Seven Principles Inspiring the Green Economy

The transition from our current economic model to a more sustainable model is the main challenge of our times. Once again, one of the main themes of Rio+20, a UN summit held twenty years after its predecessor in Rio de Janeiro, Brazil, is ‘green economy’. Back in 1992 the discussions were focussed primarily on environmental issues. More recently, this focus has shifted almost exclusively towards an economic approach to sustainable development.

The key question being asked in 2012: how do we reshape our current economy in order to become a green economy? Considering the urgency of many sustainability issues, the promising concept of a green economy should very rapidly be turned into a set of concrete actions, with both short and long term effects. But how do we go about doing this?

Seven principles

In order to contribute to this discussion, Jan Jonker, Jos Reinhoudt and Harry te Riele will take the opportunity at the final meeting of the Dutch Platform Rio+20 to present their essay Transitions towards sustainability, in which they suggest seven principles they believe could speed up the development of a green economy. In short, these are:

  • Multiple value creation. Profits should not be expressed only in terms of monetary value – they should also reflect societal value.
  • Laggards pay for innovation.  By taxing environmentally unfriendly technologies we can fund the development of sustainable alternatives.
  • A renewed balance between the local and the global. Wherever possible, food and energy should be produced locally.
  • Total societal costs of ownership are a leading concept. Companies and consumers are responsible for societal costs in the supply chain, both upstream and downstream.
  • Cyclic use of natural resources. For the production of goods only waste material of other products should be used.
  • The polluter pays. The precautionary principle of Rio ’92 should be adopted rigorously; every organization can be held responsible for environmental damage caused, even after many years.
  • Freedom to act responsibly. To speed up innovation, laws on products, methods and technologies should be replaced by ambitious sustainability goals.

In the essay, the authors elaborate on these seven principles. They also suggest a range of concrete measures that can be taken in relation to these principles.

No free lunch

The aim should be to move towards a society that is both prosperous and sustainable in the long term. For a long time, our economy was based on the idea that energy, clean air, fresh water and natural resources would always be freely available. Now we know that this is not the case. It is finally becoming clear that it is necessary for us to pay a price for our wealth. As Milton Freedman once said: ‘There is no such thing as a free lunch’.

Therefore, it is important to start applying the transition mechanisms, mentioned above, as soon as possible. There will still be plenty of room for entrepreneurship, innovation and growth, and in the end we may reach a truly green economic system. Rio+20 offers the possibility for us to realise this together.

The  essay ‘Transitions towards sustainability’ by Jan Jonker, Jos Reinhoudt and Harry te Riele was written as a contribution to Rio+20 in 2012. The essay was first presented on 19th September 2011 in The Hague, the Netherlands and can be downloaded here.

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