Why a green economy makes business sense too

Why a green economy makes business sense too

This photo taken on August 14, 2020, shows Buttermere Lake northwest England. Britain has become warmer, wetter and sunnier this century due to climate change, meteorologists say. (AFP)
This photo taken on August 14, 2020, shows Buttermere Lake northwest England. Britain has become warmer, wetter and sunnier this century due to climate change, meteorologists say. (AFP)
Short Url

To remind ourselves that climate change is indeed taking place, and that all the scientific evidence is telling us that it derives from our own behavior and the short-sighted way we engage with nature, feels almost surplus to requirements.

However, the slow pace — the utterly negligent pace, in fact — of global leaders’ response and efforts to reach agreement on how to tackle global warming and its devastating consequences, is in stark contrast to the severity and urgency of the situation. And as if the enormous body of research and commentary on the issue were still not sufficient to encourage decision-makers, and every one of us, to act quickly and decisively, nature is serving up its own reminders with unprecedented floods in China and Western Europe caused by record-breaking rainstorms, and a horrendous monsoon season in India that is claiming hundreds of lives and leaving a trail of destruction in its wake. Even my own London street, not known for being extreme weather conditions, was recently and unprecedentedly transformed by heavy rainfall that turned it into a river for several hours.

Scientists are beyond convinced that these extreme weather conditions that fluctuate between extreme heatwaves and extensive floods are due to our own behavior, and are bound to worsen if we don’t act in accordance with their severity, and that time is not on our side if we want to avoid sleepwalking into an irreversible apocalypse. It is widely agreed that to prevent the full wrath of climate change requires containing global warming to a figure no higher than 1.5 degrees above pre-industrial levels. This would mean halving carbon emissions over the next decade and reaching net zero carbon emissions no later than the middle of the century. Hence, a major speech to a global audience this month by the US special presidential envoy for climate, John Kerry, was a significant contribution in terms of its content, its underlining the return of the US to the forefront of tackling the crisis, and as a preface to November’s UN climate conference in Glasgow, the COP26, which has been dubbed “the world’s best last chance to get runaway climate change under control.” A rather frightening thought, considering that there are no guarantees that this summit will produce any workable strategy for containing and reversing the rise in global temperatures.

For decades mass consumption led us to think along the lines of manufacturing cheap items that don’t last, while exploiting cheap labor and natural resources. Green growth is about reversing this, and in the process training more skilled labor while also increasing profitability.

Yossi Mekelberg

Kerry’s speech, to a distinguished audience at London’s Royal Botanic Gardens on the banks of the Thames, contained the usual blend of warnings of approaching cataclysm and reminders that everyone must come together to prevent this from happening. Nevertheless, there was also another angle that has not thus far been sufficiently emphasised: There are not only environmental benefits to moving to clean, green energy, but there are also massive prospects for global economic and business growth. For way too long the environmental discourse has been ruled by the underlying but false assumption that what is good for the environment is harmful for business interests and that both can’t go hand in hand. This attitude is mainly due to a combination of pressure from particular economic interests and intellectual laziness. Kerry, in his remarks, drove home the message that investing in the green economy is beneficial for both the affluent and emerging economies and could carry us to prosperity “not on the polluting practices of the past, but on the clean sustainable technologies of the future.”

The estimated price tag for keeping global warming in check and in the meantime protecting our communities and natural habitats through constructing physical defences, warning systems and resilient infrastructure and agriculture to avoid loss of homes, livelihoods and lives, is at least $100 billion. This calls for a public-private partnership that will benefit both parties. Global surveys tell us that two thirds of consumers are willing to pay more for sustainable products, and the internet is flooded with ideas for sustainable businesses that range from solar panel installation to organic catering services to water-free car washes. But there are also large-scale businesses that are environmentally friendly, that generate big profits and create highly paid jobs. Whatever one’s personal opinion of Elon Musk, he is the second richest person in the world and his electric vehicle company Tesla, is the fastest growing brand worldwide. It is hard to imagine that only a decade ago a mere 17,000 electric cars were on the world’s roads, while now their numbers exceed 7.5 million, and are expected to rise to 145 million by 2030. To be sure, in a global economy where huge income inequalities prevail, and taking into account, at least for now, the high cost of environmentally friendly products, the onus is on the more affluent parts of the world to move more quickly to a sustainable economy, especially as these countries are also those responsible for the vast majority of greenhouse gas emissions.

There is a growing awareness among companies of the risks they face from climate change, but also of the benefits from moving to a green and sustainable economy. A CPD (Carbon Disclosure Project) survey of 215 of the world’s biggest companies has revealed that while these firms expect a $1 trillion risk from the impact of climate change in the next few years, they foresee opportunities to the tune of $1.2 trillion, and that the potential value of sustainable business opportunities amounts to almost seven times the cost of realising them. Modern and sustainable economies that are characterised by green growth represent not only a shift in the types of commodity we consume, but also in the very nature of consumption. For decades mass consumption led us to think along the lines of manufacturing cheap items that don’t last, while exploiting cheap labor and natural resources. Green growth is about reversing this, and in the process training more skilled labor while also increasing profitability. In some cases, such as agriculture, the need for new approaches as a result of climate change is obvious, but in other sectors the adoption of environmentally friendly practices is the result of, first, increasing public awareness that without it our long-term existence is clearly in jeopardy, and second, the huge revenues this can generate.  

It is inevitable that in the transition to a green economy there are those whose businesses will suffer or fail, and jobs will be lost. However, the overall benefits are overwhelming, and as we have learnt from confronting the current pandemic, with the appropriate transitional support to help individuals and companies adapt to the changes, humanity could successfully leap into a greener future. After all, we have no other option: There is no planet B.

Yossi Mekelberg is professor of international relations and an associate fellow of the MENA Program at Chatham House. He is a regular contributor to the international written and electronic media. Twitter: @YMekelberg

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view