Twenty years ago it seemed that business and environmentalism belonged to different worlds. Green activism was perceived as the domain of the left, running counter to the onward march of capitalism. But in the second instalment of The Green Rush, our series on business and the environment, Zac Goldsmith argues that today's challenge is to bring these two worlds together.

"Marrying the market with the environment is the defining challenge of our day," he says.

"If you can find a way of ensuring that waste, pollution, the use of scarce resources become an actual financial liability, then you know that businesses around the world are going to start to do business in such a way that they design these things out of the way they do business. That's crucial."

Mr Goldsmith, the former editor of The Ecologist, has become a key figure in David Cameron's development of the Conservative Party's environmental conscience. An adviser to Mr Cameron on climate change, he was also deputy chair of the party's Quality of Life review and is the Conservative parliamentary candidate for Richmond Park.

Last week he appeared as a defence witness in the trial of six Greenpeace activists, charged with causing £30,000 of criminal damage to a power station.

Mr Goldsmith also says it will take more than a moral appeal to urge action on climate change, both from business and the wider public.

"I don't think you can influence the vast majority of people and the vast majority of businesses simply by appealing to their morality," he said.

He draws a distinction between the rapid rise of organic food in this country and the still-minimal share of the market claimed by Fair Trade products. Organic food is booming, he says, because people are concerned about the effect of pollutants on the food they buy for their children. Fair Trade, by contrast, is struggling, "because it's purely an ethical concern".

"I think what people want to know that when they go to a shop and they buy things they're part of a solution not a problem."

"I don't think people want to be experts, they want to know that the standards are there and that's really a demand for leadership," he adds.

Government, he says, should be setting a framework; he argues that there is a strong case for so-called green taxation and a need for a different regulatory approach.

Mr Goldsmith also addresses the question of peak oil in his interview, which was recorded before the recent decline in the oil price: "...every one of our economic models, every one of our projections, all our assumptions, are based on the availability of affordable oil. And if peak oil theory is correct, and there are lots of people in the oil industry who say that it is, then we ought to know that, and I'd like to see a process where there is an audit of world oil supplies so we can start factoring the reality into our projections," he says.