our need for participation are not very credible. Personally, I feel the whole need for us youth to be engaged and to be allowed to express our own issues is purely because we are growing up at a time that has not been experienced by anyone before.  Our elders have no idea how it is to be young in this day and age. We know so much about the present social challenges that our leaders and policy makers might have no idea about; this puts us at a position where we are able to easily offer solutions. I am also advocating for arguments based on critical points and tested knowledge that are actually aimed at improving the present day challenges. 

Finally, there is an issue that has been of concern to me for a while now; why are youth not very vocal when it comes to issues of security. Why are we so numb on the Syrian issues, the recent Iran nuclear discussions, the North Koreas threats, the Central African intervention mechanisms, involvement in the UN Security Council, and other similar situations?  

Sunday, November 24, 2013

Currency of leaves? : Questions in "The green Economy"

Picture 40 years from now, you are probably sitting on your balcony having an afternoon chat with your son. He has just returned from college where he is taking a course in “the 20th century economic models”. Out of curiosity and with knowledge that you were actively engaged in development issues, he asks what role you played in shaping the economic model that the world adopted. He is curious to know what your input was, even however small, into the debate .  What do you think your answer will be?

Young people have not really put their teeth into fully understanding the essential elements of the green economy. Most of the youth-led organizations that are vocal on global policy debates are not critically engaging in the economic models debates, their attention is mostly on issues of sexual reproductive health rights and overall youth participation in development discussions. Being that economic models being adopted at present will effectively take shape in our adult age, we need to pay more attention to them since we will be the ones to leave with the consequences. 

As it stands, there is no universal definition of the green economy; most interest groups have however agreed to look at it in-terms of its outcomes. UNEP (United Nations Environment Programme) defines the green economy as an economy that results in improved human well-being and social equity with significantly minimal environmental risks. This definition, however much comprehensive, begs the question, how do you achieve such an outcome?

From what I gather, the process of integrating the green economy is already being widely advocated for. Several indicators that will illustrate whether progress has been made have already been developed. For instance, focusing on the issue of Natural resource use, indicators to be used will focus on consumption levels and whether they decline as investment in efficiency is increased. The indicators therefore come in handy when designing intervention measures and policy options.

With this understanding in mind what is the youth position on this very important concept. Do you think a green economy will be in a position to create the millions of jobs that we are desperately in need of as young people? Do you know what qualifies as a green job? Is our capitalistic model able to accommodate a green economy or are we merely proposing concepts we know cannot work out? What is our basic role as youth in this macroeconomic shift being proposed?  what type of future are we walking towards with or without a business as usual state of affairs?

Wednesday, August 28, 2013


I am writing this rebuttal as a potential beneficiary of the funds. I am not where I thought I would be after my December 2012 graduation. I know the anguish of being educated and unemployed; I know the stress that comes with being broke and almost hopeless. The worst feeling ever.

Resolved: unemployed University graduates should be given monthly unemployment benefits of  KES 15,000
Consider a single mother, she sold her little piece of land, her single most valuable asset so she could pay for her son’s subsidized university fees. Four years later the young man has graduated, he has looked for work in all corners without success. He has no source of reasonable income, no possible social cushion, nowhere to run to! Not even his home village, the shame would kill him and their only peace of land was invested in his "promising" education. 15,000 KES a month to this young man would change his world. 

Kenya’s formal labour market has no ability to absorb the more than half a million graduates clearing campus every year. This means for several years after university young men and women are going to stay unemployed. The longer they stay the worse things will get, options will get limited, talent will get eroded and most of the skills they had acquired will get wasted. Disillusionment is always knocking.

In my tweet to @IEAKwame (CEO Institute of Economics Affairs),  I told him that there are social benefits associated with the KES 15000  unemployment "payout", this is after he wrote an article arguing against the bill terming it as the worst policy idea ever. He asked that I justify my argument. 

Below are my justifications.

Social cushion
As things stand, I cannot afford to take any investment risk; I have nothing to fall back to. In case I fail, I burn completely. With a guarantee of 15,000 every month, more and more young people will be a bit bolder in their endeavors; they will pursue business ventures with more confidence. The benefits will be multiplied in terms of opportunities getting created.

Incentive for more people to pursue higher education
Nothing can be a better incentive for people to join university education than a guarantee of “income” after you complete. The more educated a population gets, the better a country gets both socially and economically.

Government Commitment
I think a government has to take responsibility for educating its citizens and then failing to provide them with an income source; whether through direct employment opportunities in government sectors or creating an environment for multiple employment creation. It is therefore noble that this government is committing to making life of the educated-unemployed a little bit bearable. Evidently, as it has been pointed out by several economists, the government will not be able to support this program for a long time, so once its muscles get stretched towards its limits they will have to come up with better alternatives for tackling youth unemployment. They will have to commit much more towards developing innovative targeted employment programs.

Disposable income
If the government takes up the responsibility of supporting the unemployed graduates, parents will be relieved form the burden. This means more money to spend on clothes, entertainment and other luxuries. This creates a value chain that leads to the creation of jobs even for the unskilled people.

As Kwame clearly highlighted, the government of the day seems to throw money at every policy challenge it faces. It is as if the money is readily available and somehow it will make everything better. That is totally not the way to go, but in this situation the money will go a long way in improving this country and sparing a lot of young people from unnecessary misery.

I am no policy expert; I am a concerned policy enthusiast.