Blue is the New Green

ABU DHABI – In recent years, an increasingly loud chorus of environmentalists, civil-society actors, and international institutions have been demanding that conventional “brown” economic development, which depends on fossil fuels, be replaced by a lower-carbon “green” growth model. But there is a third, more competitive option: a “blue” economy driven by business-level innovation, rather than top-down policies.

The fact is that most environmentally friendly technologies demand significant upfront investment, meaning that “going green” remains a privilege reserved for the few countries that can afford it. After all, governments’ capacity to provide subsidies is limited, and wealthy countries cannot be expected to bear the costs of the uptake of sustainable technologies worldwide. Thus, as the United Nations recently confirmed, more than a billion people worldwide still lack access to reliable, clean, and affordable energy.

The blue economy – a concept developed by the Belgian economist Gunter Pauli – is powered less by investment and more by innovation, with a focus on creating jobs, building social capital, and generating multiple cash flows by stimulating entrepreneurship and the development of new business models. The blue economy is centered on the idea that companies should use all available resources and increase efficiency to develop a portfolio of related businesses that benefit both them and society.

Consider the Swedish company Solarus AB, whose innovative business model – manufacturing solar panels out of carbon fibers discarded by the aerospace industry – has enabled it to offer competitively priced solar technologies, without support from government subsidies. The fact that solar technologies can be produced locally from recycled materials, Pauli argues, means that governments should not provide solar-related subsidies and bailouts – the costs of which eventually land on taxpayers.