Earlier this week at the Clinton Global Initiative, UN climate chief Christiana Figueres offered her assessment of what was preventing progress in the international negotiations. Yesterday, a few high-profile American business leaders shared their perspectives. They offered a first-hand view of government shortcomings, the powers and limitations of private sector action, and the role US citizens have played in stymieing the global climate talks.
Free the market?
Regulations are important, but can sometimes get in the way. Moderator Mindy Lubber, the president of the sustainable investor network Ceres and a former regulator, defended environmental rules, in particular the one that now allows the EPA to restrict carbon emissions. “Given that the congress didn’t act [to reduce greenhouse gases], it is all the more important for the EPA to have that authority.” However, in the next breath she lamented the legal delays that have held up the permitting of Cape Wind, the controversial windfarm project off the scenic coast of Cape Cod. “It should not have taken ten and a half years,” Lubber said.
Government environmental policy is plagued by a lack of accountability and direction. Jeffrey Swartz, the CEO of sustainable footwear manufacturer Timberland, seized on the Cape Wind fiasco to illustrate the difference between how the public and private sectors operate. “If it took me ten and a half weeks to deliver against a promise I made, [the board of directors] would fire me. And I’m the majority shareholder of our company,” said Swartz, whose family has run Timberland for three generations. “The absence of leadership is the crisis” in climate protection, he continued.
Big business, small changes
So who should take the lead in reducing carbon emissions and preventing catastrophic climate change? Describing business and government as dancing partners with each waiting for the other to take the first step, the the UNFCCC’s Figueres suggested on Tuesday that it was time for business to make a move. Although Swartz used the same metaphor, he also gave a great illustration of why business can’t take the lead on an issue as big and complex as climate change. With a market capitalization of almost a billion dollars, Timberland is no small company. Yet, when it approached its leather tanners about reducing the environmental impact of their process the company was politely rebuffed. To green this one component in its supply chain, Timberland had to join forces with its footwear competitors and bring the full market force of the industry to bear on the tanners.
Large multinational corporations have more capacity to spur clean innovation. Wal-Mart Senior Vice President Matt Kistler, the last business executive on the panel, told an amazing story about what happened when his former CEO Lee Scott challenged General Mills to reduce the packaging of their products: the food giant switched from curly to easier-to-ship flat noodles in its boxes of Hamburger Helper, reducing the product’s packaging size by nearly a third. “If you’re looking for optimism in New York, that’s it, baby!” exclaimed Timberland’s Swartz.
But corporations are limited in how much they can act to protect the environment. Their first responsibility is to satisfy their shareholders, who–unless they belong to Ceres–are more concerned with companies’ quarterly earnings than their carbon footprints. As Wal-Mart’s Kistler noted, “Everything we’ve done onsustainability has been very good for our bottom line.” That may not always be the case in the future when additional emissions reductions become harder to find and more costly to make. Corporations will not take measures that reduce their profitability if they are not forced by pressure from the public or–more effectively–government policies.
A democratic solution
Governments have more leeway to make the difficult decisions required to prevent catastrophic climate change. Politically-fueled concerns about the national debt have made government investments in clean energy more difficult, but not impossible. And governments, unlike corporations, are responsible to all citizens–not just wealthy investors. Climate change will affect everyone and ensuring that those effects are minimal is well-worth the additional debt burden. Politicians are deluding themselves and voters when they say carbon can’t be regulated and an international agreement can’t be reached. The economics and politics of climate change will only get more fraught as its consequences become more apparent.
Still, there are no innocent bystanders in America’s climate standoff. Timberland’s Swartz reminded the audience that government in the US is, to quote its greatest president, “of the people, by the people, for the people.” And if politicians and the businesses they regulate fail to protect our climate, then it is ultimately the American people’s fault: “We continue to buy the lack of [environmental] leadership from our government with a smile on our face. And at the end of the day I’m accountable for that because I’m a citizen and I have a vote,” Schwartz concluded. Simply put, US businesses will struggle to provide climate leadership and the government will fail to enact domestic or international emissions regulations until Americans demand it from them at the checkout counter and the ballot box.