There is no saying what the business world will do the in short term, but these long term trends are a good bet to keep growing the green business world in the years ahead:
1. Oil will cost more
There’s only so much oil in the ground, and we’re burning it up faster than we find new supplies. The slump in oil prices caused by the Great Recession won’t last forever, and is already showing signs of upward movement. As the economy starts to grow again and China and India put millions of new cars on the road, the price of oil will rise. When gas costs more like it did in the summer of 2008, people respond by driving less and buying smaller cars. More expensive oil will mean more rapid uptake of alternatives like all electric cars and plug-in hybrids.
2. Emitting greenhouse gases gets expensive
For most of history pumping carbon dioxide into the atmosphere by burning coal or other fuels has been free, but this is changing. The carbon party is coming to an end. The US and the world are getting serious about climate change, and doing something about it, striving to reduce greenhouse gas emissions 80% by 2050. Whether or not the final climate change solution in the US is cap and trade or some variation of this is still not clear, but the US government seems likely to put a price on carbon in the not too distant future. The long term impact will be to generate economic pressure that creates a low carbon economy. Getting from where we stand today to this new economy of the future is a huge undertaking, but also a big opportunity to provide innovative low carbon solutions in many industries.
3. Water is increasingly valuable
We usually think about water and use it as if it’s free and endless, but in many parts of the world this is clearly not the case. The US Southwest, Australia, and parts of China are experiencing long term water shortages that will be even worse as populations keep growing and climate change continues in the decades ahead. When water supplies are limited, water will either be rationed, or the price will rise to reflect the true value of this resource. Either way, the impact will be to encourage water conservation in our homes, businesses, and industries, and to encourage the growth of businesses that provide water efficiency.
4. Saving Energy Pays
The most cost effective and greenest energy resource is usually not solar or wind, but weatherstripping and insulation. Most buildings waste a great deal of energy, including our homes and businesses, and this waste can be readily reduced with easy steps like fixing air ducts and putting in better insulation. Making these changes in buildings can pay for itself with reduced energy bills, and incentives from utilities and governments such as tax credits, rebates, and loans are designed to further encourage energy efficiency. The more energy we save, the more money we save, and the closer we are to addressing climate change.
5. Long-term incentives for renewable energy
To encourage the shift away from fossil fuels, another measure governments are using is to provide incentives for renewable energy. The US government greatly expanded tax credits, grants, and loan guarantees for renewable energy as part of the February 2009 stimulus package and the October 2008 bailout bill. While the tax credit for residential solar in the US frequently expired in the past and was capped at $2000, the credit has now been extended for 8 years, and the cap lifted, allowing for 30% of the value of the system to be taken as a tax credit. As the measures from the stimulus package are implemented, massive growth is expected for renewable energy.
6. Green certification will spread and grow
To avoid concerns about greenwashing, the term for overstated environmental claims by businesses, people on all sides are looking for a standard to measure the greenness of products and businesses. The greenness of buildings is certified by the LEED system from the US Green Building Council, for example, and the organic certification of food helped to bring solid meaning to the organic food industry. Look for the continued spread of green certification to allow for more easily understood green standards elsewhere in the same way it has helped these industries.
7. Better food means better health
Our national health continues to suffer from the obesity and diabetes epidemic, but there is hope. We know to a large extent what the problem is, stemming from low quality food, and lots of it, and from a lack of physical activity. The solutions have not always been as clear, but government and industry are increasingly interested in promoting preventative medicine in part to save their own budgetary hides. Something has to give, and finding ways to encourage healthy behavior and healthier food is a win-win solution for all involved.
8. The world is still flat
Economic crisis or not, Thomas Friedman is still correct – the world is still flat, and will continue to be. For US businesses to compete they must be anchored to the local, and constantly innovate in important fields like renewable energy and energy efficiency. Green collar jobs and green businesses are one effective response to this trend – you can’t send rooftops to China, as Friedman and Van Jones describe.
9. The green bar keeps getting higher
What is green today may be considered pretty grey tomorrow. Green businesses cannot rest on their green laurels. They need to keep moving and improving if they want to continue distinguishing themselves and reaping the rewards for their efforts.
10. The rise of the conserver economy
The economic crisis is not over yet. With trillions of dollars of debt, credit still tight, and housing values way down, consumers are cutting way back on spending and may keep their spending low for a long time to come. While this spells trouble for those who rely on the consumer economy, it also creates opportunities tied to the rise of the conserver economy in which people and businesses are saving more, wasting less, and thinking of the long term. By using resources more wisely and rethinking our priorities, the conserver economy is green in many ways, helping people as well as the planet.
Glenn Croston is the Fast Company expert blogger on green business, the author of “75 Green Businesses” (www.75GreenBusinesses.com), the author of the e-book “Greening Your Business On a Budget”, and the founder of Starting Up Green (www.StartingUpGreen.com), helping entrepreneurs from all backgrounds to start and grow successful green businesses. He can be reached at glenn(dot)croston(at)75greenbusinesses(dot)com.