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Report Finds Rising Tide of Green Financing

by Stephen Leahy

BROOKLIN, Canada - There appears to be hope for the planet yet.After much urging and dire threats, the global economy, much like a stubborn and temperamental toddler, is starting to reluctantly turn towards sustainability, according to the "State of the World 2008" report released by the Worldwatch Institute Wednesday.

"Innovative green efforts by governments and business are becoming commonplace," said Gary Gardner of Worldwatch, a U.S.-based environmental think tank.

"While green projects are no longer marginal, they are still a long ways from being mainstream," Gardner, co-director of the report, an annual summary that usually focuses on documenting environmental declines around the world, told IPS.

The report describes a host of new economic opportunities that are attracting capital. An estimated 52 billion dollars was invested in renewable energy in 2006, up 33 percent from 2005. Preliminary estimates indicate that the figure reached 66 billion dollars in 2007. Carbon trading is growing even more explosively, reaching an estimated 30 billion dollars in 2006, nearly triple the amount traded in 2005.

"Renewable energy is close to taking off on its own. It doesn't need much help from environmentalists any more," Gardner said.

Green announcements now come daily. Last month, Virginia Tech University said that it had teamed up with a private investor, Hannon Armstrong, to put 100 million dollars a year into improving the energy efficiency of Washington area buildings. In May, Citigroup (also known as Citi), one of the world's largest banks, announced plans to invest 50 billion dollars to address climate change over the next decade.

That squarely contradicts the fact that Citgroup is the leading financier of fossil fuel energy and the world's top financier of coal, which is the chief source of climate-altering emissions from the U.S. and in other countries.

Is Citigroup's promise to address climate change what's known as "greenwash", or a sincere effort to do business sustainably?

And what of General Motors' recent efforts to urge the U.S. to pass legislation regulating greenhouse gas emissions that are also highlighted in the report?

"GM and other corporations are shifting from denial on climate change to wanting to have influence on future regulations that they know are now inevitable," Gardner said.

However, he added, "The majority of activities by many of the corporations and countries cited in this report are bad for the environment."

But rather than focus on the business-as-usual operations that ignore the environment entirely, this year's report tries to document the rising tide of green efforts that may mark the real birth of a sustainable global economy.

What is a sustainable economy? It is one that relies on renewable energy, recycles so effectively that there is near zero waste, emits few if any toxins and meets the needs of the poorest people, suggests Gardener.

The rapid growth of microfinance -- short-term loans of often just a few hundred dollars -- has had a considerable impact in developing countries, the report finds. It also produces excellent returns for lenders, so much so that Citigroup -- yes, them again -- is now one of the largest financiers. Corporatisation of microfinance may bode good or ill, Gardner says.

"Corporations and governments are only just starting to learn what a sustainable economy is," he added.

They've been slow learners. It is more than 30 years since the 1987 Bruntland Report titled "Our Common Future", where world leaders set sustainable development as the goal for the world economy.

"Continued human progress now depends on an economic transformation that is more profound than any seen in the last century," said Worldwatch president Christopher Flavin.

"We should be practicing a sustainable approach to economics that takes advantage of the ability of markets to allocate scarce resources while explicitly recognising that our economy is dependent on the broader ecosystem that contains it," he said.

On the sustainable economy ladder, we've only got our foot on the first rung and there is no guarantee we won't slip off, says Gardener.

There are still plenty of powerful vested interests blocking the way up because they don't want change or believe it may harm their interests, he noted. However, the levers of public opinion, green purchasing, energy efficiency, renewable energy and others are now big enough to push some of them out of the way, he believes.

"I am hopeful -- but I dare not say optimistic," Gardner said.

And consumerism remains the "toughest nut to crack".

Current levels of consumption in rich countries cannot be sustained. And much of the rest of the world want to live like the average U.S. citizen. Sadly, far too many people believe an enormously powerful consumption message put out by the advertising and entertainment industry that "who they are is what they own," he said.

"Innovation is really needed to show people that we can have better lives with less," Gardner said.

© 2008 Inter Press Service

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