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The Green Emperor Gets Naked, Part IV
The key to saving the planet? Setting off the business bomb.
In an article for TomDispatch.com the day after Hurricane Katrina hit the Gulf Coast, the nature writer Bill McKibben made an articulate case for understanding the connection between catastrophic weather events and global warming. Whether you want to believe that this past hurricane season was exacerbated by climate change or not, McKibben very pointedly made it clear that Katrina-type havoc is going to occur "over and over again" whether we like it or not.
In the middle of his article, however, he wrote something very strange: â€œSo far the U.S. has done exactly nothing even to try to slow the progress of climate change.â€ This just isnâ€™t true. There are many people in this country doing a great deal to reduce and limit greenhouse gas emissions.
What McKibben meant to say, perhaps, is that the U.S. federal government has done exactly nothing. This little slip by McKibben points out the most fundamental flaw in traditional liberal environmental policy and theory: that somehow the only way to solve ecological problems is through government action and control.
American history only gets a small dose of leadership from its elected officials. Mostly, we all stand on the sidelines and watch politics unfoldâ€”and itâ€™s usually not pretty. Government leading is an oxymoron. Government following is probably a much better idea. And, to a certain extent, thatâ€™s just whatâ€™s happening with climate change in our culture.
The Strange Case of Sustainable Businesses
Nowhere in America is the legacy of the sustainable development and environmental movement of the â€˜60s and â€˜70s more defined and successful than in the business sector. It is obvious that the fossil fuel, automobile, and related big energy and transportation industries have the Bush Administration in their pockets, but it is also obvious that many large and small companies in the United States are hard at work making beliefs from some of our most idealistic years a reality.
Quietly, over the past thirty to forty years green businesses have forged new paradigms in almost all sectors of the economy. From socially responsible investment portfolios, green utilities, and Stoneyfield Farmsâ€™ organic yogurt to green architecture, bio-diesel, and the growing Ride-Share business model, there are few areas of our society not penetrated by exciting and dynamic alternatives to status quo mass culture.
Does this mean that the battleâ€™s over? Are sustainable businesses taking over? Has intelligence and smarts finally defeated economies of scale and amalgamation? Hardly. The dinosaur vestiges of industrial America are still at the root of our culture: huge discount stores selling cheap merchandise manufactured offshore; a computer and telecommunications industry boosting consumption through managed obsolescence; marketing and branding is now very likely the most well-funded science in history; and the obvious problem of an economy completely dependent upon fossil fuels with no simple way out.
The Grass Could Be Greener
We have been standing at the fence for nearly six years since the change of the millennium gazing off into the future, yet refusing to leave our past behind. We knowâ€”each of usâ€”that the old way of doing things just doesnâ€™t work anymore. A free market system based on cheap resources and the â€œrightâ€ to emit pollutants is rapidly coming to a state of dysfunction. This doesnâ€™t mean that the free market system is broken. It simply means that a free market system without intelligence and morality doesnâ€™t work. What the sustainable development movement is all about is intelligence and morality. And the key to all of this is options and information. If we have information that fossil fuels cause carbon dioxide and other gaseous emissions that contribute to global warming, and we know that there are options to either dramatically reduce or eliminate these emissions, the end result can be new and vibrant economies and reduced dependence on fossil fuels.
The $3.2 Trillion Gorilla
The insurance industry is beginning to understand the situation all too well. As the largest industry in the world with $3.2 trillion annually in revenues, insurance companies know that they stand to pay out billions of dollars every year due to the weather-related damage and death from global climate change. Swiss Reinsurance, the largest company that insures insurance companies from major losses, has now established a policy that will withdraw liability coverage from executives at companies that do not establish appropriate climate change policies. The industry has estimated that if climate change predictions are real they can lose $150 billion annuallyâ€”essentially putting themselves out of business by covering their clients for disaster that is inevitable. In addition, the industry is becoming increasingly wary of a scenario in which their customers are held legally liable for greenhouse gas emissionsâ€”similar to the way tobacco companies have had to shoulder the responsibility for denying problems with their products.
Double Talk and False Dichotomies
The biggest argument conservatives have given against developing mandated climate control policy in this country is the belief that the economy would stagnate. Forcing the automobile industry to adhere to CAFÃ‰ standards and forcing the utility industry to retrofit or re-build the 1,600 or so heavy greenhouse gas emitting coal plants (responsible for 84% of greenhouse gases produced by the electric power sector, and 24% of the total emissions for all sectors) would just be too costly.
â€œJobs versus nature!â€
â€œThe economy or the environment!â€
Um, not exactly. If you hear these dichotomies from somebody, youâ€™re probably listening to a person who doesnâ€™t read much anymore. The number of huge corporations and small companies out there doing the hard work in attacking climate change (and a number of other more down-to-earth environmental issues) is staggering. Hereâ€™s a sampling of some of the great work going on:
The Pew Center manages the Business Environmental Leadership Council, comprised of more than 40 of the nationâ€™s top companies, including DuPont, GE, Boeing, SC Johnson, Alcoa, Sunoco and Exelon. Each company has committed to varying ranges of greenhouse gas reductions and voluntary reporting of their efforts. Some of these commitments are nominal, but some are quite substantial and indicate bold leadership.
There are more than 70 companies in this group; some are also members of the Pew Business Environmental Leadership Council. More than half of these companies have formally committed GHG reduction goals to EPA (and each other).
There are roughly 1,500 WasteWise partner companies representing 54 industries. The Walt Disney Company won this yearâ€™s Golden Achievement Award for Climate Change. Besides energy efficiency and reducing the use of fossil fuels, recycling and reuse of materials contributes to greenhouse gas reductions.
The Business Alliance for Local Living Economies (BALLE) is an international alliance of independent business networks. In North America there are 22 networks comprising several thousand small and intermediate businesses.
Perhaps the Mother of all sustainable development groups, Ceres (Coalition for Environmentally Responsible Economies), which brought together investors and environmental organizations, was formed in the late 1980s. As part of their work on climate change, Ceres coordinates the Investor Network on Climate Risk (INCR), an alliance of leading U.S. institutional investors that collectively manage over $1.3 trillion in assets.
Alternatives to Canoodling
The biggest nut to crack in the climate change world is, of course, shifting over to cleaner, safer, manageable alternative forms of energy. Since the 1970s there have been vast improvements in the wind, solar, geothermal, fuel cell, and hydro fields. But the economics of cheap oil and natural gas and the abundance of coal--along with its low cost--have always left alternatives out in the cold. Currently, approximately 6% of this nationâ€™s energy comes from renewable sources. In 1990, the number was also about 6%. But $60-$70 a barrel oil may be changing all of that. Itâ€™s not reported in the press much, but natural gas prices in the U.S. are now two times what they were just five years ago. In fact, in the 1980s the U.S. had the cheapest natural gas prices in the world. Now we have the highest.
What all of this equates to is the potential for a shift in the balance sheet toward more investment in conservation and alternative energy. And investment firms are beginning to take notice. Energy expenditures in the U.S. have increased by nearly 25% in just the past year. Investors are eager to find stock that is not getting dragged through the sand and mud by geopolitical canoodling and massive natural disasters. Since September, investments in portfolios focusing on green energy have more than doubled.
In other words, if we want a fighting chance, we need conventional energy prices to stay high. Hummer drivers may be Americaâ€™s biggest slobs, but right now every time you see them speeding down the highway theyâ€™re helping the environment in the long run.
Hornets and Gadflies
So does all of this mean that we just need to leave things up to the private sector? Is environmentalism really dead? Maybe in some cases, but in others, no, environmental groups continue to be important gadflies and hornets. Most of the organizations listed above wouldnâ€™t even have come into existence without environmental groups pushing hard. Many of the corporations committed to these organizations wouldnâ€™t even have approached the table if they hadnâ€™t been pulled and pushed and bothered by environmental groups. The threat (and cost) of government sanctions have probably also played a role in bestowing â€œreligionâ€ on some of these CEOs.
But itâ€™s still clear that business is now leading the fight to stop global warming. There is definitely a need for government support, research, and planning. But finance, investment, competition, consumer demand, risk analysis, industry standards, and innovative business leadership all have major parts to play in addressing environmental problemsâ€”especially global warming.
The next to last portion of this essay will address the role environmental professionals are actually playing in battling global warming. The Green Emperor is naked right now, but there are many ways to help put his clothes back on. Itâ€™s--sad to say--still not clear though whether he wants to admit his own nakedness.
Even more so, there is a need for the American people to begin to pay attention to climate change a little bit more than they have so far. The almighty consumer is, after all, at the root of the problem. It is a pitiful indictment of this country that we must wait for catastrophes before we begin to deal with problems. This is what we will take up in the final installment of this essay.