Why there isn’t time for Green Capitalism

One of Green conservatism’s important themes, it seems to me, is a desire to reconcile individual interests with common interests. In the economy, this dilemma comes powerfully to the fore as businesses strive to reconcile the common interest of social and environmental sustainability with the individual interest of staying profitable and competitive.

The idea of “Green Capitalism” suggests that this dilemma is an illusion. Businesses no longer have to choose. They can do both.

A pioneer of this thinking is business strategy guru Michael Porter. “Static thinking,” he explains, “causes companies to fight environmental standards that actually could enhance their competitiveness. Most distillers of coal tar in the United States, for example, opposed 1991 regulations requiring substantial reductions in benzene emissions. At the time, the only solution was to cover the tar storage tanks with costly gas blankets. But the regulation spurred Aristech Chemical Corporation of Pittsburgh, Pennsylvania, to develop a way to remove benzene from tar in the first processing step, thereby eliminating the need for gas blankets. Instead of suffering a cost increase, Aristech saved itself $3.3 million.”

In this configuration tighter regulations are not businesses’ foe but its friend. Pollution equals inefficiency, so going green means less waste, less cost, higher profits and improved competitiveness. Rather than fight new regulations, businesses are re-framing sustainability though a lens of risk and opportunity.

“Fair enough,” one might say. But how long is all this going to take? A close reading of Porter reveals that his approach turns out to be far too slow. Governments, he cautions, should “develop regulations in sync with other countries or slightly ahead of them. It is important to minimize possible competitive disadvantages relative to foreign companies that are not yet subject to the same standard.” 

Increased regulations, then, can proceed but only at a glacially slow pace. The problem is that climate change and other global problems, moving at a much faster pace, will likely still outstrip them. And it’s here that Green Capitalism runs aground. The dilemma between going green and staying competitive – between individual and common interests - hasn’t gone away because of the factor of time – time we don’t have.

How, then, could governments introduce tough regulations that meet the fast pace of climate change and other global problems, without harming any business’s competitiveness? While business can innovate itself out of some costs, the competitive disadvantages created by a faster pace of regulation could only be avoided if there is a level playing field for all businesses globally: an unprecedented level of international cooperation is required.

Enhanced global cooperation would be far from easy. What seems clear, however, is that there are serious flaws in present approaches which aim for agreements on single issues, like carbon emissions. But take almost any single issue and you find it has winners and losers. The biggest emitters of carbon – China and the USA – have the highest costs to bear and the most to lose. Little wonder they too often fail to cooperate!

That’s why a multi-issue approach could prove far more effective. Imagine, for example, that alongside a negotiation on carbon emissions, governments also negotiated a global currency transactions tax. The billions of dollars raised on the tax could be apportioned so that the losers on the climate part of the agreement were compensated. In that way decisive action could, in principle at least, be made to be in every nation’s immediate interests. Global implementation would also mean that objections to the tax, such as those voiced by former Prime Minister David Cameron, would be eliminated.

But there’s still something missing: how can we, citizens, drive our politicians and governments towards such deeper cooperation?

One approach enjoying increasing support internationally and from across the political spectrum is the Simultaneous Policy (Simpol) initiative. I was responsible for starting Simpol in the UK but it’s already spreading to other countries. It invites citizens to use their votes in a new and powerful way to support the kind of global cooperation we’ve been describing. At the UK general election in 2015, it succeeded in gaining the support of over 600 candidates from all the main parties, including some Conservatives. Thirty of them are now MPs, making Simpol a powerful voice for global solutions in Parliament.

Such an approach, like Green conservatism, reconciles individual and common interests. It’s surely where our future lies.

John Bunzl is founder of Simpol

The views expressed in this article are those of the author, not necessarily those of Bright Blue.