Inclusive green economy requires bottom-up approach

THE risk of climate change is all around us and it is quite apparent that the most vulnerable in society are bearing the brunt of this risk. Whether you speak to smallholder farmers in the rolling slopes of the Rwenzori mountains in Uganda, where rainfall has dropped by more than 20% or you speak to a township dweller in the outskirts of Cape Town, whose shack has been razed by a recent fire, the story is the same. Severe change in weather patterns is rapidly eroding their livelihoods and there are hardly enough social safety nets to help them cope.

Building an inclusive green economy lies at the centre of finding solutions that help build social and ecological resilience, but also provide an opportunity for such groups to partake in identifying the solutions that works best for their local context. To achieve an inclusive green economy therefore requires a bottom-up approach to encourage meaningful participation in the process, backed by strong policy signals from the top.

Unfortunately, there is no evidence to show that this is the approach that is being undertaken in operationalising the green economy in many developing countries. Most of the discourse is still taking place at the macro-economic level and characterised by interventions at that level, whose effect on the most vulnerable people on the ground or pressing ecological crisis are limited at least in the short- to medium term.

For example, the obsession with “mega-projects”, whilst important for achieving change at a large scale, mirrors the same approaches used in the traditional economic system that led us into the climate crisis in the first place. Prestigious schemes such as the Grand Inga dam in the Democratic Republic of Congo, or the large scale procurement of renewal energy in South Africa, are all fraught with challenges, that if not well managed might negate the very purpose for which they were conceived — energy access.

The real opportunity of creating meaningful change is through activating local economies, to enable those at the frontline of climate risk to defend themselves. This is because most of the climate-related risks inevitably translate into social problems or a local ecological crisis that need to be addressed at that level. Most importantly those who are faced by the prevalent risks must be at the forefront of devising solutions that are sustainable, through green entrepreneurship for example.

Green entrepreneurship, which is a term used to describe entrepreneurial activities that focus on ecological outcomes, plays an important role in addressing social and economic challenges that are associated with climate change. One would expect that due to the well-documented effects of climate change at the local level in South Africa, there would be a hive of green entrepreneurial activities at the local level that seek to turn climate risks into opportunities. Sadly this seems not to be the case, where in many cases environmental issues are still regarded as peripheral and lack well-established support structures in terms of business incubation and finance for small- and micro enterprises.

By their very nature many green entrepreneurial activities do not lend themselves to the traditional business models that mostly focus on profitability, growth and an understanding of a readily available market. Green entrepreneurs in many instances focus on emerging business principles that promote new forms of ownership, distribution and exchange of goods and services. As a result the odds are stuck against such ventures, and they do not often find the support required to make a significant difference.

For example, a very brief analysis of business incubators in South Africa, shows that most of the support to small enterprises is for high growth sectors, such as technology, manufacturing and the retail sector. Even though some of these ventures are social enterprises, the majority still do not embrace green economy principles. There is a need therefore to explicitly support enterprises that promote green entrepreneurship, especially for a country such as South Africa, projected be highly affected by climate change.

This is the gap that the African Centre for a Green Economy is seeking to fill through its innovation hub that is being established in partnership with DOEN foundation, the Green Economy Coalition and the New Economics Foundation. Over the next two years, the initiative will develop, support and accelerate promising green enterprises that promote local participation in building an inclusive green economy in South Africa.

An earlier version of this article was posted on the Business Day Live website, available here

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