Tuesday, September 16, 2008

Why Green Remains Viable Even in an Economic Downturn

Environmental Leader cites a Christian Science Monitor report that predicts that today’s Green wave will survive, even in the current economic downturn. The reason Green will survive has to do with growing market demand. Many Americans, including those who are enduring financial hardship, are willing to pay more for environmentally friendly products, according to a survey conducted by GfK Roper Public Affairs & Media and the Yale School of Forestry & Environmental Studies.

“In a downturn, some would back away from their current commitments,” says Dan Esty, a professor of environmental law and policy at Yale University. “There could be stress in the next year or two, but I’m confident that investment in the environment will be higher.” He estimates that 80 percent of corporations’ green plans will go forward.

[Although] executives who have announced green projects admit that some spending might be tempered at least over the short term depending on the economy...economic uncertainties make energy efficiency a less expensive way to go, says Mr. Chesser. “When you build a major baseline plant, that’s a commitment. It takes five years to build, and it’s a big risk if the economy goes south,” he explains. “With energy efficiency, you don’t have that…. It has a lot of flexibility.”

As cited in another Environmental Leader article from the Yale School of Forestry & Environmental Studies, a GfK Roper survey indicated that half of the respondents said they would “definitely” or “probably” pay 15% more for eco-friendly articles like clothes and cars. Forty percent said they would spend 15% more on “green” computer printer paper and 39 percent would do the same for “green” wood furniture. Americans who said their current financial situation is “fair” or “poor” were just as willing to spend 15% more on environmentally-friendly detergent or wood furniture as those Americans more confident of their current financial situation.

Moreover, a majority of Americans said it is important to them that a number of products they purchase be environmentally friendly — automobiles (66% say it is “important” or “essential”), clothes detergent (62%), and computer printer paper (51%).

The survey also reveals that Americans want additional information about the environmental impacts of products to appear on labels. Solid majorities say that it is either “important” or “essential” to have eco-labels that describe the environmental impacts caused by product manufacture (73%), use (73%) and disposal (79%).

“These results suggest that manufacturers who offer high-quality and credibly labeled eco-friendly products will have opportunities to gain a competitive edge,” said Graeme Auld, a doctoral candidate at Yale School of Forestry & Environmental Studies.

Next: Financing a Green Business

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