Capitalism Waking Up to Climate?
28 Jan 2018: Earlier this month, the corporate world was caught off-guard by a letter demanding social responsibility. Specifically, climate responsibility. Why the surprise? The letter came from BlackRock, the world’s largest investment manager. BlackRock has been one of several financial 800-lb gorillas sounding the climate alarm recently. The list also includes Vanguard, Fidelity, Moody’s, and the State of New York.
This week, the theme of climate responsibility was advanced in Davos, Switzerland at the World Economic Forum as well. The BlackRock vice-chair stated that “we really have to change capitalism. This is really what’s at stake here…a new contract between companies, investors and governments.”
While the Trump administration is openly hostile to climate science and policy (see my video Scott Pruitt’s EPA) , the business world sees the writing on the wall. The insurance industry in particular is based on assessment of long-term risk. Like the US military, the insurance industry has been aware of climate disruption risk for many years. The broader business community likewise recognizes both the huge economic risks of ignoring climate, and the lost economic opportunities as well.
While the present administration is committed to exploiting 20th-century fossil fuel wealth, the United States will lose out in the long run, yielding world leadership in advanced energy to China and European nations. Little Denmark now boasts more than 40 times as much wind power as the United States. Soon they will be able to run their electrical grid with no fuel costs! Imagine what we could do if freed from the domination of fossil interests!
We are the only nation in the world not committed to the Paris Climate Accord. While entrenched fossil-fuel interests still aggressively block meaningful action on climate, the US ironically suffers higher dollar losses than other countries. Many of our greatest cities, and 60 million Americans, are on the coasts, vulnerable to more intense hurricanes and higher storm surges (see my video “Fake Weather“). The economic toll of extreme weather events (drought, fire and flood alike) is reported at $1.5 trillion.
We are already paying more for our foot-dragging than the cost of getting in gear and helping lead the world in rapid transition to advanced energy. A prompt about-face will boost high-quality American jobs that cannot be outsourced as well as claw back our former position in world leadership. What’s not to like?