The emerging green economy

The Future Could Not Be Clearer

Okay, the title is a bit of an overstatement. But when it comes to the economy, we don’t need a crystal ball to understand what is coming next. Rarely in history has there been a time when the greatest opportunity available has also been so obvious. People, groups and societies all wish to maintain and improve their standards of living. Yet the ecological underpinnings of the economy that would allow that to happen are at risk from legacy economic activities that we no longer need in order to maintain that standard of living. Seems like a paradox. But it's true, our practice of burning fossil fuels, which has turned out to be shockingly destructive, can now, reasonably, be replaced by other technologies in many areas, primarily led by renewables-to-electric ways of powering nearly everything we need. Similarly, our reckless and destructive depletion and methods of depletion of many natural resources can now be slowed dramatically, while not threatening our standard of living, primarily due to use of waste-to-value economics and methods.

Renewable energies and sustainable practices can now credibly be said to have the power to increase our standards of living since they provide far greater benefits for far less cost than their economic predecessors. Moreover, since fossil fuels are demonstrably destructive - to the point that their use threatens our society and its ecological underpinnings - arguments that continuing to expand their use somehow minimizes economic risks are nonsense on their face. On the contrary, it’s now clear that failing to reduce use of fossil fuels is among the riskiest things we can do.

Piecing together how the emerging sustainable economy might look turns out to be surprisingly simple, at least in principle. In each area of the economy, we need ask only two questions of each of the various ways of doing business:

  1. Is it notably less destructive to our economy’s ecological underpinnings than other methods of getting the same result?
  2. Can it be employed via a working, profitable business model that lifts the economy and provides employment?

If the answer to both is yes, there’s a good chance that we’ve identified a next economy business idea. Getting at the same things another way, we might ask of a business:

  1. Is it environmentally sustainable?
  2. Is it economically sustainable?

Different people will bring different standards of ‘sustainable’ to this way of defining the green economy, so there will be lots going on and a ton to learn as we piece together the next economy, but the principle, if not the execution, is not complicated. Ideas that lighten our footprint on global ecologies while simultaneously accelerating the world’s economy are emerging, they’re working, and they have every chance of radically altering our up-till-now recklessly destructive path.

So enough with economic prognosticating. It's time to smash the crystal ball, stop predicting and start positioning for the sustainable economy, “a global shift [Goldman Sachs] says is inevitable.” “Inevitable shifts and indispensable technologies,” our unofficial motto.

We’re not guessing. The transition is by now obvious, and the time is upon us.  

Garvin Jabusch is cofounder and chief investment officer of Green Alpha ® Advisors, LLC. He is co-manager of the Shelton Green Alpha Fund (NEXTX), of the Green Alpha ® Next Economy Index, and of the Sierra Club Green Alpha Portfolio. He also authors the Sierra Club’s green economics blog, "Green Alpha's Next Economy."

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This post originally appeared on Renewable Energy World, May 30th, 2013.