One of the most memorable moments in the history of movies about business is Michael Douglas’ famous line in Wall Street, “Greed is good.” He delivers it playing the roll of a corporate high flier speaking to a stockholders’ meeting. The phrase pretty well summed up the spirit of the late ‘eighties and early ‘nineties, where bond trading was so glamorous that successful traders were known as “masters of the universe” and the idea that any market could crash was virtually unthinkable.
How times have changed. There are so many examples of situations where greed was not good – the housing market is today’s poster child – that a new slogan is sure to emerge. My suggestion: Green is good.
A recent segment on National Public Radio put this thought into my head. It turns out that the most glamorous young financial types in Manhattan these days are – sure you’re ready for this? – carbon traders.
In case your not familiar with the practice of carbon trading, here’s how it works. If you’re a European manufacturer, there’s a government limit on your carbon emissions – and the emissions of all your competitors as well. If you go over it, you pay a fine. But if you’re under it, you can actually sell credits from your “permit to emit” to a company that’s over the limit, which enables that company to avoid a fine.
Why does this make sense? Because there are some companies that can make significant reductions at a low cost. The system of carbon trading is an incentive for them to do so, because they can actually make money selling credits to companies for whom cutting emissions is expensive and difficult. The net result, economic modeling specialists tell us, is an overall reduction in emissions at a faster pace.
The point here is not the intricacies of carbon trading, but the change in public perceptions about green, aka sustainable manufacturing. Eco-friendliness started out as a vaguely subversive philosophy held by eccentric tree-huggers who were at best morally right but hopeless naïve about the economic realities of the world. Gradually, however, the value of energy conservation became broadly acceptable, to the point where it’s now embraced by such politically diverse figures as Al Gore and George Bush (although they certainly don’t agree on all environmental issues). Concurrent with the political shift, green technologies have emerged that offer a reasonable payback, particularly when oil is hovering at the $100 per barrel mark. And now, the one element that’s been missing in the green manufacturing movement has arrived: glamour.
Green is good.
Just to be clear, I’m a sincere believer in green manufacturing, and I suspect that there are a lot of opportunities we are missing simply because we’re not looking. But it never hurts when a sensible idea has a little sizzle as well.
By the way, there is a carbon trading market in the U.S., although it’s voluntary. For information, visit the Chicago Climate Exchange http://www.chicagoclimatex.com, whose members collectively account for at least 5 percent of the total emissions in the U.S.. You can become a member online, and it may make sense.