The Complexities of Green Economy Policy Reform: a case study in Aceh, Indonesia

Abstract

As the world continues its search for effective approaches to sustainable development, a green economy has been touted as a ‘triple-win’ solution. This thesis applies a political economy framework to examine the prospects and barriers for achieving green economy policy reforms. It questions simplistic assumptions regarding the feasibility of ‘triple-win solutions’ in green economy literature. The thesis instead reveals the conflicts, trade-offs and power dynamics that ultimately determine whether or not a green economy can be realised in practice.

The research focuses on the Aceh Green intervention, initiated in 2007 in Aceh Province, Indonesia. Aceh Green was one of the first attempts globally to transform economic and environmental management systems in an integrated, cross-sectoral manner, as envisaged by green economy engineers. An analysis of the shortcomings of Aceh Green, which failed to survive a change of political leadership, provides new insights into the difficult realities of green economy policy reform, and highlights problems within the approach and its assumptions.

I argue that Aceh Green failed to achieve its vision of a private sector driven transition towards a new economic system due to three related reasons: 1) the risk versus reward balance was not sufficient for ‘green investors’; 2) actors with vested economic and political interests resisted change; and 3) the Aceh Green intervention was unable to build coalitions for change that may have helped to overcome these obstacles.

Case study findings raise important questions regarding the viability of a green economy approach to sustainable development in Aceh, and beyond. Fundamentally, the green economy approach, with its reliance on market based solutions, is vulnerable to the local investment climate as well as the lack of mature markets for ‘green commodities’. Furthermore, entrenched political and economic elites can undermine the institutional reforms on which the green economy concept is founded.

The study therefore proposes that green economy efforts must be founded upon a deeper understanding of the nuanced political economy at play in different settings. The dilemma of realising a green economy is exposed as an elemental struggle between actors over the management of and access to natural resources and the benefits derived from them. The process of navigating these complexities needs to receive greater attention. In contrast, much of the current normative work on a green economy emphasises the desired policies and outcomes without factoring in the difficulties of the reform process that must be addressed. More consideration is needed of specific and early interventions that shift beliefs and realign economic incentives amongst critical actors. Without this, attempts at green economy policy reform will fail to build the necessary coalitions for change to counter vested interests. Show more