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04/24/2009: "Green Economics"

As I write this column on the 39th anniversary of the founding of Earth Day, I am reminded of the words of Kermit the Frog. One of the late Jim Henson’s original Muppet characters for the Sesame Street television show, Kermit often proclaimed, “It ain’t easy being green.”

Of course, the green he was talking about was his color, which came from a coat Henson’s mother had tossed away and two ping pong balls that served as eyes. Today, being green has a new connotation and is often considered synonymous with ways to save planet earth.

The first Earth Day, held on April 22, 1970, was one of the early milestones of the modern environmental movement. Initially created to enhance awareness of the earth’s environment, it involved mostly Americans. This week, the special day attracted the attention of more than a billion people residing in some 180 nations around the world.

Earth Day and the general environmental movement have served as the motivational foundation for the development of myriad procedures and practices to increase the efficiency and effectiveness of non-polluting operating systems. Over the years, businesses have rethought their practices with the goal of creating a friendlier environment that will be conducive to the wellbeing of their employees, their communities, and society as a whole.

Nowadays, being green is fashionable; yet as Kermit noted, it still ain’t easy to do so—and in many cases it calls for a major short-term investment with the payoff expected to be years down the road. In fact, the cost associated with going green sometimes prevents businesses and organizations from just that, even though the overall value is easily recognizable and generally accepted. After all, why would you want to harm the planet on which you live?

Corporate social responsibility is on the rise as more collaborative frameworks are created to take advantage of various synergies. The goal, of course, is to consume fewer resources, improve business operations, and increase revenues. Potential customers are often swayed by these practices, preferring to purchase goods and services from green companies. In fact, they often pay a premium to do so. This willingness sends a signal to the marketplace that green investments may be worthwhile and even critical to maintaining or expanding sales volume.

Striving to go green is not only environmentally healthy, but it often benefits specific industrial sectors. For example, the creation of environmentally-friendly products requires the services of the manufacturing sector, and the building of green homes and businesses along with the installation of the essentials, benefiting the construction and allied industries. The creation of “green jobs” is a centerpiece to many current economic stimulus strategies.

Various procedures for creating clean energy have been up and running for quite some time. In the future, new technologies, especially nanotechnology, will push the envelope in developing structures and systems that possess even greater economic viability. In Texas, billions have been invested in wind farms and other sources of renewable energy, bringing an important economic stimulus to the affected areas and providing clean energy for the future.

Over the past few years, the transportation industry has undergone significant changes, specifically the addition of more fuel efficient engines, lighter-weight materials, and even hybrid vehicles. Utilization of web conferencing and work-at-home programs have reduced travel requirements and thus decreased energy-related emissions.

Major companies and corporations are going green by improving their eco-friendly operations, introducing broader recycling programs, redesigning products, using more renewable energy sources, transforming packaging requirements, implementing safer disposal practices, and using more biodegradable products, to name just a few.

The green products market has grown over the past several years to reach a multibillion dollar level. Although the current recession has caused numerous Americans to curtail spending on major eco-friendly items, many are still willing to purchase less expensive products in this category. Organic foods, for example, used to be available almost exclusively at specialty stores, but are increasingly finding their way into major chains, discount stores, and other outlets.

The growing “going green” movement has led many investors to put their resources into companies with more modern environmental standards and energy-and-cost-saving commitments. As operational costs decrease, greater opportunities arise for increased profits. Making money and saving the earth are going hand in hand.

Earth Day began nearly four decades ago as a social experiment. Since that time, the green movement has gone “mainstream,” involving multi-billion dollar markets for products and services in a wide variety of businesses around the world.

The clarion call to companies and organizations to become more socially accountable by going green has been heard—from rural to urban communities. Although Kermit the Frog noted that being green wasn’t easy, he undoubtedly would approve of the current movement to go green because of the vast potential for environmental and economic benefits it affords.

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