Aligning Business and Government on Climate Change
Acknowledging the power of markets means strengthening government involvement, not abandoning it.
Topics
Leading Sustainable Organizations
In 1914, Singer Sewing Machine was the seventh largest company in the world, dominating the sewing machine market with a 90% share of all sewing machine sales outside the United States. Years later, IBM created a whole new market for computers with its room-sized mainframes, ushering in a new technology era for business. More recently, Amazon upended the retail sector by expanding the market for online consumption. A great deal of business history can be written about companies creating, dominating, and upending markets.
But, not all: Business history is about so much more than what happens within markets.
Today, we know that industry actually transforms the conditions in which markets operate, including the atmosphere, the weather, biodiversity, and access to physical assets like clean water. Scientists believe this. Investors believe it. Equity markets believe it, too; as do the Pope, the Dalai Lama, and Jewish and Muslim leaders. The consensus on this view extends far beyond science and the academy; it includes 99% of the nations on this planet.
When President Trump withdrew the United States from the Paris Accords, citing his duty to protect the welfare of U.S. citizens against the “unfair costs” of participating in these agreements, he ignored the impact of U.S. market activities on industry operating conditions in the United States and abroad, as well as America’s contributions — as the world’s second biggest polluter after China — to this impact. In the United States alone, researchers estimate that weather-related climate changes from business-as-usual market activity will worsen inequality and stunt economic growth in southern states.
The President’s decision to withdraw the United States from the Paris Accords reveals a divide between those who see markets as (merely) powerful engines of wealth creation and those who see markets as even more powerful engines of both wealth creation and massive wealth destruction. It is ironic that the staunchest defenders of an exit from the Paris Agreement are also those with a more limited view about the power of markets. Michigan Rep. Tim Walberg’s comments at a recent town hall express this sentiment directly: “If climate change is real, God will take care of it. … Can man change the entire universe? No.