Harbinger of a Green Tech Gold Rush

Somewhere beneath the Ascott Beijing
Shearing the Wolf
1446 hrs.

One need only look around this amazing, frustrating, enchanting country to realize that we are slowly killing the environment, and it is slowly killing us, and that something (a lot of things, actually) need to be done to change this.

The attention of the world's growing cadre of green technology and clean energy companies was bound to wake up to the China opportunity at some point, and it seems that these nascent industries already see China as a massive opportunity. They are certainly being told as much by otherwise credible sources of business information. CNET networks' BNET Report in my mailbox this morning said:

"Dirty China could lead to clean profits. China has the green. It's just not green...yet. And that's exactly where the opportunity will be for American business as the pressure builds for the pollution-ridden country to clean up its act."

Not so fast.

There will be opportunity for companies selling green tech in China. First, however, local businesses need to get motivated. Despite the ugliness in the nation's environmental situation, there is a lot of resistance among companies, local governments, and farmers to cleaning up their respective acts. For most businesses in China, It just doesn't pay to be green, not yet, and until it does do not expect businesses to shell out the cash needed to make their businesses more sustainable.

Second, consumers need to wake up. Most consumers are far more interested in improving their lifestyles - or just getting by - than they are in environmental protection. Most of China has an environmental consciousness level that approximates pre-Earth Day America. They will not drive the greening of China until they have a clear picture of the alternative, and see a path to a better life that coincides with sustainable living.

Even the central government - arguably the strongest force for change - is sending out conflicting messages about the environment. While they understand that something has to change, they see enough economic and political risk in moving smartly to protect the environment that they are largely paralyzed, resigned to half-measures and token efforts. Most Americans don't realize that the nature of government has changed in China. Decisions are reached by consensus. Policy is no longer made at the whim of a single individual. Change cannot simply happen as quickly as it once did.

If history is any guide, what is likely to build widespread local support for greentech and clean energy is the growth of a large domestic sector in those industries. When you can make the case to the government that every job lost in dirty industries is one (or two) gained in clean ones, and that the investments in sustainability will not mean another river of capital flowing offshore, you will see things change very quickly. Government will become an advocate of environmental cleanliness, and the propaganda machine will kick into motion to help raise public support for more sustainable lifestyles.

None of that means opportunity for American businesses in particular, but none of that by definition excludes American business. It just means that a green tech company should not expect to land in China, set up shop, and start printing money, regardless of what the hype-mongers at BNET and elsewhere might think.