Gross Domestic Product (GDP), the sum of the value added of firms in various industries across the economy, has become one of the most closely watched statistics produced by economic statisticians. Economists utilise the statistic as a means of assessing economic progress overtime as well as evaluating comparative economic progress across countries. Potential investors use it to measure the potential size of their market and monitor changes to gauge the level of economic uncertainty. Governments employ the statistic to predict tax revenues and identify industries in need of greater support.
Traditionally, policies aimed boosting at GDP have largely focused on increasing the output of firms and other economic entities, with little attention paid to the environment as well as the by-products of production termed waste and therefore possessing little or no economic value. The idea of the green economy, however, attempts to enhance profits, employment and overall economic activity while minimising the impact of production. Fundamentally, it is the idea that there is not necessarily a trade-off between production and the environment.
Consider the case of a beverage manufacturing plant. Key inputs include water, energy, packaging and the like. Adopting green principles, the firm might consider utilising renewable technology to reduce the cost of energy inputs, minimise the amount of packaging utilised for the product to lower shipping costs as well as install water recycling or water saving technologies to reduce the amount of this input going into the production process. The firm benefits by decreasing its cost of production and potentially opening access markets in more developed countries that might have environmental standards in place for imported goods. These investments generate a variety of employment opportunities for other firms engaged in the installation and manufacture of such technologies. And, society as a whole benefits, as fewer resources (e.g. fossil fuels, plastics, paper, water, among other things) are now being utilised in the production process.
The Barbados Green Economy Scoping Study provides an assessment of the potential of greening various industries in Barbados (tourism, agriculture, fisheries, housing and transport) as well as outlines a roadmap for promoting the spread of this idea throughout other areas of the economy and society. Through a stakeholder consultation process, the study outlines opportunities for greening each of the above areas within the context of the key cross-cutting issues of water, land, energy and waste. These issues obviously represent opportunities for greening, but given that they are inputs or by products of production in most small states, it was considered important to ground any opportunities within the constraints posed by these issues. Specifically, given the limitations in terms of water as well as land availability on the island, opportunities should take these limitations into account. Similarly, owing to the dependence on imported fossil fuels (on average, almost $1 in every $4 of imports is spent on imported fossil fuels), green opportunities that reduce the island’s dependence on imported fossil fuels could enhance growth and reduce the rate of economic variability of the island.
Several opportunities were identified in the various industries, and some of these have already been implemented. In agriculture, organic farming was promoted as an industry that could provide greater export opportunities and stimulate backward linkages because of locally produced fertilisers. Indeed, fish offal, a current challenge to local waste haulers, could play a part in the production of these fertilizers. Using fish offal to produce fertilizers can create new industries, income and employment opportunities. At the consumer level cooperatives were also put forward as a means to not only help consumers obtain lower prices as well as provide a stable market for farmers.
Fisheries has been a mainstay of the traditional Barbadian society. It provides opportunity for work for individuals unable to obtain jobs in other areas of the economy as well as ensuring that families maintain a healthy diet. Building on the ideas highlighted for agriculture, it was also noted that Mahi-Mahi, more specifically its skin, could be utilised for as a means of obtaining fish leather that could then be used in the local apparel industry.
In building and housing, several useful recommendations were put forward. These included the development of recycling communities and the conversion of derelict sugar factories into waste-to-energy plants. Recycling communities would reduce the waste that would have to be collected by the Sanitation Service Authority as potentially be a source of income for the collection agency. In transport, the document recommended recycling in road construction as well as scrap metal from workshops. It was also noted that green vehicles as well as standards of fuel mixes could reduce the overall demand for energy in the island.
Tourism is one of the single largest areas of the Barbados economy. It was therefore not surprising that the document outlined numerous opportunities for not only greening the industry by enhancing its competitiveness. For businesses, it was noted that marketing the island as a green destination/business, the development of agro-tourism products as well as greater forward and backward linkages held significant potential. The marketing and cost saving opportunities of these recommendations would however need to be supported by greening standards, the development of heritage tourism sites as well as the creation of marine protected areas.
The opportunities identified in the Barbados Green Economy Scoping Study Report obviously suggest that that businesses, individuals, governments as well as labour can benefit from greening the economy. In addition to potential business opportunities and possibilities to increase profitability, there is also tremendous scope for reducing the stress that production places on the natural resources in Barbados. To obtain these benefits, however, a well-thought out system of finance, supporting mechanisms, incentives, education and standards and regulation would need to be part of this transition. The ten-step road map (see figure 1) identified in the scoping study is simple, easily monitored and likely to produce significant gains for all stakeholders. It is my belief that the concept of the green economy has the potential to result in rates of economic growth on par with those seen in the immediate post-independence period. Given the island’s anaemic rate of growth experienced since the 1980s, such growth could address many of the current challenges the island currently faces (e.g. high youth unemployment, low rates of economic growth and an unsustainable rate of increase in the public debt).
|Figure 1: Ten-Step Roadmap for Greening the Barbados Economy|
|Source: Moore, et al. 2014|
 Moore, W., Alleyne ,F., Alleyne, Y., Blackman, K., Blenman, C., Carter, S., Cashman, A., Cumberbatch, J., Downes, A., Hoyte, H., Mahon, R., Mamingi, N., McConney, P., Pena, M., Roberts, S., Rogers, T., Sealy, S., Sinckler, T. and A. Singh. 2014. Barbados’ Green Economy Scoping Study. Government of Barbados, University of West Indies – Cave Hill Campus, United Nations Environment Programme, 244p.
About the author(s)
Winston Moore is the Chief Economic Consultant at Antilles Economics.
More from this edition
From the Minds of Marketers with Greg Hoyos
In this first of a series of articles to introduce you to thought leaders across the Caribbean business landscape, one of the most prolific and successful marketers in the region, Greg Hoyos, shares his thoughts on the state of marketing in the Caribbean.
The Barbados Mortgage Market After 9 Years of Economic Strain
The mortgage market has proven to be one of the more resilient consumer financial markets in Barbados, growing at elevated rates long after the economic downturn began. But from 2013, growth has been subdued. This article investigates key indicators that may explain the resilience of the mortgage market and shed some light on what will be required to spark a revival in mortgage growth.
Most recent from Strategy