Saturday, June 28, 2008

Organic Standards: Certified Labels

In the United States, “certified organic" means agricultural products are grown and processed according to the USDA's national organic standards. It is then certified by USDA-accredited state and private certification organizations.

The process of being certified organic implies that a fixed set of standards must be met. Certifying agents then review applications for certification eligibility. Qualified inspectors conduct annual onsite inspections of organic operations, observing their production and processing practices to determine if they are in compliance with organic standards.

A "100% Organic" label may contain only organically produced ingredients. To be labeled “organic”, 95% of the ingredients must be organically grown, and the remaining 5% must come from approved non-organic ingredients. A product labeled "Made With Organic Ingredients" must contain at least 70% organic ingredients, three of which must be listed on the package. The remaining 30% must be composed of approved non-organic ingredients.

However, without certification, the 'organic' label does not necessarily mean anything.

Tuesday, June 24, 2008

Energy Policies of the Presidential Candidates

At the 19th Annual Energy Efficiency Forum a series of speakers indicated that both the democratic and republican nominees would support energy efficiency initiatives. New York Times columnist Thomas Friedman said, "I would be less than truthful, though, if I said that America as it operates today is ready for this mission. We are not." U.S. Energy Secretary Samuel Bodman, "spoke about the areas in which government is trying to drive efficiency, such as military bases, new appliances and in the utility, industrial and construction sectors."

“When we look across our global energy landscape and consider the formidable challenges we face today, it is clear we must make pervasive and long-term changes,” Bodman said. “We must bring more renewable energy online and aggressively deploy alternative fuels. We must develop traditional hydrocarbon resources in ways that are cleaner and more efficient.”

Senator McCain is proposing a national energy strategy emphasizing diversification and conservation of our energy resources. McCain's plan is to augment oil and gas exploration and increase coal usage. McCain opposes mandatory building standards and advocates expanding nuclear power.

Senator Obama sees the need for buildings to be 25 percent more efficient in the next decade, and 50 percent more efficient by 2030, according to Jason Grumet, the executive director of the National Commission on Energy Policy. “I think Senator Obama fundamentally understands that these are problems that are different in character and shape than almost anything we have ever had to deal with, certainly in the energy sector,” Grumet said.

Friday, June 20, 2008

Green Policy Debated in Canadian Parliament

As Canada's parliament is winding down for the summer break, a very lively debate is taking place in Ottawa. Representatives from Canada's four major parties are holding a historic debate on Green policy issues. Yesterday, the Liberals unveiled an ambitious plan of energy taxation and income tax reduction. The 15 billion dollar Liberal plan, called "The Green Shift Plan" will tax industry and consumers. According to Liberal leader Stephan Dion the plan is "powerful and simple, we will cut taxes and shift those taxes to polluters." Dion believes that the tax will encourage less energy use and stimulate innovation. The ruling Conservatives have proposed a polluter pay program. The NDP and the Liberals charge the Conservatives with accommodating Canada's oil industry.

Dion wants to tax energy (except gasoline), cut income taxes, and provide family support payments. Given that consumers and industry each account for half of greenhouse gases, the tax will be levied against industry and consumers. The average home would pay $250 more per year. The Green Shift plan will regulate 75% of the carbon emissions produced in Canada. The Liberals claim thier program is revenue neutral. Others disagree saying that Dion's plan is a tax grab.

Liberal's claim to be bringing together the common interests of Green and tax reduction. With the statement "Giving more of what we need and taking from that which we do not." Dion wants to position Canada as an example to nations like China and India. Despite the fact that several environmental groups have come out in support of the Green Shift plan, the Conservatives have prepared an advertising campaign to the proposed plan.

Putting a price on carbon is an essential step and carbon taxes are the fastest way to do that. In an interview with the CBC's Don Newman, Dion explained why he opted for the Green Shift plan over a cap-and-trade plan. Dion pointed out that cap-and-trade is complicated and it will take years to work out the details. Dion also explained that cap-and-trade, like the carbon tax will ultimately fall upon consumers. Indeed critics argue that any form of carbon tax will increase costs all along the value chain, a cost which will ultimately fall on consumers. And this is why the Liberal plan compensates families. While providing an economic incentive to reduce their energy consumption.

The Conservatives claim their plan will cut carbon emissions by 20%. But the year that is used as a starting point for reductions is another important difference between the Liberals and the Conservatives. The liberal are using 1990 levels of carbon and the conservatives are using much higher 2006 levels.

On the issue of Green, the left and the right appear to be stealing from each others playbook. The NDP's leader Jack Layton supports a cap and tax system but the Conservatives disagree, claiming they do not want to let the big polluters get away with paying their way out.

In Canada, carbon tax proposals are putting the spotlight on the environment. Like Europe and California, Canadians must put a price on carbon or risk being excluded from these trading relationships. As the Canadian parliament draws to a close, it is becoming evident that politicians are seeing the merit of a Green platform. The announcement of the Green Shift plan may be the starting gun for the next Canadian election campaign. Dion is betting his party's future on Green, setting the stage for a Canadian federal election where Green is the salient issue.

Thursday, June 19, 2008

The Greening of Cyberspace

A June 17 article in emarketer reviews the results of "The Green Marketing Study." The study reveals that 60% of online buyers said that it was "extremely" or "very" important that companies exercise sensitivity toward the environment. "Today's environmental concerns are more complex, far-reaching and interconnected than those of the past," says Paul Verna, senior analyst at eMarketer and author of the new report, Green Online: Growing Awareness. "And the Internet provides a powerful forum for corporations, marketers, policymakers and average citizens to engage in active conversations about how to approach the issues."

"Last year was the tipping point for green marketing as a whole," Jessica Hogue, research director of Nielsen Online, told eMarketer. "Every type of company is now getting into the mix. The We Campaign, an environmental awareness project launched by former Vice President Al Gore, has allocated a substantial portion of its projected $300 million budget toward online advertising," says Mr. Verna. The We campaign uses a wide assortment of mediums in its marketing mix. They include display ads, video ads, e-mail, social networking, mobile outreach, and viral marketing.

Increasingly retail establishments are using the web to cover their Green claims and according to Mr Verna, consumers are using blogs and forums to discuss these claims. "Green can do very well online. It's a topic that people get very passionate about and there are few barriers to entry," says Jarvis Coffin, CEO of Burst Media. Burst Media studied the frequency with which US adult Internet users viewed green ads and found that 46% of them reported frequent exposure. A comparable 40% of respondents said they viewed green ads "occasionally," while only 14% said they saw these types of ads "infrequently."

Wednesday, June 18, 2008

The Politics of Intransigence

Green has been slowed by a barrage of misinformation and deceit most notably created by the current American administration, whose pitiful record on environmental protection, public health and clean energy development is eclipsed only by its rush to exploit resources in Alaska and conceal the truth about global warming.

Four years ago the Bush administration began its campaign to keep the public from seeing a comprehensive 271 page report on global warming that scientifically rebuked the US government's Green record. To use the title of Al Gore's now famous documentary, the report was "an inconvenient truth" that was finally released thanks to a court order.

The report predicts thousands of deaths from natural disasters, extreme weather, heat, smog, food and water borne microbes and diseases. The report also foretells water shortages, insect infestations, and deforestation, all of which are related to global warming.

In an Associated Press article, Thomas Lovejoy, a biologist who chaired the group of scientists who reviewed the report for the federal government, states, "It basically says the America we've known we can no longer count on. It's a pretty dramatic picture of all kinds of change rippling through natural systems across the country. And all of that has implications for people."

It is incumbent upon governments and lawmakers to support Green legislation. However, there will be no progress on this front as long as administrations are impervious to the truth. In a recent teleconference with reporters, the White House associate science director Sharon Hays refused to characterize the report's findings as "bad." This administration's Green legacy, it would appear, will be defined by intransigence until the bitter end.

Tuesday, June 17, 2008

Green Dissent (Part 2)

The scientists most qualified to speak to the subject of climate change and global warming are united in their expression of concern. Some dissenters strive to make the counterpoint to global warming seem almost credible. In a Huffington Post article, Joseph Romm descrilbes "the painful obviousness of climate change, the incontrovertible science linking it to human activity, and the graver and graver warnings of potential catastrophe"

The evidence for climate change is dramatic. From rapidly shrinking glaciers and polar ice caps to extreme weather including tornadoes, draughts and floods. Yet some manage to find reasons to resist the facts. As explained by Romm there are two camps of resistance to climate change. The deniers and the delayers.

"Deniers, like Sen. James Inhofe (R-OK), just continue putting out the same old disinformation in new packages or obsessing over meaningless NASA data revisions. A lot of people seem simply impervious to the facts and to science -- and desperate to cling to any media stories or studies, however inaccurate, that seem to undermine the overwhelming body of evidence."

Delayers believe that global warming exists but seem to prefer an entirely voluntary approach to environmental management. However, meaningful change on the scale required clearly demands comprehensive environmental legislation.

"Desperate Scientists: The world's top climate scientists beg for action. First, we saw the IPCC's bleak Fourth Assessment Report (summarized here), which warns that human emissions, left unchecked, could lead to rapid, multi-meter sea level rise; loss of most species; and widespread drought and desertification. Second, we heard IPCC head, Rajendra Pachauri, warn, "If there's no action before 2012, that's too late. What we do in the next two to three years will determine our future. This is the defining moment." Finally, more than 200 scientists signed a statement asserting that, to avoid catastrophic impacts, global greenhouse gas emissions "must peak and decline in the next 10 to 15 years, so there is no time to lose." (And this isn't even counting the repeated dire warnings of our nation's top climate scientist, James Hansen, such as here and here and here, for instance.) Any sane person would be listening to our climate scientists."

Sunday, June 15, 2008

Green Not Red

The title of an October 31, 2007 article "Going Green Puts Business in the Red" gives the impression that environmentally sensitive business practices are inconsistent with profit. As the article's author points out "When companies go green, the media tend to follow with positive coverage. But journalists often ignore the higher cost of 'eco-friendly' choices."

There are costs associated with going Green and these will only grow as consumers and law makers impose standards and guidelines. The one-time costs of going Green can include, new manufacturing molds and increased marketing support. There are also increased expenditures associated with repackaging, advertising and counting carbon. Sometimes sustainable business practices come with increased costs as part of a new manufacturing process or call for the use of more expensive materials.

Careful stewardship is required to ensure that companies can finance the additional costs associated with going Green. When phasing in environmental initiatives, careful planning is key. Strategic planning helps to avoid foreseeable obstacles. Calculating and managing risk is part of running a successful enterprise. Well crafted Green strategies tend to make the process of transition (or start-up) easier.

There are savings associated with such things as energy reduction, and these should not be discounted. However, depending on the nature of the business, Green savings from environmental initiatives are often eclipsed by the costs of going Green. However, there is no alternative to going Green. Business can begin a carefully planned process of transition now, or wait for Green legislation and try to play catch-up later. Astute players see whats coming and are preparing. The law of free markets dictates that businesses be competitive to survive.

There are untold opportunities associated with the Green revolution. But like all periods of economic change those who prosper will be those who can read and capitalize on the trends. It should be expected that the costs of going Green will place an additional strain, and some businesses will not be able to make the transition.

But anyone who doubts that going Green is conducive to profits need only look at the long list of companies currently investing in Greening thier operations. Companies from small mom and pop operations to some of the worlds most successful corporations are increasingly embracing Green while consistently showing a profit. Toyota, HSBC and Wal-mart are investing considerable sums to be more Green. Corporations are paying the costs associated with social responsibility because of the value derived from being identified as Green. Businesses which invest in sustainable business practices are rewarded by customer interest, loyalty and patronage.

Working towards profitability is part of a companies fiduciary responsibility to its shareholders. As part of that responsibility, a Green message can be a powerful and lucrative brand association. Leadership is required from the business community. But this leadership is driven by a form of altruism that concurrently serves a corporations best interests. The cost of going Green paves the way for longer term competitiveness.

Who says profits can't motivate social responsibility? Corporations are becoming increasingly interested in Green because it benefits their bottom line. Green businesses are harnessing the global power of market forces to serve a socially responsible agenda. And this is a marriage that has the capacity to change the world.

Thursday, June 12, 2008

Mobile Marketing: A Green Opportunity

Mobile devices represent an important new marketing channel. Increasing mobile penetration worldwide has led many in the marketing industry to believe that 2008 is the year of the mobile. According to a Cisco study mobile devices are quickly joining physical stores, websites and catalogs as an important fourth channel for retail growth.

According to Don Knox, global vice president at ad:tech Expositions, “Mobile continues to pique the interest of marketers and advertisers as it matures and the devices mature in the U.S...marketers are seeing the benefits of relying on mobile to reach consumers...Everyone seems to sense that we’re on the verge of a big breakthrough in mobile, as consumers are stepping away from their PCs and relying on these mobile devices more and more, and in that sense, it’s a logical extension of today’s marketing plans...Marketing is no longer just traditional or interactive, but rather marketing is encompassing both worlds...And as we’re seeing more of the marketing spend become digital, we’re attracting more traditional marketers and traditional media...We’re seeing mobile rapidly advancing around the world...A lot of what can be done will be determined by the carriers, but many marketers see mobile as an opportunity to extend their messaging, branding and more and more advertising opportunities."

The vast number of mobile devices in the world today makes this an extraordinary marketing opportunity. Currently, there are three times as many mobile-phone subscribers (3.3 billion) as Internet users (1.3 billion) worldwide. India is a prime example of this large and growing audience. With 267 million mobile phones, India is growing at the rate of 8.3 million phones per month, Chaitanya Nallan, CEO, Gingersoft Media adds, "As a medium, compared to the Internet, mobile is much more powerful. I can reach you wherever you are because mobile is with you all the time." And a mobile marketing dollar appears to get better results when compared to the Internet. According to Rajiv Hiranandani, CEO of Mobile2Win, "Clicks in this medium are around 5-8% and outperform the clicks in the Internet medium."

Social networking has significantly impacted the use of mobile devices. Sites like Facebook, MySpace and LinkedIn have changed consumer expectations and buying behavior. Social networking is increasingly mainstream and no longer the exlusive domain of the young. Facebook reported 286 percent growth in members aged 35 and over from May 2006 to November 2007. Social networking has grown on a global level, with the number of European log-ons (127 million) surpassing that of the United States (124 million).

The ongoing proliferation of e-commerce will also help drive usage of mobile devices. Forrester Research estimates that online sales will reach $204 billion this year and $335 billion by 2012. With e-commerce accounting for only 6 percent of all retail sales in the United States, there is considerable room for growth.

According to the Cisco IBSG survey, at present, mobile marketing is done primarily using SMS (Short Message Service). SMS is being used to communicate promotions, provide a two-way service for customers' questions, and offer item availability and delivery updates. Peer-based reviews and interaction are becoming a baseline expectation. Some mobile marketing includes advanced visualization, video capabilities, and mobile commerce technologies. Companies are also using mobile devices to generate leads, provide loyalty rewards and offer free downloadable content.

The Cisco IBSG survey found that:
42 percent of retailers provide the ability to view product information on a mobile device through reformatted web pages or specific mobile pages
15 percent offer the ability to conduct transactions (make purchases, complete inventory queries, etc.)
10 percent are using SMS to provide information or answers to customers' questions
6 percent have webpages and a URL specifically designed for mobile use
The Cisco IBSG survey of e-commerce sites found:
17 percent provide the capability to connect to communities of interest
52 percent provide customer reviews for products
50 percent have advanced visualization tools
50 percent provide multimedia such as video
50 percent offer customer support through multiple channels, such as click-to-chat

There are several factors that contribute to successful mobile marketing. Steen Anderson, VP of marketing for 5th Finger suggests a simple formula for his clients. R=V+E (Response = Value + Exposure). “By maximizing the value and relevance of the offer to the target audience and maximizing the exposure of the call to action across as much media as possible, the response rate will be maximized.” According to Anderson, “More than any other medium, in the mobile realm, marketers must strike a good balance between a creative idea and the technical execution of that idea in order to ensure ROI.”

Perhaps most importantly, successful mobile marketing involves a targeting strategy that is focused on the mobile devices used by the demographic you are seeking to reach. The call to action must be easy, clear and discernable at a glance. And as Anderson cautions “In the cases when you are offering prizes as part of the call to action, a large volume of lower value prizes can be much more effective in encouraging participation in promotions than having just one high value prize on offer.”

As reported in AdAge a recent New York Media Information Exchange Group breakfast panel was discussing mobile marketing strategy. They questioned whether the mobile category will continue to exist on its own or "simply merged into overall consumer environment of digital connectivity." According to Dick Cantwell, vice president of IBSG's Retail / CPG Practice mobile devices are part of the “new era of multichannel retail” The main threat according to Nallan is from spammers, "Spam messages have a low price band and take away our business."

Although unlikely to replace traditional mass media, mobile marketing offers a unique marketing proposition and a strong value proposition. Mobile marketing has a wide audience base and has the capability to effectively target specific demographics. Mobile marketing is less expensive than traditional marketing mediums and it is also more cost effective because the message reaches the audience directly. There is also added flexibility when marketing through mobile devices. As explained by Brand Analyst Harish Bijoor, “the advertiser can decide how much to market, to whom to market and with what intensity to market. The control lever is with the marketer. More he uses, more he pays."

Mobile marketing is easy to track. Shishir Sharma, Director of Business and operations at Active Media Technology says, "Since all downloads and SMS replies are trackable, evaluating effectiveness is much better in mobile marketing compared to other conventional marketing methods."Hiranandani calls mobile marketing “the most effective marketing channel for the years to come." And Sharma adds, "With the mobile phone being in virtually every hand, mobile marketing is the future of advertising.

Mobile marketing is still a relatively new concept and accounts for a relatively small portion of most companies marketing mix. (Only 15% of leading retailers provide mobile commerce). Marketers and business owners should understand that when is comes to mobile marketing, every sector is in the trial stage. Those that appear to be putting mobile marketing to the greatest use are the financial, auto, travel and retail sectors. By monitoring innovative companies SMEs can adapt successful mobile marketing practices to their own circumstances and strategies.

Mobiles value as a marketing medium comes from the widespread penetration of mobile devices and the fact that mobile device users are a captive audience even when they are roaming. As a relatively inexpensive marketing option, mobile marketing is an effective and accessible way for SMEs to communicate a targeted message.

Mobile marketing communicates with many thousands of users instantly. Companies and organizations leveraging the extraordinary reach of mobile marketing are also connecting with potential customers without paper, ink, transporation or the energy expenditure associated with traditional advertising mediums. Because of its smaller footprint, targeted message, wider reach, and cost effectiveness, mobile marketing is an ideal marketing medium for emerging Green themed businesses.

Success often follows those who anticipate the trends. And an effective mobile marketing strategy considers the desired capabilities long before they are worked into future platforms. In mobile marketing, as with sustainable business practices, those who are proactive in developing and implementing strategies will be in a more competitive position than those who do not.

Monday, June 9, 2008

Returns on Green Investing

Investing in companies with positive environmental policies makes sense on many levels. A growing number of consumers and portfolio managers are coming to appreciate the value of Green investments. There are more than 170 US mutual funds which focus on companies demonstrating environmental responsibility. A June 09, 2008 Ad Age Article by Kate Fitzgerald profiles Portfolio 21, a leading firm in environmental investing. With $290 million in assets, the Portfolio 21 mutual fund is invested in approximately 115 companies all of which meet stringent criteria. These criteria cover everything from manufacturing to packaging and recycling.

Portfolio 21 functions under the premise that "companies applying higher environmental standards ultimately gain a competitive advantage," says Portfolio 21's founder and CEO, he continues "Companies that began lowering their dependence on fossil fuels 10 years ago are in better shape today, and this is true for many environmental issues." The logic of this premise is hard to refute and it is further supported by the fact that Portfolio 21's mutual fund regularly outperforms the S&P 500 and other major stock indexes. Without much advertising Portfolio 21 has received considerable media attention.

Portfolio 21's founder and CEO says "We don't see a difference between risk as defined by the economy and environmental risk." Environmental risks are synonymous with economic risks. Managing environmental risks provides above average returns and uses the investment process to influence corporate behavior.

Sunday, June 8, 2008

Shoot the Messenger: The Costs of Greenwashing

A recent LOHAN article reviews some of the factors undermining the environmental movement. As pointed out in the article, the marketing industry has capitalized on the prodigious growth of Green. However, marketers have exploited the popular interest in Green with offerings that often eschew ecological concerns. Adam Werbach the founder and chief executive officer of Act Now, a Green consulting firm said "People with no technical expertise in the complex harmonies that sustainability demands, no capacity to help a company reinvent its products or processes, and no sense of urgency are promising quick fixes and cheap tricks." The result is a spate of irresponsible marketing claims and inevitably, consumer mistrust. Lohas defines greenwashing "the act of applying an eco-friendly gloss over an otherwise non-green business or product" and there is clear evidence that this is now impacting consumers buying behaviors.

Consumers feel burdened under the weight of Green demands and they are justifiably skeptical about Green claims. Evidence of this skepticism is appearing in consumer spending reports. Defiance Crescent News reports that enthusiasm for Green home products has fallen. A Columbus market research analyst said he expects a backlash. And Boulevard Strategies' Chris Boring said "Consumers push back against any big trend," According to Werbach "We are witnessing [G]reen fatigue on a grand scale. People don't like to be told what to do. Even more so, consumers are dissatisfied when a promised eco-friendly product or service is in actuality no better for the environment. Moreover, there is still a large sentiment that going green is a sacrifice and takes a lot of work and money to accomplish," he continued. "...It is also threatening the credibility - and sustainability - of the marketing industry itself." Consumers do not like to be told what to do and as Boring notes, neither do consumers like to be swayed by guilt.

Green is being exploited for its marketing appeal independent of its eco-friendliness. "The campaign is coming across as very gimmicky," Boring said. A recent Cone/Boston College survey cited by Werbach indicated that more than half of American consumers are "overwhelmed" by the flood of environment-related messaging. According to this study less than 50% of consumers trust companies to tell them the truth about sustainable practices and products, and fewer consumers believe companies are accurately communicating their environmental impact.

Despite the unfortunate efforts of some marketers, Green still garners considerable interest. Boring believes there are at least three factors that counter a buying public's cynicism - altruism, thrift and energy self-reliance. Boring adds "What brought mainstream people into the fold is the message that not only are you saving the planet, but it'll save you money." Colette Chandler, president of The Marketing Insider, believes that consumers are not tired of hearing the green message. "According to my Ohio Health and Wellness Research Report and national research and data, (consumers) are more motivated than ever to commit to a green and healthy lifestyle," Chandler continues "consumers are not bored with the green message, but they are tired of greenwashing"

Marketers are messengers, they are also responsible for crafting and communicating the message. An old adage suggests that we 'Don't shoot the messanger', in the case of greenwashing we are tempted to think otherwise. Green has been very good to marketers, if it is to keep growing, marketers will have to learn that authenticity and integrity are essential when leveraging Green's marketing appeal

Friday, June 6, 2008

The End of Oil and the Next Energy Economy

Modern industrial society is dependent on oil. A partial list of products derived from oil includes gasoline, heating fuel, fertilizer, pesticides, lubricants, plastic, paint, synthetic fabrics, asphalt, and pharmaceuticals. Oil is also crucial to manufacturing, transportation, agriculture, mining and electricity.

Oil used to power combustion engines generate the most emissions. The tar sands generate even more emissions than traditional fossil fuels and natural gas is responsible for signficant methane emissions. One of the dirtiest and most inefficient fuels is coal which is the primary power source of the world's two largest economies.

Alternatives to oil are the future but as with all things in the real world, each alternative comes with its own set of problems. Renewable sources of energy must address the problem of net energy. Energy output from alternative sources must be measured against the amount of energy input.

Fuel cells are a problem as long as they require hydrogen derived from hydrocarbons. Biofuels require enormous amounts of land and offer questionable quantities of net energy. Even energy from solar and wind power is imperfect when partnered with disposable batteries.

The world uses 15 terawatts of power every year. The peak of world oil production is about 30 billion barrels a year. Remaining world oil resources are approximately one trillion barrels. By 2030, annual oil production will be less than half of what it was at its peak. The trend is inescapable and this is leading many to conclude that the fossil fuel driven industrial age is drawing to a close.

The ever increasing cost of oil is an incentive for research and innovation. But the widening gap between domestic consumption and global production shows that price alone is insufficient to induce required changes within reasonable timeframes. Government needs to radically increase Green research funding, promote Green legislation, and implement standards.

Solutions may come from entirely new innovations, from refinements of current technology or from novel technological combinations. However, according to Paul Roberts, author of The End of Oil: On the Edge of a Perilous New World, "The next energy economy will be built by the market, at a profit, or it won't happen at all."

Thursday, June 5, 2008

The Life Cycle of Green

All products progress through a sequence of stages from introduction to growth to maturity and decline. This is important to Green marketers and business owners because understanding where we are in the life cycle of Green has a direct impact on the marketing strategy and the marketing mix.

Green energy appears to be very young, however, it is rapidly maturing. Four years ago we were already approaching 10% of our energy requirements from renewable sources. There was a 25% increase in wind generated power between 2005 and 2006 and a 55% increase in consumption of solar electricity in 2005.

Innovations like electricity, cars, television, and the Internet, took between 10 and 30 years. More recent global trends like the Internet have grown much more rapidly than older innovations like electric lighting. Diffusion is the term anthropologists use to describe the process by which something becomes an integral part of the culture. If this model and historical precedent are any indication, Green should mature in approximately 20 years. If we take 1999 as the starting point, 2019 can be taken as a general guesstimation of the timeframe for Green's diffusion.

Technological innovation and consumer acceptance are keys to Green's diffusion. Although demand for Green continues to grow, there are serious threats. Perhaps the most serious threat comes from the absence of senior government leadership in strategic planning, legislation and enforcement.

Keeping track of Green's life cycle position helps business owners and marketers make timely adjustments. Profits and revenues plotted over time indicate that Green is in its growth stage and appears destined to keep growing for the foreseeable futre.

Ultimately what we now refer to as "green" will be sewn into the DNA of all the products we buy. Until then, marketers must be mindful of how long the term will resonate with consumers. 

Green Leadership

Some appear to be waiting for environmental stewardship from national governments. Although it is desirable to have Green legislation from above, much of the interest in Green originates from below. Green has worked its way up political and economic hierarchies. Green began as a grassroots movement and has blossomed into a powerful social and economic phenomenon.

The cap-and-trade deal signed by two Canadian provinces illustrates this point. Scheduled to go into effect on January 1, 2010, the historic deal between Quebec and Ontario goes well beyond any current or proposed federal initiatives. Quebec's premiere Jean Charest said "The federal government will find itself increasingly isolated if it fails to sign on to the worldwide trend toward market-based trading systems to cut greenhouse gas emissions."

Wednesday, June 4, 2008

Green Capitalism

Carbon trading is Green capitalism. Carbon trading, (also known as cap-and-trade and emissions trading) is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Applying the basic principles of a free market, carbon trading employs a system of incentives and disincentives to reduce emissions. This system allows companies to sell their unused carbon quotas to companies that exceed their caps. Carbon trading helps to cut emissions, and assists corporations with the costs of pollution reduction. Carbon offsets also fund carbon-reduction projects.

However, the details of carbon trading, like the logistics of monitoring and enforcement, have not been adequately addressed. One of the most difficult issues is the initial allocation methods and cap. Despite these concerns, the cap-and-trade system is gaining in popularity in Europe and has been endorsed by both the Republican and Democratic Presidential candidates in the United States.

Competition motivates corporations and drives our economies and it is also helping average people to be more Green. In 2007, Carbonrally began a competition to reduce carbon emissions. Since then its 2,000 users have averted more than 150 tons of CO2 emissions. "We put the challenges in bite-size chunks, but that adds up," says founder Jason Karas.

Carbon trading helps to provide a concrete approach to measuring and managing CO2. "Global warming is an abstract idea that is hard for people to connect to," says Bob Schildgen, the Sierra Club's environmental-advice columnist. "It's good to start at the basic level, with real numbers." The carbon market is just the beginning of administrative systems designed to manage other pollutants. Markets for other pollutants already exist, although they tend to be smaller and more localized then the carbon market.

Global CO2 emissions total more than 28 billion tons a year, and carbon emissions are growing in the developing world. Clearly carbon trading is insufficient on its own to manage green house gases. The scale of the CO2 emissions problem demands global cooperation. Cap-and-trade systems employ free markets to set prices. And capitalism is the only global mechanism we have in place capable of penetrating the broader marketplace and achieving the kind of critical mass required to make a meaningful difference.

As individuals, corporations, and governments, we have an opportunity to set an example for the world. What we glean along the way will help us to make the most of these markets which in turn will enhance their value, effectiveness and appeal. Carbon trading may not be able to alter climate change by itself, but it is an important step on the road to a more sustainable future, and a powerful example of the ways in which Green is being woven into the fabric of our economies.