Can the international business community adapt to the risks?

Executive Summary

Climate change is more than an environmental issue; it also is a business issue. Conservatives have long argued that trying to slow the effects of a warming planet would badly damage the economy by raising taxes, increasing regulations and lowering employment. For business leaders, the debate is not academic. If their companies are to survive both competition and climate change, many realize they have to prepare for a future fraught with risk: rising sea levels, catastrophic weather and uncertain supply chains and markets. Many companies also see an opportunity, and they are diversifying into energy-efficient industries, using “smart” microgrid electrical systems at their factories, designing hydrogen-powered cars and building their own lower-carbon cogeneration power plants. Renewable energy is steadily gaining ground, as are “green,” energy-efficient building techniques. Climate change, in other words, is a chance for many businesses to make money. But climate change is producing losers as well. In the end, a question remains: Who will pay for solutions, and how?

Resources

Bibliography

Books

Kohlhaas, Michael, “Ecological Tax Reform in Germany: From Theory to Policy,” American Institute for Contemporary German Studies, 2000, http://tinyurl.com/nt4p6gf. In-depth coverage, by a fellow at the German Institute for Economic Research, of Germany's opening effort to curtail fossil fuels while increasing employment.

Weart, Spencer, “The Discovery of Global Warming,” American Institute of Physics, 2015, http://tinyurl.com/4l8qex. Physicist/historian's frequently updated online book serves as excellent source of background information on the history of, and science behind, climate change.

Articles

“In a bind: Will falling oil prices curb America's shale boom?” The Economist, Dec. 6, 2014, http://tinyurl.com/mwlnkck. Slumping oil prices are testing the boom in U.S. energy production.

“Sheikhs v shale,” The Economist, Dec. 6. 2014, http://tinyurl.com/klhxbej. An excellent primer on why oil prices have been falling and what it means to business concerns in the Middle East and the American Midwest.

Biello, David, “Everything You Need to Know about the U.S.–China Climate Change Agreement,” Scientific American, Nov. 12, 2014, http://tinyurl.com/pddge27. Concise explanation of a landmark agreement examines some interesting implications for American and Chinese business interests.

Chen, Kathy, and Stian Reklev, “China's national carbon market to start in 2016-official,” Reuters, Aug. 31, 2014, http://tinyurl.com/kslbyne. China readies rules for its ambitious carbon market.

Chestney, Nina, and Susanna Twidale, “Reuters Summit – Competition drives climate action, not science – PwC,” Reuters, Oct. 14, 2014, http://tinyurl.com/pg6m9y7. PricewaterhouseCoopers partner talks about how and if climate change is affecting business.

Guo, Jeff, “The old man and the rising sea,” The Washington Post, Dec. 2, 2014, http://tinyurl.com/ndsywar. Rising tides challenge residents of North Carolina's barrier islands.

Harish, Alon, “New Law in North Carolina Bans Latest Scientific Predictions of Sea-Level Rise,” ABC News, Aug. 2, 2012, http://tinyurl.com/d6sc3or. Controversial study issued by the state of North Carolina is squashed by real estate developers and other interested parties.

Kallgren, Jona, “Germany Has A Coal Problem,” The Associated Press, Nov. 28, 2014, http://tinyurl.com/ptjh2j7. Although Germany is trying to wean itself from nuclear and fossil fuels, the nation still mines and burns coal in some of its power plants.

Karnitschnig, Matthew, “Germany's Expensive Gamble on Renewable Energy,” The Wall Street Journal, Aug. 26, 2014, http://tinyurl.com/kjff87z. Germany's attempts to move from nuclear power to renewable energy sources go well beyond those elsewhere in Europe.

Kruschwitz, Nina, “Who Says Industry is Awakening to Climate Change Threats?” MIT Sloan Management Review, http://tinyurl.com/m3vhggd. Only 11 percent of company managers ranked climate change as a “very significant” issue in a survey of nearly 2,000 managers conducted by MIT Sloan Management Review and Boston Consulting Group.

McCurry, Justin, “Japan edges back towards nuclear power with vote to restart reactors,” The Guardian, Oct. 28, 2014, http://tinyurl.com/qcmwu9n. In some regions of Japan, support is growing for restarting nuclear reactors that shut down in the aftermath of the Fukushima disaster.

Montgomery, Lori, “In Norfolk, evidence of climate change is in the streets at high tide,” The Washington Post, May 31, 2014, http://tinyurl.com/o87zdhr. Rising tides have the port city of Norfolk, Va., scrambling.

Moskvitch, Katia, “Will Falling Oil Prices Kill Wind and Solar Power?” Scientific American, Jan. 22, 2015, http://tinyurl.com/oce94dq. Former U.S. Energy Secretary Steven Chu discusses Germany's attempt to replace nuclear power with renewables.

Neslen, Arthur, “Germany moves to legalise fracking,” The Guardian, Feb. 14, 2015, http://tinyurl.com/nzfr5ux. The German parliament prepares to lift bans on fracking, leading to speculation about the direction of that nation's energy policy.

Vidal, John, “UK and Germany break solar power records,” The Guardian, June 23, 2014, http://tinyurl.com/l28eokp. Germany and the United Kingdom set records for solar production in 2014.

Winston, Andrew, “GE Is Avoiding Hard Choices About Ecomagination,” Harvard Business Review, Aug. 1, 2014, http://tinyurl.com/lz6568m. Environmental strategy adviser critiques General Electric's signature program to spur green innovation.

Reports and Studies

“Climate Change 2014: Synthesis Report,” Intergovernmental Panel on Climate Change, 2014, http://tinyurl.com/pl2wwzk. U.N. advisory board provides up-to-date analysis on climate change, based on the work of more than 800 scientists in 80 countries.

Inhofe, James M., “The Facts and Science of Climate Change,” Senate Committee on Environment and Public Works, no date, http://tinyurl.com/qdbra4r. The U.S. senator and leading climate-change skeptic lays out his reasoning in an oft-cited report.

Orcutt, Mike, “How and Why U.S. Greenhouse Gas Emissions Are Falling,” MIT Technology Review, May 6, 2014, http://tinyurl.com/n392m4n. Greenhouse-gas production in the United States is dropping, according to the Environmental Protection Agency.

The Next Step

Government Measures

Carrington, Damian, “Ban fracking, says former Tory environment secretary Caroline Spelman,” The Guardian (U.K.), Jan. 22, 2015, http://tinyurl.com/krxjd2l. A conservative member of the United Kingdom's Parliament proposes a moratorium on fracking in a bill amendment, anticipating the release of a government report that says environmental damage from fracking would hasten climate change.

Fitzgerald, Jay, “State Senate report warns of climate change threats,” The Boston Globe, Jan. 6, 2015, http://tinyurl.com/lbgu52y. A report by Massachusetts state senators urges the recently elected governor to adopt new clean fuel standards, enforce pre-existing carbon emissions regulations and incentivize utility companies to track energy consumption.

Megerian, Chris, “Lawmakers take step toward fulfilling state climate change goals,” Los Angeles Times, Feb. 7, 2015, http://tinyurl.com/md3d5p5. California state legislators propose several bills setting targets for investing in energy-efficient technology, reducing reliance on fossil fuels in favor of renewable sources and boosting energy efficiency in thousands of buildings.

Opportunities

Craze, Matthew, Matthew Winkler and Javiera Quiroga, “Chile Gets Cleaner at a Profit With Pacheco Renewable Push,” Bloomberg Business, March 10, 2015, http://tinyurl.com/krzr86c. A renewable-energy boom in Chile spurred by the government's efforts to bring in new investors has generated profits for multinational energy companies and allowed local utilities to invest in energy-efficient technologies.

Monks, Kieron, “Getting rich from climate change? How business can thrive in extreme conditions,” CNN, Nov. 17, 2014, http://tinyurl.com/mkjw22l. Two former Google engineers are using climate modeling and satellite imaging software to help farmers better monitor their crops and time their use of fertilizers and pest control chemicals ahead of shifting weather patterns.

Shea, Rachel Hartigan, “Q&A: How to Make Money From Climate Change,” National Geographic, March 2014, http://tinyurl.com/legyund. Climate change presents opportunities for companies to profit from investing in water rights and developing new vaccines and renewable-energy technologies, according to the author of a book on global warming-related business opportunities.

Sustainability

Gillis, Justin, “Companies Take the Baton in Climate Change Efforts,” The New York Times, Sept. 23, 2014, http://tinyurl.com/ptzqyz5. Forty of the world's largest companies sign a declaration pledging to halve tropical deforestation by 2020 and to stop it by 2030, the newest addition to a wave of large-scale corporate sustainability initiatives.

Srinivas, Siri, “Citigroup to invest $100bn in tackling climate change,” The Guardian (U.K.), Feb. 18, 2015, http://tinyurl.com/nm39qs7. Citigroup has pledged to invest $100 billion in green energy and sustainable growth initiatives by 2025, double the amount the financial services company committed in 2007.

Threats

Casey, Michael, “Could climate change take oysters off the menu?” CBS News, Feb. 23, 2015, http://tinyurl.com/l92evx9/. Accelerating ocean acidification caused by climate change threatens the future of America's shellfish farming industry, according to a study conducted by researchers from two universities and two nonprofit advocacy groups.

McCoy, Terrence, “Threatened by climate change, Florida reportedly bans term ‘climate change,’” The Washington Post, March 9, 2015, http://tinyurl.com/k8362tz. Despite threats of submersion and daily flooding for Florida's coastline, Republican Gov. Rick Scott reportedly barred members of the state's environmental protection department from using the terms “climate change” or “global warming” in official correspondence.

Mundy, Alicia, “‘Risky Business’ Report Aims to Frame Climate Change as Economic Issue,” The Wall Street Journal, June 23, 2014, http://tinyurl.com/msh87y3. According to a report commissioned by a former U.S. Treasury secretary, ex-New York Mayor Michael Bloomberg and a hedge fund manager, climate change could cost American industries tens of billions of dollars in the next two decades.

Organizations

Center for Climate and Energy Solutions
2101 Wilson Blvd., #550, Arlington, VA 22201
703-516-4146
http://www.c2es.org
Formerly known as the Pew Center on Global Climate Change, independent, nonpartisan, nonprofit promotes clean energy and environmental stewardship.

The Climate Reality Project
P.O. Box 50803, Washington, DC 20091
info@climatereality.com
http://climaterealityproject.org
Advocacy group dedicated to climate-change-related issues.

The Heritage Foundation
214 Massachusetts Ave., N.E., Washington, DC 20002-4999
202-546-4400
http://www.heritage.org
Think tank that promotes conservative policies and free enterprise.

National Oceanic and Atmospheric Administration
1325 East-West Highway, Silver Spring, MD 20910
301-713-2065
http://www.noaa.gov/index.html
U.S. agency focused on the world's oceans and atmosphere.

Union of Concerned Scientists
2 Brattle Square, Cambridge, MA 02138-3780
617-547-5552
http://www.ucsusa.org
Organization of independent scientists and researchers working on energy, food, climate and nuclear issues.

U.S. Department of Energy
1000 Independence Ave., S.W., Washington, DC 20585
http://energy.gov
Federal department in charge of researching, establishing and implementing U.S. energy policy.

U.S. Green Building Council
2101 L St., N.W., Suite 500, Washington, DC 20037
Within the United States: 1-800-795-1747
Outside the United States: 1-202-742-3792
http://www.usgbc.org
Organization that created the LEED standards of sustainable building design.

DOI: 10.1177/2374556815581842