Why Cities & CEOs Can’t Relax

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America’s mayors, governors and CEOs may be feeling a sense of relief now that Congress shows signs of movement on a climate bill.

Over the past decade, some of them have stuck their necks out and spent their political capital on climate policy. Now, Congress is taking the heat.

Unfortunately, there is no rest ahead for anyone, not if we’re going to cut our greenhouse gas emissions back to levels we haven’t seen in a generation or more. Whatever agreements emerge from Congress this summer and from Copenhagen in December, the fate of the planet will remain largely in the hands of our corporations and cities. 

That’s a message I will deliver June 3 to corporate and local leaders from Europe and the United States at the World Investment Conference in La Baule, France, where the topic will be trans-Atlantic cooperation on building sustainable cities.

We can’t count on Washington or Copenhagen to solve the climate and energy problems. The most important leadership ahead still will come from cities and CEOs.

So far in the United States, there has been good news and bad news on climate leadership from those two sectors.

The good news: In the absence of coherent national policy, more than 940 mayors now have signed the Mayor’s Climate Protection Agreement, committing at minimum to meet Kyoto targets for greenhouse gas reductions. Most states are implementing or developing their own climate action plans. Four regions are implementing or developing emissions-reduction schemes. Twenty-five corporations, including some of America’s largest, have partnered with environmental organizations in the U.S. Climate Action Partnership to push for carbon pricing.

Several companies are showing exemplary individual leadership. I’ve written before about Interface, the Atlanta-based international carpet manufacturer that has set a zero-waste, zero-emissions goal and is fasting approaching it.

General Electric is another example. The company’s carbon-cutting products range from wind turbines to super-efficient light bulbs. GE is investing in smart-grid development. It wants its green-product revenues to grow to $25 billion next year, up from $6 billion only five years ago. It just announced it will invest $1.5 billion yearly in clean-tech research by next year.

The bad news: The 940 cities who have endorsed Kyoto are only a fraction of the 40,000 local governments and nearly 20,000 cities in the United States.

At the U.S. chapter of ICLEI-Local Governments for Sustainability, which runs an important five-step program to help mayors move beyond their photo ops to achieve real emissions reductions, only about 550 cities have signed on to date. Only about half have made it to Step 3 – meaning they’ve inventoried their carbon emissions, set reduction targets and created action plans; only 30 have reached Step 5 to implement their plans and monitor progress. More cities should be taking advantage of ICLEI’s help.

In the corporate world, the most aggressive emissions reduction target advocated by U.S. CAP – a cut of 6.75% below 1990 levels by 2020 – is far less aggressive than the caps put forward by the international and scientific communities. China wants developed economies to cut their emissions more than 36% below 1990 by 2020. The IPCC’s recommended 25-40%.

At the federal level, the Waxman-Markey bill so far calls for reductions of only 3.26% compared to 1990 levels – less than half the cuts that U.S. CAP endorsed and only about 10% of the cuts advocated by China and the EU.

The International Energy Outlook just released by the U.S. Energy Information Administration estimates that global carbon emissions will rise 39 percent by 2030 if we continue business as usual.

If Washington and Copenhagen produce climate agreements, they are likely to set the floor, not the ceiling, for sufficient action. Because they are the products of compromise, laws and treaties usually codify the lowest common denominator of commitment among the parties who make them. The lowest common denominator today is not nearly enough.

If we are to do better, cities are key because that’s where most of the world’s population lives. Estimates are that up to 80 percent of the world’s population will live in urban settings by 2030. How cities are designed and constructed – from building efficiency to infrastructure and transportation systems – will have everything to do with the world’s future energy and climate security.

As for corporations, only they may have the resources and clout to catalyze truly revolutionary changes needed in energy and climate technologies and practices.

The challenge facing corporations is illustrated in part by the national poll by Yale and George Mason Universities last fall. Asked who should be doing more to fight climate change, 73 percent of respondents answered corporations, making them the top choice over individuals, the president, Congress or local governments. At the same time, respondents ranked corporations as their least-trusted sources of information about climate change (scientists were first and environmental groups second).

As so many of us have pointed out for so long, companies need not sacrifice profits to exercise revolutionary climate leadership. On the contrary, carbon mitigation with green energy technologies promises to be one of the largest global markets ever. There are big profits to be made in being first to the future. There are big advantages for stockholders, too, when their companies subscribe to the GE model, not the GM model.

Companies may find that significant customer loyalty hinges on their climate commitments. The Yale/George Mason poll found that more than half the respondents had either rewarded or punished companies during the previous year by buying or not buying products, based on the manufacturer’s global warming record.

I don’t want to minimize the importance of national laws and international treaties. They are indispensable components of global climate action.

At their best, they create stable long-term policies and markets that encourage the private and public sectors to invest in the skills and physical plants needed to equip the world with green products and technologies. Intelligent public policies spur research and development and help new products survive the “valley of death” – that often fatal stage before a new product becomes viable in the marketplace.

But the keys to our future still are in the hands of cities and CEOs. Their goal should be to excel far beyond carbon caps established by law or treaty, to be first to market and the leaders in their fields.

Through our votes and purchasing power, we citizen-consumers must insist that our corporate and government leaders do the right thing. Stockholders should be marching on corporate boardrooms to insist that companies invest in the future.

Those who follow the GM model – short-term profits at the expense of long-term damage to the environment, public welfare and national security – are likely to end up as financially bankrupt tomorrow as they are morally bankrupt today.