L. Hunter Lovins - Climate Capitalism

The National Climate Seminar

Climate Capitalism

L. Hunter Lovins

Washington | Covelo | London

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Introduction

On October 5, 2011, L. Hunter Lovins participated in The National Climate Seminar, a series of webinars sponsored by Bard Colleges Center for Environmental Policy. The online seminars provide a forum for leading scientists, writers, and other experts to talk about critical issues regarding climate change. The series also opens a public conversation, inviting participants to ask questions and contribute their own thoughts.

Lovins is President and founder of Natural Capitalism Solutions (NCS / www.natcapsolutions.org). NCS works with businesses, governments, and civil society to develop practices that are sustainable for both people and the environment. Her lecture focused on ways that the United States can pull itself out of the current recession, while preserving natural and human capital.

What follows is an edited version of Lovins talk and the subsequent question-and-answer session. While some material has been cut and some language modified for clarity, the intention is to retain the substance of the original discussion.

Climate Capitalism

Seminar by L. Hunter Lovins

These are interesting times, are they not? Weve had young people occupying Wall Street while older activists ask, But what are their demands? We have the complete failure of climate policy at a federal level. We have Greece on the verge of bankruptcy, which is very likely to take down a number of European banks.

So whats a poor environmentalist to do? It seems to me there are several things that we ought to do. The first is to take a sober look at all that weve done and havent done. If you find youre pushing a rope, the solution is to stop. We clearly have been pushing a rope.

We elected what we believed was the most progressive administration in American history and have, so far, been sorely disappointed. We have brilliant people like Dr. John Holdren as a Presidential Science Advisor, a Nobel Laureate as the Secretary of Energy, and great scientists like Holmes Hummel in the Department of Energy, and were getting exactly nowhere.

If you find that youre getting nowhere it behooves you to examine whether your approach is working. God bless the traditional environmentalists who continue to labor away on Capitol Hill and the environmental groups that are holding the line and keeping going. But we also have to admit that were losing.

Look at Global Biodiversity Outlook 3 or the Planetary Boundaries study out of the Stockholm Resilience Center. Were losing every ecosystem on the planet and its getting worse. Last year, the world saw the highest emissions of carbon ever, and these are accelerating. The IEA and the OECDboth previously bullish on using ever more fossil fuelsstated that emissions already in the atmosphere will lock in a 2C warming, and that if global leaders fail to act by 2017, we will lock in 6C. More recently, the World Bank stated that we are now on track for a 4C warming. This year, 2012, is on track to be the hottest year ever, with violent weather, droughts, fires, floods: all harbingers of a warming planet. Look at the growth of megacities in Asia. By 2050, three-quarters of the worlds population will live in cities and these cities are generally not being built with any regard for climate protection. On current plans, China and India will build over 200 massive coal plants. Bill McKibben does the math: the world can absorb perhaps 565 more gigatons of carbon dioxide and stay below 2C of warminganything more than that risks catastrophe for life on earth. The only problem? Fossil fuel corporations now have 2,795 gigatons in their reserves, five times the safe amount. And theyre planning to burn it allunless we stop them.

Its time for a new game plan. This is why I wrote the book The Way Out: Kickstarting Capitalism to Save Our Economic Ass . It takes this approach: Fine, lets assume climate change is a hoax. Dont go to Vegas on the odds of that being true. But if all you care about is being a profit-maximizing capitalist, youll do exactly the same things youd do if you were scared to death about climate change, because we know how to solve this problem at a profit, and its what the smart companies are doing, large and small.

As bad as some of the news is, some of it is very good. Smart corporations are cutting their use of energy. Why? To save money. Investors at the Spring 2012 Financial Times Conference in New York stated that they look for companies that are investing in energy efficiency because it saves money and increases shareholder value. And yet there remains a lot of money on the table. Over 3,000 companies globally report their carbon footprint to the Carbon Disclosure Project (CDP) each year. CDP now reckons that an average sized company has 30 to 40 million dollars in uncaptured energy efficiency savings, below the line on the McKinsey Cost Abatement Curve.

McKinsey drew a graph of ways to save or make energy to de-carbonize the economy. Some, like various renewable supplies, cost money: theyre an investment. Some, like nuclear, cost a lot of money and are a waste of money.

But many, like retrofitting buildings, save moneyand fastand deliver jobs, tax benefits, and increased worker productivity. The Carbon War Room, a nonprofit founded by Richard Branson, estimates that its $650 million program to retrofit buildings in Miami Dade and Sacramento will return $1 billion in increased tax revenues, $10 billion in increased economic activity, and 40,000 jobs. Putting employees in good green buildings increases labor productivity by 6 to 16 percent. You pay 100 times for people what you pay for energy. Even a one percent increase in labor productivity is a benefit that dwarfs energy savings. In a sense, the energy savings are free. These are measures everyone should be taking anyway to increase labor productivity.

Increasingly, companies are building green. Over 40 percent of all new buildings in the US are being built green, and the industry is pushing the envelope. The Cascadia Green Building Council has issued its Living Building Challenge, which the US Green Building Council immediately proclaimed as meeting LEED Platinum. These buildings capture all the energy they need to keep everybody comfortable inside. They capture the water they need, treat their waste onsite and are made of locally sourced materials that come from within a hundred mile radius. Theyre delightful buildings to live and work in, and theyre being built.

There is a lot of good news, and there can be a lot more if we approach our economic problems from the standpoint of finding entrepreneurial ways out of this crisis.

I work with a lovely group in Boulder, Colorado, called the Unreasonable Institute. (With a name like that, Id have to work with them.) Each year, they bring in young entrepreneurs from around the world. Last year, there were 25 people from 17 countries and 5 continents. A group of us mentor them over the course of the summer. It gives them a jump start on creating a successful businesswhether its bringing biochar to Mali, or solar cook stoves that also produce electricity to the Tibetan Plateau, or enabling native communities in the north of Canada to use 100 percent renewable energy, or supplying water wheels so people in India have access to water without carrying it on their heads. There is a whole array of social enterprises.