The Challenge of Sustainability: Economic Growth and Emissions Reduction

We can simultaneously grow and enhance our sustainability efforts. These two goals are both compatible and mutually reinforcing. Research reveals that we can meet the dual challenge of economic growth and combating climate change. This means that companies can enhance their bottom line while reducing their climate change causing greenhouse gas emissions.

In business sustainability is about capitalizing on emerging trends, while reducing negative economic, social and environmental impacts. First and foremost sustainability must deliver net economic benefits. However, economic development must be achieved through providing long-term customer value, profitability and share holder return but not at the expense of practicing good business ethics.

Sustainability is premised on the understanding that a viable business is a profitable business. This must be achieved in consort with social considerations starting with employees and extending out to the communities in which business activities take place. This also includes environmental considerations in all of a companies operations. This is not only about reducing environmental impacts but as with social ramifications this implies improving the environmental corollaries of business activities.

According to the October 2014 WRI report “Seeing Is Believing: Creating a New Climate Economy in the United States,” the US can achieve deeper reductions even faster with targeted policy support.

WRI’s report builds on the September 2014 report, “Better Climate, Better Growth” produced by the The New Climate Economy, which found that global economic growth and emissions reduction are compatible.

Through a process known as decoupling a number of other reports have shown that we can have economic growth and lower emissions.

The WRI study specifically reviews the low-carbon actions, policies and programs that are delivering economic benefits in the US. It focuses on five areas of opportunity that combined account for over half of the US’ carbon footprint:

1. Reducing carbon intensity of electric generation
2. Improving electric end-use efficiency
3. Building cleaner, more fuel-efficient passenger vehicles
4. Reducing waste from natural gas systems
5. Reducing consumption of hydrofluorocarbons (HFCs)

Nine key findings:

1. New natural-gas-fired power plants already cost between 19 to 44 percent less than new coal-fired power plants.
2. In many states and regions, renewable energy is becoming cheaper than building new coal plants. 3. Renewable energy is even cheaper than natural gas plants in some parts of the country.
3. Increased renewable energy generation has the potential to save American ratepayers tens of billions of dollars a year over the current mix of electric power options amounting to savings of $83-241 per person per year, according to studies by Synapse Energy Economics and the National Renewable Energy Laboratory.
4. Since the implementation of federal fuel economy and CO2 standards for cars and light-duty trucks, the number of vehicles with a fuel economy of 40 miles per gallon or more has increased sevenfold.
5. By 2025 vehicles will be roughly twice as efficient as those sold today while saving owners $3,400 to $5,000 over their vehicle’s lifetime.
6. Battery prices for electric vehicles have fallen by 40 percent since 2010. Long-range electric vehicles may become cost competitive with internal-combustion-engine vehicles by the early 2020s, even without federal tax incentives.
7. Recent standards to reduce methane leaks are expected to save industry millions of dollars per year, while reduced air pollution will have substantial health benefits.
8. Methane emissions can be reduced by 25 percent or more through measures that pay for themselves in three years or less, and even deeper reductions are possible at just a few cents per thousand cubic feet of gas.
9. Many companies around the world—including General Motors, Coca-Cola, Red Bull, and Heineken— have already cut energy costs substantially by switching to safer and cheaper alternatives to HFC refrigerants.
10. The US can reduce HFC emissions by over 40 percent from what would otherwise be emitted in 2030 at a negative or break-even price today.

The WRI report incorporates policy recommendations that can improve economic growth. This includes standards, carbon pricing, research and development, and an enhanced investment environment promoting new technologies.