CC BY
7ECONOMIC SCIENCES
GREEN ZONES AS GUARANTEES OF A SUSTAINABLE ECONOMY
Babunashvili E.,
Associate Professor, Kutaisi University, Georgia
Kipiani M.
Associate Professor, Kutaisi University, Georgia DOI: 10.5281/zenodo.6806927
Abstract
In today's world, the consideration of environmental and social responsibility issues by the financial system, as one of the contributing factors to sustainable development, is gaining special urgency. The National Bank of Georgia supports strengthening the role of the financial sector in the sustainable development of the country and for this purpose is developing a green, social and sustainable financing framework.
Keywords: Green Zones, Sustainable Development, Sustainable Development Taxonomy, National Bank.
Georgia, as well as the whole modern world, has faced many problems or challenges against the background of development and technological advancement. The country has a strong interest in rapid economic growth over the last decade and therefore it became important for him to contribute to the achievement of the goals of sustainable development through ongoing processes.
In today's world, the consideration of environmental and social responsibility issues by the financial system, as one of the contributing factors to sustainable development, is gaining special urgency. The National Bank of Georgia supports strengthening the role of the financial sector in the sustainable development of the country and for this purpose is developing a green, social and sustainable financing framework. This means taking into account social and environmental issues by financial sector and capital market participants and managing the risks associated with them. This is important for both financial stability and sustainable economic development.
Sustainable funding taxonomy is a classification system for identifying activities that contribute to climate, green, social, or sustainable goals. The sustainable financing taxonomy developed by the National Bank includes green and social taxonomies. Green taxonomy is a list of green activities that serve the achievement of environmental goals and the development of a green economy. Social taxonomy, on the other hand, includes categories that aim to socially empower target groups. Target groups include socially vulnerable groups such as people with disabilities, migrants, refugees, socially vulnerable families, people living below the poverty line, etc.
It is already internationally recognized that problems related to sustainability can be a source of financial risks, that arise from two main channels: The physical damage caused by climate change and the structural changes required for the transition to a low-emission economy. Physical and transition risks affect the macroeconomic environment and may lead to significant financial losses.
Sustainable development is a society development system, which ensures human well-being, increased quality of life and the right of future generations to benefit from natural resources and the environment that are
maximally protected from reversible quantitative and qualitative changes, with taking into account interests of the economic development and environmental of the society
The Sustainable Development Goals (SDGs) and objectives are of a global nature and universal use as they take into account different national characteristics, capabilities and levels of development, respect national policies and priorities. They are not independent of each other and their implementation must also be integrated. The new goals focus on three interrelated elements of sustainable development: economic growth, social inclusion, and the environmental protection.
In the process of economic development, one of the priorities of the Government of Georgia is the rational use of natural resources, ensuring environmental security and sustainability, avoiding the risks of natural disasters. In decision making process, it is necessary to assess both economic appropriateness as well as environmental and social efficiency. It is this kind of relationship that serves human well-being. To achieve this goal, it is important to encourage the green economy, which is one of the essential tools for sustainable development of the country. At the same time, encouraging the growth of the green economy in the long run will help to reduce business costs, as well as the development of new business directions.
In the near future the National Bank of Georgia plans to approve the regulation of loan classification and reporting according to the Sustainable Financing Taxonomy for commercial banks. The Taxonomy Regulation formally defines green, social and sustainable loans, and imposes on commercial banks tax reporting requirements corresponding to the taxonomy. Later, a framework of green, social and sustainable bonds based on taxonomy will be developed for capital market participants.
Our country is taking important steps to move closer to the European space. Two main priorities have been identified for this: The first is to eliminate the very heavy legacy we have today and the second is to use this unique wealth of our country and in the coming years get results that will facilitate the positioning of Georgia as a green economy. The standards outlined in the strategy are fully in line with European standards. The harmonization of the legislation with the European
norms has started and is successfully underway, however, more clear and concrete steps need to be taken in the coming years to develop air, soil and water pollution prevention, as well as waste management, biodiversity, ecosystems and sustainable management of natural resources. We have a particularly difficult situation in urban cities and the bigger the city, unfortunately, the more acute this problem is. That is why it is very important to create effective air protection programs for urban cities. Each government agency, including the private sector, is defined with specific responsibilities and recommendations to improve the air condition in the country as quickly as possible.
When we talk about the green economy, it is very important to consider agricultural policy. In particular, to change the existing priorities in the field. Agriculture should be one of the main focuses of the green economy. Georgia should become a country producing very high quality, ecologically clean, so-called bio-products. Important steps in this direction have already been taken. Certain groups of natural products are exempt from VAT. The task remains to fully exempt from taxes the sector in the country that will be able to produce biologically pure products. It is also important that today, energy efficiency policy is a priority, which provides for: the definition and implementation of appropriate policies to reduce energy capacity, energy production, transmission, distribution and consumption management in the energy consuming sectors of the economy and to optimize energy consumption in general. If we take the example of Western Europe, we can say that we have about 20% of resources to achieve a very important result in energy efficiency.
One of the major challenges facing the world today is climate change. When there are such challenges in the world, the situation we have in Georgia in terms of forest care becomes even more heavy burden. It is necessary for our policy in this direction to be very principled and consistent. The forest is the wealth of Georgia, we must take care of it and develop it. Given the poverty we have in Georgia today, it is very difficult to say a radical refusal to use the forest in different directions, but this is not an argument for us not to start
taking principled steps in this direction. The government plans to encourage the import timber to Georgia. The export of so-called logs and wooden boards from Georgia should be limited [5].
On the way to implementing the green strategy, according to many leading economists, In the 21st century, it is the green economy that has the potential to generate the highest level of capitalization. This is a huge opportunity for our small economy, But in order to use it, it is necessary to be consistent in our steps.
As a result of this reform, we should have a completely unique environment in Georgia. This capitalization applies to any direction. This means that real estate prices will be higher in Georgia. Our citizens, who own land plots, apartments or private houses in Georgia, will become the owners of more capital. This means that Georgian agricultural products will be more competitive and we will be able to seize the unique opportunity offered by the free trade regime with both China and the EU.
Most importantly, along with the fundamental reform of the education sector, this will be a very important precondition for ensuring the most important thing - Georgia to be a country with a developed economy, with real European institutions. This will be the only unalterable precondition and real motivation for our Abkhazian and Ossetian citizens to build a strong and European Georgia together.
References
1. http://recp.ge/wp-content/uploads/2018/01/Green-economy-newsletter-GE-1.pdf
2. http://www.mrdi.gov.ge/sites/default/files/1_s akartvelos_socialur-ekonomikuri_ganvitarebis_strategiis_-_sakartvelo_2020.pdf
3. http://moe.gov.ge/res/images/file-manager/strategiuli-dokumentebi/strategiebi-gegmebi/2017-2021----------.pdf
4. http://european.ge/mwvane-ekonomikuri-doqtrinistvis-tezisebi/
5. https://www.facebook.com/bakhtadzemamuk a/posts/301440800591996/
