Daily Management Review

Climate Change Projects ‘Net-Negative’ Market Consequences: OECD Report


02/16/2017


While, green business and clean energy trends progress to fight against climate change, there are opposing moves that pose hurdles before them.



The present times seem to be both “hopeful” and yet “horrifying” for sustainable businesses, says Joel Makower.
 
‘Great achievements’ in the said field created milestones, like the sanction of “Paris Agreement” on climate-change which marked a historic step to confirm the “importance” attached to the “nations of the world” in the fight against the climate change. Similarly, various companies steadied up their commitments towards investing in green energy, reducing “greenhouse gas emissions”, promoting sustainability in the “supply chains, water and land stewardship, and creating the values for a “circular economy”.
 
On the front of technology too “inexorable march” was seen that growth of sustainable solutions in the “energy, buildings, transportation, food” and various other sectors. Nevertheless, the concentration of carbon emissions in the world’s atmosphere are “unprecedented” in comparison to the “past 800,000 years”, reports the “U.S. Environmental Protection Agency”. Likewise, we observe a continued rise in the global temperatures, whereby giving us the “warmest” ten years on the record since the year of 1998.
 
As a result of which related metrics like “coastal flooding, heat-related deaths, wildfires, polar sea ice, biodiversity” and other such issues continue to thrive. Moreover, the “cost to companies and economies” are also in the rise, while a report of OECD last year predicted that “6 million to 9 million” premature deaths could occur on an annual basis due to air pollution, while claiming one percent of “global GDP” by the year of 2060.
 
People around the world, over “650 million” to be precise, are not privileged to have access to proper drinking water, revealed the “State of the World's Water 2016”, claiming around “315,000 young lives” every year caused by diarrhoeal diseases. Yet, another report of OECD stated that in “most regions of the world, market consequences from climate change are projected to be net-negative”. The impacts on “selected markets” due to “macroeconomic costs” alone account for “1.0” to “3.3 percent” of global GDP by the year of 2060.
 
The beacon of hope that was kindled with the Paris Agreement, seem to grow dimmer with the “2016 U.S. presidential election” along with the Brexit impact which would perhaps “significantly” slow down the progress in the same direction. Moreover, Makower adds:
“Companies and markets dislike uncertainty, of course, so the coming year or two may see head-snapping policy shifts as the public and private sector grapple with two seemingly unstoppable forces: the political momentum of an increasingly nationalist and protectionist world, and the wrath of a changing climate on a civilization ill-prepared to cope. Which force will dominate is anyone’s guess”.
 
However, the field of corporate innovation that has received a fresh technical boost is bringing about “radical new levels of efficiency”, while IoT empowers “buildings, vehicles, power grids, factories” among other things to operate “with fewer resources” in an efficient manner. Equally, corporates are pushing for clean powers as the prices are coming down steadily while the efficiency for the same is on the rise. Many cities and towns alike are urging to become “greener and more resilient”, whereby presenting a “powerful bulwark” against any movement that could reverse or slow down the global sustainability progress.
 
Joel Makower also reports:
“And the leading edge of companies are embracing ‘net-positive’ strategies, where buildings, factories and supply chains create more beneficial impacts than negative ones. Interface, the Atlanta-based carpet company and a trendsetter in sustainable business, unleashed a new set of visionary goals last year, which included creating factories that function like the ecosystem they replace, providing such things as water storage and purification, carbon sequestration, nitrogen cycling, temperature cooling and wildlife habitat. The carpet company is starting this audacious journey with a single factory in Australia”.
 
Meanwhile, net-positive buildings that generate more power than their requirements are a growing trend today, preparing the ground for net-positive companies that loom in the horizon. 







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