Key Green Economy Concepts

Of the many green economy concepts, these are the ones prioritized.

Carbon Tax

During the inauguration, the Governor spoke of the need for the state of New Jersey to rejoin RGGI, the Regional Greenhouse Gas Initiative, carbon trading program. This “cap-and- trade” program effectively acts to raise the price of emitting carbon over time. This is a major step towards reducing emissions and improving air quality in our communities. While it is a good idea to maintain this cap-and-trade program, a larger scale, more general tax on carbon leveled on emission causing agents, based on the amount of carbon emitted, would further reduce our use of fossil fuels. It is also fully consistent with reducing externalities, a basic point of Environmental Economics 101. This tax could be placed on gasoline and resources used to create power such as oil and natural and fracked gas. Depending on the price per ton agreed upon, this money could be used to support the green industry, help develop sustainable power-producing infrastructure, and/or be rebated back to lower and middle income residents. If the amount of permits sold to the power producers through RGGI is reduced in quantity over time, supply and demand dictate that the price would probably increase, and the push to green energy would quicken.

A tax would be unpopular but if we are serious about reducing emissions to the necessary levels, it may be necessary. The same is also true for one on excessive water use, a technique used in water scarce regions. One way that we can relieve the backlash from a carbon tax is by simultaneously decreasing income taxes. Most people would support paying less income tax. This support would help alleviate the opposition as carbon emissions become more expensive.

Pricing Nature

When people think of pricing nature, they tend to only think about pricing carbon through carbon taxes. This, however, is only one example of what needs to be done to price nature and create market incentives for better decision-making. Pricing nature is about internalizing externalities. Pollution and waste are examples of negative externalities where the cost of the pollution is not assumed by the polluter, but instead by a third party. “The failure to internalize [negative] externalities in the selling price (of products) can be viewed as an indirect subsidy” (Cloete, 2013) because it creates a market distortion where the price of products are not reflective of their true cost. This market failure incentivizes the degradation of our natural capital because we are not accounting for it and it therefore provides artificially higher profits. We need to consider all of the services that ecosystems provide and put some sort of a price on them in order to make well informed decisions. People may argue that we will not be able to accurately price nature, but as Timperley (2016) points out: “Is it better to put an imperfect price on nature, or continue with economic models that currently regard the natural world and the services it provides as valueless?”

In New Jersey, we have valued our natural capital before and the findings showed “that New Jersey’s natural capital, both living and non-living, make a substantial contribution every year to New Jersey’s economy and quality of life” (NJDEP, 2007). Since this report is over ten years old, a new report should be conducted that includes costs from hidden subsidies, such as those that encourage rebuilding along vulnerable coastlines (Meyer, 2013). Updating New Jersey’s natural capital valuation will help improve policy decision-making by providing missing information that needs to be considered.

Green Design

Green Design encourages an early focus on thinking critically about the environmental and energy impacts of new and re-designed products at every stage of their life cycle, as well as the development of projects and buildings, at a point when minimizing them is most feasible. To the degree impacts can be “designed-away” with better choices, you never have to worry about regulating or addressing them (McDonough & Braungart, 2002).

This under-utilized concept could greatly benefit the development of New Jersey business’ products, infrastructure and buildings in our future. How can we reduce the energy required to do this task? What materials should we use to reduce our footprint, toxicity, and facilitate future re-use? For buildings, it can mean choosing a shaded location so that energy consumption could be reduced. These are some of the questions which might be asked during the design stage.

If more companies practice green design, they will likely save money and help the state’s progress in meeting the Governor’s goal of moving towards 100% renewable energy (Phil Murphy Democrat for Governor, 2017).

Relatedly, as you may know, New Jersey has a trade association for green buildings, the New Jersey Green Building Council. Their website (see the “References” section) shows some of their accomplishments. One of these is membership growth. From 2002 to 2016 they gained over 1000 new members, which is great, but considering New Jersey’s population is almost 9 million people, there’s still room for improvement.

The other example on the website explains how they gave grant funding for professional work to two public schools in New Jersey. Once again, that’s fine work but still on a very small scale.

Another area that the Council could improve upon is doing more work in the central part of the state. Their north and south branches are more involved with green buildings than their central branch. This could possibly be due to where the members of the Council live, but the central region is heavily populated.

This Council does great work and truly understands the concept of green buildings. If the Governor could help put this area further on the map by promoting it to more people, it might result in accelerated growth of green buildings in all areas of the state.

Green design can be applied in the early stages of development probably in most sectors of the economy. If we could find additional ways to encourage its use, green design would allow us to reduce waste, reduce energy consumption, save water, and save money.

Carbon Sequestration

Due to climate change, carbon management is one of the most important issues affecting the planet right now, and while controversial, it may be necessary to develop and eventually implement carbon sequestration if carbon emission reductions prove to be insufficient. It is most commonly known as CCS, or Carbon Capture and Sequestration, and there are a number of ways to practice it, some of which may be more feasible and less risky than others.

One way is to pull carbon out of the atmosphere, transform it into a liquid material, and deposit the waste in underground reservoirs. The waste, no longer in the atmosphere, cannot add to global warming (assuming proper monitoring). This particular technique, called direct-air capture, has not taken off, in part because of its price. According to a 2011 report by the American Physical Society, “it would cost at least $600 per ton of CO2 removed from the air.” An alternative, capturing carbon at a power plant would be “roughly $80 per ton” (American Physical Society, 2011). There are also other ways being developed or conceived which could prove more promising.

Although it will not, and should not be, the only system used to combat environmental damage, some form(s) of CCS could seriously complement direct emission reductions in the Garden State, may very well be needed, and therefore should be part of the state’s response to climate change.

Sustainable Business and the Triple Bottom Line

New Jersey has a program, the Sustainable Business Initiative (SBI) and Registry, developed and administered by the New Jersey Department of Environmental Protection (NJDEP) and the New Jersey Small Business Development Center (NJSBDC), which recognizes businesses for taking sustainable actions. This is important, but it’s not enough. There should be a dedicated governmental office that helps businesses become more sustainable in multiple ways. New Jersey even used to have one, the Office of Sustainable Business (OSB), which supported sustainable business practices and helped address misconceptions about sustainability practices (New Jersey Interagency Sustainability Working Group, 2001). This new office could get advice from, partner with, or be modeled on the New Jersey Sustainable Business Council (NJSBC), a relatively new green trade association (NJSBC, 2017). Appendix II discusses the SBI in further detail.

Having a sustainable business does not just mean recycling, reducing waste, or energy efficiency. Such thinking is too narrow and we need innovative new thinking on how business looks at and practices sustainability. Much more is possible (see Appendix II).

A part of a sustainable business is about making it easy for customers, in turn, to be more sustainable through the use of their products. For example, products could be made to be repaired or to be collected at the end of their useful life in order to reuse parts. This can save businesses money because their resources would be reused, and even if they paid to take back their used products, it would likely be less than buying and creating new parts.

Also retail stores should stop using plastic bags, and food stores should discount expired products because the dates that gets marked on food does not mean it cannot be eaten after that date (until, of course, the food actually does risk becoming spoiled) (Nguyen-Okwu, 2016). But this would require state policies to prevent people from suing stores for selling expired, but still good products. These are just a very few of many examples of how re-thinking the ways we do business could make New Jersey’s economy more sustainable.

A powerful concept in the sustainable business field, associated with John Elkington, is the Triple Bottom Line (TBL). Traditionally, businesses are one of the leading causes of unsustainability because, historically, the cheapest way to do something is the most unsustainable. But instead of just focusing on the traditional measure of profits, a sustainable business must also focus on people and the planet. For a business to be truly sustainable, it must earn profits in ways which are socially and environmentally responsible. This is the TBL framework being adopted by many businesses wishing to become more sustainable. For example, Seventh Generation, a company that makes cleaning products, has adopted this framework. Their cleaning products are environmentally sound, while effective at the same time. They use natural ingredients, which protect people and the environment, while maintaining a profit (Hendricks, 2016). With the Governor’s support, the State could encourage more businesses to adopt the TBL framework. This would help make New Jersey a better and safer place.

Agriculture and Ecosystem Services

What many people are not aware of, including those within this sector, is agriculture can and needs to be more sustainable. It not only benefits everyone involved in the agricultural industry, but will also benefit the environment and those who eat their products. Conservation will increase and with it so will the economy. Fewer valuable resources will be wasted and greenhouse gas emissions will decrease. By reducing the amount of resources used we can save money and at least sometimes increase crop yield, stimulating the economy.

With food shortages already a problem in some countries around the world, it is apparent that we must make a drastic change toward sustainability in agriculture. Seeing as we are the Garden State, New Jersey can lead the way in making this change. Protecting ecosystem services (already discussed in the “Pricing Nature” section) can help us make this change because they play an important role in agriculture, especially pollination, but they are often taken for granted or ignored. Ecosystem services are “the benefits that humans obtain from ecosystems…produced by interactions within the ecosystem.” They include provisioning, regulating, cultural services, and supporting services (Millennium Ecosystem Assessment, 2005, p. 3). Despite their importance, there are many ways that we are degrading our ecosystems in order to grow our food.

The agricultural sector is one of the most resource intensive sectors, accounting for 70 percent of all water use and 14-18 percent of greenhouse gas emissions (Nichols, 2016). With a growing number of mouths to feed, this level of resource consumption is not sustainable. Because farming is water-intensive, water conservation is important in order to improve its sustainability. Therefore, there is a need for precision agricultural techniques to prevent overdrafts from groundwater sources (Millennium Ecosystem Assessment, 2005). Another viable method of reducing water consumption, and thereby improving sustainability in agriculture, is hydroponics. Hydroponics is a promising method of farming that allows crops to be grown indoors and even vertically, reducing the land requirements for crops. It reduces the amount of water required by recycling it as it irrigates crops. The energy requirement is one of the only concerns with this technique and can easily be compensated for with renewable forms of energy.

We are also degrading our ecosystems through fertilizer and pesticide usage and use of monocultures. Fertilizers contribute to nutrient loads and pesticides can be unhealthy, while monocultures prevent proper nutrient cycling. Monocultures also mean less genetic diversity and therefore less resilience to changes, such as those that may come from climate change. Weißhuhn, Reckling, Stachow, and Wiggering (2017) show the advantages of using polycultures instead:

Perennial polycultures [provide ecosystem services such as] enhance[d] soil fertility, soil protection, climate regulation, pollination, pest and weed control, and landscape aesthetics…Additional positive factors provided by perennial polycultures [include] reduced costs for mineral fertilizer, pesticides, and soil tillage.

Polycultures can also increase crop resilience by increasing diversity.

Integrated pest management (IPM) is another technique that can make agriculture more

sustainable by allowing for natural pest management, therefore reducing the amount of pesticides used. A study by Lindell, Eaton, Howard, Roels, and Shave (2018) found that “vertebrates consume numerous crop pests, a key ecosystem service, and that this consumption often reduces crop damage.”

Since the production of fertilizers and pesticides is fossil fuel-intensive, reducing their use not only reduces the amount of harmful chemicals used, but also reduces the amount of CO2 emissions.

At the State Agricultural Convention, the Governor showed a commitment to New Jersey agriculture (Wolfe, 2018). Jersey Fresh is definitely a great program which facilitates peoples’ support of our local farmers, but it should be expanded for organically or somewhat similarly grown crops. There should be a new offering, maybe “Jersey Fresh Organics,” or “Sustainable,” which would allow people to also support local organic or even regeneratively-grown foods.

With the Governor’s continued support, New Jersey can be a pioneer in sustainable farming, using any or all of these approaches, and proving their benefits to the rest of the world.

United Nations Sustainable Development Goals

New Jersey has the ability to set yet another example to the world by working to achieve the Sustainable Development Goals posed by the United Nations (UNSDGs). The UNSDGs, also known as Global Goals, aim to end all forms of poverty. The Goals call for action by all countries to promote prosperity, while protecting the planet. It recognizes that eliminating poverty and building sustainable economic growth go hand-in-hand.

Some of the other Goals include zero hunger, quality education, sustainable cities and communities, decent work, and several others. The complete list of Goals are shown in the following image.

Figure 1

(Source: United Nations Development Program)

By following this framework, other states will be encouraged to also, and hopefully the UNSDGs could at some point be adopted at the federal level.

Improving Sustainability in Education

While the connection to a green economy is indirect, a recommendation in a 2001 State Government report said: “The State should consider incorporating sustainability as a standard component of the public education curriculum” (New Jersey Interagency Sustainability Working Group, 2001, p. 103). We concur. If we are really pushing for 100% renewable energy, and moving forward towards sustainability, students should learn about it at the middle and high school levels. This would give them opportunities to keep up with current events, as well as know about and potentially discover an interest in the field.

Sustainable Jersey does something similar to this (Sustainable Jersey, 2018). They’re a non-profit organization that, among other things, supports and gives incentives to schools that want to step into sustainability programs. For example, they host a two hour conference about the importance of composting. That’s just one of the things that they do. It would be great to see students learn more about sustainability and enjoy programs like Sustainable Jersey’s.

The above-State report said education should not simply teach environmental history, but also discuss the economy and personal responsibility. We need to teach the youth new ways to develop win/win situations. Students, teachers, and administrators should work towards understanding our energy usage.

Education on sustainability is important for future business leaders and state employees, as well. They would benefit from learning about sustainability at a young age because it can play a role in their future actions. Future shoppers can learn about the

environmental characteristics of products and services, which may perhaps guide them in their market choices towards greener companies. That would complement decisions companies make in that direction.

Ecological Modernization

Ecological Modernization is an overarching concept for the economy which has been discussed mostly in Europe for some years, but is largely unknown in our state. As Gibbs (1998) describes it, “Ecological modernisation specifically argues that economic development and ecological crisis can be reconciled to form a new model of development for capitalist economies.” Gibbs describes some of its tenets:

● (as discussed above in the “Sustainable Business” section) “…integrating environmental and economic policy can be both profitable for business and contribute to sustainable development”

● (citing Mol and Spaargaren, 1993) “…a central role (is) assigned to science and technology,” with (citing Gouldson and Murphy, 1997) increasing “use of new and clean technologies by individual firms”

● “..a major transformation…of the industrialization process in a direction that takes account of the need to maintain the sustenance base”

● (citing Mol, 1994) “The process of production and consumption can be restructured on ecological terms through the institutionalization of ecological aims”

● There is a “decoupling (of) economic development from the relevant resource inputs, resource use and emissions”

● Ecology is “economized” “by placing an economic value on nature…”

● Environmental policy goals are “integrated into other policy areas.”

So industrialization or “modernization” is maintained–and even moved forward and, in effect, defined in increasingly environmental ways, the very opposite of seeing them as in conflict. While Gibbs points out the field has its critics, one can see how the ecological modernization perspective offers a large scale potential guide to New Jersey’s integrated economic/environmental future. That brings up an interesting question for New Jersey: why couldn’t we try to incorporate this idea into our state?

Conclusions and Recommendations>>>

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