If you come, they will build it - E Word - development of a viable market for green products - Editorial

E: The Environmental Magazine, Sept-Oct, 2002 by Doug Moss

It's a no-brainer, really: You get the big guys--governments, hospitals, universities, big corporations, everyone who buys in volume--to demand green products and attributes. As a result, suppliers are forced to green up their products if they want the business. Thus they invest in doing so, and the resulting sales volume creates a large-enough production of these goods to spread out their R&D and other fixed costs. Prices come down as a result--and these products become affordable for the rest of us.

Some readers will remember when calculators, computers and digital watches were new products. And--fast forward--now the new DVD recorders, cell phones and other electronic gadgets follow the same pattern: Costs start out high, but then as their popularity catches on, the prices come down because production goes up.

The key difference, of course, between energy-saving compact fluorescent light bulbs and MP3 players or Palm Pilots is that the latter are sexy items that people want for their own enjoyment. We'll pay $500 for the X-BOX the moment it's available, even though we know that a year later it will sell for half as much. Our insatiable need for entertainment, coupled with the profound impacts of commercial advertising, makes us absolutely have to have it now.

The success of most environmental products, however, requires a measure of altruism on the part of its potential customer. And, unfortunately, as hard as some of us try to "think globally," most people do not. So the development of a market for such mundane items as recycled office paper and low-flush toilets needs a jump-start.

All this should keep the "market forces" advocates happy. If hospitals start buying mercury-free thermometers in large numbers because environmentally concerned people lean on them to do so, that's market-driven--and it will drive costs low enough for Wal-Mart to offer them affordably to consumers. If universities install compact fluorescent lighting campus-wide because the student body demands it, that's also an answer to a market demand. And if the federal government moves to convert, say, its postal vehicle fleet to run on fuel cells because taxpayers want them to, that market gives the auto industry a big incentive to invest in their production. The alternative--betting the farm on consumers, putting alternative vehicles in the showroom and then not selling enough to make production cost-efficient--is a gamble they aren't willing to take.

It's a Catch-22 for sure: Green products can't be affordable if they don't sell enough, and they won't sell enough if they're not affordable. Something has to "goose the system," and getting the big players to buy green gets the juices of the economy flowing. Think of it as affirmative action for the Earth.