06 Apr 2007  What Do YOU Think?

Will Market Forces Stop Global Warming?

HBS professor Jim Heskett sums up many creative responses from readers on the role of business in combatting global climate change. Online forum now closed.

 

Summing Up

Debate on this month's questions occurred on at least three levels. Is global warming occurring? Do humans (primarily through CO2 emissions) have much to do with it? Should we rely on market forces to provide appropriate responses, or will this require incentives provided by government?

Clearly, my effort to frame the discussion around just the third question failed. As George Olsen said, "A lot of the people posting to this discussion appear to have missed the point." But responses have prompted me to wonder whether they did or not.

The focus of comments was on questions two and three. Some respondents don't believe that global warming has much to do with humans. John Kurywchak commented "The chief contributor of CO2 into the atmosphere is the world's oceans…" (regardless of) "industrial activity." Paul Sweeney added, "I don't believe mankind is looking at the actual cause right now, and consequently that human innovation is not focusing on solving the right problem." Others were concerned about the consequences of responses based on imperfect information. P. T. Gibbons said, "If we were successful in 'stopping' global warming, I suspect there would be some nasty unintended consequences for our weather and our world." Leading from this line of reasoning, Phil Jackson advises us "we would be better (off) investing in the resources to handle whatever global warming throws at us." But most assumed human involvement, and commented on the role of market forces.

A number of you expressed the hope that the private sector can provide adequate response to a problem that is either real or increasingly perceived to be so. Commenting that "Heating costs go up, the consumer insulates," C. J. Cullinane concludes that "Industry and the individual consumer will have to be the driving force for this change." Edward Hare comments that "Given history, government will most likely get things wrong. A 'free' market will do better…albeit more painfully to too many of the world's six billion residents…." More were skeptical of this view, suggesting that either subsidies or taxes or both will be required to: (1) raise market prices for carbon-based energy in developed countries, (2) encourage the development of new innovations to lower the cost of energy worldwide to what is becoming referred to as the "China price," or (3) a combination of both. As Nancy Sullivan said, "Business will not do it without government. Government will not do it without business."

The discussion also turned to one of timing, with Chris McFadden teeing up the issue by saying, "Global warming will not 'stop'…until all accessible hydrocarbons have been consumed. Our present day efforts only affect rate, not the final inevitable steady state." Several concluded that whatever change in markets and innovation is contemplated will take place faster, for better or worse, with government intervention. Mehmet Genc pointed out that "Markets can correct the situation if these costs (of CO2 emissions) can be internalized, but government has to help…." But several suggested that government intervention has to occur on a global basis. As Ulysses U. Pardey put it, "When companies have to play by the same rules, then fair competition can take place…terms and conditions…for all concerned industries worldwide seems to be a must."

The one question that is within the realm of management is what role, if any, business leadership should be playing in this debate? Should it be arguing for government to step aside and let free markets prevail? Or should it be asking governments to set the rules of competition on CO2 emissions sooner rather than later so that businesses can plan and react accordingly? What do you think?

Original Article

The debate over global warming appears to have passed a tipping point. We can debate just when it happened. But it was probably sometime before Al Gore's film won the Academy Award. From now on, we can expect to be bombarded with almost daily news articles about its long-term effects on those living in low-lying areas along coastlines, those attempting to grow crops in rapidly shifting climates, those living along the equator as opposed to temperate climes (being addressed by the UN's Intergovernmental Panel on Climate Change as this article hits the Internet), and even those getting ready to drill for oil in open water that the polar ice caps still cover. The list goes on and on. Within the past few days, Thomas Friedman, the journalist and best-selling author of The World Is Flat, intimated in an interview with Tim Russert that he is particularly excited about what may happen when the American business community and its ideas are unleashed on the problem. We may get the gist of this in an upcoming article of his that, according to him, will be titled, "Green Is the New Red, White, and Blue."

Whether or not you believe that humans are causing global warming or that it is occurring at all is beside the point. The same was true on a much smaller and less lethal scale with Y2K. But unlike Y2K, there is no date certain by which we will know whether we have won or whether we were even fighting the right battle. There is going to be a lot of money made or lost for a long time on the effort to combat global warming. It raises the question, of course, of whether the free market has the patience for investments that may not pay out for many years. The end value may be huge (even infinite?), but the discounted value of it may be modest.

One thing we do know. There is no question that when Americans put their talent, effort, and money behind an idea, remarkable things happen faster than anyone expected. Wind power (regardless of what you think of it) in Texas is a good example. In 1999, under then-Governor George W. Bush, incentives were put in place for the development of wind power with the goal of producing 2,000 megawatts of generating capacity in ten years. The goal was achieved in five years. So Texas has renewed the incentives and raised the goal to 5,000 megawatts. I wouldn't bet against that goal being exceeded as well. Or consider Shuji Nakamura, the Japanese developer of light-emitting diodes that one day may provide energy-efficient sources of light. He moved to the U.S. where people were most interested in his work, as documented in a new book, Brilliant.

Just how should the free market be unleashed on this effort? And should business be playing a larger or different role in the debate? For example, should the Big Three argue for much higher mileage goals, however difficult they may seem at the moment to meet? After all, Toyota may owe the Japanese government a debt for holding it to stricter mileage standards than the U.S. What kind of leadership should business in America, the world's largest polluter, play in helping it catch up to or lead (depending on how you see it) other developed economies?

What kind of incentives, if any, will the free market need from government to encourage innovation and action now? Should the incentives constitute both a carrot (such as subsidies) and stick (taxes)? Just how should the free market be put to work on the challenge? Should limits be set and a market created for tradable "energy credits," as in cap-and-trade programs for utilities and others? Should "stretch" targets for highway mileage be imposed, with auto companies or others in the industry given opportunities to trade mileage rating credits? Or should government step aside and let the market work its ways without incentives? If so, what would happen? How, if at all, should business leadership play a larger role in shaping global warming policies and programs? Will market forces stop global warming? What do you think?

To read more:

Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-first Century (Farrar, Straus and Giroux, 2006)

Bob Johnstone, Brilliant! Shuji Nakamura and the Revolution in Lighting Technology (London: Prometheus Books, 2007)

Comments

    • Anonymous

    The Canadian government recently proposed placing tax credits on certain green cars, with most of them not produced by North American companies. This, however, has no incentive on the companies to improve, because their cars don't offer tax credits. Therefore, if the government does set limits, they should be on the amount of energy cars spend/save.

    However, I do think that the market force will work fine without government intervention, because ever since Al Gore's film, being "green" has become the new thing in people's minds and they consciously buy green cars. If North American companies still want to stay in business, they will spend the money into researching and changing their cars so that they appeal to the consumers.

     
     
     
    • CJ Cullinane

    The threat of global warming will be confronted by industry more than government. The success of the Toyota Prius hybrid car is an example. The high cost of gas, and the corresponding taxes on gas, has created a market for this car which has impacted Toyota's profits in a very positive manner.

    The average consumer's need to save money will create the need for more efficient products and conservation. Heating costs go up, the consumer insulates. Electric goes up and the consumer buys compact flourescent bulbs. This market/consumer driven need will drive companies to produce more efficient products and services.

    Due to politics and the status quo, the government will most likely have little positive effect on conservation and global warming. If the consumer uses less gasoline, the government gets less taxes. Industry and the individual consumer will have to be the driving force for this change.

     
     
     
    • Anonymous

    It's like starting to build a boat after a forecast of the possibility of a deluge. The comparison might seem an exaggeration, but who knows?

     
     
     
    • Anonymous

    Market forces alone cannot stop global warming. The free market has limited and selective patience, but with the assistance of government it can develop the patience to tackle global warming for the long term. This has been the case in Europe, where government subsidies have been critical to the development of renewable technologies, for example, that would have been uneconomical otherwise. The magnitude of global warming means that the combined efforts of government, individuals, business, and non-profit will most likely lead to sustainable success in dealing with global warming, rather than the efforts of any single party.

     
     
     
    • Jassi Brar

    I believe when it comes to business, "would do" takes the first seat and "should do" the last.

    Governments stepping aside and businesses "volunteering" is highly unlikely to achieve any positive result. The good thing about the free market is that it makes big money (at least it tries to) and the bad thing is that it does so at any cost. I do not have any altruistic expectations from businesses, and I do not complain. IMHO, zero government involvement is ruled out.

    There could be three possibilities. First, governments give incentives for eco-friendly products and practices. What and how much incentive to which practices? Second, governments tax highly polluting products (read SUVs et al.) and production practices. Start with the ordered list of obvious unhealthy products and practices, easier than the former approach. Third, the population grows concerned about climate change and demands only eco-friendly products.

    I see clearly that we could only count on government regulation in the form of incentives and taxes. The incentives would better go to the population--more public transport and subsidies on solar/wind technologies. Taxes for the polluting and inefficient products and production practices, higher duties/taxes for low-mileage vehicles and polluting factories.

    The unconvenient truth demands seemingly unconvenient solutions.

     
     
     
    • Dan Hoch
    • Principal, Rocky View School Division

    I would like to see an initial encouragement being offered by government to help bring people to that tipping point. Whether it be incentives to purchase certain green vehicles, or the same applied to new homes which incorporate features such as solar panels, rain water tanks, or increased attic insulation, the eventual effect would be then that the expectation is so commonplace, one would have to think consciously not to think green. At that point, the incentives could discontinue, with the standard for carrying on the initiative being set.

    I think a critical piece to the discussion is to have the process begin in schools, and the earlier and sooner, the better. Kids exert enormous influence on their parents in particular and society by extension. Schools should be encouraged or directed to provide environmental programs for kids to get involved in, so they grow up with the understanding and expectation to participate in green initiatives. Once those children then enter into adulthood, the discussion then won't be on "should we," but rather "how much and how far."

     
     
     
    • Chris McFadden
    • Sourcing Manager, Boston Scientific

    Global warming will not 'stop'. Every major industrial and commercial activity we undertake (including driving hybrids) will continue to increase global warming at some, possibly diminished, rate until all accessible hydrocarbons have been consumed. Our present day efforts only affect rate, not the final inevitable steady state.

     
     
     
    • Stephen Yanow
    • Grandfather

    I am in total agreement with Dan Hoch especially in terms of trying to harness the power of our school age children. The anti-smoking groups have proven that kids have the power to push from the bottom to the top.

    If nagging kids can make a parent stop smoking, they can certainly influence and direct their parents towards a host of green issues.

     
     
     
    • Reid Birdsall
    • Principal, One Notion Consulting

    I think more CEOs need to read "The Ecology of Commerce" by Paul Hawken.

     
     
     
    • Anonymous

    Jassi Brar hits the nail on the head in that we should not look for companies to become altruistic and to stop polluting practices. One only need to look at the devastation happening in China to see how badly companies will pollute when not regulated and managed.

    So while the topic is hot, governments the world over need to penalize the polluters and provide incentives to create clean and renewable energy.

    Will the great minds in the U.S. create the next big solution? While many Americans would relish the ability to diminish the role that foreign oil plays in our economy, this is the wrong question to ask and is perhaps counter-productive. First, there probably is no silver bullet where one solution is going to solve the problem. So let's not worry about where the solution comes from ... let's just worry until there is a solution.

     
     
     
    • Tery Tennant
    • Partner, Attainment, Inc.

    If more of the U.S. population gets onboard with the idea that this round of global warming is man-made, or at least influenced by man, then more market pressure will be brought to bear. People I talk to are generally unconvinced that this isn't just another cycle of nature. But my location tends to be somewhat conservative, and I think in urban coastal areas people are more convinced. Therefore we will likely see greater money being made in certain areas as the perceived need dictates.

     
     
     
    • Anonymous

    The challenge with government incentives is that companies may focus on gaming the system for relative advantage without impacting the problem. The idea of tradable credits sounds nice, but would only work in a closed system. As long as companies are able to move the "dirty" part of their supply chain to countries which are not regulated, then it will fail. In fact, the result may be the opposite of the intended.

    Rather than focusing on incentives for companies, we may be better off focusing on consumer incentives to increase demand for "greener" products. The market is good at responding to demand....

     
     
     
    • Anonymous

    In a capitalist system, the role of a business manager is to maximize the value of the company's shares. Period.

    If it saves money to dump waste into the air or water, do it. If management raises costs by installing pollution abatement equipment while the competition is running without them, the shareholders are right to boot the managers.

    That's the system. There are no pure private sector solutions.

     
     
     
    • Anjali Mahendra
    • Massachusetts Institute of Technology

    I too belive that in the present time, no significant changes to "business as usual" are possible without government intervention. I think incentives (the carrots) are necessary in a technology development stage and are needed today to develop, for example, alternative fuel technolgies. However, in some sectors such as transportation, utilities, and construction, we already have the technology and knowledge to make changes towards higher energy efficiency and lower greenhouse gas emisisons. To accelerate the shift to these options, taxation (the sticks; the polluter pays) or some form of greenhouse gas emissions trading policy is essential. This is already in effect in the EU and will force businesses to innovate.

    At the end, government regulations should lead the front in dealing with global warming. The market has to operate within the policy sphere and so do individuals. Apart from emisisons trading and taxation policies at the level of businesses, I also see other policies directed at individuals gaining momentum: for example, charging for the amount people drive their cars.

     
     
     
    • John Kurywchak

    I remember marching around my grade school on the first Earth Day, my social studies teacher leading us in a hummed dirge and our thumbs pointing downward. The big environmental issue beyond trash on the highways was over-population. Many of my friends at that time were voicing the anti-poverty movement's mantra against the space program. Global freezing was spoken of as well.

    Thirty-nine years later, I see that zero-population growth has led us to much older nations "needing" to allow any and all immigrants regardless on their impact on the resident culture. The space program's serendipity has improved the lives of every human being on earth and the space-faring nations have reduced their poverty numbers.

    Every post above mine considers human-caused global warming a certainty and a vast contributor. I don't. The chief contributor of CO2 into the atmosphere is the world's oceans, by multiple factors above human impact. The research I've read indicates that if we were to stop industrial activity, the result would be a .007 degree reduction to global temperatures. Will our actions combating human global warming be similar to Mao's killing of birds in China to increase food production? Will our hubris further doom developing nations to poverty and eternal Third-World status?

     
     
     
    • Chris

    If "a lot of money will be made" is the sole driver for what NEEDS to be done, then we as a capitalist country will always look for the easy way out in order to make our money. The biggest issue for companies today is not their own leadership, but the environment in which they play, namely Wall Street. For decades, it has had a "what have you done for me lately" mentality that has forced public companies to focus more on their short-term returns rather than on the betterment of their long-term portfolio. With global warming being a long-term position (gasp, more than 20 years!), some short-term gains at companies that truly want to make a difference will have to suffer. Can Wall Street, and our own fast-paced society, deal with this fundamental shift in thinking? The companies that are effectively "ahead of the curve" will win out for decades to come, and that is a viable business plan anyone can live by.

     
     
     
    • Nancy Sullivan

    Business will not do it without government. Government will not do it without business. The consumer will never do it - they are too afraid it is true! That is, their need for cheap fuel, overheated/cooled buildings, and packaged goods is destroying the earth's atmosphere. The lack of incentive anywhere in this triangle gives reason to ride this one weakness -- fear. The fear that it could be true has to drive business and government to harness the branding power of being "Green".

    Here is the scenario as a thinking individual. I am overwhelmed that my sodas and 1 hour commute are causing fish killing algae blooms. I go into denial. Yet here comes a voting choice or a purchasing choice that lets me take that great hidden fear and turn it into a power over such evils. Guess which brand / politician I can choose that can remove this damnation for me. We can expound later on the premium I would pay.

    So go Al Gore, conjure the fear. Go 3rd Avenue marketers, give the masses the brand choices that will repent the evils of SUVs, soldiers for oil, styrofoam coffee cups, and plastic shopping bags. Marketing history is filled with far less catastrophic fears that created and spawned new industries. Do you remember life before bottled water? Vitamins?

    This is a huge opportunity for forces of capitalism. CREATE the consumer need and harness the power of the consumer. It is so open. Find a little concept and jump right in.

     
     
     
    • John Goodman

    As long as corporate managers are evaluated on the current quarter's performance as measured by EPS there will be no incentive for these folks to do anything on the global warming front. I believe it will take an effort from the grassroots such as the one we've seen from the anti-smoking folks to get both government and industry to pay attention, and even then we can plan on big business living in a state of denial as have the tobacco companies. They STILL deny smoking causes cancer! While the U.S. is the biggest user of fossil fuels, and energy in general, the momentum to curtail energy use will have to be on a worldwide front. The issue is global, so local tax incentives or penalties will not solve the problem.

    I live in California, and while it's nice to think Toyota Prius and Honda Civic Hybrids will rule the highways I still see a lot more soccer moms dropping off their charges at the local schools in Ford Expeditions and Chevy Yukons than I do the aforementioned clean cars. No, it's going to take a change in mindset starting at the elementary school level to get the ball rolling. Only when the market dictates to industry that the consumer is cost/energy conscious will industry respond.

     
     
     
    • Fernando das Neves Gomes
    • principal, independent

    This is a global challenge. I think we have to see the problem through different perspectives.

    Cars, as one of the biggest businesses in the world, probably become the most challenged one. Deep changes have to happen. I can think of one example regarding new technologies. Cars can get charged with a rechargeable card as we drive; gas is free but to drive we have to buy miles, as a game! To become reality, oil companies probably have to align with car companies and banks, giving the driver a credit to run more miles without cash--a new business model.

    To the industry and cities, answering your question, new infrastructures have to be built, but to this problem we have another problem: Which energies to produce: nuclear, hydro, wind, solar? What best model serves the environment and energy capacity?

    Concluding, I think this problem can be solved if new business models urge becoming profit centres to all the usual players in traditional business models. At the same time I believe that industries that have gas emissions and pollute garbage have to be taxed; non-polluting ones should have tax incentives.

     
     
     
    • Harris Ferrell

    Care of the environment (and specifically controlling greenhouse emissions) suffers from the tragedy of the commons. As Aristotle noted, "For that which is common to the greatest number has the least care bestowed upon it."

    Therefore, to combat global warming, it will require action by both govenment and industry. Government will need to regulate emission limits and greenhouse controls based upon levels that meaningfully stem the tide of climate change. Within that framework, industry can then compete to most efficiently meet those targets and provide innovative technology for others to do so, while maximizing shareholder value.

    For such regulation to be globally effective, it will require a multi-national agreement on targets; otherwise, industry in a non-participating country will not have an incentive to curb emissions, perpetuating the tragedy of the commons.

    I would be interested in seeing the research Mr. Kurywchak cites in his posting. Even if his supposition about oceans releasing more CO2 than human activity is accurate, I believe the reason we are faced with global climate change is that the amount of CO2 released by human activity has caused a rapid imbalance in the ecological homeostasis.

     
     
     
    • Charles Kuehl
    • Retired faculty member, UM-St. Louis

    Your opening sentence mentions the public awareness tipping point. It's good that we finally made it there. But a different tipping point should be mentioned in this discussion -- the one after which the earth's ability to mend itself is compromised. Are we there yet? Is it 5 years away, or do we still have a couple decades or more?

    The only prudent response, it seems to me, is to act like the wolf is at the door. How do we do that? Nature provides guidance here; it values diversity, and so should we. The market is an essential part of our response, but we surely can't rely on it alone. We must also have government regulations and incentive programs, and enlightened, engaged consumers.

    Furthermore, to kick-start the process, political leaders have to develop not only the awareness of the enormity of problem, but also the courage to take steps that are sure to elicit rancor from all sorts of vested interests. We hear a lot of grave pronouncements from Washington, but that's about all we get. Fortunately the states -- particularly those from the West Coast and from New England -- may be getting the ball rolling.

     
     
     
    • Bruce R. Duncil

    In his unparalleled but largely unimplemented work, "The Fifth Discipline," Peter Senge outlines a classic systems engineering problem called Tragedy of the Commons in business terms. Put simply, it is the depletion of a common, finite resource by local actors acting in and rewarded by -- thus reinforcing -- their local action causing that depletion. Think of earth's cool temperature (ability to absorb heat) as that resource and each nation freely polluting greenhouse gases, thus removing their piece of that "cool" in order to drive their economy.

    Senge postulates two options. The first: put the onus on local actors to self-regulate. Think of that as the Kyoto treaty. The second option: establish a manager of the "common" able to influence individual nation's actions. Think of that as a United Nations function. The good news: the system is self-limiting. Nonconforming actors will either provoke the conforming ones to increasingly enforce their will -- or all will be stopped together at the ultimate limit of depletion.

    As chief actor, our national response now will ultimately determine our worthiness of survival as a species. A third option, anyone? Anyone?

     
     
     
    • John Inman Ed.M. PHR
    • Leadership Development, T-Mobile

    I would like to believe that business as a community would act in the best interest of the future of our world. I would like to. Unfortunately without some sort of incentive or kick in the seat of the pants, I do not believe more than a small percentage of businesses will proactively seek long-term social, ecological, and financial gain at the expense of short term rewards. If this were not so, we would see widespread adoption of a triple bottom line as a business practice.

    I believe that a combination of social pressure, government incentives/rewards, and right action by many in the executive ranks will be the combination that will help turn the tide and guarantee the future for our children and theirs. And I believe that those willing to make the forward thinking risk will be rewarded well indeed.

     
     
     
    • Michael Patton
    • Longwood Ventures

    Dr. Heskett's angle of inquiry on this issue is interesting, not least because it avoids taking a position in the semi-religious battle presently underway on global warming's most important causes, effects, and solutions available or required (if any).

    Following this derivative line of questioning, it makes sense to examine how market forces or government action can have beneficial effect. At present, the primary force at work is public relations, leading both government and businesses to think and talk about actions that could be good for the environment with or without global warming being the disaster some claim it will be.

    Tipping point reached or not, science is not public relations, and the science remains unsettled. As a result, the discussion seems likely to continue revolving around the role of government more than industry. Advocates for immediate action on global warming seem actively to be trying not only to remove industry from the solution, but also to remove much of industry's capability. I hope that we can count on industry to avoid engaging in self-immolation. However, this avoidance could lead (and has so far led) to misguided calls for government (local or "common") to perform that dubious task on humanity's behalf.

    If those calls increase in frequency or vehemence, I would expect much effort applied to continued improvement in our stewardship of the environment, as well as to confronting and rebutting the claims that we are about to irrevocably damage our planet. Given a problem that, as defined, might be either imaginary or insolvable, the alternative of investment and focus in both education and process improvement to keep humanity from wasting large swaths of global GDP sounds like money well spent.

    I hope I am correct in expecting both industry and individuals to continue moving toward better environmental choices, while not allowing government to force such efforts beyond their useful limit. Almost all versions of the Chicken Little story have irksome endings, including the ones where the sky does not fall.

     
     
     
    • Akhil Aggarwal
    • IBM Corp.

    The normal evolution may take its own time and bring forth the solution to this foreseen-apparent problem. Man did not have energy at one time; he discovered it and has been using it since. The next logical step would be to improve it and make more efficient machines or perhaps machines that use alternative sources of energy (perhaps oxygen?). Companies will have to invest in the R&D for our benefit. Will they? Yes, because we the consumers love anything that's high-tech and that's more efficient than what we already own. Given the media hype, to the level of Mr Thomas L. Friedman talking and writing about it, the industry can be certain that the consumer will be impatiently waiting for the next big innovation, which will change the way we drive, wash, cook, heat, etc.

     
     
     
    • Graham Douglas
    • Founder, Integrative Federation

    No. I think it will need some fundamental changes in how we harness and exercise these market forces.

    The challenges we face in our economies and societies in our divided, unsustainable world are perhaps greater than at any other time. These challenges have arisen because of how we have been trained to think, plan and act as individuals and how we have applied this training to the way we organise and govern ourselves. We have thought, planned, organised, governed and acted as though our world is comprised of parts that can be separately exploited by humans and managed by us from one stable state to another. We have forgotten we are just one species in a complex natural world. We have tended to act without a sense of wholeness -- without integrity. Meeting these challenges will require new approaches to how we are trained to think, plan and act as individuals and how we are trained to organise and govern. These new approaches will need to be based on our current scientific understanding of our world and the human mind.

    Integrative Improvement is such an approach. It is outlined in a paper that is available online at:

    http://topics.developmentgateway.org/businessenvironment/rc/ItemDetail.do?itemId=1091332

     
     
     
    • Phil Clark
    • Clark & Associates

    Okay, let's take a step back and take a breath. Is the climate changing? Yes. It will always be changing. Remember that we find fossils of tropical plants in the northern climes. Will we be able to scare people into making foolish decisions? Yes. Will companies find a way to make a profit on climate change ... no matter which way it goes? Yes. Does man impact the climate? Good question. I do think man may have greater impact on the quality of the air and water we need.

    We need to understand that any time we do not return the earth and atmosphere back to normal after using those resources we risk harming the life of humanity. Pollution, foolish waste, and pumping gasses into the air are likely to have ramifications. Improve the way we use our resources to a "no harm" environment and we will decrease our impact.

    By the way, I spent 35 years serving America as a meteorologist with NOAA and have extensive experience in climate studies and measuring the atmosphere. Bottom line ... for the most part we are just along for the ride. The dynamics of the earth and universe far outweigh anything man does. If we are foolish enough to ruin our life support system in the universe for a buck, we will likely get what we deserve.

     
     
     
    • John Baikie
    • MD, Private Equity Strategies

    Before vast sums are spent and serious inconvenience and possible poverty inflicted on millions of people, particularly in developing and underdeveloped countries, by reducing CO2 emissions, we all need to be assured that CO2 is in fact the major cause of global warming that it is claimed to be -- the 'naysayers' are many, authoritative, influential and convincing. As a result, efforts to encourage a sence of urgency for everyone to do something is likely to be met with very strong resistence, scepticism and/or disinterest. Clarity on this point is crucial for appropriate policy interventions to be implemented.

     
     
     
    • Hariharan Murugan
    • Business Analyst

    In a free market, government plays a minimal role than the other market participants -- industries. While the participants themselves are the experts, within their sectors, in identifying ways to minimize their contribution towards the problem of global warming, the government can, however, help resolve the problem by triggering the ultimate base on which the various market participants depend -- both existing as well as potential customers.

    Each industry can identify ways in which it can eliminate or minimize its contribution towards the problem of global warming. Even in the information technology industry, which primarily comprises software companies, where there is no apparent pollution, there are ways to minimize global warming such as adopting recyclable stationery products, minimizing usage of electricity, and reducing the amount of solid waste from food courts. Likewise, there are several factors contributing to the problem in different industries. Only individual industries can best identify what factors in their own areas can best be eliminated/minimized.

    While the market players are left to brainstorm ways to bring down their shares into the problem, the government can be given the responsibility of creating as much awareness as possible among the general mass. Instead of providing incentives to the industries, if the government can provide such benefits to the source of these industries' bread-and-butter -- customers and the general mass, people will be more willing to adapt to eco-friendly products. A demand will gradually develop from such customers for eco-friendly products, that industries will in turn try to satisfy the customers. This is one way by which the market forces can stop global warming.

    As Chris pointed out earlier, though Wall Street demands companies to show short-term results, it is in the best interest of the market forces to look at the long term and decide what's best for them. Governments come and go, but organizations last longer than governments, and should take steps in improving their own future.

     
     
     
    • Paul Sweeney

    I don't believe mankind is looking at the actual cause right now, and consequently that human innovation is not focusing on solving the right problem. My view is that the warming process we're experiencing right now is natural, not man-made. Efforts to develop hybrid cars, etc. are focusing on the 1 percent, 2 percent rather than the >95 percent which is from nature itself.

     
     
     
    • Monckton of Brenchley
    • Peer of the Realm, House of Lords

    Businesses need to be cautious before making major investments on the assumption that "global warming" caused by our greenhouse-gas emissions is likely to have enough effect on the climate to cause damage. The alarmism generated by the largely-discredited documents of the UN climate-change panel is not reflected in the balance of opinion in the peer-reviewed literature, which is why the UN has had to reduce its key projections successively in each of its past three reports. In particular, sea level -- which in 1995 was projected to rise by a maximum of 3ft to 2100 -- is now projected to rise by a maximum of 2ft, with the best estimate of 1ft being around a quarter of the mean centennial sea-level rise over the past 10,000 years. Now is the time to invest in reinsurance corporations, who will make a killing as premiums rise well beyond the natural-disaster rate. Check out Lloyds of London's latest annual profit. Finally, Harvard Business School should know better than simply to believe the currently-fashionable nostrums. Mere credulity is unbecoming in a business school.

     
     
     
    • Dr David Moore
    • Reader, The Robert Gordon University

    There seems little doubt that science can be applied in responding to the causes (and effects) of global warming. However, while there is an increasing consensus on the existence of global warming, meaningful agreement on its causes (beyond references to the activities of humans producing excessive levels of Carbon gases or some form of natural cycle), and the nature of their inter-relation, still appears to lie at some point in the future.

    Until a sufficient level of agreement to provide the tipping point effect is achieved, the scientific response will continue to be fragmented. However, on the basis that simply doing nothing is not an option, even a fragmented response has to be a good thing. The question then becomes one of whether or not the entrepreneurial spirit can provide an environment within which the fragmented response of science can intially be supported (through R&D funding, etc.) and ultimately integrated, thereby providing a more effective response.

    The entrepreneurial spirit seems to be most effective where there is a vision of a single objective or product that can respond to, or be driven by, market forces. Car manufacturers, for example, had (and generally still have?) a single objective of getting as many people as possible to purchase their product (in all its different forms). Their success in achieving this has arguably contributed to the present and near-future environmental problems. Can they be equally effective in achieving a single objective of reducing the rate of global warming? This objective seems too diffuse for a single product to achieve (even if there is an effective demand for that product), thereby requiring a range of products and/or a prescriptive approach to supply chain management; a situation that brings the discussion back to the need for integration. At present, the most probable supplier of that integration appears to be government, rather than the entrepreneurial spirit working in response to market forces.

     
     
     
    • Ulysses U. Pardey, MBA
    • Managing Director, Am-Tech, S.A., Panama, Rep. of Panama

    Just how should the free market be unleashed on this effort? And should business be playing a larger or different role in the debate? Just how should the free market be put to work on the challenge? Or should government step aside and let the market work its ways without incentives? If so, what would happen? How, if at all, should business leadership play a larger role in shaping global warming policies and programs? Will market forces stop global warming?

    Basically we companies serve people for profit, not necessarily for the conservation of nature. Business-wise, this means that the conservation of nature should become a key success factor for profit growth, not just a collective concern and a potential burden on profit. How could consumers become conservation minded consumers and how long would it take? It really does not matter when these destructive products are illegal and not available worldwide. However, it could help.

    If global warming is a bad thing then it should favor profit decline. If the conservation of nature is a good thing then it should favor profit growth. This, pleasingly combined with today's knowledge about business, management, leadership and the willingness to share accountability, I believe, makes it an issue which is more about people and a useful policy for all concerned industries worldwide in order to avoid unfair competition. When companies have to play by the same rules, then fair competition can take place. This is why an equal nature conservation terms and conditions policy for all concerned industries worldwide seems to be a must.

    Global warming as far as I have read and heard about is beyond national borders and it does affect people's environment and health worldwide, including blameless people.

    Companies are run by legally responsible adult citizens. Who can legally sue them for this damage, before what kind of legal institution and where is it located physically? Appropriate institutions interested in people's rights, the conservation of nature and business profit growth should contribute to the development of this policy and its global enforcement.

    I believe that global warming could be turned into a wonderful opportunity to take the inclusive lead and show the world how to handle globalization with innovation for long lasting profit growth and worldwide terms and conditions for doing business. This could mean, first of all, fair competition.

     
     
     
    • Simon Stapleton
    • Principal, Commerce-Savvy.com

    Reformation of humankind as we know it won't happen quickly. The live-for-this-quarter attitude of the modern world will continue to consume resources until they're spent, unless there is a short, sharp shock. A marginal change in attitudes will result only in a marginal change in the growth of global warming. If we're going to turn this mighty ship of capitalism around towards a sustainable future, something drastic, yet positive, will have to take place. With a united worldwide brain-capacity, shouldn't we be able to divert resources more so to innovations that will create a controlled, positive breakthrough? I think so. But we must stop fighting each other (on the battlefield and on the stock market) and refocus upon this common enemy.

    It starts here and now. A united earth, although a cliche, is the only answer.

     
     
     
    • Jim Buckner
    • CPA, Self-employed Public Accountant

    One of the problems with the "global warming crowd" here in the United States is the notion that the U.S. can control global warming (if indeed there really is man-created warming of any significance) when the biggest pollution comes from countries whose governments have very little concern for the plight of the general population and/or the world in general.

    And, I have yet to be convinced that global warming is something other than a natural cycle that would happen whether or not mankind was involved or not. Just because a bunch of climatoligists and other scientists have reached some sort of consenus does not mean it's factual. There are other experts that have reached opposite conclusions.

     
     
     
    • George Skakel
    • CEO, EMG, LLC

    Global warming is caused by natural processes that have been going on for thousands (or millions) of years and will continue to go on with or without man's attempts to stop them. The Earth warms up, then cools down, all by itself; man's influence is not required. Nevertheless there are now hundreds of thousands of Americans whose incomes are now in some way influenced by U.S. policy and all the hype surrounding the idea of human-influenced global warming.

    The science of global warming has now been so politicized that "truth" has been subordinated to all manner of craziness. One thing is for sure: Policies can be implemented by governments that are destructive to the incomes and health of billions of people. For example, denying central station electrical power generation to third world residents who do not have it (approximatly 1/3 of the world's population) would condem these people to further generations of short, brutal lives, all for the benefit of the consciences of middle class westerners. Less draconian but perhaps more likley wrong headed policies, like continued U.S. susidies for domestically produced ethanol (more energy is consumed in the production of a gallon of ethanol than is in a gallon of ethanol, the use of ethanol in transportation fuels INCREASES the co2 per mile driven) will harm our economy by confiscating scarce resources (money) from consumers for wasteful purposes.

     
     
     
    • Deb von Rosenvinge
    • HBS Section I 1981, Retail Shop

    Call me everyman consumer. I drive a non-hybrid car that I love (SAAB), and hate that my insurance premiums have risen just because I live within [ ] mile of the ocean--never mind that I am 80ft above sea level. I pay around $2000 a year heating my house with oil, another $1000 lighting it and heating my hot water. Each of these costs is about 30 percent higher than last year, in spite of my outfitting every available light socket with low-e fluorescents which for one month allowed me to enjoy some savings. My gasoline for the SAAB has gone up, too.

    Now believe me, no one gave me a 30 percent raise to cover these costs this year and this is only a single year of added costs. Add to this that I have a retail establishment and feel the pinch of everyone else's dwindling "spendable cash." I live in New England and although not every day is sunny, I see that big lightbulb in the sky often.

    I am embarking on the study of the solar potential for my home. Radiant heating in the floors and solar heated water for the heat and general use should give me a payback much sooner than previously predicted. This gets MY attention. If it helps globally, then I can assuage some of my guilt for being an overconsuming American. American business should get behind giving the consumer a few more bucks in his pocket and they will make out, too.

     
     
     
    • Phil Jackson
    • Jackson Consulting

    What astonishes me about this whole debate is the extent to which people are willing to make decisions about policy and strategy on the basis of propaganda and hype. I find repeatedly that very many people have formed an opinion, made decisions and are taking action to reduce CO2 emmissions without having looked at any of the basic science behind the claims.

    There is a lot of mounting evidence to support the claim that global temperatures are primarily controlled by the sun -- no great surprise there -- and that there are multiple secondary and tertiary atmospheric factors that influence the extent of this. There is also a lot of evidence to show that global temperatures and CO2 levels are not related except for the observation that increases in global temperature cause CO2 release from oceans into the atmosphere, and not the other way around.

    Water vapour forms 95 percent of all greenhouse gases, CO2 represents 0.054 percent of our atmosphere and the changes in CO2 levels we are talking about amount to a few 10's of parts per million.

    The scientific community is a long way from understanding the dynamics of our climate. In the face of all the cosmic, solar and other gaseous atmospheric varibility that naturally occurs, it is extremely unlikely that mankind can influence this planet's climate by emitting a few ppm of CO2. If it's going to happen, we are unlikely to be able to stop it.

    Economically, therefore, we would be better investing in the resources to handle whatever global warming throws at us. I could find better ways to spend the U.S. government global warming annual research budget of $4bn.

    To answer Harris Ferrell's earlier request for research on this subject, take a look at

    http://meteo.lcd.lu/globalwarming/STOTTyoucantcontrolthe_climate.html

    which is a short, intersting read and contains some useful further references on recent research.

     
     
     
    • Anonymous

    I do think that there is a lot of fantasy in this direction. There are a lot of people who are earning money despite the increase in this problem. Of course, the problem is serious, but it is not as big as some say. The market, if needed, will have the force to decrease the consequences of this phenomenon.

     
     
     
    • Sungho Cho

    First of all, these concerns on the right position of the free market to resolve global warming issues refresh me with new perspectives. But some suggestions shown above seems to be far away from the real solution to reach the fundamental and structural origin of this issue. I think the first thing we have to think about is how to control and handle human desire in terms of sacrificing one's pleasure and changing practiced attitudes for better and longer living on earth. Industrial and commercial approaches such as taxes and subsidies draw the wrong line in individuals' minds that is supposed to be the center of the action that has to be taken for this issue. ... So it is individuals' minds and attitudes in the free marktet that have to be discussed prior to the free market's role itself.

     
     
     
    • Ch. Fournier
    • HBS MBA '71

    It is not so difficult to understand why the conclusions of IGCC have been rejected by a significant portion of the American public up to now: America's prosperity being more than anywhere abroad based on energy, any tampering with the freedom to use (and maybe overuse) energy is seen as tampering with the American success story....

    But tampering there must be, if we believe (and I do) what IGCC says more and more loudly in each of its reports.

    I do not believe in voluntary restraints, except as symbolic gestures. I do not believe either in the pioneering spirit of business (except here again in symbolic gestures) in matters where the return on investment will be delayed twenty years or more. I believe in an energy policy from the government: in governmental incentives to businesses both for research on energy and for immediate energy savings -- and if necessary in "Rooseveltian programs" to tackle matters head on.

    Up to now, the U.S. government policy on energy has been "laisser faire." But public opinion is changing on climate, and governmental action shall sooner or later reflect this.

    On Kyoto, I had interpreted the U.S. attitude as: -(1) we don't want to be "alone" (together with the developed countries) to act; we want the biggest polluters (and prospective polluters) among emergent countries to be in it too; -(2) for emergent countries to engineer an energy-responsible economic growth, they must invest in energy-saving technologies which we would sell them; That would be the deal: - developed countries would trade the inconvenience of energy-restraint for the new opportunities of this market of energy-restraint in emergent countries; - emergent countries would gain the acceptability of their manufactured products in the developed economies, provided the added investment cost for an energy-responsible production is not unaffordable. -(3) but these energy-saving technologies are not yet available at an affordable cost; therefore the U.S. must buy time till these technologies are ready. -(4) Hence the U.S. must save its acceptation of Kyoto as a "bargaining chip" until the time is ripe for a deal with emergent countries.

    This was in my mind "hardball" but logical tactics. The problem is that such an attitude can be sustained only for so long: one can't hold a bargaining chip forever, especially if so doing one gets a reputation for insensitivity to the common fate of the world.

    Up to now, the fundamentals justifying the U.S. stance (ie. the insufficient state of development of new technologies such as CO2 confinement or such as safe nuclear plants) have not really changed, but enough time has elapsed for all to see that, without a governmentally sponsored pro-active effort, these fundamentals will not change quickly enough. "Laisser faire" does not work quickly enough, it is that simple.

    The time is now politically ripe for the U.S. to develop an ambitious energy-restraint policy (with consequences binding on businesses and citizens), and at the same time review its stance on Kyoto. The above-mentioned "deal" with emergent countries could be made explicit and scheduled objectives could be set.

    Too bad it was not done ten years ago!

    Yours sincerely,

     
     
     
    • K Neff
    • business owner

    Like a shout into the hurricane I voice my opinion. I have read some of the responses and I am concerned that most people seem to think in terms of government driven solutions. Al Gore did not give Eli Whitney an incentive to improve cotton production. The need was there and human genius reacted.

    The free market will create solutions but there must be a need and demand, and it is outside good government to create the demand. And only the vocal minority seem to believe all the hype. Looking to the government to levy taxes on this or that is not wise.

    If we need examples of government management we only need to look at the board of education, social security, medicare; the list could go on and on. Like the old parable of the camel wanting to come in the tent, once it gets its head in it's too late. The government was created for the people, not the people for the government.

    On a side note: It's funny that even cows are now blamed for ozone depleting gases. I may be mistaken but I think they have been producing methane since the beginning. Perhaps the brilliant scientists should produce a catalytic converter for its posterior. Perhaps exhaling should also by taxed since carbon dioxide is also harmful to the environment. Once we start where do we end?

     
     
     
    • BC of Next1Up

    This is a great intro to an article/paper. When are we going to see the rest including research and information about things like the Chicago Climate Exchange and existing credit systems for environmental impacting byproducts?

     
     
     
    • Peter Oertli
    • Managing Partner, OEC Oertli Consulting

    I am rather pessimistic regarding the developments in the USA where companies generally focus on quarterly results and neglect sustainable development (with exception of leaders with a vision like Al Gore). Due to the long time-lags of climate change, first measures should have been taken more than 30 years ago when first publications have been ridiculed. I am rather optimistic regarding innovations that will come from Europe, Japan, and India who will benefit in the long term due to advanced technologies.

     
     
     
    • Anonymous

    Problem Solving 101 states that we begin by understanding the problem. First we have to conclude we have a problem to be solved. This is not conclusive. The IGCC? Its members are self-selected based on their propensity to buy into the hype of global warming.

    When I see Al Gore and the IGCC crowd all change the way they live their lives, they may earn the credibility they need for more people to investigate their claims. "An Inconvenient Truth" is that 99 percent of those who loved that film arrived at the Oscars in a gas-guzzling limo. If you own a Chevy dealership you don't drive a Dodge and expect people to take you seriously either.

     
     
     
    • PT Gibbons
    • Director of Finance, Pinnacle Technical Resources

    Since global warming (and global cooling) are naturally occurring phenomena, we are wasting time and resources trying to play King Canute. If we were successful in "stopping" global warming, I suspect there would be some nasty unintended consequences for our weather and our world.

     
     
     
    • Anonymous

    It's the sun, silly!

    Are we focusing on the same question? Are we discussing the role of business in somehow preventing or mitigating a phenomenon on the scale of our solar system? If so, that's hubris.

    Are we discussing the role of business as regards the rapid pace of consumption of the world's natural resources, along with the subsequent pollution? If that's the case, I agree with Chris McFadden--there will be an end state achieved as regards hydrocarbons and biomass; we have to incent the search for viable alternatives.

    The free market will come to bear--isn't that the message the government is sending? The use of wind, solar, geothermal, and other power sources will only become viable as the market demand for those resources currently in short supply increases. That's pretty straightforward economics. It takes the combination of economy, opportunity, and public (consumer) awareness for alternatives to current market-driven systems to succeed.

     
     
     
    • Rowland Freeman
    • Still active, Retired

    I found some of these comments quite interesting, but missing in most cases was a focus on renewable energy. I ran such a company when oil was $12 a barrel. Solar thermal, photovoltaics, wind, geothermal, hydro power, coal slurry, fuel cells, biomass. Two studies I participated in (2000 and 2003) indicated (with reliable science) that 20 percent of our energy requirements could be furnished with renewables.

    Both studies went to Congress and there they died.

    The technology is there, particularly with wind and photovoltaics; the latter needs production to reduce costs. This takes investment and incentives; both could be provided by federal and state legislation. Make developments, homes, and commercials green by the mandatory use of renewables; this plus substantially increase the gal/mile on trucks, SUVs, and all other vehicles with high energy usage. Cut the horsepower on vehicles; a 5 cylinder engine is plenty. Thus our dependance on polluting energy sources could be reduced by 30 percent, an achievable goal.

    While I will not argue the cause, certainly humans are responsible for enough of the problem. The problem is that legislative action requires voters' push and that has about as much popularity as the current problems in Iraq. We seem to have lost the desire to discipline ourselves, and that is what it will take. We wring our hands over war shortage and the emptying of our acqifers, when the oceans are full of water, and desalinization is a well developed technology.

    The message: this has to be a state by state effort as Texas did with wind energy, and Florida and California did with photovoltaics. That might get the attention of the Congress to pass the appropriate legislation for mandatory renewable requirements and incentives. Somehow people have got to get the message that things like solar energy, wind, biomass, hydopower, fuel cells apply equally to Virginia, Vermont, Michigan and all the other states in our stubborn, undisciplined, but a great country, particularly when it has a goal. We went to the moon; we can gain on global warming.

     
     
     
    • Edward Hare
    • Retired Director of Strategic Planning, Fortune 300 Manufacturer

    To debate this subject is to debate human nature and the very purpose(s) of "government." Professor Heskett poses the question "What kind of incentives, if any, will the free market need from government to encourage innovation and action now?" I'd ask how free a market really is if change must get initiated via the application of other people's money. And how did we come to believe that progress can only be made via government incentives? Did Thomas Edison or Henry Ford think that way?

    Let's face it, humankind resists change. It likes the familiar, the status quo, incremental improvements. In America the familiar is a lifestyle built solidly on "cheap" energy. We like our buildings tall, our air conditioning, our ribbons of concrete to facilitate unprecendented mobility for everyone...and everything, at any time. Unfortunately, science has not yet discovered a means to economically replace the energy content of fossil fuels. If it does, and the economics make sense, the free market will adapt. Until that time we are faced with rationing available energy based on price. And the less advantaged of the world will suffer the most. Supply and demand, global warming, and the wasteful ways we "spend" energy are all taking us to the same place. It's time that we all realize that our lives NEED to change. Given history, government will most likely get things wrong. A "free" market will do better...albeit more painfully to too many of the world's six billion residents who have been conditioned to "compete" for what they think they want. For now, the issue is not about the markets...it's about science and the fact that we don't know enough to do much better than we're doing...and what we're doing cannot last much longer.

     
     
     
    • Anonymous

    Read Tom Friedman's article in the [Sunday, April 15, 2007] New York Times, which as Professor Hesket points out is a starting point for more:

    The Power of Green

    http://www.nytimes.com/2007/04/15/magazine/15green.t.html?pagewanted=all

    In the spirit of The Fifth Discipline, Tom consistently takes a systems thinkers approach to understanding complex problems that are rooted in so many different phenomena.

    Global warming is just one of many consequences of interdependent events and trends. He, brilliantly in my view, explains how terrorism, climate change, the price of oil, the economic future of America, the interdependecies of rich and poor nations, and so many other pieces of our puzzling world fit together.

    So to widen the discussion here I encourage people to read his manifesto which goes way beyond Global Warming, and positions Green as a global greening movement led by American industrial ingenuity and resources, or, as he puts it a Greening that is "geostrategic, capitalistic, geoeconomic and patriotic."

     
     
     
    • Mehmet Genc
    • Assistant Professor, Baruch College

    Market forces respond to incentives, and to suggest that government or other policy makers have no role is to suggest that these forces do not create powerful incentives for certain behaviors and disincentives for others. Global warming is largely a result of externalities (to the extent it has to do something with CO2 emissions), which increased unchecked and uncorrected by the markets for decades. Markets can correct the situation if these costs can be internalized, but government has to help by creating policies and laws for mechanisms to stop warming. Alternative energy sources are not yet as attractive as fossil fuels and demand is inelastic to price changes, so simple supply and demand laws have not been powerful enough to change behavior so far.

     
     
     
    • Shaiful

    Essentially I think the whole point is respect. We must start respecting ourselves and others in all our actions and act responsibly. In order to do that we must treat all creations (including one's own self) with due respect, recognize one's own rights and learning to fulfill them accordingly as we can afford. This can be easy because all of us have the potential and capability to contribute.... Don't you think?

    As for business scholars and practitioners, the best they could do is to start coining people as "people" instead of "markets." What do we talk most about in markets?...Always about money. Money has limitations in playing a role in containing the global warming issue. We can't talk too much about money when it comes to dealing with this big issue; but start to contribute.

     
     
     
    • George Olsen
    • Sr Business Advisor, A Petrochemical Producer

    A lot of the people posting to this discussion appear to have missed the point. The question wasn't about whether global warming is real or about if it is caused by CO2.

    If a significant portion of the voting population is worried about something, they believe politicians will fall over themselves to create legislation/regulations to address the concern.

    If there are incentives, whether direct or indirect, to do something, someone in the market place will attempt to benefit from those incentives and soon others will follow them.

    If the incentive is to produce products with fewer CO2 emissions, that will happen and market participants will make money doing it. Whether this will reduce global warming is a completely different question.

     
     
     
    • John Cockerill
    • President, Exquisite Heat

    The market is not incentivized by financial incentives or altruism. The minds of America are jammed up with keeping their job, fast food advertising, and redundant auto ads. If some of that time could be used to advance the need for change in the environment there would be a possibility. Americans are trained to do as they are told by advertisers. Advertisers are not talking about the environment. To get the atention of Americans you will have to compete on a budget basis to advertise as the present marketers do. Then folks will spend thier money on substance instead of the illusions of favorite five and music on the run.

     
     
     
    • Matthew Tuttle
    • Business Coach, Pure Performance Coaching

    I believe the real problem is that everyone is finding what they are looking for. If you look for global warming, you will find it. America is trying to find the answer. Businesses are going to find a way to make money at solving a problem that isn't even proven--or disproven. The focus needs to be on a joint solution. Whoever cares about the politics, business and the world needs to work on finding a common path and make steps in that direction.

     
     
     
    • Jasper Ojongtambia
    • President/CEO, AEC Computer Division

    Congratulations on the media and all concerned in finally addressing the issue of global warming. The gradual warming of the earth's atmosphere caused by the burning of fossil fuel and industrial pollutants is leaving its marks in some parts of the world. Every national government is concerned about the health of its citizens, hence they spend a sizable portion of their GNP on health care. Government incentive: It will make sense for the governments of all nations to encourage innovations by giving incentives to free markets in whatever form (subsides and taxes) for research and development to reduce and in the future stop the use of industrial pollutants.

     
     
     
    • Julian

    It is interesting to note that the polarized views reflected here essentially characterize the issue within mainstream audiences. The respondents have presented many valid perspectives such as that business innovation is a powerful force when responding to demand, and that there is much political self-interest in both sides of the
    debate.

    Finding an answer to who should take responsibility is very difficult and will eventually be determined by political forces. The climate change issue is too big to ignore and, whether you agree with the science or not, you will be effected through environmental, policy or market shifts. It is very much in the interest of business to analyze the possible impacts and determine a response based on their own context. The decision to maintain opposition and do nothing will surely lead to business failure for many reasons.

    As with many business decisions, the information surrounding climate change is incomplete and uncertain.

    The common method to overcome uncertainty is by way of risk management: what are the risks, what is the likelihood and certainty of those risks eventuating and what is the appropriate response? The response pathways then rest on three fundamental options: adaptation
    (respond to potential impacts), innovation (develop responsive technology and approaches) and mitigation (reduce emissions). Determining which combination of the three to pursue is a function of individual businesses and clusters that are related by geography, industry, or otherwise.

    This process gives business and industry an informed viewpoint that would be palatable in negotiations, and a way to integrate change with the business investment cycle and avoid destroying value.

    Business and industry having gone through this process are in a powerful position to inform the debate over where incentives and disincentives are required, the jurisdiction of decision making and administrative roles and responsibilities.

     
     
     
    • Henry Kwok

    A holistic solution to global warming has to be a community effort involving the public, the enterprises, and the government working together to resolve the social, economic, and environmental issues surrounding the problem of global warming.

    What would be the public response to the effort of businesses as the latter tries to maximize profit and reduce costs without paying due concern over global warming? What is the community going to do to reduce the use of products that would lead to global warming?

    The government can provide the carrot and stick, the incentive and subsidies for businesses to comply to lower emissions and pollutants and to the production of more environmental friendly products and the penalties and taxes for not doing so.

    Left on their own, most businesses would operate at the end of the spectrum that aims to maximize profit in disregard to detrimental of the environment. At the other end, we cannot ignore that some businesses have learned to be socially responsible for their actions on the environment. We are not here to question to their motives or reasons; nonetheless, it does appear that there must be sufficient pressures other than economic returns and profitability to get businesses to help out in curbing the global warming.

     
     
     
    • Elise

    One issue that does not seem to be addressed is that while burning fossil fuels contributes to global warming, our major fossil fuel-oil—is increasingly becoming a scare resource. One wonders why the oil companies, who know that oil is scarce, does not lead in the innovation of alternative fuel sources and green products? Their
    business will be essentially nonexistent sooner than anyone wants to think about.

    In regards to oil, it is amazing to think about the products and production processes that someone will have to re-create: CDs, plastic bottles, ink, crayons, bubble gum, deodorant, tires, heart valves. Even the fabric of your clothes has been processed with oil.

    Global warming is a huge problem, not only for the U.S., but also for the world, especially in the countries that have the greatest increase in oil and fossil fuel use each year such as China and India. It must be combated with a combination of government controls, market forces, and support for green products and companies.

    The government must take the initiative and begin to create and enforce regulations and incentives.

    Consumers must be educated on global warming and how the products they buy (not only gasoline) increase it.

    Companies must look to the future, and they will see that it makes business sense to begin investing in green products, alternative energies, and energy-saving initiatives.