Friday, May 23, 2014

Across the Pond and Ideological Divide: the Climate Bridge

You know climate change is beginning to capture everyone’s attention when two leaders with opposing political philosophies make compelling points on the issue in different speeches. In London this past April, committed conservative Lord Deben, spoke at the Church Investors Group conference held at CCLA headquarters in the shadow of St. Paul’s cathedral. He made the point that since the British were instrumental in bringing the industrial revolution to the world, they had serious responsibility for cleaning up the mess. He asked important questions: Why aren’t we developing technologies that could be an answer to the carbon problem? Why aren’t we working harder to develop massive batteries to store electricity from renewables?
Three months earlier in an equally auspicious setting, American labor union leader Richard Trumka, the president of the AFL- CIO, suggested an answer to a few of those questions in a recent speech of his own at the United Nations. Trumka said what is keeping powerful democracies like the United States from acting more aggressively on climate change is lack of real political will. People are afraid. He didn’t mean apprehension regarding next year's super storm or the carbon problem. The fear is basic: change can and does bring massive unemployment. No matter what, people don’t want to lose their jobs. And it’s impractical besides. If climate change policies make working people lose their livelihoods, it will undermine the political will to deal with the problem constructively.
Having worked with companies and investors for 30 years, I know both men are onto something. The climate conversation needs to be different to spark any progress on climate change while getting more from companies and the general public. More dire warnings won’t do it. Nor will inaccessible scientific pronouncements.
We need three things to move the needle on this issue upon which the future of the planet depends.
One, we need to deal with the overriding issue of fear.
Two, we need to devise a new way to measure what companies are and are not doing on climate change – and if they aren’t responding to the issue, demand change.
Finally, we need to research to pay for a worldwide transition away from carbon fuel
First and most important, deal with the fear.
-- Scientists agree we created the carbon problem and we can fix it. Most companies agree that something must be done. Most investors agree that there are plenty of costly risks to future profits if we don't find solutions. We all know there will be plenty of profitable opportunities if we find ways to solve the problem.
We can’t keep demanding nations solve the problem of climate change without the same energy and commitment to solving the problem of the economic upheaval that such a transition will create. These are two problems that need solutions- not one. And they are interrelated; we can’t hope to achieve one solution without the other.
We need to demand more of companies. I work with investors who have been successfully pushing companies toward more transparency for decades. Responsible investors are convinced that “we” are doing our part by asking companies to recognize and measure and reduce their carbon footprint. That's a good thing but unfortunately, it's not enough.
The questions must be different moving forward. A simple metric with easy to understand questions applied to every company is a critical next step. Questions such as: What resources are you spending on research for real solutions to the problem of climate change? And, what resources are you spending creating jobs that represent real solutions to the problem? No doubt many will quibble over the definitions of the three "r's", resources, research and real; and any reasonable definition is welcome. Ratios are always desirable for comparisons so, revenues or market capitalization could be used as the denominator. The sooner we ask these questions of all companies, the sooner we’ll start to get answers.
While we work to figure out how to avoid burning the unburnablecarbon, we need real money to pay for real research to figure out how to put some of the 400+ ppm already in our atmosphere back and to develop alternatives.
It is no secret that the way we live in developed nations depends on generation of power that is capital intensive and our fuel largely carbon-based. That doesn't help make the transition to new energy sources easy. Developing nations are just beginning to access the energy intensive lifestyle we've enjoyed. Solving this problem regionally is not an option because when it comes to the carbon problem, our region is our planet. Both the livelihoods and the lifestyle to which so many aspire were made possible by the carbon-based fuel that drove the industrial revolution.
Now it’s time to find alternatives that will be good for both the planet and the economy. We need money for research into both. Doing one without the other is not an option.
Difficult? Sure. But look at it this way. If Lord Deben and Richard Trumka can agree on climate change, there is reason to hope.

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