The Economics of Climate change

March 22, 2014

By: Christian Vavaroutsos

Over the last 10 years the ‘green movement’ as it is commonly referred to has gained a significant amount of momentum. The industrial revolution of the 20th century lead to production being carried out faster then ever before. Creating and distributing goods at this rate furthermore created profit margins that the corporate world could not have dreamed of prior to automation. Fast forward to the early 21st century and production has now become globalized. Through globalization multinational corporations have risen to prominence, producing and distributing their goods world wide. Unfortunately this rapid expansion of industry has also created adverse side effects for Earth’s environment, as is increasingly demonstrated today through global warming.

As the effects of global warming become more evident then ever before organizations all over the world are calling for more sustainable business practices. Although there has been a fairly encouraging corporate response to societies concerns, many major corporations have been reluctant to drastically cut profits in the name of sustainability. Contrary to the belief that greener production practices produce less impressive profit margins I feel that driven visionaries could stand to generate immense profit by challenging today’s corporate giants. Elon Musk and those involved with Tesla Motors, a company dedicated to producing innovative all electric cars, has shown the corporate world that going green doesn’t have to result in a companies stock price falling into the red. The most surprising aspect of Tesla’s success is that they chose to enter an industry dominated by companies with long histories of success. Furthermore by releasing relatively affordable fuel cell technology Tesla has forced the worlds prominent auto manufacturers to release comparable products. Companies similar to Tesla must further challenge other leaders of industry to consider the environmental implications of their operations.

In addition to opening foreign markets as cheaper avenues to develop supply chains globalization has also allowed ideas and information to flow through the global community instantly via the Internet. TED talks which are held annually in long beach present potential investors with a wealth of innovation some of which is directed at increasing the sustainability of modern society. Boyan Slat, a 19 year old student from the Netherlands was among the presenters in 2013. His revolutionary ocean cleanup project received great praise and was awarded the best technical design award by Delft University of Technology. As the issue of global warming continues to attract attention from the global community innovative new ideas will continue to circulate all over the world. The only thing standing in the way of their success is adequate funding. That is why I feel that the next decade will witness a shift in the focus of investmentĀ  as our race evolves to become more sustainable. If leaders of industry can take that brave first step to challenge their competition the ripples of change will undoubtedly be felt across global markets, as has already been the case with the initial stages of the green revolution.

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