Frontiers: What IS the green economy?

Green Economy - Stephen Polasky.

When you think of the economy, chances are the “green” that comes to mind is money, not nature. But what if there wwere truly a green economy – one that accounts for the value of the environment in economic decision-making?

That was the topic of last week’s Frontiers in the Environment lecture presented by Steve Polasky, an IonE resident fellow and Regents professor of applied economics. Polasky delivered his speech, “What IS the Green Economy? And How Do We Get One?” Feb. 12 at the University of Minnesota in St. Paul. While economics and the environment do not always seem to go hand in hand, it was his love for nature that pushed Polasky to pursue economics.

“From my own personal story, I have been interested in environment and resources and ecology and conservation for a long time – probably well before I got interested in economics–but my formal training is in economics,” he said. “But I always viewed going into economics as, ‘I’m really interested in the environment and economics to me seems like a really important set of tools and insights to bring to environmental issues.'”

The perceived environment-economy conflict stems largely from the fact that many environmental benefits lack an economic value, making it easier to ignore environmental considerations in economic decision-making.

“The environment is largely outside or silent in the economic accounts and economic debates,” Polasky said. “It’s said that the best things in life are free- like clean water, aesthetics, sense of place – but free isn’t valuable in economic terms so we often fail to protect or conserve or maintain what is free.”

Polasky presented a variety of mechanisms to integrate environmental value in economic decision-making. Green taxes on things like gasoline and emissions, corporate partnerships, voluntary certification programs, and payments for ecosystem services can all help “mainstream” the value of nature.

One mechanism being employed around the world is creating a market for environmental goods. Policy options like cap-and-trade, tradeable fish quotas, and wetland banking can be effective if there’s an initial push for government intervention, according to Polasky.

“We know a number of the difficulties and worked out a number of the issues of actual implementation here,” he said, “but it does require a will at the first point to say that there needs to be some government action to limit some harmful activities.”

And while the green economy may not happen overnight, Polasky is optimistic that the knowledge base and policy options are present to someday make it a reality.

“As of maybe 10 years ago, I would have said we aren’t really good at doing this,” he said. “I don’t feel that anymore. I actually feel that we have the numbers here to back up much better societal decision-making.”

Watch Polasky’s full presentation online.

John Sisser is a communications assistant with the Institute on the Environment.