Book Review: Climate Capitalism, Capitalism in the Age of Climate Change

Climate protection is good business. Entrepreneurs and companies who engage in it are prospering. That’s the message of L. Hunter Lovins and Boyd Cohen in their recently published book Climate Capitalism: Capitalism in the Age of Climate Change. They energetically urge entrepreneurs and businesses to take advantage of the opportunities opened by the need to combat climate change, or climate chaos as they often call it. Acting to protect the climate will unleash a new energy economy, and it will be profitable for business.

The authors are at pains throughout the book to relate numerous stories of the many companies that are already reaping the benefits of action. Their positive assurances are evidence-based. The businesses whose success they recount are not waiting on the outcome of the interminable wrangling of politicians but accepting the sustainability imperative and positioning themselves for competitive business advantage in a world that will no longer tolerate unsustainable behaviour.

There’s plenty for business to engage with. The book moves steadily through the list. Energy efficiency, the “low-hanging fruit that grows back”, is the first. Many examples are provided of remarkable savings made by firms who have addressed the energy efficiency of their own operations. They give the lie to the notion that climate protection in costly and burdensome. On the wider scale the authors claim that it is technically possible and economically attractive to save at least half, and maybe three-quarters, of all the energy now used, with costs well below those of building new plants. Entrepreneurial openings exist to implement efficiency in every home and office and industry, with potential for new businesses, new efficiency devices and new business models.

Renewable energy generation is next on the list. The book surveys the strong growth of renewables across the globe and the range of business and employment opportunities they provide. The topics are familiar enough, but the details of the work of some of the companies add freshness to the survey. In one small-business example the book instances a company founded in 2006 that had grown by 2010 from its initial six employees to forty-five and is installing 4.1 megawatts of solar energy at twelve municipal and regional public water and wastewater treatment facilities in Massachusetts. The project will save Massachusetts $650,000 in energy costs per year.

The greening of buildings, which are responsible for almost half of all energy consumption and a more powerful driver of global warming than manufacturing or transport, opens up a wealth of prospects. The book notes the conservatism of the construction industry, but nevertheless describes as amazing the transformation in many parts of the industry as builders recognize that their future lies in creating low-carbon buildings. Buildings reaching high levels of green certification can be built for costs comparable with conventional buildings according to Harvard University, and are much cheaper to manage subsequently. Retrofitting of existing buildings repays the initial outlay within comparatively short times and continues to generate savings in the years that follow.

Transport with its call for new improved efficiency in vehicles, airplanes, trains and ships is an obvious candidate for new modes of moving people and stuff and the book points to new ways to profit from providing for this different future. The failure of the US auto industry to identify small fuel-efficient cars as the coming market cost it dearly. American airlines are lagging behind the Europeans in the airborne efficiency competition now under way and run the risk of seeing their profits decline substantially as a result. Public transport systems are being improved in many countries and offering markets for innovative train manufacturers. Skysails on boats are likely to increase, in retrofitting existing as well as outfitting new vessels. The book mentions two industrial companies using an air lubrication system to reduce friction by bubbling air across the vessel’s bottom.

New fuels are needed. If you’re not concerned about climate change you should be terrified of running out of oil, says the book. Saving the world from climate chaos and saving it from an early supply crunch are one and the same thing. Second-generation biofuels such as cellulosic ethanol and biodiesel and algae-based fuels are attracting increasing entrepreneurial attention. One firm, Better Place, is highlighted for its plans to implement the first electric car refueling systems, selling battery electric cars and then selling the service of swapping out and recharging the batteries at specially designed and operated renewable charging stations, thus extending the range of the vehicles.

Sustainable agriculture is seen as crucial. The book is strongly critical of industrialised farming and its environmental effects. It provides many examples of successful farms which employ organic or other sustainable farming methods. Sustainable agriculture is a growth industry. It makes financial sense and ecological sense say the authors, and “is humanity’s best insurance policy against the onslaught of climate chaos”.

As one would expect of a book which expects much from capitalism, carbon markets with the purchase of carefully approved offsets are stoutly defended. Voluntary regional markets, in despite of the dereliction of duty by US federal and international climate negotiators, are hailed, and other widespread voluntary approaches described. Significant business opportunities exist in the carbon-trading sector as companies and countries get more serious about cutting their carbon emissions. Innovation is needed in creating carbon markets, in implementing self-regulation and in creating offsets that both cut carbon and also empower people in poorer communities to begin solving their own problems.

Turning to adaptation the book points out that many adaptive measures are profitable for business. It notes that the best adaptive measures also mitigate climate change. The separation is in some ways artificial. There is much to be done to assist adaptive strategies within existing industries, particularly insurance, energy, construction and tourism. But there are also newly emerging sectors which need attention from business and entrepreneurs. Water is one, including the vital task of delivering potable water to water-constrained populations; one interesting example is an innovative Swedish company which has developed a personal solar-powered water filter for rural residents in developing countries. Disaster preparedness and response is another emerging sector, including the design and provision of temporary shelters for displaced populations and measures to help prevent and monitor forest fires.

The authors are firm. Climate chaos is undeniable and the business community has an essential role to play in leading us out of the danger we are in. But not through business as usual, which they describe as “cheater capitalism”. Honest accounting shows that business which externalizes environmental and social costs is bad and unethical and won’t survive the destruction of ecosystems to which it leads. Business which makes sustainability the key driver of innovation will do well and will also hasten our abandonment of the fossil energy which has become so threatening to our future.

One doesn’t have to be a corporate executive or an entrepreneur to feel a sense of excitement at the invigorating stories of businesses already at work in climate protection and the further prospect opened up for a business-led transition to a sustainable future. No doubt I need to be reminded of the continuing power and influence of the fossil fuel industry, which won’t go quietly. But I was still heartened by the book.

Article by Bryan Walker, appearing courtesy Celsias.