German policy: building a green economy
Economic development cannot take place at the expense of the environment, but must conserve natural resources – that is one of the principles of German development cooperation in the economic sector. The German government's economic policy is therefore based on the principles of a social and ecological market economy. Thus, it is the state's responsibility to adopt a precautionary environmental policy and ensure that national and international standards are met.
Many developing countries fear that the industrialised countries are abusing the debate on environmental standards to protect their own economies from competition. Through development cooperation, Germany has for many years supported the development and implementation of pertinent standards of sustainability in its partner countries. This has promoted sustainable production and enabled producers to gain or maintain market access as a result of engaging with these standards systems. Germany places particular emphasis in this regard on support for small and medium-sized enterprises. Technology transfer and reform projects, for example to improve the regulatory framework or provide staff training in administrative authorities, are a further focus.
Special inspection and consultancy procedures (environmental audits) make it possible to compare corporate activity and offer businesses in developing countries the opportunity to adapt step by step to environmental and social standards. The companies make a voluntary commitment to improve their standards of environmental protection. The aim is to persuade them to change over permanently to ecologically oriented management, verified by certification.
On behalf of the BMZ, all German implementing organisations have integrated programmes to promote environmental standards into their activities. They work with non-governmental organisations (NGOs), national authorities and international organisations. This broad-based cooperation helps to build sustainable economic structures and also covers related thematic areas relevant to development, such as education and health.
Germany supports forestry certification and thus sustainable forest management in its partner countries. As a result, there is a growing market for wood and non-wood products from sustainably managed forests. Under forestry certification, independent inspectors check whether wood and non-wood products originate from ecologically and socially responsible cultivation. If that is the case, the products are labelled accordingly.
For example, the NGO Forest Stewardship Council (FSC) has developed international forestry certification standards. The standards not only define the legal and environmental requirements of regulated forest management, but also cover working conditions and the participation of various stakeholders (such as indigenous groups) in standards development.
The use of biomass for energy – especially soya oil, sugar cane and palm oil – has risen sharply in recent years.
The ecological objection – levelled primarily at soybean, palm oil and sugar cane production – is that cultivation is moving into areas of high ecological value and thus destroying biodiversity, natural forests and wetlands. The social objection concerns the expulsion of indigenous peoples and small farmers, as well as reports of inhumane working conditions in production and processing plants.
To avoid these negative outcomes and promote positive outcomes, sustainability standards for biomass as a source of raw materials are currently being drawn up in a number of different initiatives worldwide and certification systems are being developed. Germany and the EU have recognised that certification systems are necessary to ensure sustainability. It was decided that in future only biomass for which proof of sustainability, in the form of certificates, can be furnished should receive state support.
The increasing global demand for organic products has led to a strong interest in organic farming in developing countries. Under development cooperation, Germany assists the agricultural sector in its partner countries with the introduction and certification of organic farming methods.
More and more fair-trade products are organically produced. In Germany practically all fair-trade bananas, biscuits, rice, wine and coffee also carry the organic label.
For small farmers organic farming represents an opportunity to open up new markets and thus increase their income. In addition, improved farming methods mean they can save on expensive means of production and prevent erosion.
Environmental standards can also be enforced by means of economic cooperation:
Voluntary codes of conduct and private-sector initiatives:
In 2001 the BMZ together with representatives of businesses and private-sector business associations, NGOs, trade unions and governmental organisations established the Round Table on Codes of Conduct. The Round Table promotes the introduction of voluntary codes of conduct to enforce social and environmental standards in German companies that have production sites or suppliers in developing countries. In addition, Germany supports global business initiatives such as the UN Global Compact to enforce these standards in companies.
The BMZ has developed concrete environmental and social standards that must be met when export guarantees are granted. Germany uses such guarantees to protect German exports against economic and political risks.
Development partnerships with the private sector:
Numerous development partnerships with the private sector focus on eliminating inhumane working conditions in developing countries. Through qualification and certification measures partner companies are obligated to apply minimum social and ecological standards.
See also the topic: Cooperation with the private sector
- Good work worldwide – Vision paper by Federal Minister Dr Gerd Müller and Federal Minister Andrea Nahlesnew window, PDF 1.5 MB, accessible 02/2015 | pdf | 1.5 MB | 12 P. | accessible
Social and Ecological Market Economy Principles in German Development Policy
Strategies 158 new window, PDF 234 KB, accessible 07/2007 | pdf | 234 KB | 6 P. | accessible
- Green Economy new window, PDF 1.1 MB, accessible 02/2011 | pdf | 1.1 MB | 27 P. | accessible