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THE environment is big business in Europe, and growing. The Commission
of the European Community estimates that in 1980 the ‘green industry’, as
it is now known, employed 1.5 million people. By the turn of the century,
the number is likely to rise to at least 3 million.

The green industry ranges from producing pollution-control equipment
on cars to recycling rubbish and performing scientific analyses of environmental
quality. Throughout Europe, it is generally governments which have promoted
growth in the green sector: by imposing legal limits on pollutants, by tax
incentives for cleaner technology and by levies on emissions. Now industries
are catching on to the advantages of taking into consideration the environmental
views of the buying public.

France is often thought to be the least concerned of European countries
about the environment because of its commitment to nuclear power. But, as
early as 1983, the French government spent 226 million francs (Pounds sterling
23 million) promoting industrial investment in clean technology – ranging
from the desulphurisation of flue gases from power plants, to the installation
of chemical processes requiring fewer toxic solvents. As a consequence,
French industry spent 627 million francs.

Tax incentives have not so far encouraged industries in Europe to spend
much on environmental issues. In Britain, though, such incentives were responsible
for growth in wind power. And West Germany’s finance minister revealed in
July that tax incentives totalling DM800 million (Pounds sterling 267 million)
for energy-saving technology prompted industry there to invest DM11 billion.

Government policies can retard as well as expand green industry. According
to the OECD, many government policies directed at promoting clean technology
favour so-called ‘end-of-pipe’ measures, which aim to contain the pollutant
once it has been created, rather than encouraging new technologies which
do not create the pollutant in the first place.

In West Germany, for example, factory managers can claim tax relief
on an investment if 70 per cent of it is devoted to pollution control. This
means that installing, say, an air cleaner might attract tax relief, whereas
changing to a cleaner production process would not if less than 70 per cent
of the investment were devoted to ‘pollution control’ per se.

What industries are now willing to spend on environmental issues may
not be related just to complying with government regulations or tax breaks,
but to the importance they attach to having a green image with their consumers
and the public at large.

German manufacturers advertise ‘phosphate-free’ soap powders, claiming
them to be environment friendly. Appliance manufacturers, such as AEG, label
refrigerators as ‘-50%’ as a selling point when they use half the usual
charge of chlorofluorocarbons (CFCs) as the working gas. They also promote
the fact that they will recycle the CFCs (essentially the F-11 and F-12
varieties, which are the most damaging to the ozone layer) in old fridges.

The rise of ‘green consumerism’, in which people actively choose products
because they are more environmentally sound, may turn out to be a more potent
force in cleaning up industry than any number of government rules. Recent
surveys, such as that published in June this year by the London-based Mintel
International, show that the number of people who will pay a bit more for
a green product is now substantial. After questioning 1000 people, Mintel
found that ‘more than seven out of ten UK adults are willing to accept higher
prices for green products’.

Clearly, manufacturers can no longer think of environmentally friendly
products as being attractive to a minority market. This will be particularly
true when the much-vaunted open European market for goods and services comes
into operation in 1992. This is meant to provide manufacturers with 320
million captive consumers, all using the same brand names, the same packaging
and the same product standards. The financial risk of launching a new product
diminishes as the number of potential buyers increases.

Sellers are also looking furiously for the edge they will need to compete
successfully in the larger market. Many people now conclude that the edge
could be green.

Tony Venables, of the Bureau of European Consumers Unions in Brussels,
warns of a danger in ‘environment friendly’ logos and symbols, such as the
‘blue angel’ awarded to innovative ‘clean’ products in West Germany or the
ozone-safe logos now appearing on aerosols. Such devices, complains Venables,
do not explain to consumers, in detail, what they are getting. He believes
the effort to harness consumer choice to the promotion of environmentally
safe products will be seriously undermined if the consumer is not convinced
that choices are meaningful. Venables favours the detailed kind of explanatory
labelling now used for food additives.

Green labelling and promotion do not enter the picture in the pulp and
paper industry, says Gunnar Freden of the Swedish paper company Holmen.
The Vargoen plant owned by Holmen is the only one in Europe not to use chlorine
bleach to whiten its paper. Environmentalists charge that waste from the
chlorine processes damages local waterways. Freden says his company chose
to use peroxides, not to favour the environment, but to overcome the difficulties
of handling the chemically dangerous chlorine bleach. Unfortunately, peroxides
do not bleach as white as chlorine compounds. Sales will depend on whether
buyers accept this in exchange for environmentally sound paper. Holmen’s
decision could pay off, however, for Greenpeace is launching a campaign
against chlorine bleaching.

Chemical companies, the target of the fiercest green protests in Europe,
are also beginning to see a commercial advantage in embracing, rather than
fighting environmentalism.

For example, last year the Italian government announced a ban in the
coming decade on all non-biodegradable packaging. It apparently made the
decision after consultations with the Italian chemical and agro-industrial
giant Ferruzzi. The company announced this June that it would shortly market
a plastic, suitable for packaging, that is the world’s first to be truly
biodegradable.

Italy’s move was not a response to specific consumer pressure. The explosive
rise of green awareness in Italy recently, however, will make the decision
profitable for all concerned. The government will look good because it has
banned the worst component of publicly obvious litter: plastic bags. Italy
has probably created, single-handedly, a lucrative export market for the
patented plastic, as other consumers demand the biodegradable bags.

Energy is one area where the impact of consumers may be increasing.
Residents of modern communities need electricity, and get it from a common
grid. They can scarcely exert classic consumer preference for electricity
produced by one means or another. But public opinion means a lot to some
sectors of the industry, notably nuclear.

BNFL in Britain has placed advertisements in newspapers and magazines
jogging the public’s mind that nuclear energy does not emit greenhouse gases.
Electricite de France, the state energy utility, which runs the world’s
largest civil nuclear programme, has run similar campaigns. It is, however,
rumoured to be considering indefinitely postponing several planned nuclear
plants. France has much more energy than it can use at home and needs to
export any new electricity it produces. Although markets for the supply
of energy are opening up in the European Community, the most obvious one
is West Germany. Public opinion has all but killed nuclear power in West
Germany.