1
Entrepreneuring the Solutions: The Business Case for Climate Protection
Entrepreneurs, companies, and countries are prospering from climate protection even in challenging times. This book describes how you, your family, your community, your company, and the world can profit from Climate Capitalism. The chapters present the good news about how you can become a part of the solution. They show that intelligent use of market mechanisms can solve the climate crisis not at a cost but as an investment, delivering enhanced profitability and a stronger economy as well as a better future for the planet. The best and fastest way to protect the climate is to reduce the unnecessary use of fossil energy. It is also the fastest way to an immediate return on investment. Cutting waste saves money, whether you are a business leader or head of a household.
The case stories that follow demonstrate that entrepreneurship is alive and well. Which is good: without it no solution to climate change makes any sense. It is good for another reason. Entrepreneurs discover opportunity even in the midst of financial crisis. Throughout history, the nations that have innovated to meet human needs have ruled the world, economically, politically, and militarily. How we respond to the twin crises defining our generation—economic collapse and climate change—will very likely determine the world future generations will live in.
The current economic crisis is extremely fluid. It could go in any of several directions. Commitments by global leaders to unleashing the green economy could turn the world around. Conversely, delay in implementing sustainable measures could deepen the current depression, now recognized as the worst since the 1930s.1
Change will occur because past best practices are no longer sufficient to deal with the challenges facing the world. Businesses and industrial policy will implement the measures described in this book, or the world will face crises far exceeding what this young century has already brought.2
The choices you make this year and next will determine whether you, your community, and ultimately your country come out of the economic collapse prosperous and in a position to secure the future you want, or whether life will become an unending reaction to emergencies that batter our ability to cope.3 Recent American history suggests there is reason for hope. The Architecture 2030 project points out:
During the 1970s oil crisis (an 11-year period from 1973 to 1983), this country, drawing on American determination and ingenuity, increased its real GDP by over one trillion dollars (in Year 2000 dollars) and added 30 billion square feet of new buildings and 35 million new vehicles, while decreasing total US energy consumption and CO2 emissions. This was accomplished with increased efficiency and with cost-effective, readily available, off-the-shelf materials, equipment and technology.4
A new reality, now recognized as “the sustainability imperative,” is inexorably driving companies to implement practices that are more responsible to people and the planet because they are more profitable.5 When the likes of Goldman Sachs and Deloitte report that companies leading in environmental, social, and good governance policies have 25 percent higher stock values, change is clearly under way.6 Or when an industry giant such as Walmart begins to require its sixty to ninety thousand suppliers to answer a sustainability scorecard tracking their carbon footprint, their impact on water and other resources, and their engagement with local communities, it is clear that behaving in more sustainable ways has moved from a chic niche position to a business imperative.7
Melting Capital and the Warming Climate
Two words define the current era: “climate” and “capitalism.”
People raised on images of limitless possibilities, muscle cars, Western superiority in world markets, and a rising standard of living watched in shock as General Motors, the iconic American business, melted into bankruptcy in 2008. For many the magnitude of that collapse has yet to sink in. Nor has the recognition that Toyota became the world’s largest car company—subsequently supplanted by Volkswagen in the top spot—by riding to preeminence on the success of fuel-efficient vehicles that seem an affront to everything that made America great. GM’s reemergence from bankruptcy is similarly based on a small electric hybrid. The economic collapse of 2008 devastated communities and families, leaving more than 15 million people out of work, and sent unemployment over 25 percent in Detroit and other cities.8 It made economic recovery almost everyone’s top priority.
Another meltdown, however, poses an even greater threat. In the fall of 2009, the United Nations warned that even if the nations of the world deliver on existing promises to cut emissions of greenhouse gases (GHGs), the globe will still warm beyond levels ever experienced by humankind by the end of the century, perhaps sooner. In his introduction to the film An Inconvenient Truth, Al Gore called climate change “a moral issue.” But at heart it is neither a moral nor an environmental issue. It is a crisis of capitalism. What is little recognized is that the twin threats, to the climate and to the economy, are linked in both cause and cure. Unless nations move aggressively to implement energy efficiency and renewable energy, key elements of the transition away from fossil fuels and necessary to save the climate, it is difficult to see how our economy can lift itself from recession or avoid further crises. Solving the climate crisis IS THE WAY OUT of the economic crisis.
Capitalism to the Rescue
Critics argue that the science is uncertain. Absolutely. The goal of science isn’t infallibility or unanimity. Scientists don’t know how bad it’s going to be, or how fast climate chaos will proceed. If anything, the science is conservative in its predictions: for example, the observed reality of climate change is outrunning the scientific models, happening faster even than the most alarmed scientists predicted that it would.9
But with all due respect to the great climate scientists, let’s assume that the skeptics are correct. They are not, and you would be a fool to go to Vegas on the odds that they might be, but in a sense, the science is irrelevant. For purposes of argument, let’s assume for a moment that the skeptics are right. If all you are is a profit-maximizing capitalist, you’ll do exactly the same thing you’d do if you were scared to death about climate change because smart companies are recognizing that you don’t have to believe in climate change to believe in its solutions. We know how to solve this problem at a profit: through Climate Capitalism. DuPont was among the early climate capitalists. About a decade ago the company’s leaders pledged to cut its carbon emissions 65 percent below their 1990 levels, and to do it by 2010. That’s a bit more ambitious than the United States, which still refuses to ratify the Kyoto Protocol, a pledge to cut emissions 7 percent below 1990 levels by 2010, will accept.
Has DuPont joined Greenpeace?
No. The company made its announcement in the name of increasing shareholder value.
And it has delivered on its promise. The value of DuPont stock increased 340 percent while the company reduced its global emissions 67 percent. DuPont’s program had by 2007 reduced the company’s emissions 80 percent below 1990 levels. Doing this created a financial savings for the company of $3 billion between 2000 and 2005.10 The...