Regardless of how you feel about climate change, you can take comfort in the fact that America’s commitment to the goals of the recently-ratified Paris accords has opened up our nation to one of the biggest business opportunities we’re likely to see in this century. Rather than rely on another war to drag us out of our current economic doldrums, the next boom could be fueled by the demand for clean energy, energy-efficient products, and the other tools we need to create a lower-carbon economy.
Even if you choose to ignore the environmental benefits, it’s becoming increasingly clear that investing in a sustainable future yields higher and more sustainable returns. There are at least three advantages to adopting a green bottom line that even a hard-nosed entrepreneur can’t ignore.
First, renewable energy liberates our economy from the wild cost fluctuations of fossil-based energy sources. While oil and gas will inevitably soar above the historically-low prices we’ve recently seen, the cost of solar, wind, geothermal and bio-derived energy will continue to drop as the technology matures. And those savings don’t even include the billons we won’t have to spend protecting off-shore fossil energy interests.
In addition, energy-efficient vehicles, equipment, and other products save money. Lower utility and gasoline bills can help the average family stretch their monthly budget further while the savings for businesses and manufacturers can add up to a significant bump in their bottom line. That’s why energy-efficiency is becoming one of the key deciding factors when consumers, businesses, and governments make purchasing decisions for many products.
There are also many opportunities to capitalize on the steadily-growing global market for renewable energy systems and energy-efficient products. The demand is especially high in Europe where energy has traditionally been expensive, but India and Africa represent potentially huge markets for the advanced energy technologies currently under development. Some of these can be manufactured at a good profit in domestic factories while others can be licensed for overseas production.
But don’t take my word for it. Take for example, the Regional Greenhouse Gas Initiative (RGGI, www.rggi.org), a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO2 emissions from the power sector.
According to a 2015 study (bit.ly/1I92nnC) conducted by the Arcadia Center, an advocacy group, the states participating in the RGGI enjoyed growth in their gross domestic product of more than 21.2 percent between 2009 and 2014. Meanwhile, non-RGGI states’ GDP grew only 18.2 percent. At the same time, the participating states’ emissions dropped by 35 percent, compared with 12 percent in other states. Equally surprising, the Acadia center reports that electricity prices in RGGI states tended to decline during the same time period.
The Paris accords put us at a crossroads where we can choose to enjoy the rewards of leading the race towards a green economy or suffer the consequences of ignoring the direction most of the rest of the world is headed.
Comments? Questions? Tips on new green energy stories? Write me at Lee.Goldberg@advantagemedia.com.
This blog originally appeared in the May/June 2016 print issue of Product Design & Development.
