A Green Economy Will Lift Us All - But Cheats Like Volkswagen Still Stand in the Way

07/10/2015 09:17 | Updated 06 October 2016

A Joel Pett cartoon from 2009 still making its rounds online neatly summarises the battle to create a green economy. In it, a climate summit is interrupted by an angry outburst: "What if it's all a big hoax and we create a better world for nothing?"

On the surface, the joke pokes simple fun at climate change deniers - but at its core it carries an important truth: A green economy is not only a goal we should pursue because the alternative is a deep-fried planet. It's also a project that will bring unparalleled prosperity.

Extensive research proves we can do it. Most recently, Stanford scientists have shown how all 50 U.S. States can transition to 100% clean energy; the Paris-based Institute for Sustainable Development and International Relations have shown how a de-carbonization of big economies can accommodate economic and population growth; and Greenpeace have shown that within a mere 15 years, nearly two thirds of global electricity can come from renewable sources.

And we are already on our way there: Last year, renewable energy contributed to 60 per cent of new power generation worldwide. When it comes to generating electricity, the case increasingly looks open and closed for solar and wind power's superiority over fossil fuels. Soon it could also be the same for heating and transportation.

Solar and wind power, however, are not only the best way of generating electricity, they are also the best way of generating jobs. There are 17.5million positions being created worldwide by the solar and wind industries alone - dwarfing the jobs disappearing in oil, gas and coal.

The oil price drops is, in fact, another positive: Not only is it great for consumer spending and investment, but low oil prices will persevere and astonish because markets haven't caught on the fact that the advance of solar and other forms of clean energy, now irreversible, is displacing demand for fossil fuels.

On a personal level, estimates from the US even suggest that a green economy will save us each about $10,000 every year in energy, health and global climate costs. Not only for our survival, then, but also for job security and personal wealth, a green economy is certainly the way to go.

So who and what is standing in the way?

There are the usual culprits: Ineffective governments influenced by fossil fuel interests and dysfunctional UN climate talks ongoing for 25 years with rising emissions to show for. But it's the unusual culprits we should prioritize.

First, the $150 trillion capital markets behemoth that completely ignores climate risks and doesn't price them into valuations or risk premiums applied to future cash flows. Climate risks can't be found in building prices, infrastructure, clothes, water, consumer goods, industrial goods - indeed climate risks are taken into account exactly nowhere. This has to change, because when the markets move, everyone else does too.

The Governor of the Bank of England made the point clear recently when he said, in effect, that trustees of investment managers are not doing their job if they don't incorporate climate risks into their analyses.

Second, corporations that cheat - and in some cases commit crimes - to defend dominant positions in their sale of pollution worldwide. Volkswagen's unconscionable emission control fraud, a poster boy of unethical corporate behaviour, is merely the most recent instance of the resistance by fossil fuel interests (Volkswagen is no less one than BP or Exxon) to the systemic change underway in the way we fuel our lifestyles and economies.

The key stumbling blocks to a green economy are these unusual culprits: The $150 trillion capital markets and cheating corporations.

Politicians and regulators have a limited window to do their jobs to ensure citizens are protected. They aren't doing their jobs at the moment: It took Chancellor Angela Merkel two weeks even to comment on the Volkswagen scandal. Failing effective interventions by politicians and regulators, the mantle for climate action will pass to citizens and to the courts.

Truth will prevail: The wind, the sun, waves and ocean tides are free and therefore fundamentally superior as fuel for everything we need. A green economy lifts us all, as the social media cartoon reminds us. It brings better health for everyone, cleaner air and water, liveable cities, a halt to disappearing rainforests, energy independence and security, and much, much more.