“We have the tools today to steer the global economy onto a sustainable path.”

“Continued human progress now depends on an economic transformation that is more profound than any seen in the last century.”

Environmental Action Driving Global Economy

Environmental issues were once regarded as irrelevant to economic activity, but today they are dramatically rewriting the rules for business, investors, and consumers. Around the world, innovative responses to climate change and other environmental problems are affecting more than $100 billion in annual capital flows as pioneering entrepreneurs, organizations, and governments take steps to create the Earth’s first “sustainable” global economy.

In State of the World 2008: Innovations for a Sustainable Economy, researchers with the Worldwatch Institute and other leading experts highlight an array of economic innovations that offer new opportunities for long-term prosperity.

In Chapter 1 of State of the World 2008, project co-directors Gary Gardner and Tom Prugh highlight seven principles of a sustainable global economy, which underlie the work of innovation pioneers concerned about environmental degradation and widening income inequality:

1. Adjust the scale of economic activity to fit within boundaries set by the natural environment
2. Make prices tell the ecological truth, by incorporating environmental costs into the price of goods and services
3. Shift the goal of economies from growth to development, by focusing on generating greater levels of well-being
4. Account for nature’s economic contributions through a full assessment and valuation of nature’s services
5. Apply the precautionary principle to economic activity
6. Revitalize ancient principles of commons management to govern resource use in an increasingly crowded world
7. Properly value the extensive contributions women make to any economy

Some examples:

• In 2006, an estimated $52 billion was invested in wind power, biofuels, and other renewable energy sources, up 33 percent from 2005. Preliminary estimates indicate that the figure soared as high as $66 billion in 2007.
• Carbon trading is growing even more explosively, reaching an estimated $30 billion in 2006, nearly triple the amount traded in 2005.
• Innovative companies are revolutionizing industrial production while also saving money: for example, chemical giant DuPont cut its greenhouse gas emissions 72 percent below 1991 levels by 2007, saving $3 billion in the process.