One of General Electric’s top executives called the belief that the economy and the environment are competing concerns “nonsense.” Marc Vachon, the vice president of GE’s Ecomagination program, made the statement while speaking at a clean energy investment conference earlier this month. According to this ThinkProgress article, GE has been heavily investing in “clean technologies” since the founding of Ecomagination in 2005, and revenues from green investments have actually been double that of other portfolios.
Vachon was also quoted as saying, “Companies that don’t get this, really risk becoming irrelevant to the marketplace. Whether you believe it for climate change or just the markets that are developing, it is our responsibility as businesses to be responsible to the design signal that the world is telling us.”
I’ve heard this story before, and the only part that confuses me is that so many in the business world continue to ignore the facts telling them where the world is heading. I can’t help but think of the EV1, General Motors’ electric car from the 1990s, scrapped apparently under pressure from the oil industry. They were in on the ground floor of something, technology-wise and market-wise, and they threw it away. Now every company in the world is trying to create their own plug-in hybrid, and GM is lagging behind.
Still, at least the trend is catching on. The same article reports that in 2011, for the first time ever, renewable energy investments were greater than fossil fuel investments. It’s a few decades late, but at least we’re moving in the right direction.
This article at EurActiv makes a similar, but slightly different argument. These private investors seem at least as concerned about the huge costs of unchecked climate change as the huge profits in renewable energy investment. This might seem rather obvious to those reading this – of course the overwhelming damage expected from climate change will be bad for the economy — but for major players in the business and finance worlds to acknowledge this is still an unusual, though welcome, development.
The individuals quoted in this article, at least, are well aware of the environmental state the world is in, and they’ve further concluded that they need to take a stand against climate change themselves, rather than relying on government. “It is clear that as long as Congress is effectively controlled by climate change deniers, all of us – investors, companies, workers and the broader public – must take action ourselves,” says Richard Trumka, president of the US-based AFL-CIO labor federation.
Ann Simpson, of CalPERS, a pension and health benefits giant agreed, saying “We as the major capital providers have got to work this out.” She even relishes the difficulty of the task. “I think it’s a turning point from petitioning politicians into thinking about this as an investment challenge. For me, that’s liberating.”
Part of the reason even intelligent businesspeople have been slow to get on board with investing in sustainable industries is that the existing fossil fuel giants and their government cronies have artificially made it more difficult to do so. In a recent Guardian article, the International Energy Agency’s chief economist, Fatih Birol, blamed huge fossil fuel subsidies for the difficulty in slowing emissions.
“Energy is significantly underpriced in many parts of the world, leading to wasteful consumption, price volatility and fuel smuggling. It’s also undermining the competitiveness of renewables,” said Birol. Accordingly, cutting government subsidies of fossil fuel could take us halfway to our global carbon in one fell swoop.
This raises a rather obvious question: why in the world are governments subsidizing the industries that are killing the world instead of the ones that might save it? Conscientious American eaters may not be surprised. It’s the same thing the US government does with the beef industry. And the reason is the same. One hand washes the other.
It’s perhaps fortunate that some private interests have decided not to wait for government to get the memo.
Photo credit: Ali Madjfar