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Green Production

The color green is closely associated with environmentalism—and therefore “green production,” “green enterprise,” “green business,” and similar tags signal activities related to environmental goals in a positive way.

Environmentalism arose in the 1960s as the younger, more politically active post-war embodiment of an earlier conservation movement that is still active today. The latter is associated with President Theodore Roosevelt (1858-1919). Environmental interest reached its peak in the 1970s. The first major environmental law, the National Environmental Policy Act of 1969, came just before the first Earth Day was celebrated on April 22, 1970 (coinciding then and every year since with the older Arbor Day on which, once, people planted trees). The eight years between 1969 and 1976 saw passage of nine of the 18 fundamental environmental laws.

Since those days environmentalism is an undeniable public movement, ranging from political activism to a general sort of mild piety. Since 9/11, two analysts (Michael Shellenberger and Ted Nordhaus) have produced much discussion with an influential paper titled The Death of Environmentalism, but environmental polls, tracked by PollingReport.com (http://www.pollingreport.com/enviro.htm), show that public support for environmental causes was very high in the mid-2000s whether measured by Gallup, Harris, or one of the major media polls. Regarding this topic, no real differences in public opinion are discernible between the 1980s and the 2000s. A great majority (around three quarters) are favorably inclined toward the environment; more than half participate in some form of environmental activity (like recycling); and around 30 percent are actively involved in the cause.

This is the general “environment” in which green enterprise operates. Green products and services have a substantial market and command a premium price. The movement now embraces much more than simply pollution-free manufacturing and also encompasses healthy foods (organically produced, if possible), opposition to all manners of artificial ingredients, alternative fuels and modes of transportation (e.g., solar power, bicycles), alternative methods of construction to save energy (e.g., earth-sheltered homes), holistic and alternative forms of medicine, “green investment” in the securities of environmentally sensitive corporations, and many other forms of day-to-day or recreational behaviors, some of which can be supplied by business.

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Corporate Response

The corporate response to environmentalism has taken many forms. These range from simple exploitation of the phenomenon to a deeply committed entrepreneurship by those who share the values of the environmentalists and attempt to incorporate those values into the production process itself in every possible way.

Exploitation typically takes the form of offering a few higher-priced versions of a product line which will appeal to environmentalists or positioning traditional products in marketing to highlight and emphasize the environmental aspects of the product.

The middle-ground is occupied by companies that deliberately make and sell only products that are environmentally superior, have been produced by a non-polluting process, or are made of natural ingredients only. A Google search on the phrase “environmental products,” for example, will produce more than 2 million hits; a Yahoo search around 900,000. The products offered cover a bewildering variety of literally anything and everything—including even surprisingly technical items such as automotive catalysts.

Finally there are corporations in which environmental values are central to corporate values and all operations are deliberately and consciously managed with those principles guiding all choices. Often these are major publicly-traded corporations. And investment funds sold to environmentally-aware investors will feature such stocks. Sellers of such portfolios like the term “sustainable” industry as an alternative to “environmentally friendly” or “green” industry.

Environmental Production

All manufacturing processes, of course, are regulated under federal and state laws that deal with air and water pollution; the transportation and final management of toxic, hazardous, radioactive, and infectious wastes; land management and restoration in the mining of resources or the extraction of timber; the raising of animals and the management of their wastes; etc. “Green production,” however, represents an effort to go the extra mile, not merely to meet all relevant environmental laws. This type of production involves, principally, four strategies: 1) methods of growing, harvesting, or extracting new raw materials in such a manner that energy is conserved and few or no artificial chemicals are introduced into the process; 2) methods of reusing materials to minimize waste and, indirectly, to save energy; 3) techniques for avoiding where possible high-energy or chemicals-intensive processes; and 4) schemes for processing production wastes back into the process or into secondary uses.

Extraction The first strategy typically involves growing agricultural commodities with minimal or no artificial fertilizers, utilizing natural method of pest and weed control, and labor-intensive rather than machineintensive methods of harvesting—including selective timber cutting rather than clear cutting. People engaged in green production understand that substantial amounts of energy are consumed in making fertilizers and pest/ weed-control chemicals—and both the extraction and use of energy harms the environment. Chemical methods of control disturb the natural ecosystem and have farreaching down-stream consequences as run-off carries residues into waterways and the tissues of aquatic life absorb and cumulate poisons. Modern agriculture and forestry, of course, has been optimized using energy and chemicals. Therefore “green production” tends to be more costly on average.

Reuse/Recycling Where at all possible, green production will make use of waste materials and residues as raw material although, typically, such substances require more processing. Here again the motivation is to reduce production waste and to capture for continued use energy already embedded in the waste. Economic forces have, of course, long favored such reuse where the wastes are relatively uniform or abundant. Secondary paper mills and electric furnaces to remelt scrap steel predate the environmental movement. Green production is an extension of this market-driven recycling achieved by redesign of processes.

Minimizing Energy Use Modern processing has evolved around the use of machines driven by energy and the use of chemical solvents and catalyst in preparing raw materials. The two environmentally superior means of getting the same job done are to use labor instead of machines— and time. High-powered paint-spraying, for example, requires more energy, produces more pollution (unless very carefully shielded) and, especially if combined with high-heat drying systems, is much more rapid than hand painting followed by just letting time pass as the painted objects dry. Many variants of this general approach are used.

Waste Handling In green production wastes are intensively managed to keep them useful for immediate recovery or reuse as energy in on-site furnaces. In many such production facilities, organic wastes are further treated— by composting, for instance. The waste-handling aspects of production may therefore, in turn, produce additional products for sale.

Economic And Other Ambiguities

Green production specifically, but green commerce as a whole, has ambiguous aspects arising from higher costs generally and the form of the dominant production culture, particularly, the nature of the U.S. consumer market.

U.S. industry has evolved from a dominantly agricultural past in which the small farmer was the “typical” American to a high-geared energy/chemical culture where the typical American works in or out of an office. Automation is the norm of production—which depends, ultimately, on oil fueling machines. Green business looks back and, —once oil resources are depleted—perhaps also forward to a simpler and much more labor-intensive time. But that time is not yet. For that reason, green goods generally cost more. But they are consumed by a public wealthy from the exploitation of oil and technology.

Using 2003 data released by the Central Intelligence Agency (The CIA World Factbook), the U.S. had 4.6 percent of the world’s population but consumed 25.9 percent of global oil—the highest consumption rate in the world. Oil consumption may be viewed as a proxy of all other consumption. Consumption of goods and energy is the cause of virtually all environmental pressures—and the U.S. consumption “footprint” is the largest. The American (and for that matter European) embrace of environmentalism can thus be seen in a cynical light as perhaps a well-meaning but naiu ¨ ve and sentimental activity: the recycling bin, after all, is sitting right there, next to the SUV. Another view of this situation—the reason why it is ambiguous—is that the broad public reflects a dim but clear realization that the current culture is not “sustainable” and needs to change.

And many members of it are willing to pay for that by paying higher prices for green goods.

The Small Green Business

Small business is not only well-represented in the green market but, judging by the products on offer out there, also the largest supplier, in terms of enterprises, of this sector. Small business typically leads in innovation— because it is less weighed down by institutional inertia.

As the 21st century advances, small business owners are perhaps, like the public at large, hearing the beat of a different drummer.