How Green Economy creates wealth

Throughout history, innovative ideas have created jobs and wealth.

When Henry Ford discovered how to mass produce an entire automobile, he had no knowledge that his action would create the road infrastructure we have all over the world today.

Therefore, each new concept has had its positive disruptive path.

It is for this reason that I explore the concept of a Green Economy (GE).

Many experts have linked it to a means of fostering economic growth and development while ensuring that natural assets continue to provide the resources and environmental services.

But contrary to this, many people have heard about GE in the context of the changing climate currently affecting the world.

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Because of its seriousness, GE is now the subject of discussions at the ongoing conferences of parties or COP 27 that ends tomorrow in Sharm El Sheikh, Egypt.

But as countries come together to act towards achieving a collective climate goal as agreed under the Paris Agreement and the Convention, the following questions call for an answer:

What will be the disruptive path of GE? How do we know the opportunities that lurk behind this new concept? And how do we take advantage of it to create wealth?

We must constantly find ways to answer these questions ourselves. But unfortunately, the discourse around GE is coming in the form of threats.

Little is said about its potential to create wealth and eventually a better world.

Inside the United Nations Environment Programme (UNEP) Green Economy Report the agency defines GE as seeking sustainable development without endangering the environment, reducing environmental risks and ecological scarcities.

It shares many similarities with ecological economics but focuses more on political applications.

One can therefore conclude that it is the politics of the environment that drive us away from the path of wealth creation by giving us false promises and baseless hopes.

Last week young climate activists protested in Sharm El Sheikh with placards reading “show us the money.”

Their action was in reference to promises made by the developed world to finance new climate-friendly solutions and adaptation in developing countries.

Politicians in developing countries are attempting to make the case for fossils but it coming too late. Soon the demand for dirty fuels will dissipate.

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Many of the developed countries will not allow combustion engine vehicles on their roads. And those advocating for fossils have neither the capacity nor the technology to exploit the resource.

In my view, we should just move on with GE and focus on what the future presents.

Currently, Africa is dark compared to other parts of the world when viewing night lights from space. Although it is a problem as a result of the cost of energy, it is a multi-billion-dollar business gaping at us.

A look at the monthly cost of fossil fuels used in lighting poor homes, the $2.60 cost per litre (assuming consumption of 2 litres a month) is higher than investing in a solar solution to light the entire homestead with a subscription fee of $2 a month.

The opportunities lie in building microgrids or single household solar panels and leveraging on cheap microloans.

Already, the manufacturing of Electric Vehicle (EV) batteries has started in Kenya. But many of the startups lack venture capital funds to scale up. Yet the market, especially for motorbikes, is huge.

The future is clearly green mobility. The emerging industry requires funding to scale across the continent.

In addition, more funding is needed to build charging stations that will create thousands of jobs before big energy companies move into space.

Universities and Technical and Vocational Education and Training (TVET) institutions should now embark on local production of solar panels and other green energy equipment.

Many other opportunities like solar freezers for fishermen and fruit farmers would not only help cut post-harvest losses but also bring the much-needed income to support their development and cut dependence on the exchequer.

Although the production and distribution of green hydrogen require scale, there is a sense of collaboration to build a plant for mobility and fertilizer.

These are all wealth-creating solutions that have the potential of replicating the impact of Ford’s discovery in the future of work.

With the declining land resources, it is imperative to replace current farming practices with climate-smart agriculture, an emerging idea to improve productivity, advance resilience and reduce carbon emissions.

There are more opportunities lurking around the delicate balance between sustainable development and environmental protection.

The writer is Kenya’s Ambassador to the Kingdom of Belgium and the European Union. The article is written at a personal level.