Which will melt first, the Arctic or the economy?

The National Snow and Ice Data Center recently warned that the death spiral of the Arctic would leave the North Pole ice-free by 2013. But borrowing $2 billion a day to buy imported oil (and the rest of our unsustainable business practices) might melt financial stability even faster. As the stock market oscillates faster than world oil prices, is this the start of a global economic collapse? Given these twin perils, should a company or government put its sustainability agenda on hold or drive forward?

Both our financial future and the climate need us to unleash the new energy economy. Implementing the aggressive climate protection programs that planetary survival requires also will create millions of jobs, revitalize local communities, and offer sweet investment opportunities for Wall Street.

Companies that follow this prescription are financially healthier, have higher stock value, outperform their competitors, and achieve enduring competitive value. Goldman Sachs found that companies that are leaders in environmental, social and good governance policies outperformed the MSCI world index of stocks by 25% since 2005. ¹ The Economist Intelligence Unit found that companies with the highest share price growth over the past three years paid more attention to sustainability issues. Poorly performing firms were far more likely to have nobody in charge of sustainability issues. ²

Energy efficiency costs far less than the fossil energy that endangers the climate. Researchers from the U.S. National Laboratories found that energy efficiency remains underused in every sector of the economy and is by far the cheapest option. ³ Combining energy efficiency with renewable energy technologies can meet all our energy needs, while providing 10 times the job creation of investments in fossil or nuclear technologies. ⁴ These technologies can eliminate the need for new coal or nuclear power plants over the next 20 years, create $700 billion of economic activity and add five million high-quality jobs by 2025. ⁵ An similar study found that $300 billion in federal funding for low-carbon energy, infrastructure, and urban development would add more than 3.3 million jobs to the economy, stimulate $1.4 trillion in new GDP, cut $284 billion in net energy costs, and repay taxpayers in 10 years. ⁶

Climate protection strategies can enable companies and communities to cut their costs and enhance their sustainability. This approach creates competitive advantage in a normal economy, is a turn-around strategy in a down economy, and may be the only basis for survival in a collapse.

Hunter Lovins
Note.  Footnotes are available on request