Businesses are beginning to see climate change as a market opportunity, one that will yield profound changes in what they do and, ultimately, in how we live

Climate change is one marker among nine of what scientists call "planetary boundaries” in the Anthropocene. We are crossing four at our peril: climate change, species extinction, nitrogen pollution and land system change. These represent far more than an environmental challenge. They represent an existential shift in our culture, one akin to the Enlightenment in the eighteenth century, provoking systemic changes in how we view the natural world and our role within it. The shift of the Enlightenment took nearly 100 years and many did not know it was underway until it was over. The cultural shift we are facing today will also take centuries to complete and many do not know it is already underway. But the signs are there if you look.

SHIFTING PUBLIC OPINION Public acceptance of climate change has been growing in the United States. By 2018, 71% of registered voters thought global warming was happening, including 95% of liberal Democrats, 88% of moderate/conservative Democrats and 68% of liberal/moderate Republicans. Between 2013 and 2019, the people alarmed or concerned about climate change grew from 43% to 58%, while the number of people who are doubtful or dismissive declined from 27% to 20%. Here are four reasons why this is happening. The first is the weird weather. Extreme hurricanes, droughts and wildfires are becoming the “new normal,” not just for people in other parts of the world, but here at home in the US. The second is that more people are speaking out on the issue, convincing people locally. The third is that growing youth movements are voicing anger that their future is at stake and changing the minds of parents and relatives. They are also changing the corporations that want to hire them. That is the fourth reason for the shift in public opinion.

CORPORATIONS DRIVING OUR CULTURAL SHIFT One key distinction between the Enlightenment and our present time is the role of the market. Though some blame capitalism as the cause of the climate change problem, one must also recognise that the solutions must also come from the market. Business transcends national boundaries, possesses enormous resources and has unmatched powers of ideation, production and distribution. If there are no solutions to climate change coming from business, there will be no solutions at the scale we need. And business is in the midst of a shift driven by two failures of capitalism — income inequality and climate change. Signalled by young people’s disenchantment with capitalism, political proposals to reign in corporate power and aspirational statements from the Business Roundtable, BlackRock, World Economic Forum and others, we are reexamining the purpose of the corporation from simply making money for the shareholder to making a positive contribution to society. This shift is critical to solving the climate challenge, as business uses its power to find solutions in three primary areas:

Adaptation:
Businesses will be forced to adapt to climate change as costs reach hundreds of billions of dollars a year in lost labour productivity, declining crop yields, food shortages, early deaths, property damage, water shortages and more. The insurance sector will facilitate this shift as it changes, underwriting coverage and costs for what surveys show is the top concern among underwriters.

Mitigation:
Beginning with pledges to reduce carbon emissions, companies have now moved to carbon neutral and carbon negative pledges, and are exploring solutions that are as radical as the objective.

Opportunity:
Most importantly, businesses are beginning to see climate change as a market opportunity, one that will yield profound changes in what they do, and ultimately in how we live. These shifts show that change is already underway. With it, we can examine trajectories for what the world will look in 100 years. Fossil fuels will eventually be seen as arcane sources of energy, while solar and wind energy, and battery storage will continue to drop in price. Consumers are playing an increasing role in how energy is distributed by using smart home devices to monitor their energy use, generate their own energy and purchase smart appliances that monitor energy use when grid demand is low. Thinking more holistically, some are examining ways in which our homes and transportation can become fully integrated in an electric lifestyle. Two way flows of energy and information, demand-side management and other innovations are already hitting the market. The energy transition will also manifest itself in mobility as transportation becomes electrified and autonomous, eventually spelling the end of private car ownership (with some exceptions, such as farms). Today, many young people have a declining interest in owning a car. This shift will eventually mean fewer cars on the road (at any moment 95% of today’s auto fleet is idle) and a concurrent decline in petrol stations, parking garages and some streets. This shift will be aided by greater attention to the redesign of urban centres to become more focused on human walkability than their present focus on car habitats. Going further, the growth of the alternative protein market suggests that most of the meat we eat will be plant-based or grown in vats. Recent events around Covid-19 foretell a future in which we will be less interested in travelling freely over vast distances, finding social media platforms a replacement for job interviews, in-person conferences and other forms of personal engagement. These are just some of the changes already underway that tell us how different will be the world in which our children will grow old compared to the one in which we are growing old. But in making such predictions, the most uncertain variable is human behaviour and this is something we can influence.

SHIFT THE POLITICAL CALCULUS TODAY These shifts show that a transformed world is possible. But the challenge for today is to break down the remaining partisan divide that blocks us from embarking on this path. Though many right-leaning politicians privately admit they believe the science, they fear their voter base will turn on them if they acknowledge that publicly. That calculus is weakening as it is becoming harder to be sceptical of the science. Politicians need help in making the shift to a consensus position and business can help them by showing what human ingenuity can make possible. In this way, business can offer hope, something the next generation — my students — need badly. Many are concerned, afraid and angry. They have the data and they know the problem. At this time, we may not be able to give them all the solutions, but we can give them hope. That can be our legacy. That is, what I hope to be my legacy.

The views expressed in this opinion are those of the author and do not necessarily reflect the position of FORESIGHT _Climate & Energy_Do you have a thoughtful response to the opinion expressed here? Do you have an opinion regarding an aspect of the global energy transition you would like to share with other FORESIGHT readers? If so, please send a short pitch of 200 words and a sentence explaining why you are the right person to deliver this opinion to opinion@foresightdk.com.