Give us Your Ideas for Green Businesses

**JohnYE** · 03-31-2010 12:25 AM

Hello Forum-goers!

As part of our continuing series compiling 100 great businesses to start, our next post is 10 Green Businesses to Get Started Now. What ideas do you have for a business that would be considered a great "green" business?

If it's your company, we might just use it as an example in the post, so don't hold back!

Respond here or PM me.

Thanks!

John

**DerekS** · 03-31-2010 07:22 AM

Mitigation banking is/was a great business that involved several different processes/business entities- and actually helped the environment. More or less it involves restoring former wetlands or agricultural fields and selling credits to nearby developers to offset their impact on the environment (when building shopping centers, housing tracts, highways, etc.) They beat the cesspools that are often dug by developers next to housing developments that end up being nothing more than muddy mosquito habitats.

Unfortunately, the down economy and lack of lending has put the brakes on the development of many of these banks. My fiance was helping a startup get the ball rolling on this but saw 4 of their proposals completely stalled in late '08/early '09 due to the economic crisis.

Hopefully the ball will get rolling on these banks when the economy improves (and as more state governments understand them and become mitigation banking friendly.)

**rogercbryan** · 03-31-2010 10:14 AM

Originally Posted by DerekS

Mitigation banking is/was a great business that involved several different processes/business entities- and actually helped the environment. More or less it involves restoring former wetlands or agricultural fields and selling credits to nearby developers to offset their impact on the environment (when building shopping centers, housing tracts, highways, etc.) They beat the cesspools that are often dug by developers next to housing developments that end up being nothing more than muddy mosquito habitats.

Unfortunately, the down economy and lack of lending has put the brakes on the development of many of these banks. My fiance was helping a startup get the ball rolling on this but saw 4 of their proposals completely stalled in late '08/early '09 due to the economic crisis.

Hopefully the ball will get rolling on these banks when the economy improves (and as more state governments understand them and become mitigation banking friendly.)

There is a problem here... when you say 'giving them credits'... what are the credits.. what are they good for? Currently they are not marketable and there is no legitimate valuation tool in the US.

I'm paying a lot of attention to this industry. One of the organizations I work with is REDONA (Renewable Energy Development of North America) which is working with the National Rural Electric CO-OP Assn. We have been looking to add carbon offset certificates to our fundraising but they have no real value. Currently they are simply novelty. We can calculate your offset based on your donation amount. So a $500 donation can offset a persons footprint by 2-7% depending on where they are in the country. That's all fins and dandy... but it really means nothing beyond the novelty.

I'm also keeping a close eye on ACCO (The Association of Climate Change Officers) as they try to develop a support function for companies that employ a CCO (Climate Change Officer). Again they are stuck at the point where there is no real benefit to having this position do to the fact there is not solid legislation in place to support the need for this position.

I think the best business position someone can take in this industry in the US is to educate at this point. I see in the next five years many major corporations having an executive position called a sustainability officer. When this happens an entire service industry will develop to support these people and the tasks they need to do to service their company. I'm taking action on this idea as well. I've recently enrolled in an MBA Program in Sustainability and Green Building Design. It's not a fancy program at a fancy school but it gives me an opportunity to develop the skills needed to consult in this industry in the next few years. The capital needed to do this is significantly lower then starting up a renewable energy firm or some other green company.

Here is my point:
1- Currently any 'business plan' that involves giving people 'credits' isn't a good idea. The credits are worthless (in the US) and are simply novelty.
2- Educate: This is a new industry with 20-50 years of growth ahead of it. Now is the time to (formally) learn how it works so you can position yourself as a knowledgeable player in the near future.
3- Get involved: Join every single group you can in this industry. Get all the newsletters and the pamphlets and email you can. Sooner or later one of these organizations is going to have a need and you can be there ready to serve it.

Get in now...

**DerekS** · 03-31-2010 11:17 AM

My knowledge of mitigation banks is limited (as I'm in no way affiliated with the process), but here's how I understand it:

When a developer seeks to develop a tract of land (for whatever use) that will impact an ecosystem, regulators establish standards by which that impact must be offset.

The developer can then "offset" that impact by establishing their own mitigation site (which usually consists of a drainage pond that does nothing for the environment), or by buying credits from a mitigation bank. It is my understanding that it is often cheaper for the developer to purchase the credits than it is to do the work themselves.

The best part is that the value of the credits are set by the market. There are no "pie-in-the-sky" valuations that determine what one should pay in a particular area. The process is overseen by regulators like the EPA, US Fish and Wildlife, the US Army Corps of Engineers, etc. The land is set in easement perpetually, so that once the bank is established, it's there to stay. Revenue is earned through the establishment of the wetland (the actual labor process of conversion/reversion to a wetland), sale of the credits, and management of the wetland.

Some states aren't Mitigation Bank friendly (like Maryland) and there are lots of issues that can hold up a deal (as my fiance learned when the startup she was working for screeched to a halt.) What I do know, is that these banks are real. Rather than just selling "credits" that disappear into the ether, there are real wetlands in place that cannot be disrupted- as the land that they are on is set in easement. I agree that most of the credit stuff is BS, but there are banks that have successfully sold their credits and are in place. Unfortunately, the economic slowdown has stalled the propagation of many more banks.

**mcfarldr1** · 03-31-2010 11:28 AM

What about a local furniture exchange where people could post what they have and what they are looking for. I literally just thought of it and it would be like a Craigslist.com kind of thing. PM me for more details or questions you might have.

**rogercbryan** · 03-31-2010 01:31 PM

Originally Posted by DerekS

My knowledge of mitigation banks is limited (as I'm in no way affiliated with the process), but here's how I understand it:

When a developer seeks to develop a tract of land (for whatever use) that will impact an ecosystem, regulators establish standards by which that impact must be offset.

The developer can then "offset" that impact by establishing their own mitigation site (which usually consists of a drainage pond that does nothing for the environment), or by buying credits from a mitigation bank. It is my understanding that it is often cheaper for the developer to purchase the credits than it is to do the work themselves.

The best part is that the value of the credits are set by the market. There are no "pie-in-the-sky" valuations that determine what one should pay in a particular area. The process is overseen by regulators like the EPA, US Fish and Wildlife, the US Army Corps of Engineers, etc. The land is set in easement perpetually, so that once the bank is established, it's there to stay. Revenue is earned through the establishment of the wetland (the actual labor process of conversion/reversion to a wetland), sale of the credits, and management of the wetland.

Some states aren't Mitigation Bank friendly (like Maryland) and there are lots of issues that can hold up a deal (as my fiance learned when the startup she was working for screeched to a halt.) What I do know, is that these banks are real. Rather than just selling "credits" that disappear into the ether, there are real wetlands in place that cannot be disrupted- as the land that they are on is set in easement. I agree that most of the credit stuff is BS, but there are banks that have successfully sold their credits and are in place. Unfortunately, the economic slowdown has stalled the propagation of many more banks.

I understand the offset part of this. We built an auction building in Cleveland in 2004 and part of that project included redeveloping 5 acres of wetlands to offset the land we were using. What I don't understand is where you are getting this 'credit' market from. As far as I know there is no formal exchange market for these types of credits (offsets). Is this more of a private exchange say between two development companies?

I love the idea of this... you make it sound like this is already taking place in the US. If it is in a formal setting I'm behind the curve here. More info? I appreciate it!

**DerekS** · 03-31-2010 02:19 PM

From my understanding, it is a private exchange between the developer and the mitigation bank. More or less, the mitigation bank's analysts determine what they think the credits can be sold for, and the developer decides whether or not the credits are worth the asking price, based on how much the regulator told them they needed to offset.

The more competition for the credits, the higher the price (obviously.) A lot of the business is speculation because the developer of the mitigation bank has to determine a suitable location for the bank (in theory in the path of "progress") early enough to purchase the land as cheaply as possible. They then have to start the process of establishing/restoring the wetland and hopefully complete the process (which involves the US Army Corp of Engineers, US Fish and Wildlife, etc) before developers of housing tracts/shopping centers/etc have to start offsetting their impact. The more ecological impact, the more competition there are for credits.

The buzz I heard back in '07/'08 was that West Virginia corridor close to DC would become a great market for MBs because it was assumed that many beltway people would be trying to escape the Metro Area via West Virginia (instead of MD and VA suburbs which were already congested.) The recession obviously hampered development, though.

I actually went to visit a potential banking site back in '08 with my fiance when we were on our way to the Outer Banks in North Carolina. It was pretty cool to see the potential (it was just old farmland with irrigation ditches everywhere.) Unfortunately that deal died with a few others when their primary backer MuniMae (for which my fiance still works) decided not to proceed with the projects due to economic issues (both externally and internally.) The guy who was the primary brains behind the operation ended up buying the business entity and decided to pursue it on his own. They were called MuniMae Sustainable Land Investments (Sustainable Land Investments - which is now defunct.)

I called my fiance at work and was grilling her with questions but she told me to leave her alone, lol, and that she would talk with me about it tonight when she wasn't in the middle of working. I'll hopefully be able to get a few examples of functioning banks and direct you to them. They're definitely in existence, and the model supposedly has worked many times before.

I'll keep you posted!

**CGM** · 03-31-2010 03:20 PM

I'm in the process of getting my new web hosting company up and running, hopefully I can begin hosting clients within the next month or so.

How is this green? The servers I chose use 43% less energy then conventional servers, wind powered and the company in which I lease the server from also offsets their carbon footprint by purchasing reneweable energy credits.

While this isn't the most "green" thing in the world, its important to understand that datacenters use 4% of all the world's electricity, and currently only 3% of web hosts are "Green". Its a step in the right direction, and hopefully as time goes on more datacenters, hosts, etc will become more green.

**JohnGalt** · 03-31-2010 07:41 PM

First result on Google for "Mitigation Banking" gives a pretty good explanation of the process:

Mitigation Banking | Wetlands | EPA

**hopepuzzle** · 04-01-2010 06:33 PM

Green My Car - Junk Car Removal

**brandoncdg** · 04-02-2010 05:15 AM

I would say whoever can come up with the green mitigation exchange with a trading floor wins. Not only for being too smart, but also becoming way too rich. Obviously I just stated what I would do environment wise. =)

For my field I am slowly learning, that we are already so strict that we already have to beat LEED requirements, so we were beyond green way too long ago.

**rogercbryan** · 04-05-2010 11:09 AM

Originally Posted by hopepuzzle

Green My Car - Junk Car Removal

Do you actually get any cars from this? I'm a national car recycler so I could possibly be a buyer of your inventory?? Email me rbryan charitydispatch.com

**rogercbryan** · 04-05-2010 11:10 AM

Originally Posted by DerekS

From my understanding, it is a private exchange between the developer and the mitigation bank. More or less, the mitigation bank's analysts determine what they think the credits can be sold for, and the developer decides whether or not the credits are worth the asking price, based on how much the regulator told them they needed to offset.

The more competition for the credits, the higher the price (obviously.) A lot of the business is speculation because the developer of the mitigation bank has to determine a suitable location for the bank (in theory in the path of "progress") early enough to purchase the land as cheaply as possible. They then have to start the process of establishing/restoring the wetland and hopefully complete the process (which involves the US Army Corp of Engineers, US Fish and Wildlife, etc) before developers of housing tracts/shopping centers/etc have to start offsetting their impact. The more ecological impact, the more competition there are for credits.

The buzz I heard back in '07/'08 was that West Virginia corridor close to DC would become a great market for MBs because it was assumed that many beltway people would be trying to escape the Metro Area via West Virginia (instead of MD and VA suburbs which were already congested.) The recession obviously hampered development, though.

I actually went to visit a potential banking site back in '08 with my fiance when we were on our way to the Outer Banks in North Carolina. It was pretty cool to see the potential (it was just old farmland with irrigation ditches everywhere.) Unfortunately that deal died with a few others when their primary backer MuniMae (for which my fiance still works) decided not to proceed with the projects due to economic issues (both externally and internally.) The guy who was the primary brains behind the operation ended up buying the business entity and decided to pursue it on his own. They were called MuniMae Sustainable Land Investments (Sustainable Land Investments - which is now defunct.)

I called my fiance at work and was grilling her with questions but she told me to leave her alone, lol, and that she would talk with me about it tonight when she wasn't in the middle of working. I'll hopefully be able to get a few examples of functioning banks and direct you to them. They're definitely in existence, and the model supposedly has worked many times before.

I'll keep you posted!

This makes sense... As I thought it is more of a case by case basis like we worked with in 2004. I guess buying and holding land that has potential for this type of exchange is the only approach unless you are in the development business already.