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Towards a ‘Green’ Economy

Market Facilitation in Ecosystem Services; Contemporary Developing Cases in the UK

Is there reason to believe that there maybe profit to be made by investing in eco investments while conserving the environment?

There does exist some scepticism about the market’s involvement in green initiatives. Even though research conducted by Frost & Sullivan about the telecom industry, which is yet to be published, next month (but was mentioned in The Guardian in late April) apparently shows that there is no measurable link between a company’s share price and investments in green initiatives. However, if pursued they could reflect an improved brand value for a company with an environmental focus.

A recent example to highlight how companies may still profit from these initiatives is to look at the case of the mobile phone operator O2, who invested £1.4m in smart metering last year helped them shave off £700,000 from its annual energy bill. It is now forecasting additional savings of £1m a year and it also the first mobile firm to gain the Carbon Trust Standard as reported by Business Green in Feb 2009.

The Offshore Wind Farm Challenge

In the UK, Sam Laidlaw, the Chief Executive of Centrica, an integrated energy company was of the view (in The Guardian, 5 April 2009) that Britain has an opportunity to lead the world since it overtook Denmark last year in its operation of offshore wind farms even though they face a problem where the building cost for offshore wind farms seems to be higher than that for a nuclear power station. He suggests a simple way in which the economics can be improved, which is to increase the incentive given to developers of offshore wind farms under the government’s Renewable Obligation Certificates (ROC) regime.

This scheme rewards the producers of renewable electricity with additional funding paid for by those energy suppliers who emit more carbon dioxide from fossil fuels (see www.newenergyfocus.com). I suppose this is justified in terms of a retribution mechanism where money is taken from the “dirty” to pay the “green”. He states that once the supply chain is allowed to grow successfully, there would be more ‘downward pressure’ on manufacturing costs. However, Janet Dube who is a member of the Campaign to Protect Rural Wales and secretary of Blaengwen Objectors responds in an article in The Guardian (10 April, 2009) that wind turbines were never going to replace fossil fuels. She also asserts that wind turbines were successfully deployed in Denmark because the electricity grid operated differently from that in Britain. Promotion of wind turbines came about because of lobbying from industrialists and not because of straightforward science or economics, she says. Under the ROCs turbine investors could earn upto twice as much from selling ROCs as from selling electricity.

The Waste- to- Energy Challenge

Alternatively, considering how much rubbish is accumulated in landfills in Britain and else where in the world for that matter, the waste-to-energy sector projects maybe more promising.  Since it is not dependent on weather conditions and there is plenty of waste from households and other institutions, investors are reportedly interested in this idea. The process is simple where, burning the waste, which would heat water, sending steam through the turbines that would in turn generate electricity, creates energy.

The ROC scheme, which came into effect on April 1, allows for developers to earn a “gate-fee” between £31 and £136 for every tonne of rubbish taken off the hands of local councils. This too however has its pitfalls with respect to planning and funding.

Local Initiatives in the UK

Recently, Brighton based local newspaper; The Argus reported that local firms such as Rabbit Skip could help the councils make a difference in terms of disposing off demolition and construction waste. The company that employs 70 people has successfully come up with an ambitious solution; Enviropower, which is a massive processing plant in Lancing that generates, clean green electricity from the waste.  The electricity is sold to the national grid through a company called Green Energy. This project is the first of its kind in Britain.

Potential Prospects

Channel 4 news reported  (7 April 2009) that a village called Uyuni in Bolivia is a vast reserve of an essential element of the 21st century; Lithium. This is a key ingredient in electric cars and as we know there are more manufacturers moving towards making battery operated cars. Investors are looking forward to  extracting this element from the largest salt plateau but the Bolivian government is hesitant. One of the reasons is that they do  not want to be exploited. The village is poor in terms of water and communication services. This is a case  that  would need international negotiations where international competition should be welcomed but in exchange for essential development within Bolivia.

Collective Constructivism

Understanding the ways in which ecosystems, and the goods and services that are associated with them, contribute to the economy can also be used to identify new opportunities for economic and social development. For instance, chemical engineers are interested in making bio-fuels from non-edible oil seeds in India.

If the value of ecosystem goods and services can be assessed and expressed in robust ways, then the ecosystem approach may enable more integrated economic and environmental accounting systems to be constructed and used as the basis for future decision making. The approach could therefore be an essential element of sustainability appraisal.

International markets could in fact be value additive in the conservation process as long as clear guidelines are emphasized as to how the different local and global partners would be expected to benefit from the ecosystem services projects.

There would need to be clear guidelines laid out in terms of project designs and assess risks with respect to multiple-level projects owing to the complexity of bringing together the multiple interests of investors, governments, and NGOs. Most importantly, environmental project developers should seek to educate the global populace about the short and long-term implications.

The Excel carbon show in September 2009 in London leading up to the climate debates in Copenhagen in December would be a much needed platform for global investors, energy companies, the public and campaigners to come to certain terms about how together they best could achieve low carbon emissions and sustainable development.

Reuters reported (7 April 2009) that European Investment Bank (EIB) has approved 866 million euros of loans to EU car manufacturers including Nissan and Jaguar to make green cars as part of a bigger package to help the automobile sector with an eco-friendly approach. South Korea has aimed to use its £23 bn green deal to not only create more than 940,000 new green jobs but also improve the country’s energy efficiency. In the UK, Alistair Darling announced the first carbon budget in April where it committed Britain to cut carbon emissions by 34% by 2020 while investing in renewable-energy technologies. Perhaps the recession has inspired a change towards clean and collective constructivism.

Image credit:  Emsago via stock.xchng

Written by Reethira Kumar

Graduated with a First Division in BA Journalism from Lady Shri Ram College, New Delhi (India). Proceeded to graduate with Merit in MA Media and Cultural Studies from the University of Sussex. In the past, as a freelancer, have scripted public service advertisements for BBC World Service Trust (India) to spread awareness about HIV/AIDS in rural India. Interned with NDTV 24x7, Indian Express newspaper and UNESCO where I assisted in researching and updating the IPDC (International Programme for the Development of Communication) projects and edited the 'Education Makes News' kit for journalists. I am an avid researcher (mainly International relations and climate change) and a social media enthusiast.

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