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The Green Consumer, 1990-2010
It wasn't 20 years ago today, but close enough: About this time in 1990, my book, "The Green Consumer," hit the bookstores. The book — the U.S. version of a 1988 U.K. bestseller, "The Green Consumer Guide," by John Elkington and Julia Hailes, which I substantially adapted for U.S. audiences — began with a simple premise:
You probably don't realize it, but every week you make dozens of decisions that directly affect the environment of the planet Earth. At work, at home, and at play, whether shopping for life's basic necessities or its most indulgent luxuries, the choices you make are a never-ending series of votes for or against the environment.
I went on to note that:
The marketplace is not a democracy; you don't need a majority opinion to make change. Indeed, it takes only a small portion of shoppers — as few as one person in ten — changing buying habits for companies to stand up and take notice.
From that opening gambit sprang 340-odd pages of overviews, insights, advice, lists, and sidebars (including one cheery piece titled "How the American Way of Life Is Destroying the Earth"). And from that book sprang 1,001 magazine articles, syndicated columns, newsletters, speeches, interviews, panel discussions, books, reports, websites, and more that have been the centerpiece of my professional life over the past two decades.
The world has changed dramatically over those 20 years. There's the Internet, for starters, as well as 500-channel cable TV, social media, globalization, and the rapid growth of emerging economies, the current Great Recession notwithstanding. Environmental issues have gone from the margins to the mainstream. School kids, young adults, their parents, and even some politicians today are well-versed in environmental problems, if not their solutions. And more and more companies continue to be engaged in more and more ways, addressing and reducing their environmental impacts. Many companies are going beyond that, creating innovative new products and services designed for a low-carbon economy.
But one thing hasn't changed all that much: green consumers. That is, there don't seem to be that many more today than in 1990, in terms of people making significant changes to their shopping and consuming habits in ways that move markets toward greener products and services, never mind actually "saving the earth."
I won't bother to make the case that consumers — in the U.S. but also elsewhere — say one thing and do another. I've harped on that theme relentlessly over the years. (See examples here, here, here, here, and here, among many others.) Suffice to say, the chasm between green concern, as expressed by consumers to market researchers, and green consumerism, as reflected in real-life purchase of products and services, remains vast, as much today as in 1990.
True, there are successes. In the cleaning products aisle, Method and Seventh Generation now compete to scrub market share from the likes of Clorox and Procter & Gamble. Fedex and UPS compete vigorously on who can deliver greener operations. So, too, Dell and HP, Coke and Pepsi, and a handful of other leading brands that compete to see who is greener. The notion of big companies competing, at least in part, on environmental performance represents progress, no question about it.
But all of this represents only a tiny fraction of the economy, and little of this is driven by consumer demand. Consumers, for all their good intentions, don't really want to change. They want what they want — and what they feel they need and deserve — with little regard for where it comes from, how it's made, how it's used, and its impacts throughout its life-cycle.
To be sure, consumers haven't been overwhelmed with green choices. While hundreds of major companies have reduced their impacts in ways both large and small, few of their achievements are visible on supermarket shelves. As I've written in the past, the aluminum can containing a third less aluminum than its predecessor, the laptop computer that has eliminated toxic flame retardants, and the bag of snack food whose manufacturer now recycles its rinse water, all represent tangible environmental improvements. But these companies aren't typically messaging those achievements. Indeed, they're not even undertaking these measures to "save the earth"; they're doing them because they save money, reduce risk and liability, improve quality, and delight employees — and maybe win them a few reputational points.
That is to say, they're doing these things for all the right reasons.
The result: We've all become greener consumers in spite of ourselves. The stuff we buy is greener than it used to be, sometimes significantly so, even though its producers don't necessarily tout their achievements.
All of which raises the question: Are green consumers even necessary? Is much of this marketing and labeling activity a waste, a distraction from the business of running an eco-efficient business?
It's an open question. As I've mentioned in the past, green marketing represents a reputational risk for most big companies. Consumers, activists, bloggers, and others are quick to dub things as "greenwash" when environmentally imperfect companies make green claims. That has led many companies to engage in, for lack of a better term, covert environmentalism, burying mentions of their green deeds in their websites or corporate responsibility reports, rather than tout them on products or advertisements and risk the wrath of critics.
I'm not quite ready to proclaim green consumerism dead (though I can't honestly say it's ever been alive and well). There will always be a small corps of true-blue green consumers ready to vote with their dollars — at least for some products. But my 20-year-old premise — that a relative handful of committed consumers will transform companies and markets — hasn't really panned out, though I still believe it to be true.
What will green consumerism look like over the next decade? Will we be celebrating or mourning green consumerism when Earth Day 2020 rolls around? And if the former, how will we have gotten there? I welcome your thoughts.
March 29, 2010 in Business Practices, Green Marketing, Trendwatching | Permalink | Comments (3)
Clean Technology's Unstoppable Energy
One of the truly positive stories of the Great Recession is the continued growth of clean technology in general, and clean energy in particular. This isn't the prevailing narrative. According to the mainstream media, the excitement over cleantech has eased, the victim of global economic travails, the dearth of investment capital, and the cooling of political momentum to curb global warming. It's a bubble that, if not burst, has at least depressurized a bit.
That's not the world as I see it. Interest over cleantech remains high — perhaps not by the media, which seems to have deemed it yesterday's story, but by the large corporations, national and sub-national governments, and the thousands of start-ups that seem to be surviving, even thriving. Not to mention all of their customers.
True, it's not all a bed of solar-soaked roses. The economy is making things tougher, the lack of a price on carbon emissions has tempered growth, investors are being tight-fisted, and the vagaries of energy prices has made the shift to a low-carbon economy seem somewhat less urgent, however short-sighted that may be. But cleantech is alive and well.
I was reminded of that this past week with the annual release of Clean Edge's Clean Energy Trends report, which found an 11.4 percent increase in the growth of solar photovoltaics, wind, and biofuels deployment globally during the past year. (I am a co-founder of Clean Edge but did not play a role in the report.) That growth was remarkable, considering the obstacles, and greater than anticipated at this point last year.
"In the past year, we've seen clean-energy technologies continue to gain a foothold in the broader energy market," says Ron Pernick, Clean Edge's managing director. For example, he points out that wind power in the U.S. roughly matched natural gas as the leading source of new electricity generation for the third consecutive year. Moreover, "Investments in clean-energy generating capacity continued to outpace total global investments in conventional fossil fuels for the second year in a row."
That's a positive indicator, if ever there was one: Investments in new clean energy generation around the world are greater than investments in conventional fossil fuel energy, and have been for two years running.
Much of this is happening outside the U.S., which is one reason Americans may be sheltered from the clean-energy success story. China, for one, has created a cleantech boom. China, by some estimates, could end up spending $440 billion to $660 billion toward its clean-energy build-out over the next decade. As Pernick notes: "Just five years ago, China was a virtual non-player in the cleantech space."
Last year alone, China, the global leader in new wind energy installations for the first time, accounted for more than a third of all new wind installations, representing 13,000 megawatts of capacity. China also leads the world in solar hot water heater manufacturing and installations, and manufactures more solar cells than any other country. Still, says Pernick, "We believe it's too early to declare China the de facto winner for a host of reasons. These include the fact that the breadth and complexity of cleantech mean that no one country will dominate in all sectors; that China might find it increasingly difficult to build cleantech off the backs of polluted water, air, and products; and that the constrained flow of information in China might impact entrepreneurship and technology innovation."
The Clean Edge report puts a positive spin on climate developments, or the lack thereof. The failure to develop binding agreements in Copenhagen and the significantly diminished prospects for U.S. federal cap-and-trade legislation would seem to hamper clean energy's growth. "But in many ways the climate debate had become divisive and distracting and, we believe, the use of a different frame or lens for cleantech is a positive development for the industry," says Pernick. "Many industry proponents believe the conversation needs to shift away from climate and toward issues like energy and national security, job creation, environmental protection, and economic competitiveness. The industry will still need a price on carbon to signal markets, but that can now come by viewing carbon for what it is: a source of pollution."
That remains to be seen, of course, but it certainly jibes with the perspective of those of us who have long been talking about the multiple benefits of clean energy beyond curbing global warming.
All of this provides a solid footing for the continued growth of clean energy, not to mention the smart electric grid, the acceleration of electric and plug-in hybrid vehicle introductions, smart home appliances, and other technologies that will tie these things together. And looking forward, the indicators are promising. In GreenBiz.com's 2010 State of Green Business report, we noted that U.S. patents for clean-energy technologies in 2009 were at an all-time high, with 200 more patents filed than in 2008, according to the Clean Energy Patent Growth Index, compiled by the intellectual-property law firm Heslin Rothenberg Farley & Mesiti. The rise continued a trend we've been seeing for several years. In 2009, solar patents returned to levels last seen in 2003 and were barely edged out by wind patents in the clean-energy patent standings.
Patents are a leading indicator, suggesting that a new surge of energy-related innovations is on the way. "We're seeing a lot in the pipeline regardless of the [federal government's economic] stimulus, and that's just going to add to it," Victor A. Cardona, intellectual property law attorney at Heslin Rothenberg, told me in January. "There are a lot of people working in cleantech and renewable energy that weren't a year ago."
That may be the most significant clean-energy trend of all.
March 21, 2010 in Clean Tech, Climate Change, Trendwatching | Permalink | Comments (1)
A Tale of Two Countries: Japan, China, and the Low-Carbon Economy
I've had the good fortune to view the world through a Japanese lens over the past 10 days — specifically, the worlds of green business and clean technology, about which I've come to Japan to speak.
My host is the U.S. State Department, whose Office of International Information Programs invites a range of speakers to various foreign outposts at the host countries' request. (I did a similar speaking tour in Europe last fall, and another, in India, in 2000.) This latest trip took me to four cities — Tokyo, Fukuoma, Nagoya, and Osaka — to give presentations and to participate in two international symposia. My overall focus was on green innovation in the U.S. toward the goal of a "low-carbon economy."
That's a term that seems to be gaining currency in Asia, Europe, and elsewhere, though it isn't uttered often in the U.S., where, at best, adherents of green business, renewable energy, and sustainable commerce typically refer to the more generic "green economy." "Low carbon" demonstrates the growing focus on climate change among business and governmental leaders in Japan and elsewhere.
It was an interesting time to be here. On Friday, Japan's Cabinet approved a major piece of climate legislation — Japan's first. And while it represents a major hurdle, it is less than it's cracked up to be. As the English-language Daily Yomiuri reported this past weekend:
The bill incorporates bold reductions first touted by Prime Minister Yukio Hatoyama when he addressed the United Nations in September, saying Japan would cut its greenhouse gas emissions by 25 percent from 1990 levels by 2020.The bill also includes policies that were rejected by past Liberal Democratic Party-led governments due to concerns by business circles. If the bill becomes law, it will mark a major turning point in the country's global warming policy.
However, details of the policies incorporated in the bill are still to be discussed, and there are differing opinions within the government. The government will be required to tackle a mountain of problems in the days ahead to resolve these issues.
Among those issues is that the 25 percent reduction goal has the precondition "that all major greenhouse gas-emitting nations will agree on a fair and effective international framework and ambitious goals," the paper reports. Suffice to say, that precondition doesn't seem forthcoming any time soon.
Nonetheless, Japan's enlightened business leaders are focused on how to move forward on a low-carbon economy, though my conclusion is that they don't have much more of a plan to get there than do the Americans. At the events I attended, there was much discussion about how to achieve the green vision of Hatoyama, the first prime minister who seems to "get it," when it comes to the economic potential of cleantech and a green economy, but whose vision is thwarted by the legislature. That was one recurring theme. Another was commiserating over how to motivate employees to engage in green practices. They expressed frustration in Japanese consumers' willingness to buy green products. They wondered how stable oil prices will affect progress, not to mention the impacts of the global economic recession. They asked repeatedly about President Obama's "New Green Deal," a remnant of the 2008 campaign that, far as I can tell, has disappeared into the ether.
For an American visitor, it seemed, much as I wrote during my visit here in 2007, that "I was six thousand miles from home, but I could have been anywhere in the U.S., given the stories I was hearing."
But far more than I expected, the conversation that took place seemed less about Japan than about China. Japan's neighbor to the southwest seems to be causing a mild case of dyspepsia in the Land of the Rising Sun. Though the events I attended featured only one Chinese speaker, there was much conversation, and more than a little handwringing, about the role China will play in the low-carbon economy.
The conversation about China has taken a dramatic turn over the past year or so. In the past, it had more to do with "What happens when 1.3 billion Chinese want to achieve the same standard of living as their Western (and Japanese) counterparts?" That's still a concern, of course. But the conversations I've been hearing lately, in both the U.S. and Japan, have more to do with "What happens when China produces the clean technologies we'll all be needing?"
That's Japan's concern. Indeed, it seems a cruel turn of fate from just a quarter-century ago, when American leaders were asking the same question about Japan. At the time, that country seemed to be eating our proverbial lunch, outperforming us in producing a wide range of goods that had been invented in America, from solar panels to televisions.
Japan now worries that China will be a similar threat, with its weak intellectual property laws, which mean that it can easily "own" the technological secrets of things invented elsewhere, made cheaply due to its low-cost labor and manufacturing prowess. Already, for example, Japan has dropped from the number-one producer of solar panels to the number-three producer, behind China and Germany, according to the Earth Policy Institute. (The U.S. is fifth, just after Taiwan and ahead of India.) As the Institute reported last week, "Chinese annual production skyrocketed from 40 megawatts in 2004 to 1,848 megawatts in 2008, nearly five times the output of the United States."
It's that state of affairs that has Japan — and the U.S. — fretting. Not just about climate change but also about the economic climate that may see their global competitiveness fall further and further behind.
March 14, 2010 in Clean Tech, Climate Change, Trendwatching | Permalink | Comments (0)
