Get online and learn to be green

On the internet, you can read without harming a tree. But you can also order a dirty great van to de

Shawn Fanning, the twentysomething renegade founder of Napster, is an unlikely environmental hero. Napster, the online music community, uses a simple yet powerful software programme that allows a computer user, armed with a modem, to download music files from someone else's computer.

This technology may seem to have nothing to do with climate change or pollution. Yet if the entire music industry were to embrace Napster-style technology, we would have no need of compact discs, tapes and all their materials, packaging and transport. Fanning turns out to be not just a techno-entrepreneur but, unintentionally, an environmental entrepreneur, too.

The new economy holds out a tantalising promise for environmentalists. It's not just the promise of dematerialisation (though replacing millions of 30-volume leather-bound Encyclopaedia Britannica sets with one website is quite an achievement in environmental terms); it is also that the new economy can make us think differently, value differently and consume differently.

Take valuation. We still find it hard to value a company that is not based on physical assets. Accounting systems measure the throughput of resources, not the ideas, creativity and innovation that really drive the value of most companies these days. The new economy may also change the way we think about ownership. In the old industrial economy, ownership of physical products and assets was essential. Owning a car or stereo was a badge of honour for young people. In the new economy, consumers will value experiences: getting a high, feeling special or, as the American futurist James Ogilvy put it, "trading in what makes the heart beat faster". Companies, too, are shying away from ownership - the new economy maxim for fixed assets such as land, offices, computers and machinery is "use it, don't own it". In the US, about a third of business machines, equipment and vehicles are leased.

All this could result in significant environmental gains. Leasing gives producers ultimate responsibility for a product, including its disposal at the end of its life. So they have the incentive to make the product robust, durable and recyclable. And, in an economy in which competitiveness turns on innovation, the opportunities to design new production systems that use fewer materials and energy have never been greater: think of the Dyson vacuum cleaner, designed for easier consumer use, but also to be recycled.

So is the new economy a green economy? Alas, not always. Fanning may yet abolish CDs, but to use Napster you still need a computer, which uses resources and energy. We all know people who print out their e-mails, instantly cancelling out any environmental benefits of virtual communication. Amazon.com may appear ethereal when you log on to buy your books; but it is in the real world of pollution and congestion when the van delivers them.

Then there is the new economy's propensity to increase consumption. Increased efficiency means reduced prices, which means more consumption. The accelerating rate of product innovation, along with ceaseless advertising, creates constant demand for the newer version of computers, hi-fis and MP3 players.

We need a public policy that encourages innovation to take a greener form. Policy has focused on capping the environmental costs of the old industrial economy; in future, we need to unleash the potential for green innovation. That means encouraging research into technologies, such as solar power, which could be both more efficient and more green. We should create incubators for green businesses, even schools for environmental entrepreneurs. Nowhere is collaborative innovation needed more than in city transport, to combine electronic vehicles and intelligent road-pricing systems with simple initiatives to create more cycle lanes and pedestrianised areas.

There are signs of a new coalition developing between greens who recognise that protest alone will not bring change, responsible businesses that recognise they have to respond to the green agenda, and a new generation of innovators who buy into environmental values. This coalition will, in time, find its voice heard among a new generation of political leaders who are able to embrace environmental goals within mainstream politics.

We are not entering a promised land in which the interests of business and profit can be magically reconciled with the interests of the natural world. But there is an opportunity that did not exist 30 years ago.

Charles Leadbeater's pamphlet Mind over Matter: greening the new economy is published by Green Alliance. Rebecca Willis is the alliance's policy adviser. More at www.green-alliance.org.uk