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Is recession good for the environment?
Sorry to add to the forecasts of economic doom (partly because I'm not convinced it will be doom) but as people begin to tighten their belt (i.e. reduce resource usage), start worrying about energy costs and reduce waste (such as food waste) will this not benefit the environment and those businesses that operate in the environmental sector?
Should we not see a boom in energy efficiency devices or renewable energy options. Will the environmental message be welcomed with open arms by the public and industry alike?
Is a recession just what we need to get people to understand and value the environment and its resources?
I suspect the responses will not be as universally pro-environment as we may think. Most consumers are 'green inclined' and will only opt for an environmental option if other factors (notably price) meet their expectations (5%-10% margin before environmental consciousnesses is over ruled). In times of recession with an increasing demand for cheaper food, charging a premium, no matter how most, for a greener product may not be viable.
Business too become much more short term focussed and will often resist investment in resource efficiency as the return on investment may be longer than they can accommodate.
I recall having a conversation with a major food company in the early nineties where we proved he would save £40K per year and recoup his investment in 18 months. He didn't do it he said he didn't have the time or resources to allocate to this project.
Overall the environmental sector will do better than most in weathering the storm of a down turn but as is so often the case behaviours of consumers may not always follow the route that we believe is the rational one.
What do you think?
Should we not see a boom in energy efficiency devices or renewable energy options. Will the environmental message be welcomed with open arms by the public and industry alike?
Is a recession just what we need to get people to understand and value the environment and its resources?
I suspect the responses will not be as universally pro-environment as we may think. Most consumers are 'green inclined' and will only opt for an environmental option if other factors (notably price) meet their expectations (5%-10% margin before environmental consciousnesses is over ruled). In times of recession with an increasing demand for cheaper food, charging a premium, no matter how most, for a greener product may not be viable.
Business too become much more short term focussed and will often resist investment in resource efficiency as the return on investment may be longer than they can accommodate.
I recall having a conversation with a major food company in the early nineties where we proved he would save £40K per year and recoup his investment in 18 months. He didn't do it he said he didn't have the time or resources to allocate to this project.
Overall the environmental sector will do better than most in weathering the storm of a down turn but as is so often the case behaviours of consumers may not always follow the route that we believe is the rational one.
What do you think?
Replies to This Discussion
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Permalink Reply by Gareth Kane on -
Tricky one - most of the impact so far has been in the financial and construction sectors - finance has little direct impact on the environment whereas construction has massive impacts - both positive (due to improved building regs) and negative (land & resource use).
I have noticed however that other manufacturing companies are reluctant to invest to save in the current climate. They know logically that paying a relatively small amount to a consultant (guess who!) to reduce high waste and energy bills is the right thing to do (with a very short payback), but with jobs on the line no-one wants to stick their neck out and try it. Even though job cuts cost money in redundancy and kill morale, capacity and productivity - whereas waste cuts can cost very little and will improve productivity in many cases.
I wrote a white paper called 10 reasons why you MUST improve the environmental performance of yo... and should have subtitled it "evenespecially in a recession".
Gareth
Terra Infirma - environmental and sustainability consultants
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Permalink Reply by Francesco Corsi on -
Interesting stuff. People will think a lot more about the cost of everything. Consumers are less likely to make 'environmental' decisions that have a long-term payback when cash/credit is short. They might leave those investments for a few years, or will certainly be less likely to take a risk and be innovators/early adopters of new products. Anywhere they can see an immediate financial benefit though, and they will probably jump on the 'environmental' option: eg choosing a company car with low CO2 emissions and good fuel economy under the current tax regime and with fuel well over £1/litre.
Businesses will probably follow a similar pattern.
Government however, might start spending more to support the economy through the recession, and environmental programmes could be among the winners.
Certainly as environmental consultants there are pros and cons, with property sector clients clearly cutting back (or stopping) what they're doing. But other sectors will definitely hold up: no reason to think that clients in power, water, government etc will stop spending. And any private sector work that is legislation driven will still need to be done.
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Permalink Reply by GreenLabelman on -
From an eco-friendly label and packaging standpoint an economic downturn just might BE a good thing Graeme. At Label Impressions, we're hoping people consider switching from petroleum based plastic film labels to equally high performing labels (translation: waterproof labels) made from either corn-based film or stone paper (FiberStone™) since these materials actually cost LESS than oil-based film labels offering similar performance. We'll see!eco friendly.pdf2 page FiberStone lii-nsp.pdf
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Permalink Reply by Graeme Mills on -
Excellent white paper - should be compulsory reading for Business Link advisors
Gareth Kane said:Tricky one - most of the impact so far has been in the financial and construction sectors - finance has little direct impact on the environment whereas construction has massive impacts - both positive (due to improved building regs) and negative (land & resource use).
I have noticed however that other manufacturing companies are reluctant to invest to save in the current climate. They know logically that paying a relatively small amount to a consultant (guess who!) to reduce high waste and energy bills is the right thing to do (with a very short payback), but with jobs on the line no-one wants to stick their neck out and try it. Even though job cuts cost money in redundancy and kill morale, capacity and productivity - whereas waste cuts can cost very little and will improve productivity in many cases.
I wrote a white paper called 10 reasons why you MUST improve the environmental performance of yo... and should have subtitled it "evenespecially in a recession".
Gareth
Terra Infirma - environmental and sustainability consultants
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Permalink Reply by Graeme Mills on
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Update Dec 2008.
In the European Union Italy and Poland are attempting to block carbon reduction targets because they are felt to be too expensive. I also get the feeling that the strategy to get out of recession is to kick start public consumption rather than conserving resources.This seems a counter-environmental strategy or is this too simplistic?
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Permalink Reply by Nicola Chang on -
Graeme Mills said:Excellent white paper - should be compulsory reading for Business Link advisors
Gareth Kane said:Tricky one - most of the impact so far has been in the financial and construction sectors - finance has little direct impact on the environment whereas construction has massive impacts - both positive (due to improved building regs) and negative (land & resource use).
I have noticed however that other manufacturing companies are reluctant to invest to save in the current climate. They know logically that paying a relatively small amount to a consultant (guess who!) to reduce high waste and energy bills is the right thing to do (with a very short payback), but with jobs on the line no-one wants to stick their neck out and try it. Even though job cuts cost money in redundancy and kill morale, capacity and productivity - whereas waste cuts can cost very little and will improve productivity in many cases.
I wrote a white paper called 10 reasons why you MUST improve the environmental performance of yo... and should have subtitled it "evenespecially in a recession".
Gareth
Terra Infirma - environmental and sustainability consultants
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