Why Cities and CEOs Cant Relax

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 and spent their political capital on climate policy. Now, Congress is taking the heat.

But 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 next 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 International Council of Local Environmental Initiatives (ICLEI), 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 percent below 1990 levels by 2020 — is far less aggressive than the caps put forward by the international and scientific communities. China, for example, wants developed economies to cut their emissions more than 36 percent below 1990 by 2020. The European Union has endorsed cuts of 25-40 percent.

At the federal level, the Waxman-Markey bill so far calls for reductions of only 3.26 percent compared to 1990 levels — much smaller than 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 dominator 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 taken 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 indispensible 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.

— Bill Becker

6 Responses to Why Cities and CEOs Cant Relax

  1. Ken says:

    Good post. Waxman-Markey will either (1) not pass, or (2) be emasculated by political compromise. In either case, people will be looking for alternatives or supplementary mechanisms for reducing GHG’s with local action.

    A concern that hasn’t been given much attention is whether emission trading under W-M could effectively snuff out local regulatory incentives, corporate initiatives, and voluntary actions. To give a specific example, consider the Berkeley FIRST program for financing residential solar installations. Will this program still be able to claim environmental benefits, or will it just free up surplus allowances, which will allow someone else to increase their emissions and reduce their compliance costs? Similarly, if I buy a hybrid vehicle, will its superior emission performance result in additional emission reductions, or will my investment just be effectively subsidizing polluters?

    W-M partially addresses this concern by authorizing states to “require surrender … of emission allowances or offset credits established or issued under this Act, and require the use of such allowances or credits as a means of demonstrating compliance with requirements established by a State or political subdivision thereof.” This would appear to allow California, for example, to require surrender surplus allowances resulting from its 33% Renewables Portfolio Standard, ensuring that it results in additional emission reductions. It is not clear to me, however, whether this provision could be used to ensure additionality of emission reductions resulting from volunteer actions or incentive policies. (Maybe the final bill will be strengthened to ensure additionality of local and volunteer actions.)

  2. David B. Benson says:

    No rest for the wicked.

    We’ve been wicked.

  3. David B. Benson says:

    Can’t relax, Lake Baikal’s methane:

  4. Matt Dernoga says:

    Great post Joe. I’d be interested in seeing more posts from you about what local cities and county governments can and should be doing to reduce emissions and spur US leadership. As an activist, these are the levels at which I feel grassroots action is most effective and influential. I go to the University of Maryland and we’re looking into ways this fall to push for our city of College Park to go green, cut emissions, invest in efficiency, and create jobs.

    By the way, there have been stronger global corporate stances taken by the BICEP coalition, which includes Nike, Gap, and Starbucks. I have a post on them, and the website link shows their site. They support very strong targets.

  5. Brooks says:

    Great post. Really appreciate the info for local level action.

    The meager response at the higher levels is distressing.

  6. A California city “there is no there, there” is about to invest a few Millions to save one or two minutes to the wealthy few that still ride airplanes to and from Oakland.
    A local Minister called that “Wasteful and Immoral”.
    The time saved, of a minute or two, will let them get on time for the one hour or two they are supposed to be available to go thru the Security Checks. The Aviation forum never mentioned and they never mentioned that the fraffic at the airport started going down a year or two BEFORE the Recession started. Traffic is now one third what it was then. They seemed not to notice that a few airlines have either folded or moved to San Francisco, the last one was American Airlines, probably their biggest.
    They want to use $70 Million in Federal funds and must add $330 Million they do not have and will pay the interest for years. You are right “Cities can’t Relax.”
    Of course their $100,000 to $300,000 salaries are Recession-Proof.
    They have all the power they need to make sure they get paid.
    Not even the “G-men” can put them out of business, they “have people”, they are the new Royalty.