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Investments in Life Systems Boosting Green Transition

Earth Day 2015 marked $6.22 trillion invested in the global green transition since 2007, on track to meet the Green Transition Scoreboard® (GTS) goal of $10 trillion privately invested in the green economy by 2020 to effectively scale innovations and reduce costs in green technologies. The report, Breakdowns Driving Breakthroughs, focuses on Life Systems, a new category capturing system-wide interconnections, equaling 14 percent of the overall $6.22 trillion total.

While renewable energy ($2.8 trillion) and efficiency ($1.56 trillion) are key to the transition to the Solar Age, many other technologies enhance quality of life; protect nature; provide education, healthcare and food; and protect and enhance ecosystem services. These systems require redesign of major infrastructure no longer fit for purpose. This system-wide transition toward efficiency, information and digitization can best be viewed through a Life Systems lens, mapping interconnections such as between energy, water and food and highlighted in the GTS Green Bonds Growing Green Infrastructure report.

For 2014, Water, Community Investment, E-Learning, Land & Water Remediation, and Waste and Recycling reached threshold minimums for inclusion in the GTS, totaling $876 billion in investments since 2007. Infostructure, e.g., broadband, is interspersed throughout these categories.

Water is the most important commodity for life on this planet, after the sun's daily free photons. The GTS totals private investments in water since 2007 at $599 billion, what the Global Water Intelligence has identified as a global water market worth more than $500 billion annually. Most water infrastructure is hidden away and, if working well, goes unnoticed for decades. These investments include pipes, valves, filters, membranes, meters and even biological systems along with infrastructure that improves delivery, recognizing tremendous savings from limiting leaks, and addressing clean drinking water and sanitation.

While water is abundant on Earth, fresh water accounts for only 3 percent and is unequally distributed. Saline water constitutes 97 percent. Globally, significant droughts cost billions in lost economic activity, with taxpayers paying to remedy the resource depletion and tech solutions falling far short of what healthy ecosystem services can provide. As reported in “Plenty of Water” (GTS 2014), enormous opportunities are under-appreciated in desert-greening and growing food and fiber from the 10,000 varieties of halophyte (salt-loving) plants that are grown in many countries, on desert lands using solar energy, and from biofuels grown from algae on seawater.

Community Investing refers to capital specifically directed to traditionally underserved individuals or communities. In 2014, community investing across the US, Europe, Asia, Canada and Australia/NZ totaled $109 billion. Still overlooked in traditional markets are the millions of cooperative enterprises that employ more people on Earth than all the traditional for-profit, commercial companies combined.Community development financial institutions provide housing, healthcare and services across the USA, along with not-for-profit credit unions and for-profit B Corporations. All of this is facilitated by the rise of the digital share economy.

E-Learning has experienced tremendous growth and accounts for $73.7 billion in Life Systems. This subsector covers everything from online and mobile education from MOOCs (massive open online courses) and education platforms to learning management systems (LMS) and for-profit institutions. The GTS focuses on the first three, avoiding investments in “for-profit” colleges and universities because of the controversies over government subsidies, predatory lending, student debt, and poor graduation and employment rates. Conversely, MOOCs and other self-directed learning methods have gained in popularity. While graduation or certificate earning rates are low, that final “piece of paper” misses the point of much of e-learning. It is self-directed, self-paced and self-realized (see, for example, the Ethical Markets MOOC). The growth in the market is estimated at more than 7 percent per year.

To find data on Land and Water Remediation and Waste and Recycling, one has to go directly to company reports, with a dozen international companies reporting on their worldwide efforts. Site remediation in particular is on track to grow to a $40 billion market by the end of 2015, led in large part by remediation of contaminated land in China and the former Soviet Union.

While water, education and waste management are big-ticket items that can be meaningfully aggregated into the GTS, many other subsectors are ripe for sustainable investment while not meeting the GTS reporting threshold:

  • Agriculture can be tracked by sales of organics and non-GMO products, which are exploding; however, sales figures are not easily translatable to investment numbers.
  • We expect a surge in forest and farmland remediation from natural methods of carbon sequestration such as with the ancient technique of biochar. There is also a movement to invest in protected areas both for intrinsic value and to increase values of adjacent lands for development.
  • Aquaculture, besides fisheries and the growth of seaweed for food and feedstock, benefits from the 97 percent of saline water on Earth combined with abundant wasteland, salt-loving halophyte plants and the Sun.
  • In the healthcare industry, a global Harris Poll survey commissioned by Johnson & Johnson supports R&D for healthcare, finding healthcare professionals across six countries believe sustainability initiatives protect staff and make business sense, ameliorating the more than 30 pounds of waste per bed per day and $8.8 billion per year on energy in the USA alone.