There was much to be pessimistic about in 2015 in terms of people, planet and business success. 2015 generated further documentation that the world is hot and is getting hotter. It also generated increased evidence of our national, and now international, obesity and diabetes epidemic. Seven years after the Great Recession, our national and world economies are still struggling to achieve sustained growth. The numbers suggest it will be hard to be optimistic about 2016 based on 2015.
However, 2015 did see milestone events that advanced sustainable solutions. It provided additional confirmation that the green economic revolution is real and growing even if the word ‘green’ may be fading in use as a description for triple-bottom-line results. 2015 was a milestone year for growth in economies of scale for renewable energy technologies that will enable a low-carbon world. It saw consumers buying record volumes of clean food to address their fears over food safety and health. Based on this evidence, I now project that $250 trillion of investment and commerce will occur during the 21st century that will reshape the world’s trajectory toward economic, human health and environmental sustainability.
This article is the first of a two-part series. This first article focuses on the birth of the low-carbon economy, solar energy’s milestone price-competitiveness and the emergence of cities as sustainability pioneers. The second article focuses on how millennials, our national weight crisis and corporate social responsibility (CSR) is reshaping, and greening, our economy.
The birth of the low-carbon economy
In 2015, the concept of a low-carbon economy achieved milestone acceptance levels among businesses and governments. The COP21 agreement established a working framework for the development of a global low-carbon economy. COP21’s economic challenge, and opportunity, will be whether a global price for carbon emerges at the world’s pump, meter and cash register.
What may be the larger 2015 low-carbon economy milestone is the success California has had in decoupling emissions and economic growth. California’s economic growth is the envy of the nation and the world. California is the headquarters for the companies that are reshaping the world including Google, Apple, Disney and Amgen (Applied Molecular Genetics). As significantly, California set a 21st-century milestone by achieving leadership economic growth while also reducing emissions.
The emerging path toward a low-carbon economy was also confirmed by the International Energy Agency. It reported that, for the first time in modern history, the world achieved economic growth while also reducing greenhouse emissions. It may be that the world will look back at 2014-15 as the end of the Industrial Age and the birth of the low-carbon economy.
Cities are where most of us live. They have also become the 21st-century battleground for mankind’s adoption of sustainability. City mayors and their staff no longer have the luxury of debating climate science. Unfortunately, Beijing is now the poster child of a city that is suffering economic loss and a human health crisis as a result of unsustainable decisions to rely on coal-fired power plants and vehicles running on fossil fuels.
2015 also saw cities around the world invent sustainable best practices to improve human health and grow their economies. An emerging trend that surfaced in 2015 was a default-to-green public policy. Default-to-green turns traditional public policy of accepting the lowest bid on its ear with public policy that makes sustainable procurement the supply choice. Less sustainable supply choices can only be procured through written justification and special approval.
Solar wins on price!
Solar price competitiveness was the renewable energy story of 2015. In Texas, the prices submitted to the city of Austin’s renewable energy RFP shocked the electric utility industry. The average solar bid price was 4 cents per kilowatt-hour. There were bids priced even lower than this average. Even with natural gas prices hovering around $2 per MMBTU, the price for zero emissions solar is a disruptive force reshaping the electric utility industry.
The 2015 Clean Power Act will further accelerate the electric utility industry’s shift away from coal. This act mandates utility reductions in carbon emissions by 32 percent by 2030. Low solar and wind power prices along with increased environmental regulations are pushing utilities to reconsider their traditional solution of displacing coal with natural gas. 2015 saw progressive utilities actively reconceptualizing their grids to displace both coal and natural gas with a combination of wind/solar energy plus battery storage.
However, the electric utility industry’s path toward sustainability was not all positive. The electric utility industry had milestone success in 2015 protecting their revenues against customer-owned solar. 2015 saw utility after utility successfully convince their regulatory bodies to limit, undermine or block net-metering economics. The rate redesigns won by the utilities have eroded the economics of customer-owned solar through higher fix charges, lower payments for solar energy and increased pricing complexity. This has made it more difficult, or even unlikely, for customers to successfully figure out the economics of investing in solar for their homes or businesses.
However, in jurisdictions like California where the regulatory commission confirmed net metering, customer-owned solar is changing consumer behaviors. Customers with their own solar system are increasingly leasing electric cars — using the savings from their utility bills to pay for the leases and lower solar electricity costs to save at the pump. This growing class of solar customers are dramatically lowering their carbon footprint to achieve equally dramatically lower costs.
How millennials and our national weight crisis is shaping business success
What emerged during 2015 was the growing role that millennials, our national weigh crisis and CSR is having on a business’ ability to win customers and retain work associates. The second part of this two-part article focuses on these three 2015 mega-trends that are changing the path to business success.
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