Editor’s Note: Jeff Nesbit is author of This is the Way the World Ends and executive director of Climate Nexus. The opinions expressed in this commmentary are his own.
The sobering report issued by the United Nation’s Intergovernmental Panel on Climate Change last month was a public jolt. The report found that the Earth’s temperature will warm by 1.5 degrees Celsius above pre-industrial levels by as soon as 2030, sparking some devastating consequences.
Like it or not, if we are going to make any progress on climate change, we are going to have to look to the business world. There are roughly 100 companies directly responsible for CO2 emissions, outlined in the Carbon Majors report. Others in the utility and transportation sectors are indirectly responsible for carbon emissions.
The good news is that more business leaders are recognizing that climate change is indeed a real threat, and many are leading the way in making it a priority in business decisions.
Here’s how businesses can tackle climate change head-on:
Make it a part of the business
Some boardrooms have begun to build climate risks into their assumptions and business plans.
For some businesses, it means making changes in their own supply chains that reduce CO2 emissions. Walmart, for instance, has pledged to reduce a gigaton of CO2 from its supply chain.
For other companies, it means shifting their own energy needs away from fossil fuels to renewable energy. Google and Facebook are good examples of this. They have both committed to buying 100% of their energy needs from renewable sources.
Support a carbon tax
Many large multinational corporations now allocate resources to either mitigate damage or exposure from climate risks or to adapt to changing environments. They’re doing so largely because they want regulatory certainty, as well as a level playing field as governments begin to restrict carbon emissions in the next 20 years.
More than a dozen industry sector leaders — including General Motors, MetLife, Exelon, AT&T, Johnson & Johnson, Procter & Gamble, PepsiCo, Unilever, Shell, BP and Total — have agreed to support the proposed Climate Leadership Council’s Baker-Shultz carbon dividends plan in the past year. This plan would set a national carbon price at $40 a ton in the first year, and it would rise each year after that. The revenue from the carbon fee would be returned to US families as a dividend. The business community as a whole can and should support this prospoal.
Turn to renewable energy
Renewables now disrupt our biggest energy markets and industries such as transportation and utilities. Distributed-grid technologies offer homeowners and small businesses options to generate power for zero fuel costs. Vast new economies of scale drive down prices, making clean energy easier, cheaper and available to all. For businesses, utilities should offer solar and wind options and have solar rooftops integrated into the electric grid. The cost of building solar plants is now as cheap as building a coal plant.
Corporations are realizing that shifting to more efficient, environmentally friendly renewable energy can be important to bottom lines. Pepsi and Coca-Cola have both chosen to address climate impacts affecting their supply chain. Two of the largest packaged food companies, Kellogg and General Mills, have environmental and climate data programs that map out risks and energy efficiency goals throughout their global supply chains. The programs embrace renewables as a way to find and improve efficiencies and reduce energy costs.
But will such changes happen fast enough to stave off the worst impacts already occurring? Renewable energy needs to replace traditional energy as quickly as possible, and electric vehicles need to replace the internal combustion engine in the next 10 to 15 years. Those are big, seemingly impossible benchmarks. Consumers should demand this.
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But the next move could be revolutionary. Climate change has created the single greatest wealth opportunity in history. The free-market forge is poised to refine a $90 trillion thing of beauty and wonder by using a “carbon price signal” sufficient to engineer a low-carbon energy economy.
Will America’s business leaders choose to grab this hammer and aim it at the anvil to remake the world before it’s too late — especially if tens of millions of technology-savvy consumers actively support that change for all our best interests on this shared planet?