For Businesses, Challenges and Opportunities Ahead

The Council on Foreign Relations commissioned a Task Force on climate change to offer suggestions for the next administration on how America can reposition itself as a leader in climate change. I was honored to co-chair the Climate Change Task Force, along with former New York governor George Pataki.

The Task Force report, "Confronting Climate Change: A Strategy for U.S. Foreign Policy," confirms what most scientist now believe: the world is warming and human activity is primarily responsible.

While the consequences of climate change are difficult to predict with detailed accuracy, we do know that sea levels will rise, threatening some coastal regions and likely causing significant migration of populations. Storms will be more frequent and more severe, floods will increase while other areas will be hit by drought, and diseases will be more deadly.

U.S. Must Lead the Way

The world is motivated to reduce the risk by reducing greenhouse gases and will be looking to the United States for leadership. Our leadership must start with an aggressive effort to reduce our carbon footprint by as much as 60-80% over the next 4 decades. To reach that target, massive efforts will be required from business, individuals and government:

  • All Americans will be asked to increase energy efficiency that will impact what we drive, what appliances we use, where we live, and what we develop in the future.
  • Renewable energy and fuel use will be expanded, but in a sustainable way that means more solar, hydro, geothermal and wind energy while at the same time converting corn-based ethanol to cellulosic ethanol.
  • We must development clean technologies that allow us to use coal and nuclear energy in a way that does not harm the environment or threaten our safety.

Government Role

Government must provide a wide range of tools to allow all of this to happen as quickly as possible. A strong domestic policy will allow America to reclaim the moral high ground in international efforts.

While committing to a strong UN effort, the task force recommended that America work with a small number of major emitters to work on agreements around specific programs and policies including an improved mechanism of offsets, expanded availability of our technical expertise, and the creation of a climate fund through which American technology can be purchased for export at low cost to developing nations.

Implications

The costs climate change will not be insignificant, but the opportunity may be limitless. Businesses in every industry — though most immediately, the energy industry — will confront new realities in nearly every phase of their business. Examples include:

  • Understanding and complying with regulatory environment that may change dramatically.
  • Confronting the likelihood of carbon cap-and-trade systems, and the financing mechanisms, markets and disputes that may accompany them.
  • Developing new real estate and land use strategies.
  • Understanding, and having a voice in, legislation related to climate change.

Every person, family, business, and community in our country will be impacted in some way by climate change and now is the time to learn how to use this change in the best way possible.