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Monday, September 28, 2015

Four Trends Driving Profitable Climate Protection/Part 3


Five years ago, most pundits opined—and activists despaired—that nothing could be done about climate change without a binding global treaty. Today, spurred by ever-starker evidence of climate perils, and with leadership from Pope Francis to The New Climate Economy and from the grassroots to the pinnacles of finance and industry, disparate interests are converging on a Paris agreement in December. China–U.S. climate cooperation makes this far more likely. However it turns out, the world’s climate conversation seems to have passed a tipping point toward a constructive direction led by popular demand, national example, and corporate purpose.
If RMI’s Reinventing Fire (2011)—for which the U.S. is essentially on track—is potentially a model for developed countries and Reinventing Fire: China (2016) for developing countries, both together could start to provide a model for the world. The U.S. synthesis showed how to raise 2010 energy and carbon productivity 3- and 16-fold respectively by 2050, and preliminary results from the China synthesis showed 7- and 12-fold, both trillions of dollars cheaper than business-as-usual. That’s a winning formula for a clean, secure, prosperous, low-carbon energy future for all.
Corporate purpose combines serving customers and employees, expanding markets, making profits, building brands, and sustaining the conditions that prosperity and life itself require. Investors and directors are focusing on these imperatives. Six years ago, the Copenhagen climate conference reminded us how hard it is to price carbon and craft international cooperation if policymakers assume, as many still do from misapplied economic theory, that climate protection must be costly. RMI has been pointing out for more than a third of a century that this assumption is empirically wrong (e.g., Least-Cost Energy: Solving the CO2 Problem,1981). Business practitioners prove daily that saving fuel costs less than buying fuel, let alone burning fuel; that’s how Dow already returned $9 billion on a $1-billion efficiency investment. As such business experience gets noticed, eminent groups are now starting to accept they got the sign wrong, so we must focus on turning market failures into business opportunities. If that meme spreads, Paris may mark the crucial shift of the climate conversation from cost, burden, and sacrifice to wealth creation, jobs, and competitive advantage. That recognition of market realities could so simplify and sweeten the politics that any remaining resistance can melt faster than the glaciers.
Now more than ever, the biggest levers for energy transformation—business logic, smart policy, public demand, and an insistent Mother Nature—can build on each other at that critical moment when, as Dana Meadows said, we have exactly enough time, starting now.
This article originally appeared on Forbes. Reprinted with permission.
Image courtesy of Shutterstock.

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