Monday, February 21, 2011

Green Economy a win-win-win?

Green agriculture is capable of nourishing a growing and more demanding world population
at higher nutritional levels out to 2050. An increase from today’s 2,800 Kcal availability per person per day to around 3,200 Kcal by 2050 is possible with the use of green agricultural practices and technologies. It is possible to gain significant nutritional improvements from increased quantity and diversity of food (especially non-cereal) products. During the transition to green agriculture, food production in high-input industrial farming may experience a modest decline while triggering positive responses in the more traditional systems, which account for nearly 70 per cent of global agricultural production. Public, private and civil initiatives for food security and social equity will be needed for an efficient transition at farm level and to assure the sufficient quality nutrition for all during this period.

This is written in the Chapter on agriculture in UNEP's report on "Green Economy" which was launched today (I had the opportunity to comment on the draft). UNEP says that the report challenges the myth of a trade off between environmental investments and economic growth and instead points to a current "gross misallocation of capital". The report sees a Green Economy as not only relevant to more developed economies but as a key catalyst for growth and poverty eradication in developing ones too, where in some cases close to 90 per cent of the GDP of the poor is linked to nature or natural capital such as forests and freshwaters.

Well, I wished UNEP is right. But I have my serious doubts. I don't have any doubts about the feasibility of Green Agriculture (Organic), renewable energy etc. but I do have doubts that this major conversion of society is doable without changing the underlying drivers and mechanisms. Those brought us here in the first place. The report partly acknowledge this and suggest extensive financial incentives:
Agriculture’s environmentally damaging externalities could be reduced by imposing taxes on fossil-fuel inputs and pesticide and herbicide use; and establishing penalties for air emissions and water pollution caused by harmful farming practices. Alternatively, tax exemptions for investments in bio-control integrated pest management products; and incentives that value
the multi-functional uses of agricultural land have proven effective in improving the after tax revenues for farmers that practice sustainable land management....Payments for environmental services (PES) can further incentivize efforts to green the agriculture sector.

It is theoretically possible. I have myself studied how such a transition would look like in Moldova, Ukraine and Armenia (for UNEP, report to be published soon). However, we have to realise that these massive interventions in agriculture will amount to very detailed regulations and a maze of taxes, incentives, regulations etc. Do we want that? And why do we need that? Mainly because the underlying economic drivers (essentially the capitalist market economy) have created the situation we have. I believe time is now ripe to question those drivers instead of tweaking with the incentive structure.

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