New Economy is Green Economy

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In recent years the concerns about the negative impacts of degradation and pollution on future development of both the developing and developed countries have been growing.

The conflict between economic growth and environment is in fact sharper particularly in developing countries like Nepal with fast growing economic size and population. It may be noted that the country is the third fastest growing economy in the world in 2017 with the projection of growth of 7.5 percent, according to the World Economic Forum.

In line with the country’s gradual economic expansion, the level of different types of pollution like air, water seems to be intensifying rapidly.

For instance, the capital city Kathmandu is ranked at the bottom of the heap in terms of pollution. The capital has been placed at 5th position in Pollution Index 2017 mid-year out of 269 cities around the globe by the Numbeo.com. The increasing number of vehicles and snail-paced road construction works are among the major causes behind making Kathmandu one of the unhealthiest cities to live in.

In Nepal, a total of 2.6 million vehicles have been registered till the first eight months of the FY 2073/74 and the registration rate is increasing exponentially. In line with such increment, the demand of petroleum products is also going up steeply, thus deteriorating the air quality of major cities including Kathmandu. At the same time, the unplanned urbanization, which over the years has been growing rapidly, is contributing to the various types of pollution in the country.

Globally speaking, air pollution, in particular, has adverse impacts on both climate and human health .Apart from causing millions of deaths worldwide, it is causing decrease in crop yields, weather extremes like hurricane etc.

No doubt, the economic consequences of air pollution are also really frightening.

For example, the market impacts of outdoor air pollution, which include impacts on labour productivity, health expenditures and agricultural crop yields, are projected to lead to global economic costs that gradually increase to 1% of global GDP by 2060. The calculations were made by the reports published by the Organisation for Economic Cooperation and Development (OEDC).

According to it, global air pollution-related healthcare costs will increase from USD 21 billion recorded in 2015 to USD 176 billion 2005 in 2060. It does not take an expert to say that a developing country like Nepal could suffer more from the economically lethal ramifications of environmentally unsustainable development. In order to stave off such ominous scenario, the country needs align its economic growth trend with ecologically sustainable practices.

Focus on green economy to simultaneously address the challenges posed by the positive relationship between the pollution and economic growth is highly desirable.

A green economy is described as one that accentuates on improved human well-being and social equity while reducing environmental risks and ecological scarcities. Moreover, its viability largely hinges on innovations in renewable energy, arguably the lifeblood of a sustainable economy.

For the sake of green economy, we have to leverage adequate resources into renewables to achieve green growth. This form of growth is all about fostering economic growth and development while ensuring that the natural assets continue to provide the resources and environments services on which our well- being relies.

By all indications, the share of renewables in the global power generation portfolio is growing exponentially. According to the International Energy Agency, as much as 25 per cent of the world’s gross power generation will come from renewable energy sources by 2018.

Of course, the concerned Nepali authorities will do to cash in on this emerging global trend by devising a comprehensive green growth policy.

On the one hand, the country is currently obliged to make economic sense of the federalist set-up, which it has adopted for inclusive and balanced development. On the other, it aims to graduate from the Least Developed Country status by 2022 and to become a middle income country by 2030 through sustainable and resilient growth trajectory. In order to achieve such lofty goals, a concrete and prudent step towards a green economy through efficient resource mobilization in renewables seems highly desirable. After all, new economy is green economy.

Mr. Santosh Acharya is a Lecturer of Economics cum Freelancer. He can be reached at acharyaxantos@gmail.com.