Why The New Administration Should Be The Loudest Advocate For Climate Action
Amidst all the political rancor, the reality is that the incoming administration should be the loudest advocate for climate action, if for no other reason than to deliver on its ambitious jobs creation goal.
Maintaining U.S. climate leadership would better position companies to capitalize on the immense business opportunity and get out ahead of growing international competition.
U.S. leadership will help to drive economic growth. Recognizing this, Morgan Stanley’s CEO James Gorman stated that “companies that focus on these challenges will be best positioned for long-term growth” as the sustainable business opportunity explodes to as much as $10 trillion annually by 2050. And this was before 162 countries (and counting) developed specific commitments to reducing greenhouse gas emissions and increasing renewable energy deployment as part of the Paris Climate Agreement. The demand for renewable energy, energy efficiency, and emission-reducing technologies and services will only grow.
The private sector has already demonstrated strong climate leadership. More than 80 major companies, including many Fortune 500s have committed to using 100 percent renewable energy. Leading banks are also boosting their focus on clean energy finance. They include:
- Citigroup has supported over $70 billion in market activities towards its $100 billion, 2020 environmental finance goal.
- Bank of America has supported over $60 billion in low-carbon and sustainable financing towards its $125 billion, 2020 goal.
- Goldman Sachs has committed over $40 billion in clean energy financing and investments, towards its $150 billion 2025 goal.
In order for U.S. leaders to unlock the nation’s true economic potential, companies and investors will need regulatory and policy certainty. States are already showing strong leadership that is catalyzing strong job growth, but in varying degrees. And these complications will compound for long-term, energy-intensive capital investment decisions and related financing. For example, electric power utilities may delay updating their generation fleets if the rules of the road are not clear. Additionally, multinational companies will bear the cost of operating under different state-level policies, and different regulations between the U.S. and the rest of the international community.
Climate scientists are urging quick action in order to keep global temperature at or below two-degrees Celsius – the threshold above which we are more likely to suffer the most severe impacts of climate change. Actions by countries and leading companies over the next 10 to 15 years will largely determine whether we can stabilize the global climate for decades to come. If we don’t sufficiently reduce emissions, the Organization for Economic Cooperation and Development estimates we could face global GDP losses ranging from 0.7 percent to 2.5 percent per year by 2060. As alarmingly, bipartisan military and security experts warn that climate change poses a “strategically-significant risk to U.S. national security and international security”.
To help drive new job growth, provide regulatory certainty and ensure the economy and American companies are best positioned to capitalize on international demand and stabilize global temperatures, we urge the new administration to, at a minimum:
- Maintain the U.S. leadership role in the Paris Agreement;
- Continue to advance policies, including promoting clean energy and energy efficiency; and
- Maintain programs that provide the scientific data that the private sector needs to make informed investments.
In that vein, we are not alone. The breadth of private sector support for continued U.S. climate action leadership cannot be overstated. More than 700 companies and investors are calling on President Trump and Congress to advance policies that will accelerate our low-carbon future. These weren’t businesses simply from blue states or just mom-and-pop shops. The more than 100 investors have more than $2 trillion in assets and the more than 600 companies earn more than $1 trillion in annual revenue, with headquarters in 44 states, and employing nearly 2 million people.
There is widespread, diverse support because these companies and investors recognize the business and scientific imperative for action. With election campaign posturing behind us, hopefully so too will the new administration and Congress.