Our country, and the world, stands at a crossroads. The technologies to deliver both sustained economic growth and reduced emissions have all been invented. These technologies now require a path toward mass economies of scale to enable their delivery of lower prices, increased employment, reduced emissions and sustainable economic growth.
Two key steps are required to achieve these mass economies of scale. The first is to accurately price carbon at the cash register, pump and meter by adding carbon’s human health and environmental consequences. The second is to eliminate protectionist barriers that shield carbon-based industries (and states) at the expense of alternative technologies that will deliver lower costs and reduced emissions.
Examples abound. Uber is now the world’s largest taxi company, but it owns no taxis. The world’s largest accommodation provider, Airbnb, owns no real estate. Alibaba has displaced Walmart as the world’s largest retailer, but Alibaba owns no inventory. Companies that include General Motors and Dupont are pioneering how to run factories with zero waste and facilities using only renewable energy.
The Information Age is enabling job creation, entrepreneurship and economic growth while at the same time reducing the environmental footprint tied to commerce. This new economy delivers products that cost less while also meaning more in terms of human benefits. Sustained economic growth is now based on technologies in our factories, homes, cars and purses that increase efficiency, connectivity and productivity even while using less carbon and producing less pollution.
California has achieved both economic growth and emissions reductions by taking two key steps. One was the state’s adoption of a cap-and-trade system that prices carbon for its emissions. Oil refineries and power plants pay to pollute, and these funds are used to reduce consumer electricity bills and invest in energy efficiency. The real economic value is at the pump and meter, where consumers see a more accurate price that reflects both production costs and the pollution impacts from consuming carbon-based energy.
The second key step was the state’s adoption of public policy that drove key technologies to mass economies of scale. California’s million solar roof program created the economies of scale that have enabled solar to be price-competitive with grid power. California is now pioneering building codes where all new residential buildings will be zero net energy (ZNE) by 2020 and all new commercial buildings will ZNE by 2030. This will accelerate mass economies of scale for smart building controls, LED lighting and onsite batteries that can store electricity produced from onsite solar systems.
California is also pursuing public policy toward having a million electric cars on its roads within the next 10 years. Achieving this milestone would catapult California to an electric vehicle inventory equal to all the electric vehicles sold to date around the world.
Combined, these public policies are increasing the state’s economic competitiveness and growing its economy by moving innovative technologies to mass economies of scale, enabling business startup/growth and creating local jobs. This at the same time carbon-focused states continue to struggle with stagnant or slow-growing economies.
Increasingly, more CEOs and businesses are embracing the idea of pricing carbon emissions. The ranks of CEOs advocating for carbon pricing now include Brad Smith, president of MicroSoft, Andrew Liveris, president of the Dow Chemical Co., Paul Polman, CEO of Unilever, and Masashi Muromachi, chairman of the board of Toshiba Corp. These executives advocate for a carbon price to accelerate investment in low-carbon technologies that they believe will generate sustained job growth, improved economic competitiveness and increased productivity.
Green does build business, and it is increasingly the propellant of economic growth in the 21st century.
Image credit: Flickr/Jeffrey
Bill Roth is a cleantech business pioneer having led teams that developed the first hydrogen fueled Prius and a utility scale, non-thermal solar power plant. Using his CEO and senior officer experiences, Roth has coached hundreds of CEOs and business owners on how to develop and implement projects that win customers and cut costs while reducing environmental impacts. As a professional economist, Roth has written numerous books including his best selling The Secret Green Sauce (available on Amazon) that profiles proven sustainable best practices in pricing, marketing and operations. His most recent book, The Boomer Generation Diet (available on Amazon) profiles his humorous personal story on how he used sustainable best practices to lose 40 pounds and still enjoy Happy Hour!