Rutland Business Journal

April 15, 2006
The Green Business Boom
by
Daniel Hecht

My day job is to develop Vermont’s environmental enterprise sector, but I didn’t clearly see green as the coming boom until last week, at the Globe 2006 Business & the Environment Conference in Vancouver.

Globe is a biennial conference and technology trade show, one of the world’s largest, featuring scores of presenters, 400 exhibitors, and 10,000 attendees that include senior business executives and government officials from over 70 nations. According to participant surveys, the three-day event alone directly generates $500 million in business.

I was there as director of Vermont Environmental Consortium, carrying the flag for Vermont’s green enterprises, and as part of a trade delegation that included Lt. Gov. Brian Dubie, Dept. of Economic Development Commissioner Mike Quinn, Agency of Commerce staff, and representatives from UVM, Vermont Global Trade Partnership, Vermont Center for Emerging Technologies, and several Vermont firms.

Our little exhibits at the U.S. pavilion did a brisk trade. Innumerable conversations affirmed that Vermont has an international good name as a green state -- a reputation that environmental businesses here can capitalize on in the emerging green boom.

Only a year ago, that venerable oracle, The Economist, cast a gloomy eye over world economic trends and saw no imminent replacement for the earlier impetus of the silicon and Internet booms; stagnation seemed the prognosis. Since then, how-ever, rising concern about climate change, energy supply, and resource depletion has catalyzed green entrepreneurship. The environmental enterprise boom is now increasingly evident in every area of economic activity and every part of the world.

Technological innovations, from nanotech to heavy manufacturing, play a major role. At Globe, we viewed fantastic new machines that remove toxic pollutants; ingenious solar, wind, biomass, and geothermal power generators; new chemistries and manufacturing processes that create mixed-media alternatives to wood and plastics made from corn-derived polymers; agricultural equipment that’s energy efficient and converts farm waste into value added products; and innumerable others.

In the transportation area, the propulsion systems most in evidence used – or created -- hydrogen. Honda’s exhibit featured several slick hydrogen-powered cars with tanks in the trunk and fuel cells under the passenger compartment floor. Meanwhile, Innovative Hydrogen Solutions is manufacturing H2 N-GEN, an after-market device that is easily attached to any vehicle; through electrolysis, it turns water into hydrogen and oxygen and feeds them into the combustion cycle, increasing fuel efficiency by 20 percent while reducing greenhouse gas emissions. H2 N-GEN is even fitted with gauges that measure reductions in carbon dioxide emissions – providing certified carbon credits users can trade!

This last element deserves closer inspection, because it shows that while technology propels much of the green economy’s growth, the environmental business boom is not just about R & D, high tech, and manufacturing. Environmental concerns are having equally profound effects on finance, service industries, education, consumer products, policy and administration, and many other sectors.

Publishers have begun putting out whole libraries of books and magazines devoted to developments in sustainable technologies, practices, international policies, and business opportunities. New marketing agencies are starting up, specializing in strategy, communications, and positioning for green businesses. Consulting firms offer efficiency improvement services, strategic planning for sustainability, green business practices training, technology assessment, etc. Software designers are devising monitoring and information management systems specific to renewable energy and environmental impact. Even the arts are responding: I was particularly impressed by Swell and its dazzling array of highly stylish art works, furnishings, and craft items made using environmentally-friendly or recycled materials and low-impact production processes.

Environment-related education has emerged as an admissions magnet for many colleges and universities. At Globe, UVM joined a handful of U.S. schools in touting its attractive new environmental programs. But compared with some Canadian institutions, they’re late-comers. The University of British Columbia has been building such programs and demonstrating a deep commitment to sustainability for years. At its impressive exhibit, an all-electric UBC fleet car sat beneath an electronic billboard flickering with numbers boasting the savings in water, electricity, and trees, and the reductions in greenhouse gases, contributed since the inception of UBC’s campus sustainability programs.

A key aspect of this new economy is a different view of “waste.” Even the word is considered passé. Solid waste is now seen as a resource for energy creation, recycled materials, remanufacturing supplies, and compost. Waste recovery and reuse technologies were prominently displayed at Globe, demonstrating novel applications of an ancient principle: waste not, want not. New approaches to waste not only create opportunities for solid waste handlers but profoundly change the way cities administer waste policy and the way corporations think about raw materials, production and operations expenses, and the bottom line.

I was not surprised to see that major green hotel chains are springing up throughout Canada and other Kyoto signatory nations; here in Vermont, we’re fortunate to host a growing green lodging industry, promoted by the Vt. Small Business Development Center. Nor was I surprised to see that “sustainable” restaurants are profiting by catering to a growing customer base concerned about environmental impacts. However, I was impressed that green supply companies and distributors have come into being just to provide those restaurants and hotels with non-toxic cleaning agents, energy efficient appliances, and locally-grown foods; that green advertising firms have mushroomed to convey the eco-friendly message to customers. Where a secondary market thrives, the primary must be doing all right.

Perhaps the most telling indication of the rapid maturation of the green economy lies not in the gleaming devices that line exhibition hall corridors, but in the increasing scope and sophistication of the financial institutions and instruments spawned to support and profit from it.

As that gauge on the H2 N-GEN suggests, carbon credit trading is serious business. Financial service firms and venture capitalists have developed specialties in socially responsible and green tech investing, sustainable cities bonding, and carbon credits; international exchanges have sprouted to facilitate trading. Meanwhile, universities offer programs in green economics that are not only training future professionals for the emerging “environmental era” but are developing new economic and business administration paradigms based on multiple-bottom line business practices, new value creation models, whole-system cost analysis, and life cycle economics.

Reflecting this trend, the Globe agenda included 46 conference sessions on such topics as “Market-Driven Supply Chain Management: Sustainable by Demand” and “Sustainable Risks to Corporate Performance: New Approaches to Capital Decision Making.”

Sophisticated stuff. It’s a whole new world out there.

But will Vermont necessarily follow the example of Europe, Canada, and other countries? Will the green enterprise boom blossom in Vermont?

The answer is: Yes. Bet on it.

By signing the RGGI (Regional Greenhouse Gas Initiative) and instituting our RPS (Renewable Portfolio Standard), we now inhabit the same economic sphere as those nations. Furthermore, consumer choice is increasingly influenced by environmental literacy: that is, how much the average citizen knows or cares about environmental issues, and how much these values affect purchasing decisions. Vermonters have long ranked high in this area, and the coming years promise only more awareness and concern – resulting in predictable consumer preferences.

Our state officials of all three parties have staked out a commitment to going green; a consensus is emerging that green enterprise is the most promising -- and achievable -- growth sector for the state’s economy and the best way to counter the demographic crisis caused by the flight of young people to regions with more alluring job opportunities. Too, sustainable enterprises tend to be engaged in their communities and reliant on locally-derived supplies and resources; the jobs they create are less vulnerable to outsourcing. There’s also the matter of security -- we all want the basic assurance that we’ll still have jobs, energy, food, and water in the coming years.

So: Go green. Yes, it’s risky to be too far out in front of the wave. But based on what we saw at Globe, that’s the least of our worries at this point. Now is the time to position Vermont enterprises to take advantage of the green boom.

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Daniel Hecht is executive director of Vermont Environmental Consortium and author of six novels published in the United States and internationally. He lives in Montpelier.

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