Introducing the Blue Economy

It's the opening of the World Economic Forum in Davos, 2014. Well-dressed men and a handful of women clutch drinks under soft lights. Armed guards patrol the roof.

Several NGOs used this year's high-altitude hobnobbing session to make the case that inequality and environmental concerns are not taken seriously by the world's powerful.

Oxfam released a new report to show that the world's richest 85 people are now as wealthy as the bottom half of the world's population. A group of Greenpeace activists in polar bear suits writhed in a pool of dark liquid to protest Gazprom's oil drilling in the Arctic.

Activists are also starting to gather inside the forum itself. Virgin's founder Sir Richard Branson is among the most outspoken, summoning high-powered groups The Elders, The Carbon War Room and The B Team to work on social and environmental problems.

"The world has got a major problem," he explained afterwards. "Every year, we put more and more carbon in. We're creating this thicker and thicker blanket around the world. And we're experimenting with this very beautiful world we all live in; we're taking a big risk with the world."

In 2009, Branson came under fire for his environmental philanthropy, with several climate change activists accusing him of supporting the cause for his own business reasons.

Yet this might be precisely the point. Doing business doesn't have to be bad for the environment. In some cases, doing the right thing could be worth millions.

One early advocate for this idea is Belgian entrepreneur and former Ecover CEO Gunter Pauli - but he argues that just tweaking or "greening" existing business models won't do the trick.

"Less bad is still bad," he told students at the World Student Environmental Network Global Summit 2014 in South Africa. "Unfortunately, the green economy, the way it worked out, is that whatever is good for you and good for the environment is expensive. It's for the rich."

Instead, Pauli has spent the last ten years trying to further what he's dubbed the blue economy - new technology and business models, inspired by nature, that can create jobs while having a positive effect on society and the environment.

In 2009, he collected 100 examples of this blue-sky-design thinking together as The Blue Economy, a report to the Club of Rome (re-published a year later as a book).

The report's guiding principles include 'substitute something with nothing' (question the need for each resource), 'work with what is locally available', 'use water as a main solvent', 'water, air and soil are the commons' (shared resources) and 'waste does not exist' (each by-product becomes the source for a new product).

"We have one very clear agenda," he explained. "Use what you have locally. Respect biodiversity. Generate value - and the local population is the primary beneficiary."

Some of the case studies - such as razor blades made of silk threads - may never reach commercial reality. Other picks, though, are going strong. Ecovative, founded in Troy, New York in 2007 by two young college graduates, offers a way to use fungi to replace plastic and foam shipping packaging. The company has raised over US$14 million in equity financing, including from US multinational 3M - and announced plans to open packaging facilities in Europe and Asia.

Architect William McDonough - who came up with the cradle-to-cradle concept and certification framework - takes a similar approach to building and product design.

"We eliminate the concept of waste. We send materials out with a good sense of where they go next, what is next," he told Element in February. "If it's going into an electronic product, it is going to come back to be used in electronics, so it is designed for disassembly and reuse."

Some new companies are building entire multi-million dollar business models on what others consider trash. TerraCycle, sometimes called the "Google of Garbage", teams up with major corporations to collect and convert materials that would otherwise end up in landfill.

"Garbage in nature doesn't exist," TerraCycle CEO Tom Szaky agreed, speaking to Element from the US. "It's a completely man-made idea."

The energy sector is also due for re-invention - and it doesn't have to involve nuclear power, according to US scientist and policy advisor Amory Lovins. In 2011, Lovins came up with a strategy to run a 158 per cent bigger US economy without coal, oil or nuclear energy by 2050, again based on principles of biomimicry, resource efficiency and whole-system design.

As resources become scarce and more expensive, it may not be a question of whether businesses adapt but when. In new book Resource Revolution, Stanford University consulting professor Stefan Heck and San Francisco-based McKinsey director Matt Rogers argue that businesses are facing the "biggest business opportunity of the century".

Those that adopt five key principles, they say - resource substitution, optimisation, virtualisation, circularity and waste elimination - will be more likely to flourish.

The motivation here is profit - in contrast to the social impact prioritised by Pauli - but the outcomes may be surprisingly well-aligned. In one example mentioned by Heck and Rogers, ATMI, a materials-technology company, wanted to find a better way to extract gold from electronic waste. The answer: a water-based solution that is safe to drink, cheaper than traditional smelting and toxic acid baths, and makes it easier to re-use computer chips.

Biomimicry gets a nod here, too. The US Air Force has already found it can save up to 20 per cent on fuel by having some planes copy the flight formation of geese.

There are problems inherent with chasing new technology as a fix for social and environment ills - and with leaving it up to entrepreneurs and the private sector. There may never be enough of a commercial incentive to solve certain problems.

According to TerraCycle CEO Tom Szaky, consumers also have a vital role to play. "Companies aren't there to shove stuff down our throats we don't want. They're there to give us more of what we want, easier, better and cheaper," he pointed out.

"The real fundamental answer for this will be consumers buying and supporting companies and ideas that further this goal."