Innovations Help Economy, May Save the Planet

California’s ambitious energy conservation legislation has created an unusual challenge for the state’s utility companies: to get customers to consume less of their product. Laws that reward utilities for meeting energy reduction targets and punish them for missing the goals have led to unusual business tactics. “It’s a strange business,” Roland Risser, the head of customer energy efficiency for Pacific Gas & Electric (PG&E), told the Wall Street Journal. “You have to do gymnastics to get things moving forward.” 

To reduce energy demand for lighting, California utilities have spent millions of dollars subsidizing compact fluorescent lamps (CFLs). The energy-efficient light bulbs, which can cost several dollars elsewhere, are branded with the utilities’ logos and sell for as little as 25–50 cents in California. PG&E, which may earn or lose up to $180 million over three years under California’s energy conservation laws (depending on whether they meet or miss the reduction targets), enlisted the help of nonprofit groups like the Sierra Club and the Girl Scouts of America to distribute 1 million free CFLs last fall.

  !ADVERTISEMENT!

These types of shifts in business thinking are not unusual today, according to the authors of the Worldwatch Institute’s latest report, State of the World 2008: Innovations for a Sustainable Economy. Everyone from entrepreneurs and manufacturers to investors, policymakers, and consumers are finding ways to make helping the environment profitable, says Gary Gardner, co-director of the project. The book describes efforts by one American innovator to become a “wetlands banker” by creating marshlands to sell to the government. And because of the sheer size of the European market, manufacturers in other countries are being forced to meet progressive EU safety standards for chemicals in order to remain competitive.

Worldwatch Institute President Christopher Flavin warns that environmental degradation continues to threaten the world economy, with far-ranging consequences for ecosystems and human societies. But at the same time, he says, “an unprecedented wave of innovation” is now rising to meet those threats. “If these innovations…are multiplied and scaled up,” Gardner adds, “the prospects for a sustainable economy are indeed very bright.”