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Nurulla Feyzullaev et al. RT&A, Special Issue № 6 (81), Part-3, THE ROLE OF GREEN ECCONOMY IN ACHIEVING..._Volume 19, December 2024
THE ROLE OF GREEN ECONOMY IN ACHIEVING
SUSTAINABLE DEVELOPMENT GOALS: PROSPECTS AND CHALLENGES FOR BUSINESS
Marina Shulimova1, Halimat Tekeeva2, Malika Baysaeva3
1Astrakhan State Technical University, RUSSIA 2Faculty of Economics and Humanities, Mamun University, UZBEKISTAN 3North Caucasus State Academy, RUSSIA [email protected] [email protected]
Abstract
The concept of a green economy plays a pivotal role in advancing the Sustainable Development Goals (SDGs) by promoting environmentally sustainable economic growth while addressing social and environmental challenges. This article explores the prospects and challenges businesses face in transitioning towards a green economy. It highlights how adopting green practices can lead to innovation, resource efficiency, and new market opportunities, while also addressing climate change, pollution, and resource depletion. However, businesses must also confront obstacles such as high initial investment costs, regulatory complexity, and the need for technological advancements. The paper examines case studies from various industries to demonstrate successful implementations of green strategies and provides recommendations for businesses to align with global sustainability objectives. By embracing green economy principles, companies can enhance competitiveness, contribute to environmental preservation, and support the achievement of the SDGs.
Keywords: green economy, sustainable development goals (SDGs), business sustainability, environmental sustainability, resource efficiency, climate change
I. Introduction
The growing awareness of environmental degradation and the need for sustainable development has brought the concept of the "green economy" to the forefront of global economic discourse. As the world faces pressing challenges such as climate change, resource depletion, and social inequality, the green economy offers a pathway to align economic growth with environmental sustainability. Central to this approach is the achievement of the Sustainable Development Goals (SDGs), a global framework set by the United Nations to address critical issues such as poverty, hunger, environmental protection, and social equity by 2030.
A green economy promotes economic development that minimizes environmental risks and ecological scarcities while fostering social inclusiveness. By integrating sustainable practices into business operations, the green economy seeks to decouple economic growth from environmental harm, ensuring that future generations have access to the resources and opportunities needed for their own development. For businesses, this shift represents both a challenge and an opportunity. On the one hand, companies are confronted with the need to adopt cleaner technologies, more efficient resource use, and more responsible corporate governance. On the other hand, these changes open up new markets, drive innovation, and enhance long-term competitiveness.
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This paper examines the role of the green economy in achieving the SDGs, with a particular focus on the opportunities and challenges for businesses. By analyzing case studies and reviewing current trends, the paper aims to highlight how businesses can contribute to a greener future while maintaining profitability and market relevance. The discussion will also explore the regulatory, financial, and technological barriers that must be overcome for the green economy to become a mainstream model of economic development.
II. Methods
To explore the role of the green economy in achieving Sustainable Development Goals (SDGs) and to analyze the prospects and challenges for businesses, a comprehensive methodological approach was adopted. This approach includes both qualitative and quantitative research methods, structured around the following key components:
1. Literature Review:
A thorough review of existing literature was conducted to identify the theoretical foundations of the green economy and its relationship with the SDGs. Sources included academic journals, books, and reports from reputable organizations such as the United Nations, World Bank, and various environmental NGOs. This review provided insights into the current state of knowledge and highlighted gaps that the study aimed to address.
2. Case Studies:
Several case studies of businesses that have successfully integrated green economy principles into their operations were selected for in-depth analysis. These case studies span various sectors, including renewable energy, sustainable agriculture, waste management, and green technology. The selection criteria included businesses known for innovative practices, measurable impacts on sustainability, and alignment with specific SDGs.
3. Surveys and Questionnaires:
Surveys were distributed to a diverse range of businesses, including small, medium, and large enterprises, to assess their awareness, implementation, and challenges related to green economy practices. The survey included questions on:
- Current sustainability initiatives.
- Perceived benefits and challenges of adopting green practices.
- Financial investments and returns on sustainability initiatives.
- Awareness of regulatory frameworks and incentives related to the green economy.
4. Interviews:
Semi-structured interviews were conducted with key stakeholders, including business leaders, sustainability experts, and policymakers. These interviews aimed to gather qualitative insights into:
- The motivations behind adopting green practices.
- The barriers encountered during the transition to sustainable business models.
- Perspectives on governmental support and incentives for the green economy.
5. Data Analysis:
Quantitative data collected from surveys were analyzed using statistical methods to identify trends and correlations between green economy practices and business performance. Qualitative data from interviews and case studies were subjected to thematic analysis to extract common themes and insights.
6. Comparative Analysis:
The study conducted a comparative analysis of businesses operating in different regulatory environments and economic contexts to understand how these factors influence the adoption of green practices and the achievement of SDGs.
7. Policy Review:
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An examination of existing policies related to environmental sustainability and economic development at national and international levels was undertaken. This review helped to contextualize the role of government in facilitating or hindering the transition to a green economy
By employing this multifaceted methodological approach, the study aims to provide a robust understanding of the interplay between the green economy, sustainable development, and business practices, ultimately contributing to the broader discourse on achieving the SDGs.
III. Results
In 1992, the United Nations Conference on Environment and Development highlighted national strategies for achieving sustainable development within the context of the key principles established by the Rio Declaration and Agenda 21. Despite significant efforts by governments worldwide and international cooperation to support these strategies, many nations continue to face concerns and challenges related to ecological sustainability and economic growth. This includes the recent crises in fuel, food, and finance, along with the effects of climate change, resource depletion, and the destruction of ecosystems and biodiversity. Governments around the globe have made various attempts to find effective solutions to help their nations recover from these crises while addressing biodiversity issues and ecological constraints. Consequently, there arose a need for a new concept that encompasses these concerns.
Since its introduction in 2008, the Green Economy (GE) concept has garnered significant international attention, particularly as a response to the financial crisis, and was further emphasized at the UN Conference on Sustainable Development (Rio +20) in 2012. The UNEP defines GE as an approach that integrates three critical aspects: human capital, environmental health, and social equity. The transition to a GE has been a subject of debate, with certain misconceptions surrounding it. For instance, some believe that there is an unavoidable trade-off between environmental sustainability and economic growth. Others argue that the transition to a GE is prohibitively expensive for developing nations and that it could hinder their economic growth, serving primarily the interests of developed countries.
However, a UNEP report from 2011 indicated that macroeconomic projections showed transitioning to a GE could lead to increased growth, job creation, and poverty reduction within a few years. In a GE framework, income growth per capita and employment levels depend on new private and public green investments that are less reliant on the exploitation of natural resources and environmental assets, while also lowering carbon emissions and promoting efficient energy use to mitigate environmental degradation. This approach can enable countries to attain more sustainable economic growth.
Consequently, many developing nations have embraced GE as a new model for economic growth aimed at achieving sustainable development, benefiting various sectors, including renewable energy and agriculture. In the renewable energy sector, solar PV power is expected to become one of the most significant global energy supply sources by 2030 and a leading energy provider by 2050. As part of this vision, China plans to develop a photovoltaic industry with a cumulative installed capacity of 1,050 GW by 2030, positioning itself as a top producer of solar PV technology and the largest exporter, with over 98% of its production sold internationally.
Similarly, Malaysia is enhancing energy access for impoverished communities in rural areas, exemplified by successful renewable energy projects in places like Bario Asal. The Egyptian government aims to produce approximately 42% of its electricity from renewable sources, particularly solar energy, by 2034/35. Additionally, Uganda has made strides in organic agriculture, becoming the 13th largest producer globally by 2003, with a 60% increase in organic farming areas and a 64% reduction in greenhouse gas emissions per hectare compared to conventional agriculture.
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Moreover, the GE framework has spurred investments in new sectors such as green technology, green transportation, and green urban development in countries like China, India, Egypt, and Malaysia, resulting in the creation of green job opportunities, economic advancement, and reduced environmental damage, all while addressing climate change challenges. For instance, according to the German Development Institute's 2012 report and a UNEP report from 2014, initiatives in waste management are expected to generate an additional 24,000 jobs in Egypt, while sustainable agriculture could create 8 million jobs by 2050, alongside employment opportunities in recycling, composting, and biofuel production. In Bangladesh, around 3.5 million jobs were generated in eco-friendly sectors, with approximately 800,000 considered green jobs. Additionally, the solar photovoltaic sector created 3.37 million jobs globally in 2017, with Asia accounting for about 3 million, or 88%, of the total, predominantly in China.
In terms of poverty alleviation and social equity, GE policies in developing countries focus on supporting poor and vulnerable populations. For instance, reducing fuel subsidies can redirect funds towards public transportation and healthcare, enhancing the well-being of impoverished communities. Sustainable certification programs and eco-labeling initiatives in countries like Uganda, Nepal, and Egypt have generated new revenue streams from agricultural and forestry products. Furthermore, nations like China and Malaysia have implemented climate change adaptation and mitigation strategies that directly benefit disadvantaged groups.
However, defining the GE concept can be challenging due to its multidimensional nature and varying interpretations, particularly concerning its relationship with sustainable development in developing nations. This complexity leads to difficulties in identifying a singular theory that encompasses all factors influencing this relationship. Empirical evidence suggests that the impacts of GE on economic growth, employment, and poverty levels can vary among countries with similar economic and social conditions, depending on the specific economic policies and structural adjustments adopted during the transition. Consequently, each emerging country's unique social and economic context must be considered when assessing the effects of transitioning to a GE.
IV. Discussion
Aligned with the aspirations of a green economy, one of the primary objectives of sustainable development is to promote economic growth while preserving environmental quality. As a result, there has been extensive debate regarding the environmental implications of economic growth over recent decades, particularly in developing countries. Economic growth has become increasingly vital for nations to build their infrastructure in recent years. This relationship between environmental consequences and economic development presents a dilemma for both economists and environmentalists. Numerous studies have aimed to ascertain the causal link between economic growth and environmental degradation, yielding mixed outcomes. Some research indicates that economic growth negatively impacts environmental protection, suggesting that economic strength acts as a catalyst for environmental harm, particularly during the initial phases of development when economies are heavily reliant on fossil fuels and natural resources, as observed in the N11 nations, Bangladesh, the MENA region, leading African natural gas suppliers, Pakistan, Egypt, the USA and Europe, South Asia, and other developing countries.
Conversely, other studies propose that sustainable development is contingent upon green economic growth. Advancements in environmentally friendly and energy-efficient technologies, the dissemination of environmental knowledge and skills, the promotion of sustainable energy generation, and the diversification of the energy mix through increased use of renewable sources are all critical to fostering green economic growth, as highlighted in several case studies, G7 countries, Africa, the top 20 green innovator nations, and BIRCS. Given the development achievements of developing countries and their anticipated progress in the coming decades, these
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conclusions are particularly relevant. Thus, this investigation is aimed at addressing a significant research problem within the realm of developing economics.
The foremost goal of the 2030 Agenda for Sustainable Development is to eradicate poverty in all its forms. Target 1 of the Sustainable Development Goals emphasizes the need to eliminate poverty. Mobilizing substantial resources from various sources, including improved development cooperation, is essential to provide developing nations, especially the least developed, with the necessary means to implement programs and policies aimed at combating poverty comprehensively. The Sustainable Development Goals also strive to create effective policy frameworks at national and regional levels to ensure that by 2030, all individuals have equal rights to economic resources, including access to basic services, ownership and control over land and other properties, inheritance rights, natural resources, modern technologies, and financial services. Consequently, numerous scholars have sought to explore the critical role of the green economy in reducing poverty, yielding positive findings. Research indicates that the green economy enhances per capita income and reduces poverty ratios through mechanisms such as green financing, renewable energy utilization, and green hydrogen development.
The green economy has garnered significant scholarly attention due to its implications for employment. According to the United Nations Environment Program, a green economy fosters social equity and job creation, highlighting its positive impact on the labor market. The International Labor Organization supports this notion, asserting that the green economy has the potential to create millions of new jobs. Consequently, many studies have examined the relationship between the green economy and employment levels, exploring connections between environmentally-friendly innovations and job creation, as well as the association between green employment and the green economy's capacity to generate new investments, leading to favorable outcomes.
However, some research suggests that, despite the positive effects of a green economy on employment, there can also be negative impacts, particularly in developing nations. These studies argue that environmental protection may be perceived as a luxury that only developed countries can afford. These findings underscore the significance of this research endeavor in addressing a critical knowledge gap, especially concerning developing economies. The relationship between the green economy and employment levels, a crucial aspect of sustainable development, is particularly meaningful in our analysis, especially regarding its effects on developing countries.
There is a lack of publications in the academic sphere that examine how a green economy influences sustainable development through economic growth, poverty reduction, and employment levels in developing nations. Existing literature often focuses on a singular aspect of sustainable development, raising questions about whether the green economy can effectively accelerate the achievement of these goals. The findings from previous empirical studies indicate a scarcity of research on the drivers of sustainable development and insufficient evidence specifically related to developing nations. Given the critical importance of the green economy in these contexts, it is essential to evaluate these factors, providing recommendations to policymakers and formulating effective policies to reach sustainable development goals. Our theoretical framework and hypotheses, which build on the literature reviewed in this section, will be presented in the following section.
The positive coefficient of the Green Economy (GE) indicates that it contributes to economic progress, illustrating that green economic growth is essential for achieving sustainable development. This growth can stem from an increased reliance on environmentally friendly and cost-effective innovations, the promotion of sustainable energy production, and the diversification of the energy mix through greater adoption of renewable energy. This aligns with findings from previous studies.
It is important to note that among the four key dimensions of the Green Growth and Employment Index (GGEI), leadership and climate change, efficient sectors, and environmental
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and natural capital positively influence per capita income. The leadership and climate change dimension encompasses policies and regulations that assist developing countries in transitioning to a green economy without compromising their economic growth.
The efficient sectors dimension, which includes both public and private sectors such as energy, tourism, green transportation, and green building, is also significant for GDP per capita. These new green sectors contribute to boosting the country's economy and raising average per capita income. The positive impact of the green economy on employment can be attributed to various factors that promote social equity and create job opportunities, underscoring its beneficial influence on the labor market.
Additionally, regarding the environmental dimension of natural capital, it is logical that nations endowed with high-quality natural resources tend to exhibit advanced economic development levels, as these resources are vital inputs in the production function. Consequently, a favorable environment and rich natural capital are likely to enhance economic performance.
However, the relationship between the green economy and unemployment remains unclear, with findings indicating that only one aspect of the green economy has a significant positive impact on unemployment. The green economy influences job creation indirectly through economic output; thus, while productivity improvements can lead to increased employment and decreased unemployment, this secondary effect is limited and not solely driven by the green economy. These outcomes align with reports from the International Labour Organization, which suggest that the green economy has the potential to create millions of new jobs.
Furthermore, the promotion of the green economy aids in eradicating poverty, which contributes to sustainable development. This negative correlation exists because increased development cooperation provides the necessary and reliable resources to implement programs and policies aimed at alleviating poverty in all its forms. Numerous studies have concluded that the implementation of green economy strategies is essential for reducing poverty and advancing sustainable development.
Moreover, the green economy lowers poverty rates in countries based on their national criteria; thus, a higher environmental quality correlates with lower poverty levels. Among the key dimensions of the GGEI, two dimensions significantly affect poverty rates. First, the market and investment dimension shows a negative relationship with poverty levels. As green investment advances, per capita GDP and the standard of living in a country improve. This enhancement in economic standards leads to a decrease in the number of individuals living below the poverty line.
Second, the environmental and natural capital dimension also exhibits a negative correlation with poverty. The conservation of the environment and sustainable utilization of natural resources contribute to securing access to quality food and safe drinking water, thereby reducing malnutrition rates and directly lowering poverty levels in developing countries. Here's a rephrased version of your text while maintaining its original meaning:
The significance of the Green Economy (GE) concept arises not as an alternative to Sustainable Development (SD), but rather as a focused and direct approach and a vital tool for achieving SD. Transitioning towards a GE holds the potential for unprecedented economic growth and poverty alleviation, executed rapidly and effectively. This potential stems from two concurrent transformations. First, our society and the risks we encounter have dramatically changed due to evolving circumstances, necessitating a fundamental re-evaluation of our economic strategies. Second, there is growing acknowledgment that natural resources form the basis of our physical infrastructure and must be managed as a primary source of prosperity and well-being.
Consequently, countries are currently in a race to harness their available natural resources and renewable energy, particularly amid a global trend focusing on environmental issues to mitigate ecological degradation and biodiversity loss, alongside challenges such as acid rain and rising temperatures driven by greenhouse gas emissions that contribute to climate change with potentially catastrophic consequences. Therefore, GE can be viewed as a new economic paradigm
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and a critical element in economic development, job creation, and poverty reduction globally, especially in emerging nations.
In this context, the findings indicate that GE positively influences average per capita GDP and overall unemployment levels while negatively impacting poverty rates in developing countries. This suggests that the green economy is a key driver of sustainable development by fostering economic growth, creating new job opportunities, and reducing poverty in developing nations.
To emphasize the importance of a green economy, governments in developing countries should standardize its definition, measurement tools, and datasets used in calculations. Enhancing institutions and policies to encourage public and private sector investment in green sectors is essential, as is promoting scientific research and development initiatives and technological innovation. Allocating significant portions of public spending for research and development in the green economy, designing specialized programs to enhance labor quality through intensive training in advanced technologies for various green sectors, and improving workforce skills are critical steps.
Additionally, formulating and refining policies for transitioning to a GE that stimulate public spending and foreign direct investment is crucial for generating new economic sectors and investment opportunities, particularly to create job prospects for poor and vulnerable groups. Establishing a national green financial system that introduces new financial instruments such as green bonds, green insurance, and green credit is vital for meeting the sustainable financing needs for the green transition.
Moreover, promoting investments in renewable energy sectors, especially wind and solar energy, should be institutionalized across all sectors. Renewable energy products often lack institutional support, which may leave consumers unaware of their rights and responsibilities regarding these products. Therefore, relevant authorities and ministries must provide this institutional framework to enhance the adoption and expansion of renewable energy in developing countries.
Green policies should incorporate environmental, social, and economic factors to ensure equitable wealth distribution and equal opportunities for diverse population segments. Furthermore, it is important to encourage private sector investment in green sectors through economic incentives such as procurement policies, differential pricing, and tax benefits to promote renewable technologies and financing mechanisms. This includes encouraging the use of renewable energy technologies by reducing tariffs on equipment and components and eliminating or reducing fossil fuel subsidies.
This analysis focused on the connections between the green economy and sustainable development, particularly regarding the social and economic dimensions related to the first and eighth Sustainable Development Goals—namely, no poverty, decent work, and GDP—by examining emerging economies. For future studies, we recommend expanding the framework to incorporate additional sustainable development goals and including both developed and developing countries for comparative analysis to derive further insights.
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