07 May How Entrepreneurs Can Make Environment Cleaner
by Yasser Al-Saleh
In recent years, an increasingly loud chorus of environmentalists, civil society actors and international institutions have been demanding that conventional “brown” economic development, which depends on fossil fuels, be replaced by a lower-carbon “green” growth model. But there is a third, more competitive option: a ”blue” economy driven by business-level innovation rather than top-down policies.
The fact is that most environmentally friendly technologies demand significant upfront investment, meaning that “going green” remains a privilege reserved for the few countries that can afford it. After all, governments’ capacity to provide subsidies is limited, and wealthy countries cannot be expected to bear the costs of the uptake of sustainable technologies worldwide. Thus, as the United Nations recently confirmed, more than 1 billion people worldwide still lack access to reliable, clean and affordable energy.
A ”blue economy” led by business innovation should replace the top-down green initiatives.
The blue economy — a concept developed by the Belgian economist Gunter Pauli — is powered less by investment and more by innovation, with a focus on creating jobs, building social capital and generating multiple cash flows by stimulating entrepreneurship and the development of new business models. The blue economy is centered on the idea that companies should use all available resources and increase efficiency to develop a portfolio of related businesses that benefit both them and society.
Consider the Swedish company Solarus, whose innovative business model — manufacturing solar panels out of carbon fibers discarded by the aerospace industry — has enabled it to offer competitively priced solar technologies, without support from government subsidies. The fact that solar technologies can be produced locally from recycled materials, Pauli argues, means that governments should not provide solar-related subsidies and bailouts — the costs of which eventually land on taxpayers.
The blue economy would also help to resolve the intermittency problem inherent in solar- or wind-power systems. Even after the needed technologies are deployed widely, additional investment in power storage or a back-up energy would be needed. Given that an abundant hydropower backup supply would not be an option everywhere, businesses would have to find ways to employ the energy and resources available locally.
It is not difficult to discern the potential benefits — for businesses and communities alike — of matching a set of seemingly disparate problems with the efficient use of locally available resources. Companies simply must be willing to develop bold and creative new business models that change the rules of the game.