City Eye: It's enough to make Gordon Gekko go green

I'm beginning to wonder whether Gordon Gekko had a speech impediment. The fictional lizard king of Wall Street, as embodied by Michael Douglas, complete with red braces, gave us the deathless observation that greed is good. Nowadays I wonder if he meant "green is good".

There is huge cynicism about the sordid business of labelling things from zero-carbon homes to allegedly organic food to (I kid you not) fair trade rubber gloves, our consciences are being used to persuade us to buy. It's the false logic of getting consumers to drink gallons of Coke because it's "lite".

I railed in this column last summer against the woolly thinking that underpins supposedly ethical investment. A fund might not invest in a defence firm that makes tanks, but what about a glass company that provides drinks bottles for soldiers?

The Germans have got it right. They have no ethical investment industry to speak of because logic dictates that if one fund is more ethical, others are less so. With a Teutonic shrug of the shoulders, they just get on with the business of making money in a responsible way.

There are signs, though, that the "green is good" sector is attracting some grown-up players. Enter Dr David Strong, chief executive of Inbuilt, a new consultancy that will advise the construction industry on envir- onmental building. According to a spokesman, the company ethos is to expose "companies claiming to have a commitment to sustainability when it's actually no more than PR puff".

Dr Strong is a heavyweight in this area, and positively loathes what he calls "greenwash". He simply wants sustainability to work, and for government and private sector alike to be practical about these matters. He is scathing about the way in which the Government has moved the goalposts on what constitutes a net zero-carbon home, as we report elsewhere in today's paper.

And so to carbon trading, which cynics would say is a process where the rich just buy the right to pollute. I have been on a press trip where we were presented at the airport with a certificate showing that our flights had been carbon offset.

Last week there was a landmark, with the European Climate Exchange (ECX) trading its one billionth ton of CO2 under the EU Emissions Trading Scheme. The ETS is part of the "cap and trade" solution, requiring companies to limit their carbon output and buy offsets if their output exceeds a certain level.

It's a booming business for the ECX, and Patrick Birley, the exchange's chief executive, is bullish about the future: "As phase two of the EU ETS begins in January 2008, we expect to see even greater interest in ECX from an enlarged membership trading ever more volume as EU allowances are reduced further."

The monetary route to limiting pollution seems attractive, but does it really work? The evidence, such as it is, shows that big business will dip into its pockets to pollute, while hiring PRs and consultants to do a bit of greenwash. On a micro-level, 4x4 vehicles are being hit with a congestion charge, but London is still awash with scrummy- mummies taking their little ones to school in lightly modified armoured cars.

The more practical route to sustainability was being explored, if that is the right word, at the second week of the UN Climate Change Panel conference in Bali. The delegates numbered 10,000 and they certainly exhaled a lot of CO2 at this gigantic talking shop. But with the Americans being recalcitrant and the Russians, Chinese and Indians gleefully if quietly following their lead, I've a hunch it will all come to nothing. Although, as Gekko almost said, a hunch is for wimps.