Is the Age of Green Economy Finally Here?
Spiraling oil prices, bottomless trade deficits, irreversible global warming, widespread poverty -- even a glance through the newspaper provides abundant evidence of consumerism's cost to the planet and its people. To some it might seem that this decade will be remembered as the years our mistakes finally started to catch up with us.
But rising awareness of the downsides of our ultra-consumptive culture has prompted the beginnings of a shift toward a more sustainable economy. From clean energy to Fair Trade to farmers' markets, socially and ecologically responsible alternatives are increasingly becoming the norm in the United States. In the end, these years may also be seen as the time when we began to come to our senses.
"If we don't change our behavior we're not going to have a planet," says Denise Hamler, director of Co-op America's Business Network, which promotes sustainable business practices. "People are understanding there's a connection between what they eat, what they wear, and the health of the planet."
After years of thankless work and piecemeal gains, the struggles of organizations like Hamler's are finally moving from the periphery and into the mainstream where they are being taken up by Americans of all stripes.
Collectively referred to as the "Green Economy," an alternative model of economic activity that incorporates these social and environmental concerns, is growing. "Many of these industries are at the tipping point. Everywhere you look you see the Green Economy taking root. Once you give people easy access to the right choices, they make them, over and over again," continues Hamler, who has worked in the field since the '70s.
Some of us may love to admit it and others cringe at the suggestion, but Americans and their money have a lot of power. According to the Bureau of Economic Analysis, American consumers spent more than $2 trillion in 2004 on "nondurable goods" such as food, clothing, and fuel -- that's more than the individual economies of all but five countries in the world.
Fair Trade is an obvious example of a way to harness this economic power. In contrast to conventional "free" trade that is driven solely by profit, Fair Trade focuses on establishing a sustainable, balanced relationship between buyers and sellers and guarantees a living wage to participating producers.
For example, coffee is the most popular Fair Trade good. Participating farmers are guaranteed a floor price for their crops as long as they meet certain production standards. As a result, these growers can receive three- to five-times as much for their coffee as other farmers selling in conventional markets. Furthermore, by compensating producers for operating responsibly, Fair Trade helps preserve small-scale, sustainable farming methods.
Fair Trade Sales on the Rise
The good news is that the number of people turning to Fair Trade is definitely on the rise. The Fair Trade Federation's "2005 Report: Fair Trade Trends in North America and the Pacific Rim," due to be released later this year, shows that total sales increased by 52 percent from 2002 to 2003. This comes on the heels of a 44 percent increase the year before, and estimates for 2004 show even further growth.
In addition to gross sales, the number of companies selling Fair Trade goods is increasing as well. "More and more companies are trying to be socially and environmentally conscious," claims Pauline Tiffen, executive director of the Fair Trade Federation. Proctor & Gamble, the largest coffee seller in the country, now sells Fair Trade coffee through its specialty brand Millstone. Starbucks has a Fair Trade blend on the menu, and Dunkin' Donuts uses Fair Trade beans for all its espresso drinks.
Tiffen attribute these victories to a combination of consumer demand and pressure from groups such as Global Exchange and Co-op America for more accountability. "Most companies that have a brand name have to have more of an idea of their social and environmental performance than ever before," says Tiffen.
In fact, a 2002 joint report by the United Nations Environment Programme, the World Business Council for Sustainable Development and the World Resources Institute asserts that continued success in the global market will require that businesses give attention to social and environmental factors in addition to the conventional economic ones.
A positive public image is only one of the benefits of participating in the Green Economy. According to Marjorie Kelly's article "Business Ethics," corporate responsibility is an indicator of overall financial performance. Kelly cites two comprehensive meta-studies, or studies of studies, to show that statistically "social and environmental responsibility does go hand-in-hand with superior financial performance."
Moreover, a report by the nonprofit Social Investment Forum found that socially responsible investments -- that is, those based on personal values and societal concerns -- have on the whole performed 40 percent better than all other investments from 1998-2003, the last time they compiled data.
Solar and Wind Energy Becoming Fastest-Growing Power Sources
The Green Economy is also making headway through the rising popularity of solar and wind energy. Solar photovoltaic (PV) installations rose by 62 percent last year worldwide, according to Solarbuzz, a solar energy research and consulting firm. The American Wind Energy Association (AWEA) predicts record growth in wind energy this year -- already it is the fastest growing power source.
"It's looking like global warming is something they [corporations] are going to have to deal with, and renewables are a part of that," said Tim Herzog, who has worked with the World Resources Institute since 2000.
What's more, it is a lucrative industry, and growing. General Electric, for instance, began dealing in wind energy in 2002 and is now one of the largest producers with more than $2 billion in revenue anticipated this year. Shell controls about one-fifth of all solar power in the world and Sharp Electronics (better known for their TVs and video cameras) is the largest producer of solar cells -- more than a $1 billion business annually.
In some places wind energy is cheaper than coal and natural gas, and the price of solar continues to drop as the technology keeps developing. At the same time, the costs of conventional energy sources like oil and natural gas are increasing. "We're getting to the point where we're able to compete in price, so clean energy makes more sense economically," says Ron Pernick, co-founder of the research firm Clean Edge.
Clean Edge's "Clean Energy Trends 2005" predicts more than 600 percent growth in solar, wind and fuel cell markets in the next 10 years. "Energy and water and materials are the core of an industrial society. I think the general consensus is that we're entering a new era in clean energy," Pernick says.
An additional advantage to solar and wind energy is that they can be produced locally, reducing our dependence on foreign energy sources and the need to transport energy over long distances, an inefficient process. Clean energy production is just one aspect of a movement to promote local economies over sprawling global markets.
Choosing Local is Good for Business
The Institute for Local Self Reliance (ILSR) has been working for more than 30 years to promote self-sustaining community development that utilizes local resources as an antidote to the homogenizing forces of large-scale development. "For a long time there was this feeling that these big companies were going to come to your town and create these jobs and economic prosperity. But that's not what happened. We saw examples where people actually lost jobs," Stacy Mitchell, a senior researcher at the Institute for Local Self Reliance explained.
A number of trends indicate a move towards localization. The USDA's National Directory of Farmers' Markets, a list of all registered farmers' markets in the country, has demonstrated growth every year since its inception in 1994. According to the Community Investing Center, from 2001-2003 there was an 84 percent increase in the community investment industry -- such as banks and credit unions that prioritize giving loans to disadvantaged groups to facilitate community development.
Cities and towns are working to pass legislation to limit the number of Big Box stores, often Wal-mart in particular, in order to protect local businesses from large-scale chains with which they cannot compete. The Business Alliance for Local Living Economies (BALLE) was founded in 2001 to help establish local networks of small, independent companies whose members could work together to keep business local.
Local businesses do a lot more to help a community than chain stores. Separate studies in a Chicago neighborhood and in Austin by Civic Economics, an economic analysis and strategic planning consultant, as well as one by ILSR in Maine, all show that substantially more of the money spent in locally-owned stores stays in the community. Local businesses utilize local ads, banks, and services and all the employees are drawn from nearby. They also reduce fuel consumption by getting rid of the need to ship goods from thousands of miles away.
Taken together, positive growth in these different areas indicate that some of the problems are finally being addressed on a large scale. The dire need for change trumps the possibility that these trends towards green and local economies could be just a passing phase. "These are such serious issues they skirt being a fad," says Denise Hamler.
Businesses Want Industry-Wide Green Standards
Yet the federal government is doing little, if anything, to address these issues. Instead it is negotiating more free trade agreements (such as the Central American Free Trade Agreement, or CAFTA), leaving giant corporations largely unregulated and continuing to roll back environmental protection legislation. Interestingly, some corporations themselves have stepped into this vacuum and are calling for regulations.
Recent articles in the Los Angeles Times ("A Shift to Green") and Mother Jones ("Global Inc. Goes Green") mention multinational corporations that are uncomfortable operating under President Bush's energy bubble. Because many of these corporations function in the European Union where they must adhere to emissions standards, some, such as General Electric, Duke Energy and DuPont have voluntarily cut down on their pollution and are calling for national standards in the U.S.
Hamler says the same is true for some companies that in the past practiced Fair Trade voluntarily -- now they want industry-wide standards in order to level the playing field and keep themselves competitive. By being involved in the formation of regulations, they can insure that they won't have to adjust to unexpected rules in the future.
But as of yet, as the World Resources Institute's Tim Herzog puts it, there is a "black hole" on the national level. Federal proposals for 2004 directed more than two-thirds of all energy subsidies and tax breaks -- more than $35 billion -- towards fossil fuels and nuclear power, according to a report by PennEnvironment, a research and policy center.
Time to Organize
Though growth rates in the Green Economy may be high, phenomena such as Fair Trade and clean energy are quite small in absolute terms when compared to "free" trade and fossil fuels. But the biggest problem may be the lack of coordination between these different movements. Few people look at it in a comprehensive manner and even fewer are involved in more than one field at a time. Hamler and Mitchell both mentioned that most people tend to look at these issues one at a time, neglecting to acknowledge the interconnections that must be considered to build a more effective and unified alternative economic model.
Yet the green economy movement has a clear ability to appeal to a diverse array of people. Encouraging people to shop locally furthers the progressive aim of subverting unjust "free" trade regimes they claim place corporate interests far above those of working people or the environment. At the same time, local industries would benefit directly from increased patronage, a boon to generally more conservative business leaders and chambers of commerce. No one can criticize a campaign to encourage shoppers to choose local goods.
In a separate vein, the Green Economy gives progressives a clear way to be proactive and not just protest policies with which they disagree. Long criticized for not having an articulated alternative to the status quo, this movement is clearly a different way of doing things that has the potential to make a significant difference in the future of both our country and planet.
A valuable step towards building and consolidating widespread support for the Green Economy is the rising popularity of related conferences and conventions around the country. In early September, for example the Fair Trade Futures Conference brought more than 700 buyers, sellers, and activists from 20 countries to Chicago to strengthen ties both within the industry and with the general public. Co-op America is now holding a Green Business Conference on November 5 and 6 in San Francisco.
The biggest events, by far, are Co-op America and Global Exchange's annual Green Festivals, which attract participants from all sectors and industries for two days of showcasing, networking, strategizing and inspiration. More than 15,000 attended the first Green Festival, in Washington, D.C. in September, and at least as many are expected for the fourth annual San Francisco installment in November.
Through events like these, which include an ever-broadening segment of the population, the Green Economy will be able to make cohesive progress towards its goal of changing the world. And these festivals really are festivals, not just men in suits making presentations and passing out promotional pens. In the words of Denise Hamler, a Green Festival organizer, it is about "being able to move and dance and celebrate and drink -- it's a celebration of what's working in our communities."
And working they are.
The 4th annual Green Festival is taking place this weekend in San Francisco. Click here for more information.