Comprehensive coverage

Following Davos 2012: investment in the environment is closely tied to Israel's economic growth

According to Doron Lavi, the author of the opinion on trade and economy as part of the 'Sustainability Forecast for Israel 2030' project, "it is not possible to separate the environmental risks from the general risks, as they are an important part of the overall picture"

Green charging stations for electric vehicles. Illustration: Fernhauper Institute
Green charging stations for electric vehicles. Illustration: Fernhauper Institute

Written by: Ephraim ben Amos. The article was published on the website Sustainability 2030

The meetings of the World Economic Forum in Davos, held every year at the end of January in the Swiss Alps, have taught us in recent years that the economies of the West are facing many risks. The subprime crisis that began in the United States in 2008, and the debt crisis in the European Union that is currently taking place, cast a heavy shadow on the global strategic system, but the risk components are not only financial. Environmental risk elements also enter into the picture of uncertainty - for the first time, these elements take part in the overall picture when looking at the growth of the world economy and are integrated into the economic agenda of Davos.

According to Doron Lavi, the author of the opinion on trade and economy as part of the 'Sustainability Forecast for Israel 2030' project, "it is not possible to separate the environmental risks from the general risks, as they are an important part of the overall picture". According to him, "Investment in the environment is closely related to economic growth".

The "Sustainability Forecast for Israel 2030" project began in October 2010 as a joint venture of the Ministry of Environmental Protection and the Center for Environmental Policy at the Jerusalem Institute for Israel Research, and is expected to be completed in May-June 2012.

The initiative to prepare a 2030 sustainability forecast was born out of the need for the environmental future in Israel to be paved by a cohesive public policy, which will define a desirable vision to which we can strive, which will define strategies to move towards the vision, which will identify the barriers that stand in the way and learn how to deal with risks and how to identify and take advantage of opportunities.

"Sustainability Forecast for Israel 2030" aims to set a sustainability vision for 2030 to which Israel should strive. This is in order to enable the decision makers in Israel to understand the existing trends, to locate the gaps for the realization of the vision, and to indicate the paths they must take in order to fulfill it.

The ambition is that the project's products will be part of the preparation process for the Rio 2012 summit conference and will be adopted by the government as a long-term framework for cooperation and building consensus between sectors in the field of sustainability

The risk elements include the unstable and uncertain global situation, which may affect Israel's economy, which is mostly based on foreign trade and exports. For many years, the United States and Europe led the world economy, and Israel's economy was closely related to them. Challenging this economic-strategic balance, within the framework of which new forces are rising in East Asia, may harm Israel's economy, which is an export-oriented economy, which cannot rely on local consumption as a central engine of the economy.

Another important risk element is the heavy pressures exerted by various sectors of Israeli society on the government. This fact means that the prioritization carried out by the government is not optimal and does not lead to sustainable development. The government, which is supposed to lead strategic economic moves with a long-term vision, usually finds itself being dragged along by demands from all sides. Even the social protest in the summer of 2011 - which had positive and important elements - emphasized the need to avoid a tendency to change public priorities, other than through an orderly decision-making process, in which the government may change its policy in the face of pressure from groups in the population.
Another risk arises from the fact that in recent years the growth in the State of Israel has led to a considerable increase in the social gaps between the poor and the rich. Such gaps are not sustainable over time.

The high growth in the State of Israel in the last decade has apparently reached exhaustion, and it is difficult to see where sources can be drawn to continue such a level of growth in the coming years. The current low unemployment in Israel - about 5% - means that the potential in the field of manpower is almost fully realized. On the other hand, Israel has a problem of structural unemployment. The Israeli economy shows flexibility in moving between different fields of activity. However, the workforce found in the economy does not show the same flexibility in adapting the required skills. A very high demand for personnel in certain fields, such as high-tech, does not necessarily receive an answer in reasonable time frames, at the same time there is an excess of personnel in other fields. Therefore there are gaps between the skills of the existing employees and the skills required by the employers.

Another area that makes it difficult to continue growth is the lack of excellence in education. After many years in which Israel stood at the forefront of scientific achievements - among other things thanks to immigration from the former Soviet Union in the 90s - today the achievements of students in Israel fall short of those of their counterparts in Asia and Europe. In the absence of expectations for another large wave of immigration with characteristics of education required to integrate into the activity in the Israeli economy, there is a risk that in the coming years the technology and creativity in Israel will weaken.

However, on the side of the risks there are also opportunities. For example, it is possible and necessary to increase the rate of participation in employment, which is about 10% lower in Israel compared to the average in the OECD countries. Israel needs to divert manpower towards the areas where the demand for workers is greater, and especially from the direction of traditional industries to advanced industries.

In the field of foreign trade, Israel needs to try and drive a stake in the huge markets that are opening up in Asia - in India, China, Vietnam, and other places, where growth is particularly high. This is a very large consumer market, in which Israel has an advantage, because its products are considered high-quality and competitive.

According to Lavie, this period of relatively stable economic growth is a golden opportunity to formulate principles of action for the relationship between the economy and industry and the environment. "This is the time to agree on the tools and methods of action between all the players, which will serve us even when the economic situation in Israel is less good."

Leave a Reply

Email will not be published. Required fields are marked *

This site uses Akismat to prevent spam messages. Click here to learn how your response data is processed.