Sez report

1.2.8.1. Realising the potential 
Sustainable economic growth will, of course, continue to be a priority. The key word, though, is 
sustainable. There does not need to be a trade-off between the economy and the environment, simply 
the retuning of growth to take account of environmental health. This will best be done by pricing 
carbon into the equation as the most effective surrogate for environmental cost. The economic benefits 
of thus reducing the carbon-intensity of production and consumption are not limited to security of 
energy supply or driving down costs through increased efficiency. The pricing of carbon itself 
represents a host of exciting opportunities for reinvigorating the economic system and companies 
within it – for flushing out old power structures, opening space for new entrants and technologies, 
stimulating job creation and encouraging nimbler, lighter management.
This is being grasped by progressive management throughout the world. As Scott Vitters, Coca-Cola’s 
director of sustainable packaging has recently said, ‘Waste of any kind is inefficiency, and inefficiency 
equals cost.’ The carpet-manufacturing company Interface is feted for having shifted its business 
model radically in this regard. Instead of simply selling carpets, it now rents floor covering to its 
customers, removing worn parts and replacing them, and re-using or recycling the materials. Wal-Mart 
has insisted that it suppliers cut 25% out of the packaging they use and, because that improves 
suppliers’ profits, expects to share in the saving. 
This potential has not escaped the money-men either, with venture capital funding for environmental 
technologies having nearly doubled to $1.28 billion in 2006. The development of emissions trading to 
tackle climate change will drive strong growth in carbon trading markets, whose global aggregated 
value is expected to be around 23 billion Euro in 2007. According to the Stern Review, carbon markets 
are already worth $10 billion a year. If all developed countries committed to such markets, this sum 
would grow by 200 per cent. The OECD’s International Energy Agency estimates that the annual 
market for low-carbon technologies would reach over $500bn per year if we shift our energy demand 
to low carbon sources and cut emissions by 60% by 2050.