Capitalism is the best force to fight climate change

Capitalism is the best force to fight climate change

BY NICK LINDQUIST, OPINION CONTRIBUTORAmidst talks of a Green New Deal, the Paris Climate Accord, groups calling for government-led action, and more, there is a lot of public confusion surrounding environmental issues today. Though Democrats have always advocated for many of these things, 2020 candidates clambering for the spotlight have begun to embrace giant plans like the Green New Deal, despite having no real plan in place to accomplish it. However, there are alternatives to these unrealistic ploys, and they deserve a place in the conversation.

What isn’t being discussed nearly enough is private-sector-led environmental actions, and the potential we have to accelerate these efforts. Companies have been making their own operations more efficient and eco-friendly, green entrepreneurship has also grown significantly and is developing the green technology of the future.

Part of the reason private-sector companies are taking these actions is because they have to be innovative and forward thinking in order to survive. Consumers care about sound environmental practices more than ever before. They are more informed than ever about the environment and the impact it has on our everyday lives. Consumers are even willing to spend more on a product if it means that the product will have better environmental outcomes.

Furthermore, companies that have a mission bigger than just profits are more successful and retain employees better. Environmental and corporate social responsibility initiatives keep employees happier because they feel like they are doing good for the world by working at their company. A prime example is Unilever, whic has an employee engagement rate of 80 percent, far above the industry average for satisfied employees. Another plus is that a better motivated and satisfied workforce leads to higher revenues, according to a study by IBM.

Satisfied employees and consumers lead to better business outcomes, and green initiatives satisfy both of these stakeholders. This is not just a theory, either: Companies have tapped into this potential and are leading voluntarily. Through AI, software integration, more efficient appliances and technology, and a new generation of business leaders, private companies are revolutionizing the way they do business.

A major initiative is better supply chain management. A supply chain is essentially the timeline of a product from sourcing materials to putting a final product on the shelf. An iPhone, for example, has parts from all over the world built into every unit. The supply chain for the iPhone is the map of where all of those parts come from, what their costs are, and how they make it to the assembly plant and then into your hand as the final product. Through software and AI, companies are able to optimize their supply chain by sourcing materials more locally and that are more sustainable, which reduces energy consumption, all while optimizing cost. Apple has perhaps the best supply chain management strategy when factoring in social responsibility and environmental impact. It has brought 5 gigawatts of renewable energy into its supply chain, which is enough energy to power 3.5 million homes.

This new demand for green practices has grown the market for green technology and investments. Market forces and private investments have sparked tremendous growth of the wind industry in Texas. Texas produces the most wind energy in the United States. If Texas were a country, it would be a top 5 wind-producing country. California, on the other hand, produces as much renewable energy as does Texas, but took a mandate-based approach to solar production. As a result, their residential energy cost is over 58 percent above the national average. Contrary to what happens in a mandate-based energy transformation, energy costs in Texas are still low, with residential energy costs still 10 percent below the national average.

New, young companies are also forming to make the world better. 4Ocean is a company that collects ocean plastic and makes products out of it while recycling the rest. Since their founding, they have managed to gather over 4.2 million pounds of ocean garbage — and this is only one example of many.

The facts and figures also support the idea that free markets and private industry innovation are capable of achieving better environmental outcomes. The United States saw a 12 percent decrease in carbon emissions from 2007 to 2017. There is an increased emphasis on natural gas, nuclear, wind, hydro and more in order to live in a cleaner world. We are seeing clean energies thrive and the renewable energy market is one of the fastest growing job sectors.

We can accelerate our cleaner future by enacting smart policies that encourage the market to lead on these issues and drive the costs of green technologies down. In fact, this is the only way that has already been proven to work. If we were to expand on this and tap into the potential of American innovation and entrepreneurship, we could achieve so much more. We need a cleaner, greener future for the world, and the only way to achieve it is by building on the momentum the market has built.

Nick Lindquist is policy director for American Conservation Coalition, a free-market environmental organization.
https://thehill.com/opinion/energy-environment/439949-time-for-the-private-sector-to-lead-on-earth-day