Human impact on the environment is a function of three main factors: population size, per-capita consumption of resources, and technologies—not surprisingly, all are part of the wealth creation story.^[1] Since 1900, the world’s population has tripled while the global economy has grown 20-fold, fossil fuel consumption 30-fold, and aggregate industrial activity 50-fold.^[2] According to the World Wildlife Fund’s (WWF) Living Planet Report (1998), between 1970 and 1995 more than 30% of the non-renewable resources that sustain life on the planet were lost. Every product comes from the earth and returns to it in one form or another. Forests are shrinking, fish stocks are declining, temperatures are warming, topsoil is eroding, and water is increasingly polluted or scarce. Indeed, our demands on the environment continue to expand as populations grow and consume more, raising serious questions concerning long-term survivability.

The relationship between development and the environment has been described as an “environmental Kuznet curve,” an inverted U-shaped curve.^[4] Growing GNP increases environmental destruction to a certain point, and then it begins to decline. This means developing countries need to promote growth and consumption to improve the lives of their citizens, which in turn will lead to greater demand for environmental protection. Generally, subsistence economies in low stages of development have a minimal impact on their environment and on a country’s resources. Think of nomadic or small farming population areas. As agriculture, industrialization, and resource extraction grow, waste generation, resource exhaustion, and pollution accelerate, as they have in China in recent decades, and as they did in the West during the 20^th Century. However, higher levels of economic development and wealth creation (as in parts of the U.S. and western Europe today) also produce advanced technologies and information service industries that are more efficient and less resource-intensive. Additionally, a social demand for increased environmental quality leads to a leveling off or decline in environmental damage.^[5] People demand better environmental protection because, in many ways, they can afford it.

The underlying reasons for environmental degradation go beyond the obvious increase in population and material wants. Poor public policies, inappropriate technologies, and the failure to take advantage of the latest, cleanest methods are also at fault. Often, it is not in the immediate, short-term economic interests of governments, companies, and consumers to use the cleanest means of production.

Growing energy consumption may be linked to atmosphere changes. Expanding agriculture has diminished forests and led to desertification around the world. Industrial waste and poor sanitation have degraded world water supplies. While these issues are global in scope, for developing nations, environmental degradation poses a unique problem as it is intertwined with economic development and long-term national security. For these nations, the problems are immediate, such as contaminated water and polluted air. A 1997 World Bank study estimated that the cost of air and water pollution (due to lost productivity) in China during 1995 was equivalent to an astonishing 7% of the country’s output.^[6] Among the country’s biggest issues are soil erosion, deforestation, land degradation, water shortages, and wetlands damage. Another study estimated the health costs of air pollution in Jakarta and Bangkok in the early 1990s at around 10% of these cities’ income.^[7] In 1996, 84% of Chileans thought their health had been affected by environmental problems, up 28 points from a 1992 study. Eighty percent of Peruvians also agreed.^[8]

Not only are developing countries saddled with the consequences of their own environmental problems, but also the fallout from thriving industrial countries. Approximately 20% of the world—largely advanced Material countries—have accounted for approximately 50% of global carbon dioxide emissions since 1950. And while deforestation is concentrated in the developing world, over half of the wood and the world’s paper is consumed by the world’s wealthier 20%.^[9] The conspicuous consumption of the rich has a lasting impact on the poor.

It is not terribly surprising that developing nations are wary of strict environmental rules proposed by international institutions and wealthy nations. Countries amid industrialization and growth are generally concerned with physical sustenance and safety, which are not Material or Experiential concerns. They do not necessarily have the luxury of embracing environmentalism. A 1998 U.S.IA poll in India found that only 7.6% of respondents indicated the environment as the first priority in government spending. This came behind population control (18.7%), job creation (10.4%), infrastructure projects (9.4%), and education (8.3%).^[10]

Today, many developing governments recognize the need for sustainable development but lack the means to provide these services to their populations. Poor countries may have a choice either to repeat the industrialization process of the wealthier world or to use technologies and public policy to pre-empt harmful environmental fallout. A 2000 World Bank report suggests that some are doing just that.^[12] The report shows that, in some cases, countries are able to improve water and air quality before they hit a “middle income” level. For example, another World Bank study found that steel production in open economies is more likely to utilize the latest technologies, reducing pollution by 17% as compared to production in closed, statist economies.^[13]

In the industrialized West, concerns over the environment have roots in the Material need and value shifts of the early 20^th Century.^[14] However, environmentalism, as it is now known, is a relatively recent cultural and political phenomenon. Not until the 1960s, when widespread activism began to challenge the status quo, did the conservation movement begin to have real social and political meaning. Rachel Carson’s book Silent Spring (1962) about the effects of DDT on birds was among the first popular books underscoring the environmental impacts of modern life. In his 1963 essay “Environment: A New Focus of Public Policy?” Lynton Caldwell indicated a shift in American attitudes to the environment precipitated by more knowledge regarding human impact on natural surroundings. It was at this time that “environmentalism” entered the lexicon as a replacement for “conservationism,”^[15] and the focus shifted from resource and land management to pollution and waste management and their impact on individuals and local communities.

From the 1960s and 1970s rose recognizable groups devoted to the cause of environmental protection: The Sierra Club, Friends of the Earth, Greenpeace, the Natural Resources Defense Council, and the Environmental Defense Fund became highly visible and were instrumental in shaping the environmental legislative agenda at the U.S. state and federal levels. Increasing public awareness of environmental issues led to the passage of several important legislative milestones, including the Clean Air Act (1963) and the Wilderness Act (1964).

By the 1970s, environmentalism had developed a consistent following and an agenda that began to be accepted by the greater body politic. A Gallup poll from that period shows that concern about air and water pollution grew from 15% to 53% between 1965 and 1970. A growing individual concern and awareness of the natural environment became a focal point for larger scale activism, and the movement began to influence the business and political communities of North American and western European societies. Now the movement has been accepted as a cultural norm.

As societies continue to grow economically and achieve an undisputed level of financial security, their concerns shift from economic well-being to self-expression and quality of life. The World Values Survey has shown a high correlation between environmental concern and wealth.^[18] Higher income countries are about twice as likely as middle-income countries to favor environmental protection and are 4–10 times as likely to be active members of environmental organizations.^[19] Not surprisingly, the highest levels of support for environmental protection are in the Nordic countries and the Netherlands, which have some of the highest concentrations of Experiential populations in the world.

Since the early 1980s, environmentalism has become more pervasive in the West, as shown in Figure 9-1. In the U.S., for example, 74% of Americans polled in 1990 agreed with the following statement: Protecting the environment is so important that requirements and standards cannot be too high and continuing environmental improvements must be made regardless of cost. In 1981, just 45% agreed.^[20] Not surprisingly, these preferences have had an impact on government policies and politics in general. Across Europe and North America, political parties have, in some cases, altered their agendas to include this new environmental constituency. In other cases, new parties have been formed to compensate for the lack of conservation concerns in existing parties.

Figure 9-1. Percentage of people who say they are willing to pay higher prices to protect the environment, select industrial countries.

In West Germany, the early unresponsiveness of the Social Democrat Party to environmental concerns (mostly about nuclear energy) led to the formation of the Green Party. In 1983, the West German Green Party was able to surmount the 5% hurdle and enter parliament. In 1998, the Greens became an integral part of Chancellor Gerhard Schroder’s coalition government, garnering three ministerial posts. Green parties also emerged in the Netherlands, Belgium, Austria, France, and Switzerland. In the 1997 election, France’s various nascent Green groups won 6.8% of the vote.^[21]

The acceptance of Green parties across western Europe is a result of a growing sense of environmental peril. A 1999 Eurobarometer poll asked the following question: Some people are concerned about environmental protection and the fight against pollution. In your opinion, is it an immediate and urgent problem, more a problem for the future, or not really a problem? The majority of western Europeans responded that environmental protection is an “immediate and urgent” problem: 55% in Belgium, 70% in Denmark and Germany each, 91% in Greece, 73% in Spain, and 52% in France.^[22]

While Green parties have not quite found the same political support in the U.S., the environmental agenda is increasingly affecting the tone in American politics. Environmentalism is now a major campaign issue, highlighted by the fact that Ralph Nader, Green Party candidate for the 2000 presidential election, won 3% of the vote nationally and as much as 10% in Alaska.

Unlike in other areas of the economy where government interaction recedes as wealth grows, with environmental protection, policy actually plays a larger role. In the U.S., this has come in the form of legislation ranging from the Clean Air Act to the creation of the EPA and the protection of forestland. Spurred by popular support for environmental legislation, European governments continued to press for a global warming accord after the American rejection of the Kyoto agreement. In July 2001, 178 nations (without the U.S.) agreed on such an accord, which included mandatory greenhouse gas reductions for industrialized nations and funds to help developing countries adapt and build more efficient technologies to reduce pollution.

The outright rejection of this protocol caused environmental backlash against American President George W. Bush, both internationally and domestically. Bush’s failure to address the environmental concerns of the nation led to a sharp rebuke from the electorate. A June 2001 poll demonstrated strong disapproval of the president’s environmental policies. By nearly two to one, respondents said they preferred protecting the environment to producing more energy, and 57% indicated that, if needed, Americans should pay higher prices for energy to protect the environment. This poll revealed that one of the most pressing challenges facing a nation is the need to protect the environment that sustains life while safeguarding the economy that ensures ongoing wealth creation.^[24]

Not surprisingly, the clash of environmentalism with traditional economic policy is most dramatic in Experiential parts of the world. As individuals begin to demand more environmental protection, the policies and practices of government and business that brought them prosperity are paradoxically challenged.

Environmentalists see the action of consumers and individuals as vital to the cause of conservation. The UN calls for “consumption for human development,” that is, consumption that supports a healthy environment for all.^[25] To some degree people are responding. A 1995 Gallup/Waste Management poll in the U.S. found that 95% of adults reported that they recycled some items. Forty-one states had comprehensive waste-management laws and 45 had waste-management goals.^[26] In addition, earth-sustainable, organic food production is growing 20% per year.^[27]

As Material and Experiential people turn toward a greater concern for the environment, they begin to exert their economic and political will in a manner that is difficult to ignore. Perhaps nowhere is the power of individuals more obvious than on their collective effect on the behavior of corporations. McDonald’s—one of the world’s most recognizable companies—was persuaded to modify its behavior under mounting pressure from consumers and environmental groups. The offense was the styrofoam clamshell packages that carried McDonald’s hamburgers. Environmental organizations such as the Earth Action Network and the Citizens Clearinghouse for Hazardous Waste started a “send-back” campaign in which people mailed the packages back to McDonald’s national headquarters. The campaign resulted in the replacement of clamshell packaging with recyclable cardboard boxes.^[28]

MNCs, the great engines of global wealth creation, have also been some of the greatest global polluters. However, many have been forced to recognize, sometimes through legislation, that sustainable development must be incorporated into production and distribution processes. Restrictive environmental safeguards have been turned into seals of approval and marketing tools. Now MNCs are lining up to partner with environmental groups. Where Ford Motors once fought stiffer regulations on emissions and energy policies, it has recently announced its own plans to self-regulate and slash its emissions without a federal order. Starbucks coffee advertises an alliance with the World Resource Institute. ExxonMobil took out an ad in the New York Times to trumpet its energy-saving history, and British Petroleum redubbed itself “BP—Beyond Petroleum” in its recent ad campaigns. Sweden’s forest products companies have been at the forefront of setting and adhering to environmental standards.^[29] They are involved in “sustainability” certification practices that have also influenced other forest products companies worldwide. Both IKEA and Home Depot have committed to using wood that comes only from properly managed forests.^[30]

Companies have learned how profitable pollution reduction and energy/resource conservation can be. Xerox reported doubling sales of reconditioned, used machines between 1992 and 1997.^[31] Dow Chemicals actively promotes its global Environment, Health & Safety Goals for the Year 2005. These goals include increasing resource productivity by the reduction and better management of waste. The company plans to reduce energy use per pound of production by 20% and the amount of waste, including water, by 50%. After facing a number of protests in the early 1990s, the Coors Brewing Company embarked on a series of programs to institute an environmental management system. Coors now boasts that it has slashed its annual generation of hazardous waste by more than 90% since 1992.^[32] About 10% of the plastics that IBM uses now come from recycled sources.^[33]

Even the automobile industry, which has historically been one of the most environmentally harmful in the world, has begun to alter the way it views environmental degradation as well as its own role in the process. In the spring of 2001, Ford Motors, the world’s number-two automaker, declared that it believed global warming was “real,” after years of public skepticism.^[34] The automaker also pledged to increase fuel efficiency in its SUVs though details are scarce. Toyota, after years of flat energy use, plans to decrease the energy needed to make a vehicle by 2005. The company has already started shutting off lights between shifts and more closely monitoring air-conditioning levels.^[35] Virtually all the major car manufacturers have environmentally friendlier vehicles in the pipeline, including electric-powered, fuel cell, alternative fuels, and hybrid engines, among a variety of other reduced or zero emission technologies.^[36]

The World Resources Institute (WRI) identifies the natural progression of steps that corporations go through as they make an environmental commitment. The process begins with basic compliance with regulations and then moves to reducing emissions beyond legal requirements. The final stage is resource efficiency and waste minimization.^[37] Despite the high-profile programs outlined above, the WRI estimates that in the mid-1990s, less than 20% of North American and European companies could be described as proactive in their environmental agendas—the majority of firms fell in the compliance stage of the corporate cycle.^[38] In 1999, according to a KPMG study on 1,100 companies, the number of firms with formalized impact reports on health, safety, and the environment grew to 24%,^[39] up from 13% in 1993. According to the same study, the rate of environmental reporting has increased for companies in all countries except the U.S. Companies in Germany and Sweden topped this list.^[40]

Capital has been flowing as environmentally friendly initiatives become more accepted cultural norms. The UN estimates that the market for environmental-protecting products alone is $500 billion.^[41] Investment has been flooding into new energy technology funds, which in turn invest in companies on the cusp of micropower and renewables, important innovations toward making energy more efficient and clean. Merrill Lynch, JP Morgan, Britain’s Impax Capital, and Switzerland’s Sustainable Asset Management all have funds devoted to these new technologies.^[42] There is a growing class of mutual funds like the Green Century Equity Fund and the New Alternatives Fund that are committed to investing in companies and industries oriented toward a clean environment.

All of these trends are representative of the gradual weaving of new values into the social fabric of a nation. Growing individual concern for the environment in the past few decades has been slowly infiltrating the social, political, and economic arenas of the industrialized world. Companies once only concerned about the short-term bottom line have been forced to consider the impact of their behavior on consumer perception.

Of course, the larger economy-wide shift from manufacturing to services as well as amazing technological innovations have also been important steps in combating environmental degradation and resource depletion. The growth of material resources has slowed in recent years and consumption patterns have turned toward less material-intensive goods and services. Energy efficiency has improved and per-capita use of many basic materials such as steel and timber has leveled off in the OECD. The UN calls this process “dematerialization.”^[43]

This is not to suggest that a greener world is a foregone conclusion. While there is a growing embrace of environmentalism in the industrial world, it is by no means universal, and most corporations grudgingly play ball. There is still much work to be done. Pollution and global warming are immediate concerns, as are waste and renewable resource depletion. These are problems not only in the industrialized nations of North America and western Europe, but in the developing world where economic growth is arguably still the predominant concern of most citizens and governments. In such countries, there are moral and practical issues at hand. For example, should India or China—with nearly 40% of the world’s population—be told how many cars its citizens can drive because of global greenhouse gas concerns? Indeed, this question goes to the heart of whether economic development and environmentalism are fundamentally antagonistic ideals.

One of the major impetuses for environmental action in developing and developed countries both has been the proliferation of NGOs devoted to conservation. While many of these groups originated in the developed world and have, at times, been considered insensitive to the struggles of developing countries, many are now gaining ground. The WWF, for example, has created a platform called “Indigenous Peoples and Conservation” to connect economic well-being with environmental protection. The program involves local communities in the management and conservation of their lands and wildlife.^[45]

Of all the major issues facing the world, environmentalism is one of the most contentious and hotly debated. While basic concerns about the planet’s health are universal, where such concerns rank in priority varies in the Biological, Material, and Experiential-trending worlds. In poorer countries, where economic growth is brisk, environmentalism is taking a backseat to wealth creation, as it did in the West until the 1960s. Clearing forests, exporting metals and petroleum, depleting aquifers, and spewing pollution are all costs of such prosperity.

As wealth grows, concerns for environmental preservation increase in Material and Experiential populations, and are reflected in many ways: in the Human Value Surveys, in increased regulations of consumer and business practices, in growth of non-governmental watchdog groups, and through voluntary corporate action. However, when it comes down to it, there are still large gaps between expressed public sentiment and implementation through public policy or consumer behavior. One only has to look at American highways, which are crowded with gas-guzzling SUVs, cleverly classified as “light trucks,” and thereby exempt from a variety of emission and fuel economy standards.

While there is a consensus on the environment being important, there has yet to be universal agreement on which global regulations to enact, what they will cost, who will pay for them, and which people need to alter lifestyles to help protect the planet. There is clearly still a long way to go in preserving the world’s ecosystems. But the shift seen in more environmentally friendly business practices—such as increasing disclosure, voluntary individual action, and multilateral agreements—may be precursors to greater coordination to preserving our fragile environment.

The 20^th Century has shown that prosperity has its price, and that largely this expense is borne partially by the environment. It seems inevitable that the process of wreckless wealth creation, particularly the industrial phase, could damage the planet unless new policies and technologies are employed. However, we have also seen that when the Experiential stage of wealth creation is reached, concern about environmental degradation becomes an important value, with Experientials’ extra money available to absorb the costs. The hope is that governments will foster policies toward more effective resource management, and that businesses will adapt and invent technologies to meet the needs of this growing cultural demand. The wealth process and mass consumption may have created environmental problems, but perhaps the power of late-stage Material and Experiential populations will also help to solve them.