Episode 24 – Why Climate Change is Really Bad for Business

Welcome Friends, Neighbors and people everywhere. This is your host, Michael Nunes.

Welcome to the Twenty-Fourth episode of my podcast, The Power of Three. I want to help show you how harnessing the Power of Three can lead to a more fulfilling life, a life that celebrates our differences and our similarities, and accepts that we are part of the great web of life.

In this episode, I will discuss why I think that not taking action on climate change is really bad for business. The election of Donld Trump has resulted in a dramatic u-turn from President Obama’s commitment to repairing the damage from climate change. The current president is expending a lot of energy rolling back action on renewable energy and increasing the speed of environmental destruction by business.

The Republican Party and it’s backers, the carbon-based energy industry, is hell-bent on continuing to exploit the resources of our Earth without remorse. The resulting increases in pollution, toxins and carbon dioxide pose a dire threat to the continuing existence of humankind. The regime appears set on promoting half-baked conspiracy theories. They are allied to the small-government, deregulatory regime favored by the oil, gas and pipeline industries.

Like the tobacco industry, the carbon industry promotes the scientifically fraudulent idea that climate change is a conspiracy floated by the world’s scientists and environmentalists. The president has fallen in line behind this cabal of conspiracy theorists to further the idea that we can continue to exploit our Earth without paying the price.

Yet, the effects of climate change will have a dramatic impact on the viability of many businesses. The businesses most likely to be affected are those in carbon-based industries. Much of the world is starting to move passed oil and gas to renewable sources of energy. It is highly likely that increased taxes will be imposed on carbon technologies by a majority of the world’s nations.

The single biggest mistake that the current president has made is to withdraw from the Paris Climate Accord. The United States, while still the world’s largest economy, constitutes only 4% of the world’s population. If we continue to rely on carbon to power our industries, the world may impose taxes on our exports, or any export using old technology. It is likely to happen whether we desire it or not.

Countries like China are building their renewable infrastructure at a ferocious pace, building things like the world’s largest floating solar farm. The Chinese have recognized that climate change is a significant threat to their economy and to their people. The United States is moving in the opposite direction, placing American workers and the economy at great risk. Our competitiveness is at risk unless concerted action is taken now. If the United States put in place a program of scientific study and research into renewable energy, we could remain the foremost authority on these technologies. China has invested 1.2 Trillion dollars in research, an order of magnitude higher than anything the United States has in place.

Even the president and his family issued a statement in 2009 affirming the risk from climate change. He stated that the evidence is scientifically irrefutable, and yet he now restracts that very statement to join the carbon industry. We are giving up the chance to dramatically increase jobs right here. The solar industry in the U.S. already employs more than 300,000 people. World wide, energy efficient jobs employ more than 1.9 million people. This overshadows the marginal jobs in the oil industry. As climate change becomes more apparent, increasing numbers of workers will be required to fill positions to mitigate the effects.

A number of companies have already reports on the risks of climate change to their profitability. Companies like Nike, Johnson and Johnson and Coca Cola report that there could be dramatic effects to profitability. Moody’s Analytics has start reporting on the risks of transitioning to efficient energy.

The United States is falling behind the rest of the world. Countries like Germany and Norway now obtain a large percentage of their energy from renewables. In Costa Rica, their entire nation was run successfully on renewables. Yet, we sit and contemplate a return to coal, an industry that employs fewer and fewer people as countries turn away from coal.

Consider the impacts of climate change on the economy. Water shortages will make it difficult to run businesses profitably. Businesses as dissimilar as agriculture, fast food, and even energy companies will find it difficult to find water to cool their power plants, water their crops and receive vegetables like lettuce, cucumbers or tomatoes.

Food insecurity will become a very real problem. Along with that and water shortages comes the escalating chance of conflict across the globe. Conflict areas are seldom profitable for companies unless they are selling armaments to belligerents. This has the effect of forcing people to migrate, which in turn creates humanitarian disasters. The Syrian refugee crisis was created in no small part because of the failure of traditional water sources like wells.

The continued destruction of our environment will have irreversible and catastrophic consequences on the people of the United States and countries around the globe. Once the impact of climate change is being felt, we cannot just switch it off. It could take decades or centuries to reverse the damage to our planet. Only if we act now to create infrastructure that is resilient can we hope to battle the effects of the crisis.

We know that there is an increasing frequency and severity of extreme weather events. This affects our infrastructure, our agricultural output, the productivity of the labor force and even public health. Studies show that diseases like malaria, which were once restricted to equatorial areas along Africa’s East coast and the coast of India are now making progress in other parts of the world.

Consider that in 2016 alone, the U.S. experienced 15 extreme weather events, all of which had costs exceeding $1Bn and a total of $46Bn dollars. If events like this continue at this pace, economic growth will be dramatically affected, costing potentially millions of jobs and disruptions to economic activity. The costs of not doing anything exceed the costs of doing nothing.

Investors around the world have seen the growing investments in renewables and away from carbon, and they are participating. It may well be that assets invested in oil and coal will be lost as people move away from those technologies. Investors are unlikely to want to lose money on assets that are losing value or even becoming stranded assets. The business opportunities in mitigating climate change are likely to grow incrementally as governments determine the advantages to their economies. Between 2005 and 2014 the U.S. economy grew by around 13%, yet carbon emissions fell by 8%.

If the U.S. wants to participate in the global economy, we will have no choice but to tackle climate change, and especially the use of carbon technology. Many companies are already taking action internally to take advantage of the opportunities presented by new technologies. Many realize the threat to their profitability from climate change. This crisis is not something from which we can hide. It is going to have an impact on profitability whether we like it or not. The size of the impact can be mitigated.

If consumers are affected by increasing crop prices, damaged infrastructure, a loss of jobs and increased disease, it is going to affect their ability to consume. That will undoubtedly affect business at every level. It will also cause extreme hardship on families.

It is in the best interests of business to show consumers that they care about the environment. Socially conscious businesses will increasingly realize that in order to remain competitive they must be seen as caring for consumers, for employees and for the health of the planet. Companies that can accomplish this task effectively will increase profitability. Companies that do not will increasingly be seen as the problem, not the solution. It is only when government and businesses use strategies that combat the effects of climate change that we can produce a more sustainable world.

The United States and local businesses must decide whether to lead the transition to a new, cleaner economy, or whether they will lead us into poverty and loss of global authority and influence. The uncertainty and lack of vision from the current regime in Washington will discourage innovation. Other nations and businesses will increasingly look to China and Europe for leadership and scientific modernization. As a nation, the United States will be seen as the old, stagnant and aging hegemon. We should join the 83 companies that are committed to sourcing 100% of their energy from renewables and move into the 21st century. We cannot afford to lose our planet to the greed and rapacious traditionalism imposed by the oil and gas industries.

I encourage you to continue to enhance your life with the Power of Three and search for the best possible life to live.

Until next time, go well my friends.

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