UK: IM Sounding Board - Save the earth and make a profit.

UK: IM Sounding Board - Save the earth and make a profit. - The penalties for causing environmental damage in the UK can be severe - jail sentences and unlimited fines. But improving the environment also provides opportunities for saving and making money

Last Updated: 31 Aug 2010

The penalties for causing environmental damage in the UK can be severe - jail sentences and unlimited fines. But improving the environment also provides opportunities for saving and making money. We must make sure the UK does not miss out on the local and global opportunities.

Many environmentalists believe that industry and technology are the enemies of the environment. There appears to be much evidence to support this view. Often-quoted studies indicate that, this century, over 90% of our wetlands have disappeared, 75% of the turtle doves we sing about at Christmas and almost 50% of our skylarks and blackbirds have been lost because of intensive agriculture and urbanisation. Environmentalists point to our continued wasteful use of materials, most of which are used once and then thrown away to be buried in holes in the ground. They see all this exacerbated by a world population forecast to grow to 12 billion by the middle of the next century, creating the equivalent of a new China every 12 years and placing unsustainable pressure on the planet's resources.

Faced with these gloomy prospects, environmentalists have called for tough laws to prevent damage to the environment. In the UK, you can go to jail for up to two years and there are unlimited fines in the crown courts for those guilty of disregarding their environmental responsibilities.

The Environment Agency is often judged on the prosecutions that it brings rather than the environmental improvements that it achieves. It has been called 'toothless and weak' by one environmental group because it sent only four people to jail and prosecuted just 500 individuals or companies in its first year.

However, industry and technology are not always the enemy.

In 1898, if we had been searching for a sustainable development solution to live within our means, we would not have factored in the full effects of food preservatives, antibiotics, the computer or the telephone. Unless you believe the unfortunate patent office official who in the last century said that all worthwhile things had already been invented, similar discoveries will have an equally large impact in our children's time.

But the largest flaw in the environmentalist argument that innovation and technology are harmful to the environment is the large number of 'win-win' situations in which the environment and industry can benefit. There are at least three ways in which industry can save or make money by taking full account of its environmental responsibilities and possibilities.

First, opportunities to save money were demonstrated very clearly in a study done on the Aire and Caulder rivers in 1992. Eleven firms worked with regulatory agencies and consultants to reduce their polluting loads to land, air and water by 25% and, at the same time, they saved themselves £3 million a year in operating costs.

These savings were achieved in both the most modern and the more antiquated plants. The largest savings of almost £1 million were at an American soft drinks company at its most modern plant in Europe. Around two thirds of the projects had pay-back periods of less than nine months and many required little investment at all. Equally impressive savings have been repeated in similar projects around the country in the North West, in the Midlands, and in north Wales. They are conclusive proof that investment in clean technology, waste minimisation and energy efficiency benefits both the environment and industry.

The second opportunity is the growing market for reused and recycled products. A leading photocopier manufacturer is marketing products made from recycled and reused components, which sell at a 30% discount to products made from completely new materials, and is gaining market share. Markets for scrap metal are sufficiently buoyant to permit one metals recycler to invest in several millions of pounds of automatic equipment to separate ferrous and non-ferrous metals and to employ graduates learning Chinese and Japanese to help with the export effort. Some markets for recycled materials, such as recycled paper, are still highly erratic but it is surely only a matter of time before normal commodity market disciplines and more sophisticated trading techniques are brought to bear.

Third, there is a huge market for pollution control and abatement equipment and services. This market is estimated to be around £180 billion worldwide and growing fast. The UK has a trade surplus of around half a billion pounds in this market, dwarfed by the £17 billion surplus of the US and Japan. Nevertheless, this is a significant foothold from which further opportunities to make money can evolve.

Normal economic forces increase prices as goods become scarcer when populations increase. As well as this, a new driving force for cleaner technologies, waste minimisation and the re-use and recycling of materials will come from changes in taxation. Political parties seem committed to reducing direct taxes on people and increasing taxes on materials and pollution.

We have seen a start in the UK with the landfill tax. These new taxes could have a dra-matic effect on our economy, which will benefit the far-sighted. Goods will need to be of higher quality and greater durability than those currently available, and will fuel service and accessory businesses employing people who are unable to find work in automated factories.

These changes will undoubtedly put pressure on some indus-tries. The second-rate - or even the average - company may not survive in some market segments as the overall demand for their products reduces. Only the best will remain. But there will be many new opportunities for new industries and new entrepreneurs to supply the needs of people living in the next century. It has always been so. Our economic system, which brought us the high stan-dards of living that we enjoy, has never been static. The difference now is that the environment will play an increasingly large part in transforming industry and society within the lifetime of this and the next generation of business leaders.

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