Earth Day started in 1970. That year, CO2 PPM (parts per million) atmospheric concentrations were approximately 380. Earth Day started, in part, to increase awareness that air pollution had soared past the 250 ppm levels of pre-Industrial Age CO2 concentrations and were a human health threat. Today, the earth’s CO2 concentration is 418 ppm. A massive body of audited scientific research now concludes that CO2 concentrations are creating climate change and climate change’s anecdotal evidence is reported daily in the form of extreme weather events and massive wildfires.
Global plastic production in 1970 was 50 million metric tons. Today, it is almost 400 million metric tons. And 91% of plastic production is not recycled. A Texas sized patch of plastic waste now floats in the Pacific Ocean. Our plastic pollution litters our beaches, parks and streets. Our landfill plastic entombment is a monument of failure.
What has changed since 1970 is that a majority of consumers and voters now believe climate change is real, manmade and a threat to them. That is now an issue for your business as consumers seek price competitive, greener products and the Biden Administration seeks to implement a multi-trillion infrastructure plan.
More than ever before, your business must focus on Earth Day’s lessons learned.
We Failed at Pricing Pollution’s Costs
The Biden Administration is returning to regulation and financial incentives as the public policy solutions for climate change and life endangering pollution. Like past Big Spending/Big Regulation efforts it will fail to achieve sufficient scale. Its results will be like dropping a good sized rock into a very large lake.
This is not a dump on Biden or government regulation. California’s green regulations have created the most energy efficient state economy in the U.S. California leads the nation in economic growth while also lowering its CO2 emissions. But part of that emission reduction success came from Industrial Age manufacturing companies fleeing to states or countries that have less pollution regulation.
I am not criticizing government offering consumers and businesses money for buying clean tech products. Solar is now the least cost source of electricity in human history because California’s solar cost subsidies created a scale of consumer demand that generated a global manufacturing economies of scale that the rest of America and the world now benefits from.
But the fundamental reason why pollution now threatens our health, safety and economic success is that government regulations and subsidies pale in their consumer decision making impacts compared to pricing pollution at the cash register and pump.
Don’t blame big business any longer for our pollution pricing failure. The Business Roundtable now backs a carbon price. The U.S. Chamber of Commerce supports a “market-based” approach to reducing carbon pollution (hard for them to say the word “tax”). Remarkably, the American Petroleum Institute, the oil and gas lobbying group, now backs a carbon tax.
If you want to appreciate why we do not tax pollution then look in the mirror. None of us want to pay more taxes. And most especially now that we own gas guzzling, full-sized trucks and SUVs, we do not want to pay more at the pump.
So how will we ever really address pollution’s costs unless we tax it?
The Technology Revolution That Will Create a Green Economy
Clean tech has opened the door for a price competitive green economy. Solar is now the least cost generating source in human history, and because of that, is now the fastest growing source of electricity generation. Hundreds of MWs of battery storage are being installed in utility grids, homes and commercial buildings as batteries gain price and reliability competitive advantage. Tesla, GM, VW and Ford are now implementing product strategies that will push down electric vehicle costs, enabling their mass adoption. As clean tech increasingly delivers price competitiveness it will be easier for governments to win pollution tax approval from voters.
This reinforcing pricing loop where clean tech’s price competitiveness accelerates the ability of government to increase the price of polluting products is the foundation for a green economic revolution. This Green Economic Revolution will dramatically reshape business’s investment options for reducing costs. A business’s green pricing competitiveness will be as impactful on consumer decision making as the Covid pandemic was on accelerating consumer/business digital connectivity.
Don’t miss the business lessons gleaned from past Earth Days. Your business’s success is now based on adopting clean tech’s growing price competitiveness that cuts costs, reduces emissions and wins customers.