Talk is cheap: strong climate action is good for the economy

It always surprises me when someone is claiming that a transition to intermittent energy sources is “good for the economy”. This evening I was watching the U.S. House Committee on Science, Space & Technology hearing of last Tuesday titled: “Paris climate promise: a bad deal for America” and yes, again there was someone praising such transition and how good it all would be.

US House Committee Science Space  & Technology hearing Feb 2, 2016

The praise came from Andrew Steer, president and CEO of the World Resources Institute, who had the dubious task of defending the outcome of the Paris climate conference last December. Although I liked his enthusiasm, I had the impression that he wasn’t alway very honest, for example when describing the commitments of China and India. I think he greatly oversold the outcome of the climate conference. His story was overly rosy and he seemed to be completely unaware of any issues with intermittent, low density energy sources. If this is how he frames it, I fear for the rest.

Just a few of the many claims he made in his oral statement (my emphasis):

  • a growing recognition the that strong climate action is good for business
  • American businesses and cities are supportive of the Paris agreement
  • it wasn’t just national government that is taking action in Paris, but CEO’s, bankers, mayors, governors, who is pushing hardest for the deal and announcing new climate efforts of their own
  • 140 companies including Coca Cola and General Mills committed to serious ambitious emission targets aligned to climate science
  • 63 companies including Wallmart, Google and Microsoft pledged to transition to 100% renewable power in the shorted practical time frame.
  • the 6 biggest banks in the United States issued a statement in favor of a global agreement
  • 450 cities joined the compact of mayors, a coalition of cities of leaders dedicated to reducing emissions, including 120 from the United States
  • this flood of support is indicative of a new understanding of the relationship between climate change and the economy
  • growing evidence from groups like the Global coalition on economy and climate is proving that strong climate action is compatible with and actually even necessary for economic growth
  • this is why 365 companies including Adidas, Unilever, Gap and Staples wrote to US governors last year in strong support of the EPA carbon pollution standard for existing power plants. They wrote, quote, our support is firmly grounded in economic reality. Clean energy solutions are cost effective and innovating ways to driving investments. Increasingly, businesses rely on renewable energy and energy efficiency solutions to cut costs and improve corporate performance, unquote.
  • the 365 companies who wrote this letter know the smart money increasingly lies in the sustainable economy
  • the United States is a leader in the deliverance of improvements in energy efficiency, cleaner fuels and new technologies.
  • we already seeing the benefits. Last year the US solar industry added workers at a rate of 12 times faster than the overall economy
  • transitioning to a clean energy economy will create hundreds of thousand of more jobs, increased GDP and save families money on energy bills. But if unchecked, the negative economic impact of climate change will profoundly undermine the US economy
  • our analyses show that the US is already well positioned to meet its international climate commitments, but it will require continued strong leadership
  • and so on and so on…

This was only his oral statement, he gish galloped similar stuff in his answers afterwards. He also wasn’t afraid using words like “unprecedented”, “overwhelming”,…

Okay, that is all well and good, but the question that kept popping up in my mind was: why don’t they just DO that? As in: lead by example. If the advantages are so incredibly big, even crucial for economic growth and savings on families energy bill, then what keeps them from doing so?!??!

Now they are just keep on telling us that it is necessary, reliable, smart, economical, beneficial and all kind of superlatives, but why don’t they PROVE exactly that? Why are they even waiting for others to start doing what they believe is so beneficial? Why all the pledges? Just do it and show others that it can be done and how it has to be done. This would be the best proof that it can work. If others see how successful and easy it is, they ought to jump all over it…

I am not impressed by such statements. Let them first prove that renewable sources can carry an economy, that it can spawn sustainable jobs and is good for business, that energy prices driven by alternative energy can bring wealth to the people and companies!

This all reminded me of 75 Belgian company leaders that wrote an open letter to the federal government. That letter read as some pamphlet from WWF and had the same claims of more jobs and a stronger economy. In it also some really vague pledges. But I remember foremost that they were eager to be on the receiving end for support from our government…

Why was I thinking this is no different here?

2 thoughts on “Talk is cheap: strong climate action is good for the economy

  1. manicbeancounter

    I have been looking at the policy proposals in the INDCs submissions made for the Paris meeting. Looked at from the standpoint of putting forward policies that will reduce global emissions there is very little. In fact even if all proposals are fully implemented global emissions will keep on rising. They will just be rising at a slightly slower rate. To use a PR phrase there is “a lack of real ambition” in the proposals. The reason is that serious cuts in emissions are extremely costly. For a developing country constraining emissions growth means constraining economic growth. For the EU, emissions reductions are achieved through making energy more expensive, increasing costs for both households and businesses.
    Why would established businesses sign up to reduce their emissions when there is no pressure to do so?
    Take the example of Coca-Cola. They are highly dependent on the intangible perception of the brand to maintain dominant market share whilst charging premium prices. If they sign up to reduce their emissions, they probably get to put a little logo on the products and advertising. For a large segment of the population who believes in global warming, this enhances the product. The extra costs are quite small relative to the marketing budget. Alternatively, if they claim to have nothing to do with the emissions scheme – or worse said it would do nothing to reduce global emissions but would hurt the living standards of its poorer customers – then various green groups would be protesting outside the corporate headquarters and tarnishing the name of the business. So they go along with the whole scheme.


    1. trustyetverify Post author

      That was my idea also when I heard about those 75 companies writing an open letter to our government. These are not charities, but try to make profit. So they will not just make some (vague) pledges, they will expect something back in return. If not from the government, then from its costumers.

      When one looks at it like that, then yes, it is obvious that there is money to be made with climate action, that strong climate action is good for business, that clean energy solutions are cost effective and so on. But only if government favors that as a winner. Or when costumers are willing to open their wallet a bit more when purchasing their product (for companies that sell a product). That is why I think a widespread agreement was so crucial for Steer. Without that, strong climate action would not be good for business, clean energy solutions not cost effective and so on.



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