Home >

Government must act to secure green benefits of new economy

2001-08-28
Substantial environmental benefits may result from the development of the "new economy", dominated by the service sector and information technology — but they will be realised only with Government policies to steer development in a sustainable direction, according to a new Green Alliance pamphlet.
Environmentalists anxious to gain the ear of Prime Minister Tony Blair have been developing an "environmental modernisation" agenda which emphasises business-friendly environmental policies. An important theme is the potential for resource efficiency measures to stimulate economic innovation and efficiency.
One initiative seeking to draw the Government into this debate is the "Digital Futures" programme, launched in February. The one-year project, involving eight think tanks including the Green Alliance, is assessing the social and environmental impacts of e-commerce and the new economy.
The new pamphlet, by Blairite thinker and journalist Charles Leadbeater, is the first fruit of their work. It plays up the potential environmental benefits of the new economy. Driven by innovation, the new economy will bring increased efficiency and the replacement of materials and goods with services and "experiences", he contends.
Mr Leadbeater notes that "virtualisation" — the replacement of material goods with services — can have environmental benefits. Examples include sending emails instead of letters, or buying music in the form an MP3 computer file rather than a CD. Such services avoid manufacturing, storage and delivery costs.
However, the environmental benefits of the new economy are far from clear. Mr Leadbeater admits that a service-based economy may still be underpinned by manufacturing — possibly abroad. And while e-commerce has the potential to reduce car journeys, it will not necessarily reduce consumption and could lead to an explosion of van deliveries.
"As technology has got cheaper we use it more, and so consume more energy and raw materials, and dispose more quickly of products which have shorter lifespans," observes Mr Leadbeater.
Nor are the new technologies environmentally benign. The boom in home and office computers has brought increases in energy use. And plans for "internet hotels" housing hardware needed to cope with growth in e-traffic could boost electricity demand in London by as much as 20%, according to some reports.
Mr Leadbeater says the Government must act now to ensure that the environmental potential of the new economy is realised. Technological innovation is not being matched by change in social and political institutions, he complains.
"Making these products and services more environmentally friendly, in the long run, requires not just technical but social change," he insists. "We need to focus all the tools of policy — taxes, regulations, inward investment, competition policy research and development — to drive environmental innovation."
Part of this will involve shifting the burden of taxation away from people and services and onto energy use and materials consumption, he suggests. But policies to promote the new economy must also be accompanied by demanding environmental standards. Far from being a burden to industry, Mr Leadbeater sees tight environmental standards as a spur to innovation. He wants the Government to set demanding goals, leaving it up to companies how to meet them.
"Environmental regulation could have a new role within a wider process of innovation," he asserts. "Open markets and tough environmental standards, when combined intelligently, may be the best way to spur innovation."
He sets out an action plan for a greener new economy. He thinks that policies should be formulated to support "virtual" products and wants to see the emergence of "a new breed of environmental entrepreneur" who sees the environment as an integral part of product and process design.
"The new economy will develop along more environmentally sustainable lines only if technical, social, organisational and political innovations work in combination," he says.