Green Economics

DEFINITION of 'Green Economics'

Green economics is a methodology of economics that supports the harmonious interaction between humans and nature and attempts to meet the needs of both simultaneously. The green economic theories encompass a wide range of ideas all dealing with the interconnected relationship between people and the environment. Green economists assert that the basis for all economic decisions should be in some way tied to the ecosystem, and that natural capital and ecological services have economic value.

BREAKING DOWN 'Green Economics'

The term 'Green Economics' is a broad one (it's a term that's been co-opted by groups ranging from 'green anarchists' to feminists), but it encompasses any theory that views the economy as a component of the environment in which it is based. Green economists generally take a broad and holistic approach to understanding and modeling economies, paying as much attention to the natural resources that fuel the economy as they do the way the economy itself functions.

Broadly speaking, supporters of this branch of economics are concerned with the health of the natural environment and believe that actions should be taken to protect nature and encourage the positive co-existence of both humans and nature. The way that these economists advocate for the environment is by making an argument that the environment plays a pivotal role in the economy, and that the health of any good economy is essentially determined by the health of the environment of which they believe it is an essential part of.

In many ways, green economics is closely related to ecological economics in the way that it views natural resources as having measurable economic value and in how they focus on sustainability and justice. But when it comes to the application of these ideas, advocates of green economics are more politically focused. Green economists advocate for a full cost accounting system in which the entities (government, industry, individuals, etc.) who do harm to or neglect natural assets are held liable for the damage they do.

There are a few different definitions of a Green Economy or 'Green Economics'. In 2012, the International Chamber of Commerce (ICC), stated in their Guidebook To The Green Economy that a green economy is one "in which economic growth and environmental responsibility work together in a mutually reinforcing fashion while supporting progress and social development". Some of the ways that green economics has made its way into the mainstream has been by way of consumer-facing labels indicating a product or a business' degree of sustainability.

RELATED TERMS
  1. Green Investing

    Investment activities that focus on companies or projects that ...
  2. Green Marketing

    Marketing products and services based on environmental factors ...
  3. Green Tech

    1. Technology that is considered environmentally friendly based ...
  4. Green Field Investment

    A form of foreign direct investment where a parent company starts ...
  5. Green collar

    A worker who is employed in an industry in the environmental ...
  6. Green Card

    A permit issued by U.S. Citizenship and Immigration Services ...
Related Articles
  1. Markets

    Is it Time to Invest in Green Bonds?

    Green bonds have been growing in popularity at a rapid rate, but is it too early to invest?
  2. ETFs & Mutual Funds

    Challenges Faced When Analyzing Green Chip Stocks

    The fact that a green chip is not yet a blue chip should not alarm investors, but they need to be aware of the differences and challenges that can arise from assuming these are durable companies ...
  3. Markets

    Green Technology: A Solid Investment Choice?

    With global investing in green energy on the rise, there are abundant opportunities for environmentally responsible, financially sound investments.
  4. Managing Wealth

    Go Green with a Investment in Green Bonds

    If you want to invest in a socially responsible way, green bonds may be for you. And as the market grows retail investment opportunities will grow too.
  5. Investing

    Forget Green Stocks, "Green" Will Do

    More and more companies are "going green", but that term, in itself, can be subjective.
  6. ETFs & Mutual Funds

    Evaluating Green Equity Investments

    Learn how to find stocks that are both eco-friendly and profitable.
  7. Investing

    The 10 Fastest Growing Green Startups in 2016

    These social entrepreneurs adopt triple bottom lines that champion urgent environmental problems while generating returns for shareholders.
  8. ETFs & Mutual Funds

    4 Global Market Trends in 2016 (FXI, IDU)

    Discover key global trends in the equity markets that you should be stalking in 2016, such as green bonds, interest rates and the utility sector.
  9. Investing

    Green Mortgages Save Money And The Environment

    This emerging type of loan is not just for treehuggers. It rewards you for eco-friendly housing, in the form of cold, hard, cash.
  10. Managing Wealth

    How the Green Card Lottery Really Works

    Here's how the popular green card lottery, run by the U.S. State Department, operates, including some tips on improving your odds of winning.
RELATED FAQS
  1. Does investing in sustainable or "green" companies provide lower returns?

    To determine the kinds of returns that can be expected from investments in sustainable or "green" companies, the distinction ... Read Answer >>
  2. What are green investments?

    Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the ... Read Answer >>
  3. Is there a difference between socially responsible investing (SRI) and green investing?

    There isn't a huge difference between socially responsible investing (SRI) and green investing; green investing is actually ... Read Answer >>
  4. What are some of the limitations and drawbacks of economics as a field?

    Find out why the field of economics is full of controversy. Policy decisions, political campaigns and personal finances are ... Read Answer >>
  5. How is an economy formed and why does it grow?

    Find out how an economy forms and why it grows, including the role that financial markets play and how productivity increases ... Read Answer >>
  6. What is the relationship between human capital and economic growth?

    Learn what human capital and economic growth are and how human capital is related to economic growth, and see examples of ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center