Main Concepts

Problem Understanding and Concept

In the last two decades the world has experienced several concurrent crises: climate, biodiversity, energy, food, water, and more recently, the global financial and economic crisis. Among the causes of these events UNEP identifies the misallocation of capital, which contributed to the strengthening of economic sectors that are negatively impacting the environment and to the weakening of those that support natural capital (UNEP, 2011).

In light of these trends and to more effectively move towards sustainable development, several organisations and international actors have developed the concepts of Green Economy (GE) and Green Growth (GG) as action-oriented approaches, or vehicles, to transition to a more sustainable economy. In the Rio+20 conference 2012 governments have re-emphasized the importance of a sustainable development including environmental, social and economic goals. In the document, concepts of a green economy and eco-innovations are seen as important steps to reach these goals (Rio+20 declaration 2012). More specifically, at the visionary level, UNEP considers the green economy as: “An economy that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities” (UNEP, 2011). At the operational level, the green economy is seen as one whose growth in income and employment is driven by investments that:

  • Reduce carbon emissions and pollution;
  • Enhance energy and resource efficiency;
  • Prevent the loss of biodiversity and ecosystem services.

In line with the UNEP report, the European Environmental Agency (EEA) defines a green economy as “one in which environmental, economic and social policies and innovations enable society to use resources efficiently, thereby enhancing human well-being in an inclusive manner, while maintaining the natural systems that sustain us” (2012). Similarly, the OECD defines green growth as an approach aimed at “fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies” (OECD, 2011).

These definitions highlight the mandates of UNEP and the OECD. The former prioritises environmental preservation for poverty reduction, while the latter emphasises economic growth through efficiency improvements. Several other similar definitions exist (e.g. circular economy), each emphasising specific facets of a greener and resilient economy. As a result, decision makers in various countries adopt and use the definition that better fits their context. As a result, while a variety of nations have embraced the concept of a green economy in formal policy terms; other nations pursue and promote green economy policies and programs, though sometimes using different language.

As action-oriented approaches, the application of green economy and green growth principles at the national level is done through the implementation of specific policies and investments, which are adapted to the country context (e.g. political, socio-economic context) and national development priorities. In this respect, UNEP indicates four priority areas for green policy-making, namely (UNEP, 2011):

  • Addressing environmental externalities and existing market failures, where the production or consumption of goods and services has negative effects on third parties and the environment whereby the cost is not fully reflected in market prices.
  • Limiting government spending in areas that deplete natural capital, such as subsidies that stimulate unsustainable production, resulting in the overexploitation of natural resource stocks.
  • Promoting investment and spending in areas that stimulate a green economy, i.e. in areas that (a) promote innovation in new technologies and behaviours that are vital to green markets; (b) expand infrastructure that is required for certain green innovations to flourish; and (c) foster infant green industries.
  • Establishing a sound regulatory framework of legislation, institutions and enforcement.

These priority interventions are aimed at triggering technology adoption, and stimulating behavioural change. In fact, eco-innovation can be considered as an enabler for a green economy to the same extent that the green economy can be understood as an enabler of sustainable development, see Figure 1 below. Technological trajectories, capabilities to eco-innovate, infrastructures and needs however differ across countries (as well as sectors).

According to the Eco-Innovation Action Plan (EcoAP) of the European Commission (2011), eco-innovation is defined as follows:  “Eco-innovation is any form of innovation resulting in or aiming at significant and demonstrable progress towards the goal of sustainable development, through reducing impacts on the environment, enhancing resilience to environmental pressures, or achieving a more efficient and responsible use of natural resources.” The following types of eco-innovations are of major importance for a green economy:

  • Low carbon (climate mitigation) and resilience (climate adaptation) innovations.
  • Innovations with regard to sustainable production and consumption (e.g. including resource efficiency).
  • Systemic innovations, with emphasis on the synergies created (e.g. co-benefits, across social economic and environmental dimensions) and impacts on sustainable development.

While there is no universal scientific approach available for eco-innovations that is ready to be applied to the project (while there are at least partially helpful concepts from neo-classical economics, evolutionary economics and industrial ecology available, see Rennings 2000), we prefer a stepwise, systemic transition approach since it avoids shortcomings of alternative concepts. The key question though, is whether transitions can be engineered. The short answer appears to be that transitions are difficult to control, especially with regard to the global diffusion of eco-innovations, but they can be influenced and even managed. A dual strategy of incrementally improving the system under the old ‘rules of the game’, whilst simultaneously working on radical system innovations that fundamentally transform the ‘rules of the game’, is therefore needed for successful system transitions.

On the other hand, assessing progress to date, as well as prospects for the immediate future, is difficult. Organisations such as the OECD have produced partial analyses, including first efforts to define metrics. Several organisations track headline developments and “best practices.” However, no comprehensive, objective assessment of the transition process exists, as yet. This is also a result of the multitude of definitions and approaches, which lead to the use of a wide variety of - partially disconnected - indicators.

Our inter- and transdisciplinary network (including programme owners) is research based and aims to accelerate the transition towards a green economy significantly, with a European focus on co-development of knowledge. Inno4sd is designed to address these challenges, ranging the conceptualisation of the green economy, to the harmonisation of the approaches needed to coherently assess performance, and identify gaps (successes and failures) for the effective adoption of technologies that can create win-win results.

In particular, the project is designed so as to improve (1) harmonisation of definitions, (2) collection of relevant information on the performance of past and current efforts, and (3) coordination among stakeholders to achieve the following goals:

  • (Harmonisation) The network will review, assess and consolidate concepts related to eco-innovation and their role in implementing a green economy strategy aimed at reaching sustainable development, and will take up perspectives of industrialized and developing countries, as well as those in transition.
  • (Harmonisation) The network will develop guidelines for the integration of eco-innovation and green economy strategies in the work of the European Commission, also extending and customising it to the needs of developed countries and countries in transition.
  • (Collection of information) The network will develop concepts of an appropriate transfer of eco-innovation and a dialogue between the different parts of the world (North-North, North-South, South-North and South-South).
  • (Collection of information) The network will identify potential options to increase the EU's competitiveness by exploiting win-win strategies making use of its first mover advantage in the field of eco-innovation. This will be done by improving the business uptake of research results and identifying new and emerging markets beyond EU borders, together with knowledge brokers and global industry networks.
  • (Coordination) The network will bring together relevant global actors, gather perspectives and resolve disagreements due to conflicting interests and institutional arrangements, across countries. As a result, the network will identify the potential to offer services related to eco-innovation to stakeholders beyond the EU.
  • (Coordination) The network will develop a perspective for durable activities after the funding period of the project, and it will establish a work plan and exit strategy for the project to ensure sustainability.

As a result, it is envisaged that the inno4sd network will gather stakeholders, coordinate activities to ensure effective communication and knowledge sharing, and carry out global cross-disciplinary research using a systemic approach, integrating socio-economic and environmental sciences. The network would therefore help to improve the design and implementation of green economy strategies.



European Environmental Agency (EEA) (2012): Environmental Indicator Report 2012: Ecosystem Resilience and Resource Efficiency in a Green Economy in Europe. Kopenhagen.

Rennings, K. (2000) Redefining Innovation - Eco-Innovation Research and the Contribution from Ecological Economics, Ecological Economics 32, 319 - 332.

Organisation for Economic Co-operation and Development (OECD) (2011). Towards Green Growth. Paris
Rio+20 Declaration (2012): The Future we want. Rio de Janeiro.

United Nations Environment Programme (UNEP) (2011): Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication, Nairobi: UNEP.

These definitions highlight the mandates of UNEP and the OECD. The former prioritises environmental preservation for poverty reduction, while the latter emphasises economic growth through efficiency improvements

EU flagThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 641974.