What is and how does green economy work?

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According to Oxford dictionary the Green Economy is “an economy based on or guided by environmentalist principles; (also) the economic sector devoted to products and services which are intended to minimize or remediate harm to the environment.”

In other words, we could say that the Green Economy is the set of productive activities aimed at reducing the environmental impact through new energy sources, technological innovations and waste reduction. It is inspired by ecological sustainability and is already widespread in the world, so that an ever-increasing number of companies are already investing in Green, obtaining profitable revenues and creating Green Jobs, the employment opportunities born from the green economy. Furthermore, the Green Economy is not only concerned with production, but also with the impact it will have on the environment. Thanks to private interventions and public funding, it is possible to reduce pollution, safeguarding the ecosystem and biodiversity.


The green economy represents a theoretical model of economic development that takes into account the impact of human actions. Private investments, together with public spending, make possible those political reforms and those changes that safeguard nature and the ecosystem.

The better management of natural resources, optimizing production and increasing GDP would help the planet to sustain the impact of man and this would certainly lead to economic development. The excessive consumption of raw materials causes the price increase and damages the system, while the green economy creates new jobs and improves the labour market in areas such as agriculture, renewable energy, bio-architecture and recycling.

Objectives of Green Economy

The really “green” productive activities do not derive only from renewable energy sources or waste recycling, rather they include all the sustainable conversion of traditional sectors, therefore:

  • Industries, buildings and offices, renovated with excellent energy savings, with particular attention to window fixtures, heating, heat dispersion and much more;
  • Economic sectors that want to reduce the environmental impact in extraction, transportation, treatment and processing of raw materials;
  • Technological innovation for the reduction of waste material in production processes, primarily in relation to packaging;
  • Productive innovations to reduce CO2 and other pollutant emissions.

Therefore, innovation can actively contribute to reducing waste and environmental impact, as well as revamping a green economy.

Eurostat data shows that in Europe the wealth produced by the green economy has increased from 135 to 289 billion euros in the last 15 years and also the turnover has grown exponentially, reaching 700 billion euros. In addition, the sustainable employment has an exponential growth, with a 49% increase for Green Jobs and only 6% for traditional occupations.

Greenitaly confirms the growth of the Green Economy also in Italy, where many national companies have already invested in green products and technologies to reduce environmental damage, improve sustainability and keep an eye on climate change.

It is expected that in 2025 approximately 190 billion of investments will be made, with 682 billion increase in production and around 800,000 new jobs, focusing on sustainability, improving energy efficiency and the reduction of energy consumption.

The objectives and economic and employment impacts of the Green Economy are:

  • Reduction of energy consumption in buildings, schools and offices. In fact, over 40% of energy consumption in Italy is attributable to the residential and tertiary sector. To save energy, private and public investments amounting to 19.3 billion are required in six years. In the case of public investments, it could be used the eco-bonus mechanism, which could reach 75% of the interventions. The remaining 25% of energy restructuring could come from subsidised loans from the National Energy Efficiency Fund;
  • Increased electricity, thermal and fuel renewables. By 2025, electric renewables should reach 50% of consumption, thermal renewables energies should increase by about 33% and biomethane up to 1.5 billion cubic meters.
  • Rapid change towards the circular economy. Italy should anticipate by 2025 the European target of 60% of urban waste recycling, through a separate collection of over 70%. To do this some regulatory adjustments are needed and about 11.1 billion € are necessary to generate an increase in production of over 104.5 billion and over 149,000 employees by 2025;
  • Improve the quality of cities with urban regeneration. The most advanced cities are those that have focused on urban regeneration and green cities, with integrated strategies for the recovery of abandoned areas, maintenance of the building heritage, climate adaptation measures and green infrastructure;
  • Improve urban mobility and break down smog and congestion. To switch to a new mobility system, it is necessary to increase the mobility of public transport and strengthen the innovative sharing mobility systems. Furthermore, pedestrian mobility must be consolidated by building 13,000 km of new cycle paths and promoting the electrification of private and commercial vehicles.


The Green Economy requires a profound transformation of society, which can represent a limit, since the community is often not yet able to conceive the advantages. A corporate awareness is needed (corporate social responsibility), a corporate social responsibility that involves the use of tools and technologies with low environmental impact. Here are the limits of the Green Economy:

  • The costs are higher than traditional technologies, due to the fact that it is still a growing industry;
  • Less performance than traditional technologies, which improves over time.

However, the green economy remains a very advantageous sector for investments, above all for economic, working and sustainable competitiveness in a country rich in renewable energy sources such as Italy. The advantages of the Green Economy are therefore natural, but also economic and social:

  • Alternative renewable energy production with less impact on the environment, such as green technologies (wind, solar, biomass, etc.);
  • Greater efficiency and less waste, using products and services that need less energy;
  • Less impact on the environment, reducing the greenhouse effect and global warming;
  • Creation of new jobs, with new industries and markets.

“Green thinking” is also integrated into the lifestyle of the communities and the quality of the products and services of large retailers. Think about the diffusion of terms such as “eco-friendly” or “ecobio” behaviours, they now entered into the common language, or the separate collection and renewable energy, the nature excursions, from detox food to makeup without of artificial allergens and fragrances. In recent years, in terms of recycling and photovoltaics, Italy is registering encouraging data and many of the progress made are helping people to adopt more conscious measures and attentions, which are not yet adopted by everyone. Conscious consumption for some is still a luxury, given the costs of certified organic farming foods.

As regard education, instead, those who have a medium-high educational qualification support eco-sustainable energy, this shows the need for continuous awareness to respect for the environment and for others, with communications and incentives accessible to all social classes.

Therefore, even if there is still a long way to go, it is certain that almost 90% of Italians believe that the green economy is a good approach to reduce consumption.

If you are looking for an authoritative partner for digital solutions and projects that promote technologies for the environment and the green economy, IPPO Engineering could be the solution for you.