Monday, April 27, 2009

--"Major Emitters Meet"

If your business is not preparing to green itself, then this story from NPR should make you reconsider. Leaders from the 16 countries that produce the majority (75%+) of the world's greenhouse gases will be meeting to discuss how emissions might be curbed.

Two points are notable: First, China surpassed the US as the leading emitter of greenhouse gases earlier this year. This fact, coupled with a US Presidency more willing to respond to the threat of global warming, suggests that the United States might be moving into a "moral high ground" on climate change that it was unable to assume before. You can't wag your finger at the bad guy when you're the bad guy. But when someone else steals that spot from you? Wag away.

More importantly, however, is the fact that this meeting might mean international agreements among the most industrialized nations in the world regarding emissions from manufacturing. Business leaders have until this point been unwilling to accept higher emissions standards in the United States, and perhaps rightly so. If a manufacturer of steel in the US is hit with a massive carbon-emissions tax, for instance, then suddenly imported steel from China or some other country with no such tax becomes more financially feasible, even with the cost of shipping added in. Not only are greenhouse gases not curbed by such a measure, but they are in fact increased, as China presently has lower emissions standards than the US, and the emissions from shipping the material across the Pacific have to be factored in. Cap-and-trade restrictions in one nation alone would be merely a reverse tariff on domestic trade, which would have to be countered with international trade tariffs to balance the cost. The result would be pricier goods, more greenhouse gases, and strained international relations. The reason this meeting matters, then, is that suddenly every industrialized nation might be willing to impose new regulations at the same time, eliminating the penalty of being the only nation to spearhead regulation.

What does this mean? It means that a business model designed with green industry in mind will profit. It means stock in a green company will sky-rocket. It means consumer demand for goods that are unaffected by escalating "climate tax" costs will be astronomical. All industries are facing the fact that they must brace for this change.

Prediction: Home-builders who build homes with the correct balance of aesthetic appeal, energy efficiency, and upfront cost will be indescribably in demand over the next twenty years. Are you one of those home-builders?

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