Green economy grows despite policy vacuum

By Heather King for the Daily Climate

SAN FRANCISCO – The green economy continues to show almost remarkable signs of vitality, business leaders say, despite the near-total collapse of global talks, stalemate in Washington, D.C., and polls showing decreased urgency to tackle global warming.

Driving the industry, investors say,  are consumer interest in the environmental and economic benefits of energy efficiency, corporate sustainability mandates and essentially a bet that at some point there will be a price on carbon emissions.

Two companies that track clean-tech investments see signs of robust growth on the horizon. Nick Parker, co-founder of the Cleantech Group, a San Francisco-based outfit that tracks and advises green investments, estimates the sector could be a $3 trillion economy within 10 years. Last year private investment in clean-tech totaled $5.8 billion, according to Cleantech.

While that was down a third from 2008, all forms of venture capital were down last year,  the group noted. Meanwhile the share of venture money going to clean energy continues to increase, to 12.5 percent of total venture activity in the United States last year, reported CleanEdge, a company that researches and publishes on the sector.

Still, there are significant hurdles. U.S. industry overall “has not engaged the structural change required to materially impact critical issues like carbon intensity,” said Joel Makower,  Greener World Media’s executive editor.

One example: U.S. companies are increasingly setting and reporting emissions targets through such programs as the Carbon Disclosure Project. But participating companies represent only a third of the Standard & Poor’s index of the top 500 leading companies in the United States.

Another example: China, Japan and the European Union all threaten to eclipse U.S. gains in the sector. China alone has spent $200 billion – double the United States’ investment – and could end up spending $440 billion to $660 billion over the next 10 years, according to CleanEdge.

Before industry can impact climate issues and cultivate an internationally competitive clean-tech sector, the investment has to be much broader and profound, said Salman Khan, development and strategy director  for the environment division of Intertek, an international testing company that helps companies assess their green policies. There  are signs of change. Sectors such as information technology, packaging, green building all have momentum regardless of uncertainty in Copenhagen or Washington, experts say.

For Cisco Systems, the commitment to green is already a done deal. CEO John Chambers vowed in 2008 to reduce Cisco’s carbon footprint by 25% by 2012 without invoking carbon offsets. Today, Cisco’s focus extends beyond the company’s own footprint: They launched a supply chain innovation program to pressure Cisco suppliers to adhere to similar environmental standards.

As Cisco pushes their customer base and supply chains to adopt new standards, it engenders change throughout information technology ecosystem. It’s not the only big company transforming a broad swath of businesses.

Wal-Mart is also driving the green economy. The company now requires suppliers – numbering more than 100,000 companies – to submit data about their environmental footprints. That has created a business opportunity for London-based Intertek, which found 50 new clients in the past six months as a result. “Wal-Mart suppliers are scrambling not only to adhere to new rules, but to proactively use the environmental data to design new products and services,” Khan said.

In many cases, he added, Intertek’s new clients are not just looking to meet Wal-Mart’s requirements. They want to reengineer their entire business for sustainability.

Even start-ups are finding growth opportunities in a sober economic environment. Energy efficiency was a boom industry in 2009, with more than $1 billion invested in energy efficiency start-ups, according to Cleanedge. The sector should eclipse solar this year in terms of investments and growth, the company said.

http://wwwp.dailyclimate.org/tdc-newsroom/2010/03/green-economy-grows-despite-policy-vacuum