Should Business Support the Green New Deal?

Does your business support the Green New Deal?  

The American Sustainable Business Council (ASBC) does:  

As responsible business leaders and investors in industries across  America, we support the Green New Deal.  By aligning with  its brave vision and reality-based goals, American innovation can bring to  scale long-overdue  economic, environmental, and  social benefits. We  can  create  broad  opportunity, rebuild our deteriorated infrastructure, and combat the clear and present danger of climate change.  At its core, the  Green New Deal  offers  a  policy direction that will result in better business results for all stakeholders and a more vibrant and resilient economy. 

ASBC represents 250,000 businesses – including Patagonia, Ben and Jerry’s, and Seventh Generation –  that believe government policy needs to change to reflect the triple bottom line: people, planet, and profit.  Their stance comes from the understanding that we are all in this together:

The ideas of stewardship and wise investment to secure future prosperity is neither conservative nor liberal, neither Democrat nor Republican. It is a fundamental tenet of successful business and a core component of the American Dream.

What’s holding your business back?

A recent article in the Harvard Business Reviewproposes two broad and complementary opportunities for businesses:

  1. Supporting Green Initiatives:Companies can help reduce the burdens of the energy transition by supporting economically sustainable low-carbon initiatives. How? By creating new economic enterprises where coal extraction previously thrived andbeing more proactive in their efforts to expand access to renewable energy.
  2. Develop Inclusive Business Models: tailoring new business models for vulnerable populations.  These include subscription-based community solar and energy service companies (ESCOs).

Of course, none of this happens in a vacuum. Federal, state, and local government will need to do their part, say the authors, to create incentives, or at least not put up barriers, as many are doing now, to facilitate the inclusivity of the energy transition.  Is that too much to ask?  

The risks of inaction far outweigh any ideological or political leanings your company has.  Have you considered what the impact of severe climate change will be on society, your customers, and your industry?

Can Business Listen to the Voice of the Planet?

Nothing lasts forever. Jeff Bezos, the world’s richest man, told his employees that their focal job is to delay the time when Amazon dies.

Bezos is not only aware that companies inevitably die.  He is keenly aware that planet earth will eventually die. Forever the optimist, Bezos is investing money in designing space ships where human life could continue.  He differs from Elon Musk who sees human survival to depend on moving to and living on Mars.

The task of extending the earth’s life is urgent.  Scientists estimate that mankind has only 12 years to reduce our carbon footprint before the damage cannot be reversed. The Intergovernmental Panel on Climate Change concluded in October 2018 that in order to limit warming to 1.5 degrees Celsius above pre-industrial levels, the world would have to reach net-zero emissions of carbon dioxide by the year 2050.  Otherwise mankind will face increasingly severe climate impacts.

Most of the world’s worsening climate and pollution is manmade.  Our automobiles, our buildings and our meat animals release gases and CO2 emissions warming the earth.  A warming earth leads to melting ice and water flooding of coastal cities, creating untold human and physical damage.

The United States is the only country whose leader calls climate change a hoax.  In becoming the U.S. President in 2016, one of Trump’s earliest moves was to renounce and withdraw from the Paris climate agreement.  One of the world’s major polluting countries decided to take no systematic steps to curtail pollution and climate change.

In the year 1776 when Adam Smith published the Wealth of Nations, our earth supported less than one billion people. Smith’s vision of capitalism now much be revised for an earth that today has seven billion people.  By 2050, the earth will need an economic system that can feed nine million people.

Only two billion of today’s seven billion people enjoy a middle class or higher income.  Citizens in developing countries look with envy at the middle class life style and want to achieve it.  An increasing number of citizens are intent on leaving their own backward or dangerous country to enter Western Europe or the United States.  Even if some succeed, the chance that most of them will achieve a middle class lifestyle is small.  It is estimated that we would need the resources of five earths to support seven billion people in a middle-class lifestyle. 

There is not enough income and resources to deliver a middle class standard of living.  We would be smarter to aim for livable levels of income and resources for most denizens on the earth.  Stop the steady preaching of “more is more,” and replace it with  E.F. Schumacher’s Small is Beautiful and “less is more.”

Actually those who achieve a middle class level of income know that it comes with its own set of problems.  Citizens living in advanced industrial countries have to spend an increasing amount of time getting to and from their job.  They sit longer in their slow moving cars facing growing congested traffic. They need a car because public transportation is poor in most large cities.  They own an expensive car that sits idle during most of the day and night.

Citizens living in advance industrial areas work 40 hours a week and may work much longer. Many employees worry that their company will fail or that their job will be turned over to a robot. They worry about a family member having an injury or illness that wipes out all their life savings. 

Can Countries Continue to Pursue a Growth Economy?

Most companies adopt the twin goals of growing their sales and their profit. They plan to meet the growing consumption needs of a growing population.. 

But there is a problem.  The earth has finite, not infinite resources. The earth’s resources are inadequate to meet a growing population’s needs and wants.  Countries and companies need to give up on the idea of pursuing a Growth Economy.  Environmentalists propose that a Growth Economy needs to be replaced by the concept of a Circular Economy.  A circular economy calls for implementing the three Rs – Reduce, Reuse, Recycle.  Conscientous citizens should (1) cut down on their level of consuming, (2) reuse every possible item instead of discarding it, and (3) recycle every item into a usable one.  The aim is to build a closed loop system requiring few new resources.

The work in a Circular Economy will probably fall short of what is needed to meet climate change. We would still face a world of finite resources.  A major step would be to aim for a constant and not a growing population.  Families should be encouraged to have fewer children. Each child born consumes a certain level of resources over his/her lifetime. China adopted the extreme policy of limiting families to have only one child.  Democratic regimes, however, have not imposed any limit.  Several major religions push the idea of large families. Agricultural-based societies in poor countries strive for more children to do the work of planting and harvesting. Democracies have based their hope on educating more women to join the work force. Working women have less time or appetite to spend their lives in producing and managing children.

The main challenge in a world of finite resources is to persuade people to reduce their consumption.  Do citizens need as many clothing items that end up unused in overstuffed closets? Does the fashion industry need to carry out planned obsolescence so that people need to acquire the latest stylish garments?  Do citizens need so many brands of cosmetics or cereals?  Should the nation allow the building of many large mansions when so many people are squeezed into small and poor apartments?

Waking up: Is the Green New Deal the Answer?

Most democracies bury their heads in the sand rather than adjust to living in a world of finite resources.  In the U.S., this problem of finite resources was finally addressed on Feb. 7, 2019.  On that day, New York Representative Alexandria Ocasio-Cortez (AOC) introduced the Green New Deal in the Houseof Representatives. Senator Ed Markey of Massachusetts introduced a companion resolution in the Senate.

The Green New Deal outlined a comprehensive vision for how the U.S. might tackle limited resources and climate change over the next decade, while also creating high-paying jobs and protecting vulnerable communities.

The Green New Deal proposed seven goals:

  • Making every building energy efficient
  • Growing the clean energy economy
  • Ensuring a just and fair transition
  • Clean air, water and healthy food as a human right
  • Sustainable transportation
  • Cutting carbon emission
  • Moving to 100% renewable energy 

The primary climate change goal is to reach net-zero greenhouse emissions in a decade. “Net-zero” means that after tallying up all the greenhouse gases that are released and subtracting those that are sequestered, or removed, there is no net addition to the atmosphere. The goal, then, is slightly less ambitious than calling for no greenhouse gas emissions at all.

The goals seek reform in four areas: electricity generation, transportation, agriculture, and economic security.

Electricity generation.  The goal is to meet “100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources.”  This would involve “dramatically expanding and upgrading renewable power sources” and “deploying new capacity.”  The proposal did not take a position on whether nuclear energy should be expanded or contracted. However, an FAQ (stands for Frequently Asked Questions) released by Ocasio-Cortez added that the right way to capture carbon is to plant trees and restore our natural ecosystems.  The EPA (Environmental Protection Agency) estimated that generating electricity accounts for about 28 percent of the nation’s greenhouse gas emissions.

Transportation. Forthe country to reach net-zero emissions in a decade, emissions reductions must occur in transportation. Greenhouse gas emissions in transportation are responsible for about 28 percent of the U.S. total.

The Green New Deal requires “overhauling transportation systems in the United States to remove pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible, including through investment in (i) zero-emission vehicle infrastructure and manufacturing; (ii) clean, affordable, and accessible public transit; and (iii) high-speed rail.”

The Green New Deal calls for reducing transportation emissions “as much as is technically feasible.” It suggests building high-speed rail and zero-emission vehicles (electric cars), There is no mention of air travel, even though air travel releases a considerable amount of greenhouse gas emission.  Perhaps it was not mentioned because it would generate considerable political opposition. FAQs suggested that high-speed rail and more public transit would greatly reduce the amount of needed air travel.

Agriculture.  About 9 percent of the nation’s greenhouse gases stem from agricultural activities, including the release of nitrous oxide from soil and methane from livestock. The Green New Deal calls for “working collaboratively with farmers and ranchers in the United States to remove pollution and greenhouse gas emissions from the agricultural sector as much as is technologically feasible, including (i) by supporting family farming; (ii) by investing in sustainable farming and land use practices that increase soil health; and (iii) by building a more sustainable food system that ensures universal access to healthy food.”  Note that the resolution doesn’t say anything about cows and the livestock emission of methane gas.  Methane production from livestock accounts for almost a third of the greenhouse gas emissions from U.S. agriculture, and more than a quarter of all methane emissions.

Economic security.  A key goal in the Green New Deal is to “create millions of good, high-wage jobs and ensure prosperity and economic security for all people of the United States.” The Green New Deal wants to guarantee “a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States.”  An FAQ sheet goes further and proposes guaranteeing economic security to “all who are unable or unwilling to work.”

The economic security proposal largely represents the goals of the Democratic Party, not the Republican Party.  Democratic party members are highly concerned with repairing “deindustrialized communities, depopulated rural communities, the poor, low-income workers, women, the elderly, the unhoused, people with disabilities, and youth.”

Reactions to the Green New Deal Goals

The New Green Deal is a set of proposals, not a set of laws and legislation to be voted on.  It is an invitation to both parties to debate these goals and to set some policies to deal with finite resources and the climate crisis.  It does not propose how to actualize these goals nor comment on the costs and funding mechanisms of realizing these goals.  

Any thoughtful President would normally complement Ocasio-Cortez for raising the question of where the nation should be going.  He would go further and welcome the chance to undertake a big new venture that would distinguish his administration, much as did Franklin D. Roosevelt to initiate the New Deal of measures for fixing the economic depression of the 1930s.  

Unfortunately, the response from President Trump was to attack the very concept of doing anything about climate change. Trump argued in a tweet on February 9 that the New Green Deal would “permanently eliminate all Planes, Cars, Cows, Oil, Gas & the Military.”  This clearly meant that he did not read the proposals, Planes were not mentioned nor was there a plan calling for eliminating cows.  Oil and gas were mentioned as climate-damaging fuels and would be reduced.  The military was not mentioned at all in the proposal but mentioned in subsequent FAQs.

At an El Paso rally two days later, Trump told his audience that he really doesn’t like “their policy of taking away your car, taking away your airplane flights, of ‘let’s hop a train to California,’ of ‘you’re not allowed to own cows anymore!’”

On February 12, Senator John Barrasso of Wyoming incorrectly said livestock would be banned and that ice cream was “another victim” of the proposal. “Say goodbye to dairy, to beef, to family farms to ranches,” he said. “American favorites like cheeseburgers and milkshakes will become a thing of the past.”

Much of the confusion about the resolution (H Resolution 109) originated from discrepancies coming from documents that Ocasio-Cortez’s office distributed to news outlets and posted on her website.  For example, the idea that all buildings had to be made energy efficient simply followed from the fact that most buildings used fossil fuel where the ultimate need was for more use of renewable energy (solar and wind energy).

Conclusion

The Green New Deal is a plea to companies, citizens and communities (the 3 Cs) to change their behaviors in the interest of achieving better air, water and soil and reducing climate crises from hurricanes, tornadoes and floods.  

The climate problem is worsening and one political party is busy denying it and not proposing any solutions.  The quality of life in many U.S. communities is deteriorating and the same political party is without any real proposals of solutions.  The Green New Deal comes along admittedly as an imperfect and imprecise set of remedies.  Instead of viewing it as starting point for serious discussion and planning, the Republican Party prefers to satirize and clown about the proposals.  

Here we end with a set of statements from persons who care deeply and wisely about mankind’s future in a changing world.

“Economic powers continue to justify the current global system where priority is given to speculation and the pursuit of financial gain. As a result, whatever is fragile, like the environment, is defenseless before the deified market.” – Pope Francis.

“We should no longer measure our wealth and success in the graph that shows economic growth, but in the curve that shows the emissions of greenhouse gases. We should no longer only ask: ‘Have we got enough money to go through with this?’ but also: ‘Have we got enough of the carbon budget to spare to go through with this?’ That should and must become the centre of our new currency.” – Greta Thunberg, 16-year-old Swedish climate activist, now nominated for the Nobel Peace Prize.

“Our economic system and our planetary system are now at war. Or, more accurately, our economy is at war with many forms of life on earth, including human life. What the climate needs to avoid collapse is a contraction in humanity’s use of resources; what our economic model demands to avoid collapse is unfettered expansion. Only one of these sets of rules can be changed, and it’s not the laws of nature.” – Naomi Klein, author “This Changes Everything: Capitalism vs. The Climate”.

We need to recognize the threat that climate change poses to capitalism and our democracy.  The Green New Deal serves as the starting point for our discussions and planning.  

What will your company’s future look like if you fail to act?