US Election: A New Role for the Private Sector in Fighting Climate Change?
The unpredictability of President-elect Trump on key policy issues has created much anxiety, not least among all those who are dedicated to fighting climate change. During the campaign, Trump repeatedly called to abandon international climate agreements, dismantle the US Environmental Protection Agency (EPA) and repeal many of President Obama’s environmental regulations, such as the Clean Power Plan, which seeks to limit carbon emissions from coal and
gas-fired power stations.
Since the election Mr Trump has already softened his tone on the issue. The legislative scope to follow through with his plans could be also limited anyway. It was a Republican Congress which approved the main subsidies for wind and solar-power generation last year, which made up two-thirds of new generating capacity last year and with Republican-held states such as Kansas, Oklahoma and Texas among the main beneficiaries. Nonetheless the possibility of America reversing their leadership on fighting climate change is causing much concern around the world.
In a letter to President-elect Trump, President Obama, Members of Congress and Global Leaders at COP22 sent shortly after the election hundreds of American companies including Mars, Nike, Levi Strauss and Starbucks re-confirmed their commitment to addressing climate change. The letter called on US leaders to continue its low-carbon policies, invest in the low carbon economy and continue US participation in the Paris Climate Agreement, which the UK Government ratified on
17 November 2016.
Business has already demonstrated a real and tangible interest in being a driver of sustainability and has long sought to be part of relevant climate change discussions. Being so vocal and direct in asking government to commit to addressing climate chance, however, seems to have taken this to a new level. Do we see a new private sector role in fighting climate change?
No-one disputes the need of energy for economic growth and the smart exploitation of natural resources. But even the world’s largest energy firms, such as BAB members BP or ExxonMobil do explore how the increasing demand for energy can be met while addressing climate change and other environmental and social issues.
The reason is simple and openly selfish: A world that is increasingly exposed to the consequences of climate change is not good for business. A study on the Economics of Climate change commissioned by the British Government in 2006, which continues to be a relevant reference in the field, predicts that damage from climate change could be equivalent to losing 5% of global GDP annually.
Tackling climate change through joint agreements and regulation is helpful as it provides companies predictability it needs to plan and operate. Adapting to climate change in a common framework avoids costs, helps to manage liabilities, protects people and environment and fosters innovation.
With the latter, climate change is a business opportunity. Whether it be eco-friendly construction, green financial solutions or the expansions of renewable energy, the green economy’s share in world
GDP is growing continuously. BAB member Arup, for example, is already a leader in sustainable building designs.
First reactions to Mr Trump’s proposals to radical changes in environmental policy from other countries, including China, spur the hope that the rest of the world will stay on course when it comes to climate change. In America, however, we may need a louder business voice more than ever before.