tag:theconversation.com,2011:/us/topics/business-and-climate-change-6960/articlesBusiness and climate change – The Conversation2020-01-23T14:51:38Ztag:theconversation.com,2011:article/1304022020-01-23T14:51:38Z2020-01-23T14:51:38ZHow to really hold business to account on their carbon footprint – include their supply chains<figure><img src="https://images.theconversation.com/files/311424/original/file-20200122-117954-tp6roa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Supply chains can add a lot to a company's carbon footprint.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/loading-cargo-on-plane-airport-view-308983271">By mariakray / Shutterstock</a></span></figcaption></figure><p>Donald Trump may not believe climate change is happening, <a href="https://theconversation.com/why-us-companies-will-ignore-trumps-withdrawal-from-the-paris-climate-agreement-78865">but most business leaders do</a> and it is no surprise to see it <a href="https://www.nytimes.com/2020/01/20/business/energy-environment/davos-climate-change.html">top of the agenda</a> at the World Economic Forum in Davos.</p>
<p>Many firms and organisations are now working hard to reduce their carbon emissions. And it is not just good public relations. Pressure is building on firms to lead society in the move towards a sustainable future.</p>
<p>But still too few include their supply chain when considering their environmental impact and this is bad news for the environment. Supply chains contribute significantly to a firm’s carbon footprint and can amount to four times the organisation’s own operational emissions.</p>
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<a href="https://theconversation.com/why-us-companies-will-ignore-trumps-withdrawal-from-the-paris-climate-agreement-78865">Why US companies will ignore Trump's withdrawal from the Paris climate agreement</a>
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<p>The Carbon Disclosure Project (CDP), a charity running the global disclosure system on carbon emissions for investors and other interested parties, found <a href="https://www.cdp.net/en/research/global-reports/changing-the-chain">just 29% reported absolute decreases in emissions</a>.</p>
<p>As well as being bad for the environment, this will increasingly cause problems for businesses too. A growing number of regulators worldwide now require publicly listed companies to include measurements of their greenhouse gas emissions in their annual reports. The UK <a href="https://www.gov.uk/government/consultations/streamlined-energy-and-carbon-reporting">introduced</a> “streamlined energy and carbon reporting” in 2019. This includes supply chains.</p>
<h2>Different levels of engagement</h2>
<p>By analysing the CDP annual survey data from 2014 to 2017, <a href="https://doi.org/10.1002/bse.2392">my colleague Jens Roehrich and I found</a> 1,686 listed companies from all over the world that were actively collecting environmental data and engaging with their supply chain.</p>
<p>Although two-thirds of our sample firms were not doing any of this, we can at least see that engaging with your suppliers is on the rise. The number of firms talking to some or all of their supply chain increased by 57% in the three years we looked at.</p>
<p>We were able to categorise the firms into three levels of activity: basic, transactional and collaborative. The basic level sees companies typically send their suppliers a survey to fill in on their emissions. US software firm Symantec produces an annual report on the greenhouse gas emissions of its suppliers, while Bank of America has done a CDP supply chain survey since 2009.</p>
<p>This is the first step for a comprehensive carbon reduction plan, measuring and collating data. More advanced firms are using that data more productively. At the transactional level firms are calculating their carbon footprint and identifying opportunities for improvements, providing their supply chain with targets and incentives.</p>
<p>The airliner Virgin Atlantic aims to reduce emissions from its supply chain each year. Meanwhile, nuclear power firm Exelon sets goals for its suppliers to reduce energy usage and greenhouse gas emissions.</p>
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<p>This data is also being used by companies to develop key performance indicators. These can then be used to select a supplier or worked into contracts to assess a supplier’s performance. They can then send warnings to companies who are not achieving the required performance levels and demand improvements. For instance, pharmaceuticals company [Pfizer] benchmarks its suppliers on the basis of their greenhouse gas emissions and water consumption levels and demands corrective action when suppliers fall short of their targets. </p>
<p>At the collaborative level, firms are working with their suppliers to develop shared goals and values around sustainability. This means more direct conversations through meetings, seminars on best practices, as well as establishing online discussion groups designed to foster innovations that reduce their carbon footprint and create greener products and services.</p>
<p>Food multinational Kellogg’s has organised a Sustainability Consortium with its supply chain to advance scientific research and develop standards and tools that have the potential to improve the environmental, social and economic impacts of their products. Similarly, InterContinental Hotels Group is working with the International Tourism Partnership to reduce the environmental impact of the cotton used in its bed linen.</p>
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<img alt="" src="https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/311570/original/file-20200123-162232-1bykjfl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Hotels can consider the carbon footprint of how their linen is produced.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/rolls-industrial-cotton-fabric-clothing-cloth-768937246">Shutterstock</a></span>
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<p>Firms at the collaborative level also seek to engage customers and consumers, persuading them, through marketing and public relations, of the benefits of new, greener products and how to use them in a way that is less harmful to the environment.</p>
<p>Chemicals company Ecolab partners with its customers to reduce their energy demands and carbon emissions through innovations. French hospitality firm Sodexo funds a professor of sustainable sourcing at the Euromed School of Management in Marseilles.</p>
<p>If firms have to report all their emissions, from the supply chain to the customer, then what each one does affects the other. This makes the collaborative approach increasingly important. Companies need to understand that they are all part of a system that has to work together, rather than use it as another supply chain management tool.</p>
<h2>Tech leading the way</h2>
<p>Measuring emissions across the whole value chain can be incredibly complex for a company like Walmart with its thousands of suppliers around the world. The amount of data involved is probably why we see tech companies leading the way in reducing their carbon footprint. Their data analytics skills mean it is natural for them to collate data and put it to good use and work up and down the supply chain.</p>
<p>Their experience of handling and managing data also means they see this trend and increasing requirement to record and measure emissions for companies as an opportunity. If they figure out and produce a comprehensive software package that does all this effectively, they can then sell that platform to other firms looking to manage their whole carbon footprint. <a href="https://www.verizon.com/about/responsibility/sustainability">Verizon</a>, for example, now sees its Internet of Things products, designed to reduce carbon emissions, as a significant source of revenue opportunities.</p>
<p>Sustainability has become the issue of this generation. If businesses are to prosper in this climate, they need to include their whole supply chain to claim they are truly on the planet’s side and not be accused of creative carbon accounting.</p><img src="https://counter.theconversation.com/content/130402/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frederik Dahlmann does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Supply chains can amount to four times an organisation’s own operational carbon footprint.Frederik Dahlmann, Associate Professor of Strategy and Sustainability, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/797282017-06-22T00:53:56Z2017-06-22T00:53:56ZGovernment action isn’t enough for climate change. The private sector can cut billions of tons of carbon<figure><img src="https://images.theconversation.com/files/174808/original/file-20170620-11735-xutxwh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Businesses can make up for inaction on climate by government by investing in energy and fuel efficiency. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/walmartcorporate/5367638998/in/photolist-9bjy4Y-9bjwuN-92a27m-91XoNQ-91GN2j-8ZUBSr-9dqSQ7-91XmwS-91HbMW-91XnQA-8ZUXsB-91XrvC-95HXC2-97Hn6K-91XnNq-926TrD-9wuwDM-926Tpr-8ZxKxw-91Xo9j-91UjyZ-91XqtE-8ZUXtM-9dyhnV-9dycKR-9dqUbd-92a1ZQ-8ZUXqi-9wxvJN-8ZY3Ru-95M197-8ZXPUN-926TsT-91Xt5q-91Mvvu-926Txi-91MvYs-9dnMfF-97Hfv8-9uPDV7-9wuwzn-92a1X5-91XrEY-91Xs2w-926Tjk-91UhPH-91HbV3-8ZUXhX-91GN1W-8ZUBcR">Walmart/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>With President Trump’s announcement to pull the United States out of the Paris Agreement, many other <a href="https://theconversation.com/trumps-exit-of-paris-climate-accord-strengthens-china-and-europe-78653">countries</a> around the world – and cities and states within the U.S. – are stepping up their commitments to address climate change. </p>
<p>But one thing is clear: Even if all the remaining participating nations do their part, governments alone can’t substantially reduce the risk of <a href="https://www.epa.gov/sites/production/files/2014-12/documents/incorporating_catastrophic_climate-change_into_policy_analysis.pdf">catastrophic</a> climate change.</p>
<p>We’ve studied the role of the <a href="http://www.powells.com/book/beyond-politics-9781316632482">private sector in addressing climate change</a>, and we’re convinced that the next stage is going to require more than just political agreement. What is needed is a concerted effort to mobilize private action – not just corporations but also religious and civic organizations, colleges and universities, investors and households – to help narrow the gap that remains after the Paris Agreement.</p>
<h2>The Paris gap</h2>
<p>Under current policies, global emissions are on a path toward a world with temperatures more than <a href="http://climateactiontracker.org/publications/publication/154/Analysis-of-current-greenhouse-gas-emission-trends.html">3 degrees Celsius</a> (5.4 degrees Fahrenheit) above preindustrial temperatures. The Paris Agreement emphasized the need to keep warming “well below” 2°C and ideally reach a reduction of 1.5°C. The accord includes national pledges to reduce emissions, which are to be updated every five years to move the world closer to the temperature target. </p>
<p>Although the agreement takes a significant first step, without additional steps the world will fall <a href="http://climateactiontracker.org/assets/publications/briefing_papers/CAT_2017_Tracking_Progress.pdf">far short</a> of even the more modest goal.</p>
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<a href="https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/174809/original/file-20170620-2627-19dcdnc.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Without faster cuts in the rate of carbon emissions, the chances of severe heat events, like the one in Arizona this week, will go up.</span>
<span class="attribution"><span class="source">AP Photo/Ross D. Franklin</span></span>
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<p>This is the Paris gap – the difference between the goals of the Paris Agreement and what it will actually achieve over the next decade, even if all countries fully comply with their commitments. <a href="http://infographics.pbl.nl/indc/">A detailed scientific assessment</a> by the PBL Netherlands Environmental Assessment Agency found that by 2030 this gap would reach 12-14 billion tons per year even if all countries including the U.S. meet their targets.</p>
<p>The Paris Agreement sets up a process for countries to add new commitments for the period after 2025, but here’s the catch: The Paris gap is so large that waiting until then brings risks. Although no one can predict all the effects of a global temperature increase of 3°C or more, an increase in this range will <a href="https://www.nap.edu/catalog/21852/attribution-of-extreme-weather-events-in-the-context-of-climate-change">almost certainly</a> amplify the <a href="http://news.nationalgeographic.com/2017/06/heatwaves-climate-change-global-warming/">frequency and severity of deadly heat waves around the world</a>. It will also increase the likelihood of crossing tipping points that could make the consequences of climate change, such as sea level rise, much worse. Waiting a decade for additional national commitments is a <a href="https://theconversation.com/managing-climate-risk-in-trumps-america-67746?sr=8">risky option</a>.</p>
<p>So how should we close the Paris gap? Until now, global climate change efforts have largely focused on actions by national, regional and local governments – all of which will be <a href="https://theconversation.com/are-we-overreacting-to-us-withdrawal-from-the-paris-agreement-on-climate-78741">critical</a> to closing the gap. But governments are not the only actors that can make a difference: corporations, citizens and nonprofits can make an important, and perhaps essential, contribution, even if they cannot solve the entire problem.</p>
<p>We’ve already seen private actors respond to the U.S. withdrawal from the Paris Agreement. For example, the <a href="http://wearestillin.com/">We Are Still In initiative</a> is a coalition of businesses, colleges and universities, and cities and counties. And on June 20, the <a href="https://www.clcouncil.org">Climate Leadership Council</a> – a collection of big businesses, environmental advocacy groups and individuals – launched, calling for policy action on climate change. </p>
<p>Our assessment finds that private actions can close 10 percent to 30 percent of the Paris gap over the next decade. This can reduce the cost of climate mitigation and allow the politic consensus to catch up with the scientific consensus, although it is not a substitute for government action. </p>
<h2>Vast potential</h2>
<p>Private actors – including corporations, civic and advocacy groups, private citizens, and even the Catholic Church – played an important role in pushing nations to make commitments in Paris, but lobbying for government action is not the only role for the private sector. These private actors are sources of emissions that can reduce emissions directly and independently of government policies.</p>
<p><a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2533643">In an article published in the Columbia Environmental Law Journal,</a> we have shown how private climate efforts can deliver a billion tons of emissions reductions per year over the next decade from the corporate and household sectors. These reductions are not enough by themselves to limit global warming to 2°C or 1.5°C, but together with national and international efforts, they can improve the odds of preventing catastrophic climate change.</p>
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<span class="caption">All parts of society, including churches, corporations and advocacy groups, need to take steps to reduce emissions to meet temperature targets.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/mikecogh/14744726306/in/photolist-osWzr5-ouGeuT-bA3Sts-ceiq1J-b2cBTR-pJMTvz-ae6ETa-qHaEmM-pFukfu-b2cW8R-ceir5N-egdkmX-5nocvk-4gb4E1-qrWsu8-b2cwDn-qauZzM-6NYF7g-bv9Hyq-5nocAi-puXchb-6bsx9w-ceiodh-cxNdHu-pvbB6B-rnoN3b-qawr8g-bJ4tb8-6bojKa-6bojK4-n5D5th-rnp1as-qGXzbG-ceiqSq-ceipqw-rDRurm-ceiqY5-bWW1up-rnoMWE-rDXhfi-rnp2Qb-ceipco-ceipNy-ceipjG-ceioxu-bWW3kt-bWW2Pn-rkCLn8-qawqnP-bWW3EB">Michael Coghlan/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
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<p>Corporations can make significant reductions in emissions by increasing energy efficiency, investing in research and development, and insisting on emissions reductions from suppliers. For example, Walmart’s recent joint initiative with the Environmental Defense Fund reduced Walmart’s cumulative supply chain emissions over the last five years by <a href="http://business.edf.org/files/2016/02/EDF-Walmart-10-Year-Journey-Case-Study.FINAL_.pdf">28 million metric tons of carbon dioxide</a>, and <a href="http://news.walmart.com/2017/04/19/walmart-launches-project-gigaton-to-reduce-emissions-in-companys-supply-chain">Walmart recently pledged</a> to reduce its cumulative emissions between now and 2030 by one billion tons, which would be equivalent to the entire emissions of <a href="https://www.energy.gov/sites/prod/files/2013/11/f4/energy_use_and_loss_and_emissions_iron.pdf">the U.S. Iron and Steel Industry</a> over that period. </p>
<p>At the household level, efforts to improve the energy efficiency of homes and provide households with feedback on their energy use, including real-time data on energy use, data in monthly bills and energy efficiency ratings for residential rentals and sales, can make a significant impact on emissions. As we have shown in <a href="http://www.pnas.org/content/106/44/18452">an article in the Proceedings of the National Academy of Sciences</a>, within the next 10 years, simple household energy efforts in the United States could reduce annual emissions reductions by more than 450 million metric tons of carbon dioxide, which is much more than the total emissions by the host country for the Paris Agreement – France.</p>
<h2>Speed of essence</h2>
<p>Nonprofits, such as churches, colleges and universities, hospitals and civic organizations, are also starting to get in on the effort to close the Paris gap, but they can do more. For example, Pope Francis has spoken eloquently about the <a href="https://theconversation.com/the-pope-climate-change-and-the-cultural-dimensions-of-the-anthropocene-44812?sr=1">moral and religious imperative of addressing climate change</a> and has supported the national commitments in the Paris Agreement. We have calculated that the Catholic Church has emissions comparable to a medium-sized country, such as Chile. If the Church made a major commitment to reduce emissions from its own operations, in addition to pushing governments to act, it could make a significant difference on its own. </p>
<p>With or without the United States, the Paris Agreement demonstrates that the international process can take important steps, but it will not yield emissions reductions with the speed and magnitude necessary to achieve its goals. What is needed now is a new focus on the private sector – a global effort by corporations, citizens and nonprofits.</p><img src="https://counter.theconversation.com/content/79728/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Vandenbergh receives funding for private governance research from the Vanderbilt Trans-Institutional Programs (TIPs) fund</span></em></p><p class="fine-print"><em><span>Jonathan M. Gilligan receives funding from the U.S. National Science Foundation and the U.S. Office of Naval Research. He is a member of the American Association for the Advancement of Science, the American Geophysical Union, the American Meteorological Society, the American Physical Society, the American Institute for Sri Lankan Studies, the Institute for Operations Research and the Management Sciences, the Union of Concerned Scientists, the Erdos Institute, the Electronic Frontier Foundation, and the American Civil Liberties Union.</span></em></p>Without the private sector cutting carbon emissions – rather than just lobbying the government for action on climate – the world will never reach the temperature targets of the Paris Agreement.Michael Vandenbergh, David Daniels Allen Distinguished Chair of Law, Vanderbilt UniversityJonathan M. Gilligan, Associate Professor of Earth & Environmental Sciences, Vanderbilt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/788202017-06-05T01:43:29Z2017-06-05T01:43:29ZWhy Trump’s withdrawal from Paris doesn’t matter as much as you think<figure><img src="https://images.theconversation.com/files/172164/original/file-20170604-20569-13pntvs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fortunately, it's not quite so gloomy.</span> <span class="attribution"><span class="source">AP Photo/Susan Walsh</span></span></figcaption></figure><p><a href="https://theconversation.com/why-trumps-decision-to-leave-paris-accord-hurts-the-us-and-the-world-78707#comment_1304030">Many reacted</a> to President Donald Trump’s decision to withdraw from the Paris climate accord with understandable dismay, fearful that the U.S. <a href="https://theconversation.com/trumps-decision-to-withdraw-from-the-paris-accord-cedes-global-leadership-to-china-76279">is shirking its global leadership role</a>, will fall behind in green technology and is helping usher in the worst effects of global warming.</p>
<p>Let’s take a collective breath and think about what withdrawal really means. After weighing many pros and cons, I believe it’s sensible to conclude it doesn’t really matter. </p>
<p>That’s because efforts by cities, states and companies are already underway to keep up the spirit of Paris, even if the feds won’t. We’re at a point where ecological forces such as climate change are increasingly driving economic behavior, as <a href="http://web.a.ebscohost.com/abstract?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=19445083&AN=47365043&h=WkIUBVO0E30u8ptyMGpJJdmq8YoHAwBVSq27lTIKpPFivcMk6T%2bdnJTRuU%2bZp52QJBK1CFSG00yNO9fUG1rjEA%3d%3d&crl=c&resultNs=AdminWebAuth&resultLocal=ErrCrlNotAuth&crlhashurl=login.aspx%3fdirect%3dtrue%26profile%3dehost%26scope%3dsite%26authtype%3dcrawler%26jrnl%3d19445083%26AN%3d47365043">I explored in a 2009 paper</a>, which is making these efforts to combat it more inevitable, regardless of Trump. </p>
<p>While the Paris withdrawal is unfortunate, there’s a bigger threat. </p>
<h2>Reasons to worry?</h2>
<p>From a political perspective, the United States <a href="http://economictimes.indiatimes.com/news/international/world-news/in-climate-talks-its-always-been-america-first/articleshow/58955848.cms">has often been</a> a <a href="https://www.theguardian.com/environment/2001/mar/29/globalwarming.usnews">noncontributor</a> in the global carbon emissions reduction game. </p>
<p>The United States signed <a href="http://www.cnn.com/2013/07/26/world/kyoto-protocol-fast-facts/index.html">but never ratified the Kyoto Protocol</a> – citing many of the same reasons as President Trump (large, developing countries are held to lower standards, and this will put the U.S. at a competitive disadvantage). </p>
<p>Yet there was far less outrage with Kyoto – probably because people knew less about climate change. We know more now and <a href="https://theconversation.com/we-need-to-get-rid-of-carbon-in-the-atmosphere-not-just-reduce-emissions-72573">realize that climate change is real</a> and poses serious threats – anyone who actually reads the <a href="http://www.atmos-chem-phys.net/16/3761/2016/acp-16-3761-2016.html">evidence</a> comes to this conclusion.</p>
<p>The <a href="https://www.theguardian.com/environment/blog/2012/nov/26/kyoto-protocol-carbon-emissions">actual performance</a> of the Kyoto Protocol, however, does give us reason to worry today. While some countries did limit their emissions, many did not. The largest polluters (e.g., China and the United States) did not participate, so the <a href="https://350.org/science/#causes">carbon emissions problem continued to get worse</a>, which is a serious problem. </p>
<h2>‘Creative destruction’</h2>
<p>Fortunately there are trends in force that will likely limit the practical effect of Trump’s decision and, in fact, may make it almost meaningless over time, for three reasons. </p>
<p>Before I get to those, a brief economics lesson. Economist Joseph Schumpeter in his 1942 book <a href="http://cnqzu.com/library/Economics/marxian%20economics/Schumpeter,%20Joeseph-Capitalism,%20Socialism%20and%20Democracy.pdf">“Capitalism, Socialism and Democracy”</a> popularized the term “creative destruction.” Schumpeter used this term to describe the process whereby old, inefficient capitalist systems, industries and ideas are destroyed by newer, more industrious and more highly valued capital. </p>
<p>For example, been to a video rental store lately? Me neither. While video stores were useful in their time, technology changed the game (seemingly overnight) and they became obsolete. This same creative destruction is beginning to occur now for oil, gas and other nonrenewable energies. <a href="https://www.forbes.com/sites/maurapennington/2013/06/19/embrace-the-life-building-power-of-creative-destruction/#28574d0c6454">Companies such as Tesla</a> point to the future, and Schumpeter would state this is not only a good thing, but inevitable.</p>
<p>Global warming isn’t going to disappear, and engineers, scientists and companies in the United States know this and will push development – regardless of any accords. That leads me to my three reasons. </p>
<p>First, states, cities and corporations in the U.S. can set carbon targets on their own that meet (or ideally beat) global goals. For example, <a href="https://onenyc.cityofnewyork.us/">OneNYC’s 80x50 commitment</a> to reduce emission in New York City by 80 percent by 2050. If more cities, states and corporations commit to ambitious environmental goals, than President Trump not signing the accord looks less important – and may, ironically, <a href="https://www.nytimes.com/2017/06/01/climate/american-cities-climate-standards.html">kickstart more innovation</a>. </p>
<p>Second, those cities and states that accomplish ambitious environmental improvements will benefit from new technology and cleaner environments and <a href="https://www.greenbiz.com/article/how-sustainable-cities-can-drive-business-growth">will probably attract highly educated citizens</a> who appreciate progressive development. And that in turn could pressure other communities to follow suit as they witness the benefits.</p>
<p>Third, the rest of the world will act likewise, so the countries that <a href="https://www.oecd.org/greengrowth/green-development/50559116.pdf">lead with green technology will have a significant competitive advantage</a> in the future (<a href="https://www.americanprogress.org/issues/green/reports/2009/06/18/6192/the-economic-benefits-of-investing-in-clean-energy/">both domestically and internationally</a>). </p>
<h2>The bigger threat</h2>
<p>So while I’m not pleased Trump withdrew from Paris, I’m comforted that the impact will be limited. </p>
<p>Americans should be less concerned about Paris and far more so with <a href="https://theconversation.com/us/topics/epa-11106">what is happening</a> at the Environmental Protection Agency (EPA). The administration’s <a href="https://theconversation.com/in-planned-epa-cuts-us-to-lose-vital-connection-to-at-risk-communities-74489">changes</a> and <a href="http://www.cnbc.com/2017/03/16/white-house-seeks-to-cut-epa-budget-31-as-trump-targets-regulation.html">proposed cuts</a> will have a <a href="https://www.environmentalintegrity.org/trump-watch-epa/trumps-proposed-cuts-to-epa-budget/">much more meaningful impact</a> on the environment, from the air we breathe to the water we drink, which will also harm the economy. </p>
<p>In fact, the EPA – <a href="https://www.theatlantic.com/technology/archive/2010/12/gallery-why-nixon-created-the-epa/67351/">notably established</a> by President Richard Nixon in 1970 – has been underfunded for many years. Its <a href="https://www.epa.gov/planandbudget/budget">workforce has declined 15 percent since 1999</a>. </p>
<p>The recent water crisis in Flint, Michigan, <a href="https://theconversation.com/the-science-behind-the-flint-water-crisis-corrosion-of-pipes-erosion-of-trust-53776">offers a vivid illustration</a> of what happens when funding for environmental protection is cut: It becomes harder to spot, study, analyze and solve problems like Flint’s. And many other areas in the country <a href="http://www.cnbc.com/2016/03/24/americas-water-crisis-goes-beyond-flint-michigan.html">face similar threats</a> from polluted drinking water. </p>
<p>The threat of climate change is real, and our withdrawal is disappointing, but creative destruction will continue and local governments and individual companies will pick up the slack. The effects of a weakened EPA, however, can’t be made up for elsewhere. </p>
<p>The consequences are far more important and immediate than Paris.</p><img src="https://counter.theconversation.com/content/78820/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert H. Scott III does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Economic forces – alongside a moral imperative – are driving cities, states and companies to make changes to forestall climate change, regardless of the whims of the White House.Robert H. Scott III, Associate Professor of Economics, Monmouth UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/701662016-12-12T03:39:59Z2016-12-12T03:39:59ZTrump, carbon neutrality and the next phase of business sustainability<figure><img src="https://images.theconversation.com/files/149478/original/image-20161209-31396-19d1ano.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Google last week announced that it is on target to power its operations 100 percent by renewable energy, an example of businesses trying to change the energy system.</span> <span class="attribution"><a class="source" href="https://pixabay.com/en/wind-farm-windmills-turbines-energy-538576/">Pixabay</a></span></figcaption></figure><p>The Trump administration appears to be moving in one direction on the issue of climate change with the appointment of climate skeptic <a href="http://www.nytimes.com/2016/12/07/us/politics/scott-pruitt-epa-trump.html">Scott Pruitt</a> to head up the Environmental Protection Agency (EPA) and a transition team led by and stacked with <a href="http://www.utilitydive.com/news/report-trumps-pro-fossil-fuel-transition-team-worries-climate-advocates/431943/">fossil fuel interests</a>. </p>
<p>Yet many within corporate America are heading in another direction. Consider Kevin Butt, <a href="http://toyotanews.pressroom.toyota.com/article_display.cfm?article_id=2195">regional environmental sustainability director</a> for Toyota Motor North America, and his charge to take the company “beyond zero environmental impact” by reducing and eventually eliminating CO₂ emissions from vehicle operation, manufacturing, materials production and energy sources by 2050.</p>
<p>This type of effort is not as crazy as it may seem. Solutions to climate change require new types of aggressive thinking. While <a href="http://unfccc.int/paris_agreement/items/9485.php">global treaties</a> to reduce greenhouse gas emissions are important, they are not enough. Eventually society has to go carbon neutral, and then it has to go <a href="http://energy.umich.edu/research/projects/beyond-carbon-neutral">carbon negative</a>.</p>
<p>The ultimate responsibility for making this shift is falling first and foremost on business. Companies are developing the next buildings we live and work in, the clothes we wear, the food we eat, the forms of mobility we employ and the energy systems that propel them. With their unmatched powers of ideation, production and distribution, business is the only entity that can bring the change we need. Indeed, if there are no solutions coming from the business world, there will be no solutions at the necessary scale. </p>
<p>While business has been addressing sustainability challenges <a href="http://www.sup.org/books/title/?id=3692">since the 1990s</a>, and climate change since the 2000s, the focus of this effort is now at an inflection point, as Toyota’s “beyond zero impact” effort shows. Rather than looking to government for solutions, many businesses are taking responsibility for climate change seriously and changing the system on their own. </p>
<h2>Business sustainability 1.0: Enterprise integration</h2>
<p>Over the past quarter-century, companies have framed environmental sustainability as a market shift that fits into the existing ways of managing a business, an approach that we at the <a href="http://erb.umich.edu/">Erb Institute</a> call Enterprise Integration. The notion is that <a href="https://www.amazon.com/Competitive-Environmental-Strategy-Changing-Landscape/dp/1559637722">key business constituents</a> bring sustainability to the business through existing corporate functions, thereby making it a strategic concern. </p>
<p>For example, <a href="http://webuser.bus.umich.edu/ajhoff/books/2006%20Pew%20Report.pdf">Whirlpool</a> is innovating on appliance energy efficiency, not because of corporate social responsibility, but because it has watched energy efficiency move from number 10 or 12 in consumer priorities in the 1980s to number three, behind cost and performance. And it expects those concerns will continue to grow. Similarly, most auto companies are moving into hybrid and electric drivetrains because they see electrification as the <a href="http://www.aol.com/article/2012/01/26/how-the-chevy-volt-became-a-political-punching-bag/20157651/">future of the sector</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/149481/original/image-20161209-31383-1pqxq9w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Like Toyota and its hybrid Prius program, GM invested in electric cars such as the Chevy Volt (seen here in production) to be part of the auto industry’s move to electrification, not solely to meet government mandates.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/wiredphotostream/6302997579/in/photolist-aAYvA4-7ByCq8-6SbjWB-7ByCyk-9BZ8zC-7QscM4-aPgj5z-8fchRD-7x4DAf-7nXcqc-amUT74-amXrZd-5PX9GZ-8fcfRr-aEJnyj-ebVZSf-aEJmkw-aEEwLB-aEExAv-aEEvnV-9R27c2-yGSo6-4nj4Tz-cXmTxb-99JTzb-7A6YR1-7M1N7n-8hm4MK-9BWrSz-97MNdw-9BWrzB-7M5Lmh-ajT1qY-dxZFY3-7Le1P2-cXmTAL-ajQbyv-b76tU2-amXFxQ-amUDNn-6e5MXH-cXmTz3-ajT7jL-4zqdYA-6fcF7V-7M5LdQ-6Sfqh3-9pDB6N-bW3MrH-7oxrqX">Jim Merithew/Wired.com</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>To make the business case, companies turn to traditional sources and motivations. Once insurance companies apply sustainability pressures on the business, the issue becomes one of risk management. From competitors, it becomes an issue of strategic direction. From investors and banks, it becomes an issue of capital acquisition and cost of capital. From suppliers and buyers, it becomes an issue of supply chain logistics. From consumers, it becomes an issue of market demand. </p>
<p>Put in such terms, much of the specific language of sustainability recedes, being replaced by the core language of standard business strategy. As such, companies can remain agnostic about the science of particular issues (such as climate change) but still recognize their importance as business concerns. In doing so, they are turning the false dichotomy between the economy and the environment on its head.</p>
<p>Indeed, recent surveys show that <a href="http://sloanreview.mit.edu/projects/sustainabilitys-next-frontier/">85 percent</a> of business executives believe that climate change is real (well above the national average of <a href="http://www.gallup.com/poll/190010/concern-global-warming-eight-year-high.aspx">64 percent</a>) and more than <a href="https://www.unglobalcompact.org/docs/news_events/8.1/UNGC_Accenture_CEO_Study_2010.pdf">90 percent</a> of CEOs believe that sustainability in general is important to a company’s profits. This leads more businesses to develop sustainability strategies, create positions like <a href="http://www.forbes.com/sites/hbsworkingknowledge/2014/10/08/what-do-chief-sustainabilty-officers-do/#5ebdb2ef1a96">chief sustainability officer</a> to carry them out and publish <a href="https://www.globalreporting.org/Pages/default.aspx">annual reports</a> on sustainability to track and share the results. This is the first model of business sustainability and it would seem to be setting us on a path to becoming more sustainable.</p>
<p>But, not so fast.</p>
<p>As promising as these developments are, our world continues to become less, not more, sustainable, and the nature of the problems we face are markedly different than they were in the 1990s. To mark this shift, scientists have proposed that we have left the Holocene and entered the <a href="http://www.nature.com/nature/journal/v415/n6867/full/415023a.html">Anthropocene</a>, a new geologic epoch that acknowledges that humans are now a <a href="https://theconversation.com/an-official-welcome-to-the-anthropocene-epoch-but-who-gets-to-decide-its-here-57113">significant operating force within the Earth’s ecosystems</a>. </p>
<p>Recognition of the Anthropocene has broad implications for how we think about business sustainability. Rather than fitting sustainability into the existing models of the market, we must now recognize that the market is taking control of natural systems with potentially catastrophic consequences. Climate change, ozone depletion, droughts, wildfires, food insecurity, water scarcity and the social unrest that results all point to a fundamental system failure created by our market (and political) institutions. </p>
<p>As a result, the first phase of business sustainability – integrating these practices within core corporate functions – is inadequate for the scope of the issues we now face. Using this model, we are slowing the velocity at which we are approaching a <a href="https://theconversation.com/to-manage-earth-in-the-anthropocene-we-need-to-focus-on-systems-change-38452">system collapse</a>, but we are not averting that eventual outcome. A new model of thinking is emerging. </p>
<h2>Sustainability 2.0: Market transformation</h2>
<p>The next mode of business sustainability, which we call market transformation, involves corporations making <a href="http://yalebooks.com/book/9780300158434/sustainability-design">systemic changes</a> in the business environment. It sees the corporation as a positive force in society, ameliorating our legacy of harm and mitigating the impacts from a global population expected to reach nine billion by 2050. </p>
<p>We can already see some of the <a href="https://theconversation.com/capitalism-must-evolve-to-solve-the-climate-crisis-47338">elements of this shift</a> coming into view. Here are some core tenets of this change to creating sustainability: </p>
<ul>
<li><p>Focus on the <a href="http://www.sup.org/books/title/?id=22399">system</a>. The notion of an energy company installing a windfarm and calling itself sustainable makes no empirical sense. A more sustainable energy system incorporates the whole grid, encompassing generation, transmission, distribution, use and mobility. <a href="http://www.nytimes.com/2016/12/06/technology/google-says-it-will-run-entirely-on-renewable-energy-in-2017.html">Google</a>, for example, plans to run all of its data centers entirely from renewable energy by 2017. This goes far beyond a token commitment, creating a hedge against <a href="https://www.ceres.org/resources/reports/power-forward-why-the-world2019s-largest-companies-are-investing-in-renewable-energy/view">future energy volatility</a> by changing the overall energy system on which the company depends.</p></li>
<li><p>Involve the entire supply chain. Systemic approaches to business sustainability require a broader consideration of operations and supply chain logistics, using concepts such as <a href="http://css.snre.umich.edu/">life cycle analysis</a>, <a href="http://cie.research.yale.edu/">industrial ecology</a> and the <a href="https://www.ellenmacarthurfoundation.org/circular-economy/overview/concept">circular economy</a> to reduce material and energy use among all the constituents in the supply chain.</p></li>
<li><p>The government as collaborator. Since the days of Adam Smith, government has been the <a href="https://www.technologyreview.com/s/602490/capitalism-behaving-badly/">arbiter of the market</a>, helping to set the rules in the service of humans and adapting to changes as needed. You can’t price-fix, you can’t collude, you can’t sell drugs; we accept these as rules of the market. In the future, the market will restrict (or eliminate) the emission of greenhouse gases as a way to promote economic growth, not hinder it. Forward-thinking companies seek ways to constructively participate in policy formation.</p></li>
<li><p>Questioning our standard models and metrics. Ultimately, market transformation is prompting a reexamination of the models now used to understand and explain the market, such as <a href="http://www.mckinsey.com/global-themes/long-term-capitalism/redefining-capitalism">neoclassical economics</a> and <a href="https://www.brookings.edu/research/the-problem-of-corporate-purpose/">principal-agent theory</a>. Both of these are built on rather dismal simplifications of human beings as largely untrustworthy and driven by avarice, greed and short-term thinking. Anyone in business will tell you that their motivations and resultant strategies are far more complex. For example, some, like former GE CEO Jack Welch, are questioning the assumption that <a href="http://www.forbes.com/sites/stevedenning/2013/06/26/the-origin-of-the-worlds-dumbest-idea-milton-friedman/#205a8e58214c">the singular purpose of the corporation</a> is to make money for its shareholders. </p></li>
<li><p>As these models are questioned, new ones are emerging, from <a href="http://capitalinstitute.org/regenerative-capitalism/">regenerative capitalism</a> to <a href="http://www.collaborativeconsumption.com/">collaborative consumption</a>, from <a href="http://www.conflictfreesourcing.org/">conflict-free sourcing</a> to the <a href="http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy">sharing economy</a>.</p></li>
</ul>
<h2>Different from the Reagan years</h2>
<p>These are just some of the emergent notions of a new framework for corporate sustainability. Companies are altering the systems in which they operate, driving entire industries toward a set of market rules that bring us toward a sustainable future. </p>
<p>So, while President-elect Trump’s approach to the EPA bears similarities to <a href="https://theconversation.com/climate-change-and-the-presidential-race-lessons-from-the-reagan-years-66194">President Reagan</a>’s attempts to roll back environmental regulations in the 1980s, and likely faces a similar backlash, there is one big difference; some of that backlash will come from businesses who are leading on greenhouse gas reductions and renewable energy and not fighting government-led environmental policies as they did in the 1980s. To get a sense of the shifting economic landscape, <a href="https://www.bloomberg.com/news/articles/2016-05-25/clean-energy-jobs-surpass-oil-drilling-for-first-time-in-u-s">jobs in the clean energy sector</a> exceeded those in oil drilling for the first time in 2016 and continue to grow. Indeed, many within these and other sectors are <a href="https://www.theguardian.com/environment/2016/dec/01/climate-change-donald-trump-us-companies?CMP=share_btn_tw">already pushing back</a> on Trump’s dismissal of climate change and continuing with strategies of their own.</p>
<p>They will do this with, or <a href="http://www.nytimes.com/2016/12/08/us/politics/trump-climate-epa-coal-jobs.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news">without</a>, the cooperation of governments and their political shifts back and forth on these critical issues. </p>
<p>For example, Toyota, in its effort to go carbon-neutral, must think systemically and include many partners, just as Tesla is doing as it challenges the calculus for electric cars sector-wide. To enact system-wide change, companies are also working with governments to <a href="http://www.nytimes.com/2016/10/17/business/how-the-chemical-industry-joined-the-fight-against-climate-change.html?_r=0">phase out heat-trapping HFC chemicals</a>, set <a href="http://www.nytimes.com/2016/08/17/business/energy-environment/epa-truck-emission-standards.html">new efficiency standards on trucks</a>, establish transparency <a href="http://wdi-publishing.com/casedetail.aspx?cid=1429411">rules on conflict minerals</a> or participate in negotiations on a global climate change agreement. Examples of companies doing it on their own include changes in the <a href="http://www.pri.org/stories/2016-08-24/michelin-isnt-reinventing-wheel-its-reinventing-rubber-supply-chain">supply chain on rubber</a> or the reduction (even elimination) of <a href="http://www.wsj.com/articles/meat-companies-go-antibiotics-free-as-more-consumers-demand-it-1415071802">antibiotics in chicken</a>. </p>
<p>In each of these cases, companies are stepping into, in the words of Unilever CEO Paul Polman, “<a href="http://www.managementtoday.co.uk/mt-interview-paul-polman-unilever/article/1055793">a very interesting period in history</a> where the responsible business world is running ahead of the politicians” and taking on a broader role to “<a href="http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/business-society-and-the-future-of-capitalism%20%22%22">serve society</a>.”</p><img src="https://counter.theconversation.com/content/70166/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew J. Hoffman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>With a Trump administration hostile to action on climate change, businesses need to go beyond just complying with environmental regulations and take on the whole system.Andrew J. Hoffman, Holcim (US) Professor at the Ross School of Business and Education Director at the Graham Sustainability Institute, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/402442015-05-15T05:04:14Z2015-05-15T05:04:14ZA tale of two futures: Australia’s economy under climate change<p>Economic modelling and its associated forecasts are always open to criticism, particularly when the results align with the predisposition of the modellers or their paymasters. Such criticism has been a feature of economic modelling on energy and climate change for several years.</p>
<p>When it comes to climate change and Australia’s economic future, different crystal balls can produce vastly different results. </p>
<p>That’s usually because different economic models can be operating under quite different assumptions about the extent to which world leaders will act in the face of overwhelming scientific evidence showing significant climate change is on the way.</p>
<p>By way of illustration, it’s worth examining two competing narratives: one in which Australia is a future energy powerhouse and another in which its emissions intensive export revenues fall short by $100 billion a year by 2030.</p>
<h2>Australia: a future energy superpower?</h2>
<p>Federal Government <a href="http://www.dpmc.gov.au/pmc/publication/setting-australias-post-2020-target-greenhouse-gas-emissions-issues-paper">publications</a> consistently portray a positive future for Australia as a global energy superpower in the coming decades. Australia is among the world’s largest exporters of LNG, coal and uranium.</p>
<p>Yet that particular economic future only exists if Australia and the world fail to stop the globe warming beyond two degrees Celsius – which can only be done by restricting worldwide use of the very resources that make Australia the energy powerhouse portrayed in this scenario.</p>
<p>The Australian government’s recently released <a href="http://ewp.industry.gov.au/">Energy White Paper</a> notes that:</p>
<blockquote>
<p>Australia’s energy sector underpins a modern economy and a high national standard of living. The sector accounted for 7% of GDP and $71.5 billion in export earnings in 2013–14. </p>
</blockquote>
<p>With certain policy settings, our importance to global energy markets will continue to grow, particularly to meet the increasing demand for energy from Asia. Australia has the potential to reap substantial economic gains in meeting future global energy demand, which is <a href="http://www.worldenergyoutlook.org/publications/weo-2014/">expected</a> to increase by over one-third by 2040. </p>
<p>The positive outlook is supported in these documents by reference to the <a href="http://www.worldenergyoutlook.org/publications/weo-2014/">International Energy Agency’s 2014 World Energy Outlook</a>: </p>
<blockquote>
<p>For the foreseeable future, Australia will continue to be a major supplier of crucial energy and raw materials to the rest of the world, especially Asian countries. At present, about 80% of the world’s primary energy needs are met through carbon-based fuels. By 2040, it is estimated that 74% will still be met by carbon-based sources because of growing demand in emerging economies</p>
</blockquote>
<p>Yet there is a paradox in these figures. In this International Energy Agency scenario, the world fails to meet its agreed goal of limiting the long-term global average temperature increase to no more than two degrees Celsius. And Australia has committed to this goal.</p>
<h2>Australia: a country that keeps its two degree promise</h2>
<p>If the world <em>does</em> act to meet the two degree challenge, then the global share of fossil fuels will <a href="http://www.worldenergyoutlook.org/publications/weo-2014/">fall</a> to 59% by 2040. Coal’s share will <a href="http://www.worldenergyoutlook.org/publications/weo-2014/">decline</a> the most, falling from 24% to 17% – and it only retains this share by adopting carbon capture and storage (CCS) technologies. </p>
<p>By 2040, 580 Gigawatts of coal-fired power generation – or 80% of the total – would <a href="http://www.worldenergyoutlook.org/publications/weo-2014/">have to be fitted with CCS</a>. Further, <a href="http://www.worldenergyoutlook.org/publications/weo-2014/">22%</a> of gas-fired generation would come from plants fitted with CCS. This is a non-trivial challenge in which Australia has a high interest.</p>
<p><a href="http://bze.org.au/">Beyond Zero Emissions</a> (BZE), a not-for-profit organisation that has published research on a zero-emissions future. It recently released report titled <a href="https://bze.org.au/fossileconomy">Fossil Economy</a> assessed the financial consequences for Australia’s export earnings if the world limits the long-term global average temperature increase to no more than two degrees Celsius. </p>
<p>It concludes that Australia’s:</p>
<blockquote>
<p>emissions-intensive export revenue will fall short by $100 billion per year by 2030 due to emission reduction efforts by Australia’s trade partners.</p>
</blockquote>
<p>This headline figure of $100 billion per year in earnings shortfall is designed to add weight to the argument that Australia should pivot away now from emission intensive industries like coal, as they are likely to be a lot less lucrative in future.</p>
<p>But the BZE analysis that delivers the headline number assumes the world will follow a path to the two degrees goal. Should that actually happen, the consequences will be big - $100 billion in losses per annum by 2030 may not be precisely right, but it is unlikely to be very far wrong.</p>
<p>But the evidence of the commitments made by countries to date suggest that a credibility gap remains. On current policies the world won’t meet its stated goal to limit warming to two degrees Celsius.</p>
<p>The negotiations that will lead up to the international climate talks in Paris at the end of 2015 will be the big test. On one side is the simple but profound consequence of failing to meet climate change. On the other is the self-interest of each of the some 200 countries involved.</p>
<p>The BZE report cites the actions of Australia’s four key trading partners, China, Japan, Korea and India to add weight to its analysis. These countries have distinctly different circumstances and are active in the international positioning and negotiations. It remains feasible that national economic interest will yet outweigh stated intent to reduce fossil fuel imports.</p>
<h2>The likely future</h2>
<p>It has been the Government’s own choice to rely for its positive outlook primarily on the scenario outlined in the IEA’s 2014 <a href="http://www.worldenergyoutlook.org/publications/weo-2014/">World Energy Outlook</a>.</p>
<p>In this scenario, the world follows a path to a 3.6 degrees future, one simply inconsistent with the Government’s own commitment to help limit global warming to two degrees Celsius. </p>
<p>But even if one places low weight on the BZE call for an Australian shift to clean energy, there are profound consequences for Australia if our key trade partners move away from emissions intensive energy like coal.</p>
<p>Whatever the exact economic consequences of climate change will be, it surely behoves our policy makers to acknowledge the risks and plan for the consequences.</p><img src="https://counter.theconversation.com/content/40244/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tony Wood owns shares in a number of energy and resources firms through his superannuation fund.
</span></em></p>When it comes to climate change and Australia’s economic future, different crystal balls can produce vastly different results.Tony Wood, Program Director, Energy, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/375032015-03-05T10:48:52Z2015-03-05T10:48:52ZHow well prepared are businesses for climate change?<p>The world is changing. The weather is becoming more volatile, with the number of extreme weather events on the rise. Climate change represents the new normal: the Earth is already showing the impacts of our actions, which will continue to become more visible. </p>
<p>More and more businesses recognize what is at stake and are grappling with this ongoing change. Consumer goods company Unilever, for example, has estimated that extreme weather events, such as drought and flooding, cost it <a href="http://www.businessgreen.com/bg/news/2169950/unilever-boss-climate-change-cost-company-eur200m">200 million euros in 2011 alone</a>. Supermarket chain Asda, meanwhile, has found that <a href="http://your.asda.com/system/dragonfly/production/2014/06/17/15_38_19_612_4234_Climate_Resilience_Campaign_a5_Brochure_v10.pdf">only 5% of its fresh produce supply is unaffected by climate change</a> and that 370 million euros of value across its business is at risk.</p>
<p>With so much at stake, companies in many industries are already responding. Utility Anglian Water, for example, launched its <a href="http://www.anglianwater.co.uk/environment/why-we-care/">“Love Every Drop”</a> campaign to encourage customers in East Anglia to save water, while reducing operational emissions and generating its own renewable energy. Meanwhile, Thames Water has developed a risk assessment process as part of its investment planning to provide resilience not only to current flooding risks but also a range of possible futures.</p>
<p>At the University of Cambridge Institute for Sustainability Leadership (<a href="http://www.cisl.cam.ac.uk/">CISL</a>), we’ve worked to communicate the <a href="http://www.cisl.cam.ac.uk/ipcc">implications of climate science to a business audience</a>. There are a number of ways in which climate change can affect businesses in different industries, including rising temperatures, rising sea levels, changes in rain patterns, shrinking glaciers and acidifying oceans. As these impacts become more dramatic, we expect there will be increasingly ambitious policy responses. </p>
<h2>Responding to risk</h2>
<p>One industry highly attuned to climate change is insurance. CISL works closely with <a href="http://www.climatewise.org.uk/">ClimateWise</a>, a group of more than 30 major insurance companies, which warns that if left unchecked, climate change will render large swathes of the economy uninsurable.</p>
<p>Another area that will be affected by climate change is energy. To keep global warming below two degrees and retain a climate with some degree of stability, the Intergovernmental Panel on Climate Change agrees that the additional <a href="http://www.cisl.cam.ac.uk/business-action/low-carbon-transformation/ipcc-briefings/pdfs/briefings/IPCC_AR5__Implications_for_Energy__Briefing__WEB_EN.pdf">investment required in energy supply</a> alone could range from $190-900 billion.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/73640/original/image-20150303-31833-baeh98.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/73640/original/image-20150303-31833-baeh98.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/73640/original/image-20150303-31833-baeh98.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/73640/original/image-20150303-31833-baeh98.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/73640/original/image-20150303-31833-baeh98.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/73640/original/image-20150303-31833-baeh98.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/73640/original/image-20150303-31833-baeh98.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Smart city development policies can address climate change-related issues, such as making cities prepared for flooding, and, if done well, make cities more healthy and livable. This photo shows Queens Plaza in New York.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/mpstudio/7517636254/in/photolist-csiRmb-csj4fu-csiVKA-csiMXd-cqzgwG-cqzez9-cqzzY7-cqAxGA-cqAGMW-5dt5pf-cqAKuU-cqAgR5-cqAtCE-cqzW7o-cqzbuJ-cqzTnW-cqzyvw-cqA2g5-cqzsm9-cqA9kW-cqAbDb-cqAokJ-cqALGd-cqzYbm-cqAmdo-cqzLFq-cqANLJ-cqzfij-cqAet7-cqzGDj-cqzkju-cqzvJQ-cqAuWy-cqAFau-cqArEd-cqA12y-cqAJou-cqzuw3-cqzoEd-cqzCem-cqAiBU-cqzP6m-cqzUWL-cqzCZQ-cqzRTy-cqA56w-cqzBpA-cqznsW-cqzF8y-cqADNU/">mpstudio123/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>But while the scale of the challenge is daunting, investment carries a return, and there are clear commercial and social benefits from taking action. The recent <a href="http://newclimateeconomy.report/">New Climate Economy report</a> estimates that somewhere between 50-90% of the actions required have benefits that outweigh their costs. For example, better-planned, denser cities have a lower carbon footprint, but also lower running costs and better public health. On the other hand, some major investments in new technologies only have climate payoffs, such as the development of carbon capture and storage technology. </p>
<p>CISL is working with business leaders to help make this case in a practical manner. For example, we’ve tried to demonstrate that safeguarding “<a href="http://www.cisl.cam.ac.uk/business-action/natural-resource-security/natural-capital-leaders-platform/news/university-of-cambridge-to-provide-business-case-for-safeguarding-nature">natural capital</a>” like water, forest and soil in business supply chains from the impacts of climate change reduces costs, protects supply, enhances brand and even generates revenue.</p>
<h2>Policy responses</h2>
<p>Companies in all industries will need to respond to and manage the risks from more extreme weather events. However, for many companies climate change can lead to new markets and new opportunities. Increasingly, businesses are finding commercial returns in services that provide better energy efficiency, such as LED lighting, smart electricity metering or home insulation, or low-carbon energy sources solar and wind. </p>
<p>And the quickest and simplest way to unlock these opportunities is clear and bold government policy. Too often we discuss climate actions as if the question is “if” we will act, but it really is a matter of “when” and “how.” </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=830&fit=crop&dpr=1 600w, https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=830&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=830&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1044&fit=crop&dpr=1 754w, https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1044&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/73855/original/image-20150304-15267-6ikunm.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1044&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Motivations for business to decarbonize.</span>
<span class="attribution"><a class="source" href="http://www.wemeanbusinesscoalition.org/content/reports">We Mean Business Coalition</a></span>
</figcaption>
</figure>
<p>The most far-sighted businesses are those that realize this and are actively taking part in efforts to shape this conversation and call for a well ordered and business-friendly response to the risks of climate change.</p>
<p>Many people in industry expect the UN climate talks in Paris in December to be pivotal. If successful, these talks will provide an international deal that creates a clear signal to investors and businesses about the shape of the future they need to invest in.</p>
<p>We’ve been here before, of course, with Copenhagen in 2009, where world leaders were meant to provide the breakthrough leadership that put the world on a path to a low-carbon future. However, the talks descended into backbiting and confusion, and the result was too tentative and unclear to create the confidence and certainty required. </p>
<p>We cannot let this happen again; business needs certainty, stability and direction to plan ahead – not confusion or the ever-rising costs of unaddressed climate change. A strong international agreement on climate change is almost certainly the single action that, more than anything else, can help galvanize action and keep the costs of responding to climate change down. </p>
<p>The alternative to globally coordinated climate action is not lack of action; it is uncoordinated, piecemeal, stop-start responses that will prove more expensive, harder for businesses to manage and less effective. </p>
<h2>Long-term thinking</h2>
<p>Companies who see themselves as gearing up for climate change should ask themselves one thing: how are they going to influence government policies so they align with their corporate commitments of preparing for climate change? </p>
<p><a href="http://www.cisl.cam.ac.uk/clg">The Prince of Wales’s Corporate Leaders Group</a>, also hosted by CISL, is gathering business leaders from across Europe to call for a robust climate agreement. Individual business action is important, but by standing side by side with others from a wide range of sectors, the progressive business voice is stronger and louder than ever. </p>
<p>Working with partner organizations from around the world in the <a href="http://www.wemeanbusinesscoalition.org/">We Mean Business coalition</a>, the progressive business presence is increasingly being felt across the globe. This voice is calling for Paris to set a long-term global goal of net zero emissions, deliver an effective carbon price to drive emissions down and investment into new low-carbon technologies, and ensure there are clear rules and accountability to propel progressively stronger climate action. </p>
<p>While some are demonstrating leadership, too many companies are unprepared for climate change and too concerned with the likely short-term impacts of action. They should look up from the floor and speak up about the importance of mitigating risks and seizing opportunities ahead.</p><img src="https://counter.theconversation.com/content/37503/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eliot Whittington works for the University of Cambridge Institute for Sustainability Leadership, which is funded largely through fee for service for organisations that participate in the learning and research activities the organisation carries out. Specifically this includes running groups like The Prince of Wales's Corporate Leaders Group which is a membership group of companies including many of the companies cited in this article.
</span></em></p>Industry is on the front lines of responding to the effects of climate change and forward-looking businesses are trying to shape policy – before more stringent measures are imposed.Eliot Whittington, Deputy Director of The Prince of Wales’s Corporate Leaders Group , University of CambridgeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/242312014-03-19T06:08:19Z2014-03-19T06:08:19ZFinancial markets should take climate policy more seriously<figure><img src="https://images.theconversation.com/files/44322/original/vjxf3htj-1395238327.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Is the city shrouded in a carbon bubble?</span> <span class="attribution"><a class="source" href="http://www.flickr.com/photos/criminalintent/2108478134/">Lars Plougman</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The number of climate change laws on the statue books of the world’s leading economies grew from less than 40 in 1997 to <a href="http://www.globeinternational.org/studies/legislation/climate">almost 500 at the end of 2013</a>. Most leading countries now have legal provisions on renewable energy, energy efficiency, carbon pricing, land use change, transport emissions, adaptation to climate risks and low-carbon research and development.</p>
<p>These efforts <a href="http://news.nationalgeographic.com/news/energy/2014/02/1402277-global-warming-2-degree-target/">do not yet add up</a> to a credible global response that will limit the rise in global temperatures to less than two degrees Celsius – the objective of international climate negotiations. So we may expect not just more laws but also more rigorous laws over the coming years. But what relation does this have to financial markets?</p>
<p>Britain’s <a href="http://www.parliament.uk/business/committees/committees-a-z/commons-select/environmental-audit-committee/news/green-finance-por-substantive/">Environmental Audit Committee</a> has recently warned that global efforts to combat climate change could in due course pose a risk to financial stability. Coal, oil and gas companies are a substantial part of the stock market, certainly in the UK, and their share price is determined, among other factors, by the size of their fossil fuel reserves.</p>
<p>The carbon contained in these reserves is <a href="http://www.lse.ac.uk/GranthamInstitute/publications/Policy/docs/PB-unburnable-carbon-2013-wasted-capital-stranded-assets.pdf">three times more</a> than we can burn if we are to avoid dangerous climate change. In other words, unless we find a cheap way to capture and store carbon, two-thirds of the fossil fuel reserves of coal, oil and gas majors will have to remain under ground. These companies, it would appear, are overvalued.</p>
<p>There is little evidence that the market shares this concern. Optimists and green investors point to a growing interest in environmental, social and corporate governance investment. Green bonds are booming, although they are issued mostly by blue chip companies and investors are sheltered from actual green risk. </p>
<p>But much of the energy industry has a very different view. Here, the talk is of a new age of fossil fuels, of abundant new reserves from unconventional sources – in particular shale gas, which has already transformed the energy market in the US.</p>
<p>So who is right: those who look forward to a resurgence of fossil fuels or those who warn about unburnable carbon? </p>
<p>It is hard to blame hard-nosed city analysts for being doubtful about tight carbon constraints, especially if their valuations focus on the short-term. Few countries have made a significant dent into their greenhouse gas emissions. Where emissions have come down, it has often been because of unconnected factors, such as the economic crisis in Europe or the advent of shale gas in the US.</p>
<p>City analysts will also point out that climate laws do not guarantee policy certainty. In the 2008 Climate Change Act the UK has one of the most sophisticated climate change laws, which gives UK climate change policy a clear long-term direction. But it has not prevented short-term policy alterations, as today’s budget statement may again show. Australian investors will make a similar observation about their policy environment.</p>
<p>It is also the case that not all climate change laws are as authoritative as the UK’s Climate Change Act or Mexico’s General Law on Climate Change. Particularly in developing countries climate policy is often made by executive order rather than passed by parliament.</p>
<p>But these provisions can be powerful too: China’s current five-year plan includes constraints on carbon emissions per GDP that are <a href="http://www.cccep.ac.uk/Publications/Policy/docs/Walking-alone-How-the-Uks-carbon-targets-compare-with-its-competitors.pdf">on a par with Britain’s carbon budgets</a>, if these were expressed in the same way. The UK’s third carbon budget translates into a reduction in carbon intensity of 39% by 2020, relative to 2005, compared with China’s ambition of a 40-45 per cent cut. </p>
<p>More tangibly, policy makers are increasingly willing to penalise emissions by <a href="http://www.cccep.ac.uk/Publications/Policy/docs/Walking-alone-How-the-Uks-carbon-targets-compare-with-its-competitors.pdf">putting a price on carbon</a>. The EU <a href="http://ec.europa.eu/clima/policies/ets/index_en.htm">Emissions Trading Scheme</a> may be ailing, but through a combination of taxes, trading schemes and regulation OECD countries impose carbon penalties. Prices range from less than £8 per tonne of CO<sub>2</sub> produced in Mexico, New Zealand and the United States to over £70 per tonne of CO<sub>2</sub> in Germany, Japan, Norway, South Korea and Switzerland. </p>
<p>The <a href="http://www.lse.ac.uk/GranthamInstitute/publications/Policy/docs/Climate-change-policies-and-the-UK-business-sector.pdf">impact of these measures on firm performance</a> has so far been modest, but they have given an edge to firms that are willing to cut their emissions.</p>
<p>A tentative finding from the analysis of the 500 climate laws so far is that one of the most powerful drivers of climate legislation is the number of climate laws passed elsewhere. There appears to be a strong element of peer pressure and intergovernmental knowledge exchange. If this is confirmed, it would point towards a self-reinforcing cycle. </p>
<p>The more climate change laws are passed – and the current pace is <a href="http://www.globeinternational.org/studies/legislation/climate">one new law per country every 18-20 months</a> – the more ready policymakers become to take further action. The financial sector would do well to take note.</p><img src="https://counter.theconversation.com/content/24231/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sam Fankhauser is Co-Director of the Grantham Research Institute on Climate Change at the London School of Economics. He is a Director at Vivid Economics and a member of the UK Committee on Climate Change. His research is funded the Grantham Foundation for the Protection of the Environment and the UK Economic and Social Research Council (ESRC).</span></em></p>The number of climate change laws on the statue books of the world’s leading economies grew from less than 40 in 1997 to almost 500 at the end of 2013. Most leading countries now have legal provisions…Sam Fankhauser, Co-Director, Grantham Research Institute, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/170422013-09-04T03:51:43Z2013-09-04T03:51:43ZHot under the collar about climate change? It’s natural<figure><img src="https://images.theconversation.com/files/29212/original/92qxpftv-1376446671.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Don't tell me to calm down - emotional expression is an inherent part of social discourse.</span> <span class="attribution"><span class="source">Flickr/paolaharvey</span></span></figcaption></figure><p>Climate change is an issue that fires the emotions. Our media is full of images of this emotional engagement, from the <a href="http://www.ted.com/talks/john_doerr_sees_salvation_and_profit_in_greentech.html">despair of a venture capitalist in tears</a> as he describes his fear “that we’re not going to make it”, to the <a href="http://www.theage.com.au/environment/climate-change/tony-tony-poster-boy-for-a-crowd-of-fine-australians-20110323-1c6st.html">anger and personal vilification</a> directed at the Prime Minister over the “carbon tax”, to the <a href="http://thephoenix.com/boston/news/151670-new-abolitionists-global-warming-is-the-great/">steely resolve of climate protesters</a> facing prison for challenging fossil-fuel developments. </p>
<p>Over the last few years, we have been researching how major corporations are responding to climate change as a question of “risk and opportunity”, and how this results in new strategies and practices. However, what has surprised us in speaking to senior managers and advisers about climate change, is how this is often explained as a personal and emotional issue.</p>
<p>One way to understand how businesses and managers make sense of climate change is to go beyond the supposedly “rational” logic of traditional business discourse and examine this issue through the lens of “emotionology”. Emotionologies refer to <a href="http://www.jstor.org/discover/10.2307/1858841?uid=3737536&uid=2&uid=4&sid=21101969344577">social standards of “appropriate” emotional expression</a> in regard to particular issues. </p>
<p>Emotionologies are integral to social and organisational discourse and evident in different areas of public debate over time. For instance, emotionologies are currently evident in Australia in the social debates surrounding refugees, welfare, gender politics and of course the environment and climate change.</p>
<p>However, emotionologies are far from static and undergo rapid change due to economic, demographic, technological, and other dynamics. As the British sociologist <a href="http://books.google.com.au/books?id=cLguKYOoiRYC&pg=PA2&lpg=PA2&dq=steve+fineman+emotionology&source=bl&ots=WqJl4NyL6w&sig=a4zCU0lPphsvr33vdIpkEawHu8s&hl=en&sa=X&ei=LjhBUfjIEIqwkAXg6oHIBw&ved=0CEUQ6AEwBA#v=onepage&q=steve%20fineman%20emotionology&f=false">Steve Fineman</a> notes, emotionologies as “politico-ideological constructs” are often “shaped by prevailing currents of nationalism, ethnocentrism, racism or homophobia, as well as governmental, religious and party-political dogmas”. So for example, the emotionology surrounding terrorism (at least within the United States) changed significantly after the events of 9/11, <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1533-8525.2009.01150.x/abstract;jsessionid=46CE380B9F1463AAFCF4F130F6689EBC.d02t02">generating new emotionologies within the discourse of the “war on terror”</a>.</p>
<p>In relation to climate change, we can see how emotional norms have radically changed over the last ten years through the influence of opinion setters such as the media, business groups, think-tanks, political parties and NGOs. What used to be a field of sombre science has turned into a minefield of emotions, with scientists publicly attacked by a growing <a href="http://www.oxfordhandbooks.com/view/10.1093/oxfordhb/9780199566600.001.0001/oxfordhb-9780199566600-e-10">climate change denial industry</a> and even branded public enemies.</p>
<p>In studying how businesses have responded to climate change, it is clear that like other organisations they navigate in an increasingly volatile emotional milieu in which feelings of fear, anxiety, and anger shape public debate. While a range of emotionologies can be identified around climate change, two predominate in social discourse:</p>
<ul>
<li><p><em>climate change as threat</em> – which reflects the fear and anxiety of many over the future of our society given scientific projections of potentially catastrophic changes in temperature, sea-levels, extreme weather events and ocean acidification; and</p></li>
<li><p><em>climate change as ideological battleground</em> - reflecting the passion and hostility that has arisen as climate change has become a polarising and partisan political issue.</p></li>
</ul>
<p>In our research, we have explored how sustainability specialists in major corporations <a href="http://hum.sagepub.com/content/65/12/1561.abstract">interpret, internalise and adapt these broader social emotionologies into their companies’ local emotional arenas</a>. For instance, the work of sustainability specialists often focuses on reinterpreting fear or hostility about climate change into a positive local emotionology of climate change as challenge and opportunity. This might involve harnessing the environmental concerns of employees or customers into the development of more “environmentally-friendly” products, services and markets, or building employee enthusiasm for a “green” workplace culture. </p>
<p>For instance, one company we studied had built a pervasive workplace culture around reducing carbon emissions. This involved “carbon councils” and a sponsored competition in which employee emotionality was encouraged around the sustainability initiatives that individuals had undertaken at work and home. In organisations with a strong engineering culture, corporate environmentalism is often linked to locally resonant practices such as measurement, reporting and efficiency improvement; subjects that employees see as central to their jobs but also as sources of meaning and personal satisfaction.</p>
<p>However, the process of adapting and changing local emotionologies, like organisational change more generally, is often a difficult and contested activity. Indeed, such “emotionology work” often involves significant emotional labour for sustainability specialists who as <a href="http://oss.sagepub.com/content/33/11/1451.abstract">“green change agents”</a> have to deal with resistance and the tensions that arise between their personal attitudes and the demands of their organisations. </p>
<p>Here, managers often engage in a form of calculative emotionality. For some this meant constraining or compartmentalising their emotional engagement with climate change between work and home. As one manager confided “… so that’s the other challenge, how do you have passion without being seen as too passionate?”. Individuals spoke about their desire to do “something” about the climate crisis and their concerns about the world their children would inherit. These managers recognised that climate change challenges our very sense of being, of who we are and aspire to be, and what our role is within a broader ecosystem of existence.</p>
<p>While calls for a more “rational” and “less emotional” debate about climate change continue, this ignores the fact that emotionologies are an inherent part of social discourse. Indeed, calls for “rationality” are themselves an emotional statement. We <a href="http://www.sciencedirect.com/science/article/pii/S0899825604001034">understand phenomena and make decisions through emotion</a>. Rather than decrying the emotional nature of the climate change debate, a more realistic position is to seek to identify and harness the emotional levers that drive positive engagement with this most critical of issues.</p>
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<p><a href="http://aom.org/">Christopher Wright is a member of the Academy of Management</a></p>
<footer>The academy is a funding partner of The Conversation US.</footer>
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<p class="fine-print"><em><span>Christopher Wright receives funding from the Australian Research Council for a Discovery Grant examining business responses to climate change. Christopher Wright is an Academy of Management scholar.</span></em></p><p class="fine-print"><em><span>Daniel Nyberg receives funding from the Australian Research Council.</span></em></p>Climate change is an issue that fires the emotions. Our media is full of images of this emotional engagement, from the despair of a venture capitalist in tears as he describes his fear “that we’re not…Christopher Wright, Professor of Organisational Studies, University of SydneyDaniel Nyberg, Professor of Management, Newcastle Business School, University of NewcastleLicensed as Creative Commons – attribution, no derivatives.