The Decades-Long Battle of Environmental Protection
The Earth’s average temperature has risen by 0.6°C since the late 1800s (World Health Organization). The change seems minuscule given the time horizon, but even the slightest increase in temperature can have grave effects. Climate change directly affects food production and weather conditions which influence transmission patterns for diseases and infections like malaria. It has already wreaked havoc worldwide as many animal species are becoming endangered with nowhere else to go. With so many warning signs and scientists advocating that the U.S. government should take a stronger position on the issue, it is a wonder why so little change has occurred. A 2019 study by Pew Research Center indicates that the United States ranks 20th in the world regarding citizens’ views on climate change as only 59% of U.S. citizens believe it is a major problem (Fagan & Huang 2019). Given that the government prioritizes issues important to the public, it is no surprise that environmental protection has remained in the shadows of issues more pressing to Americans such as taxation, foreign policy, and more. Nevertheless, the environment has remained a controversial topic as the debate between prioritizing economic success and environmental protection has been a decades-long battle. Due to the lack of prioritization of environmental protection, there has been limited action by the U.S. government and businesses to take steps towards more environmentally-friendly regulations and measures.
It is important to preface this discussion by acknowledging that there has been significant progress in the degree to which U.S. citizens support prioritizing policies on the environment. In 2008, only about 41% of Americans supported the U.S. government taking a stronger position to tackle environmental issues. This percentage has since risen to 64% as of 2020 (Funk & Kennedy 2020). Regardless of the increase in U.S. citizens’ support of environmental protection policies, government action in favor of such efforts has been substantially lacking. On November 4, 2019, the U.S. withdrew from the Paris Agreement which unites countries around the world with the goal of limiting global warming to well below 2°C (Schiermeier 2020). Former President Trump repeatedly argued that the Paris Agreement would cost the U.S. economy $3 trillion by 2040 and 2.7 million jobs by 2025, and utilized this rhetoric as justification for withdrawing from the accord (Denchak 2021). Further supporting these claims, the U.S. Chamber of Commerce and the American Council for Capital Formation (ACCF) published a report which criticized the Paris Agreement. The report stated, “U.S. GDP loss could be about $250 billion in 2025 increasing to about $420 billion per year on average and a cumulative loss of about $4 trillion between 2022 and 2031” (NERA Economic Consulting 2017). However, a March 2017 study by the National Resources Defense Council (NRDC) debunked these claims and described that the report had “exaggerated and deceptive claims about the costs and benefits” (Steinberger 2017). One of the primary issues of the U.S. Chamber of Commerce study was that it utilized a fictitious scenario that did not reflect any of the current proposals or realistic plans to derive its headline numbers. As a result, the scenario exaggerated the costs of the future program. Furthermore, the report includes a scenario analysis of several situations, many of which concluded that the Paris Agreement goals are achievable at a lower cost, none of which were mentioned in the public-facing summary and headlines. The NRDC study also argued that the ACCF that published the misleading report is majorly funded by companies such as Exxon Mobil, American Petroleum Institute, and more which largely contribute to U.S. pollution and are greatly affected by environmental regulations (Steinberger 2017; DeSmog). Ultimately, although the report was later disproven, the damage was done as the U.S. had withdrawn from the Paris Agreement.
Since the Paris Agreement is no longer placing pressure on the U.S. government to set strict regulations to limit businesses’ emissions, there has been little incentive for individual companies to transition to more environmentally-friendly operations. Due to the high costs and time-consuming nature associated with transitioning to more environmentally-friendly business operations, there has been a reluctance to make any substantial shifts in how businesses operate. Although many businesses have social and ethical missions in which they promise to transition to zero-carbon models for manufacturing and other aspects of their operations, these transitions for many businesses are minimal, and many have not done so at all. Many businesses likely remain under the allowable emission amount but may still contribute to the deterioration of the environment on a large scale. Consumers have been increasingly pushing for changes to be made, however, it is unlikely that this pressure will be enough for all businesses to take action, especially to the extent that is desired to truly preserve the environment and its resources. A climate action tracker rated the U.S. as “Critically insufficient” as the U.S. has contributed >4°C above its emissions pledges (Schiermeier 2020). As the effects of climate change become increasingly prominent and non-renewable resources begin to diminish completely, switching to environmentally-friendly methods will likely no longer be just a socially responsible course of action but instead a necessity to continue to be able to operate.
Although many companies are making little progress in lowering their environmental footprint, more businesses are beginning to form based on innovative technological advancements that support more environmentally-friendly practices. Array Technologies (NASDAQ: ARRY) is a company leading in this area. It produces solar tracking systems that provide businesses with a cost-effective and reliable way to switch to a renewable energy source. In October 2020, Array Technologies began trading on the NASDAQ as one of the biggest U.S. renewable energy IPOs in recent years with a market capitalization of over $4.6 billion after a quick rise in its share price the day of its public launch (Stromsta 2020). Although businesses previously rushed to capitalize on rising trends such as technological growth, the environmental industry has lagged behind. Its expensive nature has been constantly cited as the reason, and although this claim may have some validity, it seems that the main problem lies in a lack of prioritization. Without governmental restrictions on businesses to limit their emissions, businesses lack the incentive to transition to environmentally-conscious methods. As a result, there is little demand for such companies which creates difficulties for existing eco-friendly companies to profit and disincentivizes companies from joining the industry.
The current effects of climate change are debatably minuscule. Therefore, many are satiated with the simple and minimal act by businesses of implementing environmentally-friendly initiatives as part of their corporate social responsibility. Still, these actions are not enough to mitigate the large aggregate amounts of oil, gasoline, and coal being burned and trees being cut down. The Earth’s average temperature is estimated to increase by another 1.4-5.8°C by 2100 (World Health Organization). Currently, 95% of the Earth’s water is undrinkable, it is predicted that fossil fuels will run out by 2060, and overfishing may cause the Earth to run out of fish as soon as 2050 (Solomon 2021). Just because the dire consequences are decades away doesn’t mean that they are ignorable. On January 20, 2021, the U.S. officially rejoined the Paris Agreement (Blinken 2021). Still, political tension and intransigence in the government will likely continue to cause a divide which renders the government unable to make further substantial changes. Without pressure being placed on the government to unite and take action, it seems that solutions are far from taking place. This begs the question of when people will start to take notice and determine that significant action must take place? By the time this recognition takes place, it may already be too late.
Works Cited:
Blinken, A. (2021, February 19). The United States Officially Rejoins the Paris Agreement. https://www.state.gov/the-united-states-officially-rejoins-the-paris-agreement/.
Denchak, M. (2021, February 19). Paris Climate Agreement: Everything You Need to Know. https://www.nrdc.org/stories/paris-climate-agreement-everything-you-need-know.
DeSmog. (n.d.). American Council for Capital Formation. https://www.desmog.com/american-council-for-capital-formation/.
Fagan, M., & Huang, C. (2019, April 18). A look at how people around the world view climate change. Pew Research Center. https://www.pewresearch.org/fact-tank/2019/04/18/a-look-at-how-people-around-the-world-view-climate-change/.
Funk, C., & Kennedy, B. (2020, April 21). How Americans see climate change and the environment in 7 charts. Pew Research Center. https://www.pewresearch.org/fact-tank/2020/04/21/how-americans-see-climate-change-and-the-environment-in-7-charts/.
NERA Economic Consulting. (2017, March). Impacts of Greenhouse Gas Regulations On the Industrial Sector. http://www.globalenergyinstitute.org/sites/default/files/NERA%20Final%20Report%202.pdf.
Schiermeier, Q. (2020, November 4). The US has left the Paris climate deal — what’s next? https://www.nature.com/articles/d41586-020-03066-x.
Solomon, K. (2021, March 30). What Would Happen If the World’s Natural Resources Ran Out? https://www.rd.com/list/what-would-happen-if-worlds-natural-resources-ran-out/.
Steinberger, K. (2017, March 22). Chamber Inflates Costs, Ignores Benefits of Climate Action. https://www.nrdc.org/experts/kevin-steinberger/chamber-inflates-costs-ignores-benefits-climate-action.
Stromsta, K. (2020, October 15). Array Technologies Shares Surge After First Big US Solar IPO of 2020. https://www.greentechmedia.com/articles/read/array-technology-shares-surge-after-first-big-us-solar-ipo-of-2020.
World Health Organization. (n.d.). Climate Change. https://www.who.int/heli/risks/climate/climatechange/en/.
