Going green a boon to business

Ottawacitizencom_jpegOriginally posted Jan. 10, 2008
by Don Butler, Ottawa Citizen

Businesses, governments and NGOs are laying the foundations for the
world’s first sustainable global ec onomy, the Washington-based
Worldwatch Institute says in an uncommonly upbeat State of the World
report for 2008.

Mobilized by climate change and other environmental threats,
individuals and organizations are field-testing economic innovations
that offer "surprising and hopeful opportunities for long-term
prosperity," says the institute, an independent research organization
that has issued global checkup reports annually for 25 years.

In many cases, the growth in sustainability initiatives has been explosive, says the report, released yesterday.

or example, renewable energy attracted $52 billion in new investment
worldwide in 2006, a 33-per-cent increase over 2005. That jumped to $66
billion in 2007, according to preliminary estimates.

Gary
Gardner, co-director of the 2008 State of the World report, says
renewable energy growth rates mirror those enjoyed by personal computer
companies in the late 1970s and 1980s.

Carbon trading markets are
growing even more rapidly, reaching an estimated total value of $30
billion in 2006, almost triple the amount traded in 2005. By putting a
price tag on greenhouse gas emissions, carbon trading creates an
economic incentive to reduce them.

Money is pouring into the
clean energy and "cleantech" sectors, the report says. Corporate R
& D spending on clean energy technologies reached $9.1 billion in
2006, with global venture capital and private equity investment hitting
$8.6 billion in 2006, a 69-per-cent increase over 2005 and 10 times the
2001 level.

Cleantech is now the third-largest category for
venture capital investment, trailing only the Internet and
biotechnology. More than 600 environmental and energy hedge funds have
sprung up in recent years.

These investment trends are significant, Mr. Gardner says, because investment "is a huge lever for shaping any economy.

"There’s enough interest there for us to take real hope in what they might portend for the future."

Even
the world’s poor are benefiting. Microfinancing, which provides small
loans to people in the developing world who otherwise would not qualify
for credit, jumped by 150 per cent between 2004 and 2006.

Shifting
the economic system to a sustainable base "can unleash the biggest
economic boom since the space race," the report says. "There has never
been a greater opportunity for entrepreneurs to do well by doing good."

Indeed, the report says, there has been a sea change in business attitudes toward sustainability in the last few years.

Wal-Mart,
the world’s largest retailer, has pledged to create zero waste, obtain
100 per cent of its energy from renewable sources and sell
environmentally friendly products.

DuPont has cut its greenhouse
gas emissions by 72 per cent below 1991 levels, saving itself $3
billion in the process. Dozens of other firms have taken similar
action, the report says.

Consumers are driving interest in green
products of all kinds. Sales of Toyota’s hybrid vehicles jumped from
16,000 in 1998 to 312,500 in 2006. Organic food sales jumped more than
43 per cent between 2002 and 2005, to $43 billion.

During the
past five years, the manufacture of wind turbines has grown at 17 per
cent annually, and solar cells at a 46-per-cent annual rate, the report
says.

A truly sustainable economy — one fuelled by renewable
energy and generating little or no waste or toxins — is still "at the
toddler stage," Mr. Gardner says. He also warns there’s nothing
inevitable about continued progress.

Still, he says this "feels
like a turning point moment. I think many of the businesses are making
the sort of investments that suggest a permanent commitment."

Some
analysts believe the changes now under way are spawning the sixth major
wave of innovation since the start of the industrial revolution, the
report says.

This sixth wave, which taps green chemistry,
biomimicry, industrial ecology and other sustainability innovations,
"offers the promise of breakthroughs in using natural wealth
efficiently, wisely and equitably," it says.

More efficient use of resources is the key to producing goods and services more sustainably, the report says.

It’s
now cost-effective to increase the efficiency with which the world’s
resources are used by at least four-fold, the report says. Some
agencies have advocated increasing efficiency 20-fold.

"There is
growing evidence that even such ambitious goals are feasible and
achievable in the marketplace. They may, in fact, offer even greater
profits."

Mixed in with the report’s upbeat message is a sense of
urgency over the environmental degradation caused by the dominant
economic system.

It notes that atmospheric carbon levels are now
at their highest level in 650,000 years, temperatures are rising and
the Arctic Ocean could be free of summer ice as early as 2020. Nearly
one in six species of European mammals is threatened with extinction
and all currently fished marine species could collapse by 2050.

These
and other environmental consequences of unfettered economic growth
"threaten the stability of the global economy," the report says.

Continued
human progress, declares Christopher Flavin, the Worldwatch Institute’s
president, "now depends on an economic transformation that is more
profound than any seen in the last century."

The report’s findings suggest that transformation may already be under way, Mr. Flavin writes.

"We
come away from this project with a strong sense that something large,
perhaps even revolutionary, is struggling to be born as business
leaders, investors, politicians and the general public create the
architecture of sustainable economics.

"Indeed, it is
breathtaking to see how much innovation has been unleashed by the wave
of concern about climate change that has broken across the world in the
past year."

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