"The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger, but recognize the opportunity.” —John F. Kennedy, 1959
JFK shared this quote at a time of great uncertainty in the world. The Cold War was being waged and many lived in constant fear of nuclear warfare. Although Kennedy was technically mistaken in his translation, he was right about the sentiment of those words, which remain truer today than ever.
Take one of our greatest global crises, climate change. We don’t need any more reminders about the dangers posed by this threat, but what about the opportunities? During a recent panel discussion in New York, Virgin Group founder Sir Richard Branson addressed this very topic. (Operating an airline might not make Branson the best person positioned to discuss environmental matters, but if there’s one thing he knows well, it’s business.)
"The knock-on effect to the global economy is enormous," Branson exclaimed, citing, for example, the potential money saved on fuel by switching to alternative sources of energy. From reductions in medical expenses to increased income, Branson said, "pushing to be carbon neutral should not only be the right thing to do, it also makes good business sense."
Sounds great in theory, but how do we get there? For Senator Carl Levin (D-Mich.), it will require a serious shift in national policy. "We need a level of leadership similar to efforts of a previous generation that put a man on the moon," Levin told a packed University of Michigan auditorium. "We need our own moon shot—to develop alternatives to petroleum and to make more efficient use of all forms of energy."
Unfortunately, by that measure, America is losing the race to China. According to a recent Bloomberg New Energy Finance study, China invested $287.5 billion in clean energy in 2016, compared to just $58.6 billion spent in the U.S. That's not to mention the $360 billion China's energy agency plans to spend on alternative energy in the next three years.
"In the past we thought government and social sector would sort out these problems," said Branson in reference to this problem. As a result, he continued, "business has to step forward to fill certain gaps that governments are leaving behind."
Branson's point was reflected by the increased presence of the private sector at COP21 conference in 2016. In fact, according to a report published by the World Bank, CEOs from a number of industries made pledges to “decrease their carbon footprint, buy more renewable energy and engage in sustainable resource management." Global financial institutions further “pledged to make hundreds of billions of new investment over the next 15 years in clean energy and energy efficiency."
Of course, making a pledge is not the same thing as actual implementation. And even then, there is still the matter of managing the existing natural resources that help to absorb carbon dioxide emissions. But let's just imagine "what if" for a moment. If such promises were implemented holistically, they could present a number of incredible opportunities. Here are five of them.
1. Cheaper renewable energy.
The principle of "economies of scale" dictates that a certain idea or technology requires a large enough level of adoption to become affordable. For this reason, it has taken society decades to stop using fossil fuels. But as more companies start to go green due to climate change and the introduction of carbon pricing—which charges companies tax for releasing greenhouse gases—renewable energy is getting more profitable by the day.
A recent study cited by Dimitris Tsitsiragos, vice president of New Business at the World Bank's International Finance Corporation, in an article republished by the World Bank, sampled 1,700 leading international firms that on average enjoyed an “an internal rate of return of 27 percent" thanks to their reduction in greenhouse gas emissions. As that trend continues, renewable energy is set to become increasingly ubiquitous in society.
2. Which means new opportunities for renewable energy industries.