Expanding green consumer and corporation

Description

According to IMF, in 2009, the world population has reached 6.65 billion, 40% increase from 1985, and would increase to 7.1 billion in 2014. (IMF 2009) This significant increase would lead to a big surge in energy demands and consequently considerable rise in CO2 emissions. IPCC estimates that annual emission in 2050 would reach 15 billion ton, triple the 2000 level. (JACSES 2009) Against the backdrop of this emergent situation in addition to obligation to meet the Kyoto targets, governments in many countries are attempting to make transits in corporate activity and consumer behavior.

Governments in EU region introduced the cap and trade system which sets the maximum amount of CO2 each target corporation can emit and allows target corporations to offset the excess emissions with carbon credits. The system made corporations realize that installing energy efficient facilities would not only reduce electricity cost but also enable them to exempt from paying for offset credits. Strong subsidy policy is another example to change their corporate strategy. In some developed countries, especially Germany, the US, the UK, and Japan, the government subsidizes consumers who purchase eco-friendly products such as low fuel consumption automobiles and low energy consumption electric devices. The subsidy policy provides a supportive push for consumers who recognize the economical benefit of the eco-friendly products but hesitate to purchase them due to the relatively high initial costs. In fact, after the subsidy policy was in effect, about 50,000 of PRIUS, TOYOTA’s hybrid car, were sold in two months. (IT Media 2009) Corporations have recognized that producing eco-friendly products would be profitable.

Government is trying to change consumers’ mindsets as well. In countries such as the UK and Japan, carbon footprint is becoming widely known. Carbon footprint is the figure that expresses the amount of CO2 emitted to produce and deliver the product. Governments induce corporations to display the carbon footprint on product packages so that consumers realize which products are more eco friendly. This education policy attracts considerable interests from consumers and encourages them to purchase greener products.

Enablers

Environmental regulations Incentive schemes to purchase/produce eco-friendly products Green education Instability in oil price

Inhibitors

Stability or decrease in oil price Economic recession

Paradigms

More consumers would pay for additional values for the products. Environmental indicators such as carbon footprint which shows the amount of CO2 emissions in product life cycle provides consumers with clear ideas whether the product is good for environment or not. More consumers' interest in green products would motivate corporations to create green product/service.

Experts

Government: Ministry of the Environment NPO in sustainable field LOHAS consulting firms