Capitalism and Climate Change

Nearly every political or economic dialogue of the past few years has featured talk of “green jobs” and the prospects offered by “the clean-energy economy.”

L. Hunter Lovins and Boyd Cohen seek to make tangible the actual business economics of de-carbonization and sustainable development in their new work Climate Capitalism (Hill and Wang, $26).  Much of their case is illuminating, but in striving to convince readers that the path toward climate change mitigation is unquestionably paved with profits, the authors neglect some of the complexities of the interplay between American capitalism and environmental stewardship.

Lovins co-authored Natural Capitalism in 1999 along with her ex-husband, the environmentalist guru Amory Lovins of the Rocky Mountain Institute.  Both she and Cohen work primarily in sustainability-focused business consulting.  Their grasp of the many societal and environmental issues behind the climate change challenge is strong, and they have clearly done their homework in researching a vast range of solutions.

In Climate Capitalism, Lovins and Boyd have produced a remarkable chronicle of the current state of environmental entrepreneurship.  They have compiled an extensive catalog of pithy case studies covering business success stories in energy efficiency, renewable energy, urban agriculture, carbon markets, and other fields.  Readers will learn about Walmart’s reduction of unnecessary packaging in its supply chain, towns that have embraced carbon neutrality, and the benefits of switching truck fleets to hybrid engine technology.

These descriptions are replete with heavily footnoted statistics detailing the profit margins and environmental impacts of corporate green initiatives, building retrofits, and public energy conservation programs.  However, the sources for these footnotes span a wide range, from academic journals and newspapers to questionable websites such as (already defunct by the time of the book’s publishing).  At times, estimates of the jobs created by renewable energy programs or the savings yielded by green building seem to be taken from the most extreme studies available, and readers may frequently feel skeptical.

As some of the more drastic claims seem to overreach, they threaten the credibility of the authors’ larger argument.  Lovins and Boyd compare the costs of solar installations in sunny southern California with those of a Montana coal plant and conclude that solar energy is closely approaching cost-competitiveness with fossil fuels.  Utility companies in coal-rich Midwestern states will beg to differ, as this logic only holds in a narrow range of regions and cases.

In general, Lovins and Boyd gloss over some of the contradictions inherent in the debate about climate-friendly capitalism.  They discuss the irony that climate change will raise demand for air conditioning and refrigeration, increasing costs for the energy companies most responsible for fueling climate change.  But these elevated demand projections may well justify business-as-usual for utilities, and Boyd and Lovins dismiss the concept with a single line – “utilities that help their customers use energy more efficiently are those that will prosper.”

A passionately written section elaborates on the flaws of nuclear energy and calls it a non-solution.  But many of those who crunch the numbers find that despite its drawbacks nuclear power must play a key role if carbon emissions are to be curtailed in a short time frame.  Many of these sources, such as the International Energy Agency, are widely quoted throughout the book but strategically ignored when the authors seek to avoid contradictions.

The authorial voice in Climate Capitalism is sometimes elusive.  In part, this is because the lengthy parade of business case studies that fills most chapters frequently weighs down the flow of the writers’ argument.  It is also due to the fact that Lovins and Boyd sometimes let other voices make their points.  Excerpts from the writings of Thomas Friedman, Michael Pollan, and others appear as block quotes throughout the book.  When Lovins and Boyd editorialize, political bias occasionally makes its way into the text.  An aside during the discussion of green building methodologies mentions that President Reagan destroyed America’s government expertise in the field, and the authors launch a small attack on the economic theories of Milton Friedman.  At such points, one wonders if the book will alienate some of the business leaders with the power to make capitalism more climate-friendly.

So who exactly is the intended audience for this book?  Those seeking new investment opportunities in the sustainability field will likely find something they like, and environmentally-minded readers will appreciate the economic arguments that bolster the case for fighting climate change.  But while Lovins and Boyd have written a noteworthy text, it is not the clarion call that will bring American capitalists into the sustainability field en masse.  Like so many other books on similar topics, it risks merely preaching to the converted.  As the many case studies reveal, some CEOs are getting the message about sustainability, but those who are not may be unconvinced by statistics that seem to inflate profits and job creation numbers without serious discussion of the tradeoffs involved for businesses.  Meanwhile, the general public is unlikely to latch onto a book based on case studies, where the characters and stories that can make the topic come to life change with every turn of the page.

Lovins and Boyd clearly believe sustainability-focused businesses and green jobs are the answer to the climate crisis, and they show plenty of intriguing numbers and stories to prove the point.  But in many cases the reality is not quite so simple.  Government policy, personal consumption patterns and pure profit maximization will all need to be adapted if capitalism is to help solve climate change.  The authors recognize these issues, but fail to devote the necessary depth to these parts of the argument.

Energy efficiency improvements and other green initiatives will indeed yield savings for businesses, but these alone will only create a small dent in carbon emissions.  Until environmental stewardship becomes more fully incorporated into the structures governing the business tax code and household purchasing patterns, capitalism will struggle to provide more than some inspiring case studies in the fight against climate change.


Cimate Capitalism: Capitalism in the Age of Climate Change

by L. Hunter Lovins and Boyd Cohen

Hill and Wang, $26


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One Response to “Capitalism and Climate Change”
  1. Boyd Cohen says:

    Hello Derek,
    First of all, thank you for reading our book, Climate Capitalism. From your review I can tell you did a fairly thorough read. Your review is one of the most rigorous I have seen to date. And you make some strong points both positive and negative that are supported with your interpretation of the book. However, a key part of your criticism, that we oversimplify the solution to climate change by over-emphasizing the role of capitalism is misguided. I say this because the book has a core thesis: that the shift to low carbon can be profitable. We did not claim that the Climate Capitalism was the silver bullet to solve the crisis on its own. As you suggest, throughout the book we allude to the role of governments, citizens, NGOs and all stakeholders in contributing to a real climate solution. However Climate Capitalism would have had to be the size of Tolstoy’s War and Peace if we were to give fair treatment to the role of all of those stakeholders. And we know very few people would have read it. The book is primarily targeted to executives, managers, students and enlightened environmentalists who would like to find ways to do well by doing good.

    Hope you enjoy your Master’s degree at Columbia and thanks again for the thorough read of our book.

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