The Economic Impacts of Going “Green”
Professor Gary Reinke
University of MD University College
May 9, 2007
The U.S. economy is dependent upon nonrenewable fossil fuels (oil, natural gas and coal) to thrive. Because of this, it faces big problems due to that economy failing and an environment that is being devastated by carbon emissions. This dependency has to stop. Consumer demands for greener products and services are putting increased pressure on businesses and the federal government to be the catalyst in ensuring the change efforts succeed and at the same time help to grow the economy.
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First, the American consumer, and their demands for more environmentally friendly products? Second, what do businesses need to do to meet the “green” demands of consumers and what do they face in their attempts to meet those needs? Finally, what is the U.S. government doing to impact a greener economy?
Many consumers have recognized that what they consume has a direct impact on the environment. This recognition has American consumers leading the “go green” charge as they search for responsible investments and consumption purchases. (Sara E. Lewis, 2008) Demand for greener products is still rising according to a recent survey conducted by the Boston Consulting Group (BCG). BCG reported that more green products were purchased in 2008 vs. previous years, and in addition to the number purchased; the survey also found that more consumers were also willing to pay a higher price for those green products as long as they saw them as being of higher quality. (Robert Kropp, 2009) “These consumers not only want products that help organize their lives, achieve personal and business success, look their best, feel their best and make them the envy of the neighborhood; they want them to lower their carbon footprint.” (Traci Purdum, 2008)
The same study by BCG that reported an increased purchased of green products by consumers, also reported that 73% of those consumers considered it important that companies have good environmental records. What consumers want, consumers get. All in the name of consumer demand, “businesses have had to factor sustainability into their business plans, embed green values throughout their supply chains, develop measurable goals and reporting structures, and communicate in a credible way with consumers about their products. “ (Robert Kropp, 2009) For example, General Electric Company, has an ecomagination campaign that highlights the company’s focus on a cleaner environment. (Traci Purdum, 2008) And amid growing consumer demand for more environmentally friendly cleaning products, chemical suppliers are increasing their efforts to provide products with more environmentally friendly ingredients that have the same results as conventional ones (Science Daily, 2008). Even Nike, Inc. has launched a team called the Nike Environmental Action Team that focuses on recycling, education and innovative programs such as Reuse-A-Shoe, which creates new products from recycled shoes. (Nikereuseashoe.com, 2008)
Consumer demand has forced companies to make significant changes in the way they operate, what they produce, and even how they market their products. In order to be successful, companies have always had to come to the market with goods and services that consumers desire most. Making changes to meet those desires is the only way for them to sustain.
So, what has “going green” meant for companies in the United States? Resource sustainability and environmental protection have become growing factors in business practices due...