Is Environmental Entrepreneurship the Key to Solving Climate Change?

By David Levine

The United Nations recently issued a report that is finally putting the issue of climate change, and its impending effects, in the news. According to the body’s Intergovernmental Panel on Climate Change, if the current trajectory of increasing greenhouse gas emissions isn’t changed soon, the effects of global warming will “spiral out of control.”

The “spiral” will bring about more natural disasters, tighten global food supply and threaten the existence of millions upon millions of people, with a disproportionately high impact on the impoverished and indigenous populations. Furthermore, our flying, swimming, crawling and vegetative relatives will be unable to adapt and face even greater devastation.

There is a reason the climate report knocked Malaysian Airlines flight 370 off the headlines for one brief moment. As organisms, we are highly attuned to danger. We evolved by avoiding being eaten first, and then eating when we had leisure. So this should be a big wake-up call.

While fear is a good initial motivator, we need more than the threat of ecological and cultural collapse to begin the process of change and adaptation. We also need something to move toward. We need a vision and a rallying cry. We need a harmonizing framework that turns opposing forces into complementary pairs.

The key is environmental entrepreneurship, and we have some role models right in front of us. The old form of environmentalism was telling people what not to do. If you cut down trees, pollute streams or throw your trash out the car window, you’re being bad. The new form of environmental entrepreneurship is to give the consumer something so compelling; they adopt it without feeling like it’s a sacrifice.

Elon Musk proved with Tesla that electric cars don’t need to look like toasters that top out at 35 miles per hour. They can be quiet, luxurious, sleek and fast. They are also economical. Electric engines are significantly more efficient than internal combustion engines, so you can include the money you would have spent on gasoline as a discount on the purchase price. Jigar Shah accelerated the adoption of solar energy by offering cheaper electricity. Rather than selling solar panels and installation, he offered property owners a Power Purchase Agreement. The company he founded, SunEdison, installed, owned and maintained the equipment and then sold the electricity at lower rate than the conventional energy from the grid. Like Musk, Shah gave people something to move toward: more affordable energy. The fact that his customers could put the reduction in greenhouse gas emission in their annual report was simply gravy.

Entrepreneurship is never easy, and in this sector known as clean tech, it’s been brutal. A few years ago, my own company, Geostellar, was about to close an investment with a major venture capital firm when Solyndra suddenly dominated the news cycle. The venture capitalists determined the investment in our company was too risky because they didn’t know enough about the solar industry. In reality, the cheap Chinese solar modules that doomed Solyndra were a boon to our company. But investors are organisms, too. The impulse to flee danger overrides the drive to move toward rewards.

Another important positive for clean energy is that it creates jobs and improves the economy. While renewable energy is becoming less expensive than fossil fuels, it still employs more people to generate a megawatt of energy than conventional forms of power. According to Environmental Entrepreneurs, the clean technology industry added approximately 110,000 jobs in 2012 and 78,000 in 2013. The benefits of these jobs are spread throughout communities, with companies hiring sales, engineering, construction, maintenance, operations, development and finance positions across the country. Unlike the boom and bust hiring of oil, coal and natural gas, these opportunities will spawn local entrepreneurship, and the jobs will stay in the community for generations.

One of the major impediments to a clean energy economy is a deep schism between government and business. Business organizations such as the Chamber of Commerce often talk about “job killing regulations” and challenge the authority of the EPA to regulate greenhouse gas emissions. The fact is, a move from fossil fuels to renewables, and inefficient production and supply chains to economical and environmentally sound processes, would lead beyond an economic recovery to an economic boon. The ramp-up in production fighting climate change would eclipse the mobilization of industry we saw in World War II that created the prosperity of the 1950s and 1960s.

It is only the entrenched interests of aging industrial infrastructure, and their allies in government, that are preventing this mass flourishing and making the destruction of our planet a near inevitability. Tesla and SunEdison were able to succeed on an uneven playing field, where the destructive carbon emissions have not yet been priced into the cost of gasoline or the electric grid. Imagine what wonderful transformation could be accomplished if we employed true-cost economics, where the cost to the planet was accounted for in the price to the consumer. A carbon tax is probably the simplest method to achieve this. Additionally, tax credits, rebates and other incentives for renewable energy need to be established long term. The uncertainty created by the expiration of wind and solar tax credits keep investments in those industries on the sidelines.

States and municipalities that have actively supported clean energy through progressive policies are seeing economic benefits. The old arguments that clean energy is too expensive, or that the creaky electrical grid can’t support it, are simply the desperate rhetoric of industrialists trying to wring every last cent out of their infrastructure for the benefit of shareholders, at the expense of the economy, the people and the planet. Similarly, the landline operators first fought against Internet technologies, then mobile phones, for as long as they could. But at some point, resistance was futile. We are starting to see the acceptance of true-cost economics in the ruling of an administrative judge for the Minnesota Public Utilities Commission in December 2013, which noted that when accounting for the cost of environmental pollution, solar is less expensive than natural gas, saving the state $33 million on that project alone.

Others will argue that the efforts of the United States are futile unless other countries step up to help combat this problem. Yet most countries across the world follow our lead in a host of different industries – look no further than the widespread adoption of Google, Facebook and Twitter. Simply put, if we take the lead in combating climate change, many other countries will follow.

Over the next few decades, the effects of climate change will make the news in fits and starts. A disaster here, a freak weather event there. Scientists have put all of this together in a clear and disturbing picture, as something we should truly be afraid of and move away from. Fortunately, environmental entrepreneurs are also showing us the world we can move toward. This world is one of plentiful resources, enlightened policy and economic rewards for all.

Image courtesy of Oxfam International

David Levine is a serial entrepreneur and the chief executive of Geostellar, America's first and largest online solar marketplace connecting consumers with accessible opportunities to go solar.