Hi! Managers: Green economics: How long can we ignore it?

Kai Schlegelmilch, co-founder and vice president of GBG, once said that the first step in the effort to convince a government of the advantages of green economics is the most important one. His key message was, “20 per cent greenhouse gas reduction and 300,000-800,000 new jobs”. Reducing emissions and creating new jobs: What a fascinating concept for politicians! Germany is one of the leading countries in terms of using economic and price mechanisms to drive environmentally aware behaviours, management systems and investment, having successfully increased GDP without increasing electricity consumption. The more exciting story is that, according to Schlegelmilch, “In the next 10 years, there will be no more nuclear power in Germany, and by 2050, almost 100 per cent of Germany’s energy supply will be alternative energy.”
The key driver of green economics in Germany is the “eco-tax”, which is levied mainly on energy sources. Most low-carbon societies have energy or carbon taxes, which make people more aware of their own energy usage. (Thailand, on the other hand, is one of the cheapest countries in the world in terms of fuel, and has never charged any form of carbon or energy tax.)
Implementing such environmental tax reform should not be done using shock methods, but gradually, and in conjunction with education of consumers. Businessmen like to be aware of environmental issues, but what really interests them is a cool business model. So the starting point – and the pillar – of the green economics business model is the charging of an eco-tax on anything that harms the environment. Then, people will naturally learn that it’s in their interest to buy good-quality, energy-saving products in order to offset energy costs, which can be expected to rise over the years. Businesses will be motivated to come up with quality products using less energy, because they know their customers will be searching for energy savings and environmental friendly products.
I would say that repeating Germany’s success story is not so far in the future for Thailand. We can all see the effects of global warming. Here, it means worse and worse flooding every year. So I don’t think it will take long for the Thai government to take green economics seriously. It is a direct way to warn people about the need to conserve energy and save the environment.
And if Bangkok does nothing, this will become a form of non-tariff barrier in the near future, anyway. One sign of the seriousness of this movement is the return of Rio 20+, the United Nations Conference on Sustainable Development, which will be held in June 2012, 20 years after the Earth Summit in Rio de Janeiro. As managers, we can choose to wait and pretend that Thailand is a developing country whose people will take a long time to become aware of global warming; or we can look around and see the reality and adapt our vision to green economics. We can be a low-carbon society or a low-responsibility society; the decision is ours.

Jirat Sirichalermpong is customer and marketing analysis manager at Siam City Cement.