[originally posted on huffingtonpost here]

Another Earth Day is here (and gone). It's probably trite to say, "Hey, every day is Earth Day, but I'll give it a go. Yes, we need to worry about Earth stuff every day, but not just because the planet is in peril — which is a pretty good reason. Think of it this way: the Earth is often metaphorically compared to our home and, as a fairly recent homeowner, I can tell you that your home needs care and feeding much, much more than once a year (my small lawn of non-pesticide laden, eco-cared-for grass and natural weeds grows really fast). It's a constant battle to keep a house running smoothly and providing for you and your family.

But let's take a business perspective. Minding your costs, taking care of your assets, figuring out and fulfilling customer needs — all part of green value creation — are best done consistently and aggressively, not just in big flashy moments of marketing excitement. The days of "plant a tree" Earth Day celebrations being the only thing companies do are over. But many execs still see green as a checkbox exercise, not a corporate mandate and core strategy — do a few things such as retrofitting a facility or putting together a CSR report and move on.

But the environmental work we have ahead of us will be hard and ongoing. Luckily, it should get easier over time. Like the "flywheel" analogy from the bestseller Good to Great, you keep pushing away, and you start to get some real momentum.

All this relates to a question I've been struggling with lately: Does it matter if a company or its execs believe in climate change and other environmental imperatives? What got me started on this weeks ago was GM Vice Chairman Bob Lutz' comment that "global warming is a crock of s***." And at nearly every talk I give on green business, people at all levels in companies from CEOs down inform me that climate change is not real.

My approach in these moments has generally been to stay quiet or point out that it doesn't really matter whether you believe it or not, as long as you buy that going green is good for business. If you're still pursuing green value through, say, eco-efficiency or product innovation, then who cares what you believe. This is basically what Lutz went on to say after his more colorful remarks ("My thoughts on what has or hasn't been the cause of climate change have nothing to do with the decisions I make to advance the cause of General Motors"). This general idea that you don't really need the first half of the Green Wave (made up of natural forces/pressures and stakeholders), is a key point my co-author and I make in our book Green to Gold.

But I'm beginning to wonder.

Yes, in the short run, you can go down a profitable green path with the conviction that if enough of your stakeholders care, it's good for business. But what about in the longer-run, as the excitement that's swept the business world quiets down and we have to make this new green way of doing business work?

Innovation is hard. Creating new products and services and finding new markets for them is hard. Handling what may be a permanent rise in the cost of all commodities and thus the cost of doing business is extremely hard. Won't all these pursuits go a lot easier if there's a bit more on the line than "well, we just have to do this because our competitors are doing it and customers are asking for it"? Won't employees drive harder if they and their bosses believe the underpinnings of why it's good for business? When Shell CEO Jeroen van der Veer said recently that dealing with climate change "will be hard work and there is little time," I believe his employees appreciated the blunt honesty and could set their nose to the flywheel/grindstone.

So does belief matter? I don't have the answer, but I have my suspicions. The now oft-told green business success story of the Toyota Prius still speaks volumes — the company set out to make an environmental car. It wasn't just an efficiency pursuit, but a real belief that the 21st century needed a form of transportation that reduced environmental burden. Going forward, GM may have trouble matching Toyota's innovations if attitudes remain so different.

In the end, doesn't it hurt morale, creativity, and productivity to hear your boss say one of the biggest drivers for action is a crock?

[First published on Huffington Post]

The U.S. Senate's latest attempt at tackling climate change, the Warner-Lieberman bill, went down this month...again. The complaints of the opponents ranged from fear of higher energy prices to concerns about how the government will use the money collected when permits to emit carbon are sold. But the biggest concern seemed to be the bill's scale and supposed lack of forethought about how it will affect the economy.

Granted, enacting a giant government initiative with no real planning and no consideration for those hurt by it isn't just for invading countries. But how much of an intrusion on the economy is cap-and-trade? It's a fair question and vital to answer since even most critics admit that we will pass something under the next President (given statements made by both Senators McCain and Obama).

If we don't understand the concerns of the few, strong voices that helped sink the bill, we'll never make 60 Senators happy and get a good piece of legislation passed. The usual suspects - the conservative media (often the Wall Street Journal on this topic) and Republican Senators - have focused on the trauma the bill would cause Americans.

Let's look at their attack points.

First, energy prices will likely rise, a regressive impact. The loony Senator Inhofe - who claims global warming is a "hoax" without explaining why thousands of scientists would be in on the big con - is now lamenting a "tax on the poor" (it's nice to see the Senator worrying about those living paycheck to paycheck). The GAO did estimate that gas prices would rise 52 cents...by 2030. Two cents more per year, compared to the price increases we're already seeing from normal market forces and oil supply constraints, is not very impressive. Of course for many people, even that much is financially challenging, which is why lawmakers wanted billions sent to those hurt the most. Confusingly, the critics decried this plan as well.

So, the second line of attack. Dripping with sarcasm, the conservative press decried the hundreds of billions that will go to relief for the poor, payments to fossil-fuel industries, investments in alternative energy, and international aid. If pricing carbon causes some pain, then getting money into the hands of the people most affected, helping carbon-dependent industries "transition," and investing in alternative energy makes political and economic sense. The last, foreign aid, is about rich countries helping poorer countries adapt to the effects of treating the atmosphere as a dumping ground for carbon for decades. These spending priorities are dead on and actually answer some of criticisms as soon as they're out of skeptics' mouths.

Finally, the third major line of attack: the larger concern about messing with the economy. The whole point of cap-and-trade is to fix the largest market failure the world's ever seen - the current pricing of carbon and its impacts at zero. So of course it's an intrusion, but it uses free market forces to solve the problem. Free markets are wonderful, but there is no such thing as a large-scale market with nobody minding the store. Would the stock market work without the SEC, FASB, and some governing rules? To be fair, there's a better way to deal with the externality of carbon - tax it. But just imagine what conservative critics would say about a new tax. So cap-and-trade is the next best thing. We set the total amount of pollution, step back, and let companies compete to get rid of carbon - the cheapest, most innovative solutions win. Isn't that free enterprise at its best?

The critics are also upset that the government will auction off some of the permits instead of giving them all away. This complaint confuses me: selling the permits is much more hands-off than the government picking segments of the economy that "deserve" to pollute. In fact, not auctioning the permits penalizes the companies that already cut carbon (like DuPont, which has reduced emissions 75%). Punishing the most forward-thinking, innovative, and leanest businesses in our economy is a horrible idea. And it certainly doesn't help our national competitiveness any either.

In total, all of the opposition smacks of being ticked off about losing the "debate" on the science of climate change. Aside from ignoring that we're running out of options, they're suggesting that the shift we need will only cause harm, disregarding the companies that will make billions selling solutions to our problems (like GE or Johnson Controls) and ignoring the strong research and analysis from non-partisan sources like Lord Nicholas Stern from the London School of Economics. The Stern Review concluded that taking action on climate change is much less expensive than the damage to world economies from not taking action.

Cap-and-trade is a great way to start. But it seems that critics don't actually love, or understand, free markets as much as they say they do.

Everybody wants to reduce their carbon footprint these days. But many companies have looked to the quick fix of buying carbon offsets. While this practice may slow down as the recession continues, the debate will continue to rage about what makes a quality offset, and there's the rub.

Ideally, you want something that is measurable and legitimately reduces the amount of carbon going into the atmosphere (especially during tough times -- why spend money on something that may not accomplish what you hoped?). A number of problems crop up, though, particularly "additionality," which boils down to whether that project -- saving some land, building a wind farm, capturing methane from a pig farm, and so on -- would have happened anyway. You don't want to pay people for things they're already doing.

A group of NGOs has recently formed the Offset Quality Initiative to tackle this thorny question - that answer is still in the works. Environmental Defense Fund (EDF) went a step further and just launched a new resource for companies or individuals looking for high quality projects to invest in today. Their Carbon Offset Project List is fascinating. They've selected only 12 projects, far less than other respectable lists, such as the "Gold Standard Registry," backed by the World Wildlife Fund and the UNDP, which lists 200 projects around the world. So EDF must have narrower criteria.

So what's really interesting is what projects they do have. Except for one project, all are focused on methane capture, and 10 of the 12 are landfill projects (the lone holdout is a truck stop electrification project so truckers don't have to idle - very cool). Many common options are not on the list - wind, solar, retrofit projects (basically changing lightbulbs), planting trees, and so on.

I asked EDF why the methane obsession. In short, they were a) looking at the longest-standing projects with solid track records and and b) focusing on measurable and verifiable proof of reductions. They felt that "grid-connected" projects such as wind power represented a different category of renewable projects, not offsets exactly.

All of this debate demonstrates how hard it is to really define an offset...which makes claiming credit for it and declaring yourself "carbon-neutral" very dicey. Reducing carbon to "zero" is the ultimate goal here, but there are no shortcuts.

Companies can tackle this problem with a basic hierarchy of priorities. Much like the "reduce, reuse, recycle" mantra for waste, we need a simple plan for addressing carbon in business. First, cut emissions directly through efficiency and smart redesign of processes and products (and this will reduce costs directly, a good thing in tight times). Second, buy renewable directly for your facilities, including solar, wind, geothermal and, yes, local landfill gas - whatever works in your region and climate. Then, as a last resort, look for quality offsets.

Some companies are following this prescription already. Dell recently announced that it hit its carbon-neutrality target (for its offices and employee travel). The company reduced emissions, bought direct renewable energy for its headquarters from a Waste Management landfill project, then made some investments in renewables elsewhere to offset the rest.

I'm searching for a catchy three-word slogan for this path. How about Eliminate energy waste, generate your own Electrons from renewables, and Equalize your emissions with offsets? Or Bring down energy use, Build your own, Buy offsets? (Clearly, it's not easy to come up with a Tom Friedman-esque shorthand for something...send me ideas...)

In the meantime, at least the information on what makes for a quality offset is getting better. Very smart people are exploring the problem, which will only get more acute as more carbon markets spring into being. When there's a price on a reduction, you can bet someone will want to define it. Nonetheless, start now by bringing your own emissions down and building your own renewables; these are cleaner options.

Because not creating carbon to begin with is the highest quality "offset" around.

This post first appeared at Harvard Business Online and at Huffington Post.

The beginning of this post is here, the rest is on Huffington Post here...

This weekend, the New York Times gave Bjorn Lomborg -- the self-proclaimed "skeptical environmentalist" -- more air time. Lomborg wrote an op-ed that railed against those who want to cut greenhouse gas emissions dramatically. He offered his opinion on a better solution: "make low-carbon alternatives like solar and wind energy competitive with old carbon sources."

As usual, Lomborg sets up a false straw-man to knock down. He says "we are often told that...we must cut emissions immediately and drastically." Then he worries that people just don't get that we actually need to make renewables cheaper. Really? So none of the major environmental NGOs, or country delegations to global climate negotiations, have thought of that? So to tackle obesity we shouldn't just talk about weight, but also about exercising more and eating right? So insightful...

Lomborg has a long habit of tilting at windmills that he mostly imagines. His most famous argument is that we shouldn't prioritize climate change over other pressing social priorities like poverty alleviation -- as if they're all separate. The poorest people in the world are energy poor and don't have access to clean water -- the two biggest environmental challenges of our time. He's always setting up false tradeoffs to establish his more "reaonsable" middleground.

I will say that one overarching aspect of his arguments is important. Of course we should constantly ask ourselves, "What's the cheapest way to solve that problem, and where should we allocate scarce resources?"...

More on HuffPo -- please go there to comment...

[A new post on my Harvard Business column -- some interesting commentary there]

I saw an interesting piece by Michael Graham Richard on treehugger titled, "Let's Put This Meme to Rest: Global Warming — Al Gore" (thanks to Will Sarni for tweeting it to me). It seems like a perfectly obvious point, but one that I agree needs to be repeated. And it's a point that I've been making in subtle, and not-so-subtle ways, everywhere I can in recent months.

I speak to business people from a very wide range of sectors and quite often to groups that are self-identified as conservative. I find myself facing real skepticism on climate change (and real dislike of Mr. Gore). I don't really spend time debating or presenting the science, though. I just try to impress on business people to accept one irrefutable point: climate change is now a political and business reality, regardless of what you think about the scientific merits. (By the way, it is actually a reality reality also — see this unheralded story about some of the first climate refugees but never mind.)

Unfortunately, in the United States in particular, the discussion on climate change has gotten wrapped up in political affiliation. And that's due in large part to the role Al Gore has played. He's done more than anybody on the planet to raise awareness of this serious issue. But for many Americans who don't like Gore or his political party, his role as the unofficial spokesperson for climate change has tainted the discussion. It's something I understand, but wish people could get past. Why are we unable to separate the medium from the message? After all, Attila the Hun could give the Gore's Inconvenient Truth presentation and the information presented would still be true.

But at any rate, from a strategy perspective, none of this really matters — and that's what I'm consistently trying to convey to business people

See the rest of this column here

[This post originally appeared on Harvard Business Online here]

In recent months, which radical, tree-hugging group has upped the volume on pushing for action on climate change? I bet you wouldn't have guessed American military leaders. Apparently, the people standing on the proverbial (and actual) walls defending our freedoms are very concerned about the dangers our soldiers face in an uncertain, physically changing world. It's something that businesses need to pay attention to, since the military's top strategists are now getting involved in developing solutions that may well be useful to — or even critical to — individual companies' success.

Generals and admirals are now making the case that climate change is a threat to our national security. Changing regional climates, more natural disasters, and displaced peoples will force us to put troops in harm's way more frequently — and the military must be prepared.

For the leading thinking on climate and security, look no further than CNA Corporation, a think tank funded by the Pentagon, which has, in the words of the New York Times, spoken "ominously of climate change as a 'threat multiplier' that could lead to wide conflict over resources."

I recently spoke at an event in DC and sat at lunch with retired Vice Admiral Lee Gunn, the President of both CNA's Institute for Public Research and the American Security Project (ASP). In his powerful keynote address, Vice Admiral Gunn spoke about the risks global climate change presents to America. His view on the science was simple: "Some are still not convinced about the science on human-induced climate change — I am."

The Admiral laid out three large shifts in military practice and strategy that climate change will bring about:

1. Why the U.S. fights, gives aid, and responds to disasters: Natural disasters, water shortages, and the weakening of some states mean "we will deploy more often to more places."

2. How logistics patterns will change: One of our primary military bases in the Middle East, Diego Garcia in the Indian Ocean, is only a few feet above sea level. The physical shifts and the changes in force structure related to #1 and #2 will all be expensive.

3. What will happen to international relations: The loss of sea ice is changing commercial and military sea patterns. The Arctic represents a new area of resources for countries to potentially compete over (remember Russia planting a flag last year on the North Pole sea bed?).

[Please see the rest of the post here]

What do Exelon, Pacific Gas & Electric, PNM Resources, Apple, and Nike all have in common? In the last month they all dropped out of the U.S. Chamber of Commerce over the group's stance on climate-change legislation.

Sadly, the Chamber's COO told the Wall Street Journal that these defections will not change the Chamber's misguided positions, including constant carping about the potential costs (almost always overstated) of climate change and calling for a mock "trial" on the science of climate change.

Here's why the Chamber is out to lunch. First, tackling climate change is good for business and improves the competitiveness of our industries and the country as a whole. And, oh, on a related note, the Chamber is increasingly out of step with its own members — because they do see how going green will help their businesses.

As so many companies already know, climate legislation will help our nation's businesses stay competitive on the global stage. But don't listen to me, listen to mega-venture capitalist John Doerr and GE's Jeff Immelt. The two staunch capitalists wrote a powerful op-ed in the Washington Post that laid out the series of crises we face: economic, climate, energy security, and now a "competitiveness crisis." As they put it, "this crisis is particularly evident in America's worldwide standing in the next great global industry, green technology."

Their evidence: One in ten of the world's biggest solar and wind companies are based in the U.S. We're falling behind China, Germany, and others fast. Their solution, in part: "Send a long-term signal that low-carbon energy is valuable. We must put a price on carbon and a cap on carbon emissions." With the right price signals, we invest, innovate, and move off of fossil fuels (and stop sending $700 billion every year in oil payments to countries that don't like us — but that's a separate story).

And with the right policy in place around the world, according to HSBC, climate change-related products and services will be a $2 trillion market by 2020. That's a big pie to compete for. But without the right price signals here in the U.S., we can't compete. It's as simple as that.

[See the rest of this post, and the always interesting comments whenever climate change comes up, here on Harvard Business Online]

Stephen Dubner and Steven Levitt's SuperFreakonomics has certainly gotten a lot of people worked up in short order. The point of contention is a chapter about global warming which makes the case that Al Gore and others are too worried about the climate problem because the only way to solve it is to convince people to "put aside their self interest and do the right thing even if it's personally costly."

The authors go on to explain their solution -- geoengineering -- which purportedly isn't going to require us to cut back on our energy use or rethink the way we do business. But what they have completely failed to address -- and what the (ahem) lively discussions on the topic have missed as well -- is what the benefits of tackling climate change might be, instead of just the costs.

The authors have missed a major economic issue: the process of shifting to a low-carbon economy has enormous upsides completely aside from the benefits to climate balance.

I'm not going to try and take apart their arguments or judge the soundness of their climate science as a whole; there are some others who are already doing a detailed job of that. If you like your climate discussions hot and sarcastic (which can be entertaining), see Joe Romm's posts on his Climate Progress blog. Or if you like the cool, dispassionate analysis, I'd recommend the Union of Concerned Scientists or the well-respected journalist Eric Pooley's take on how the authors -- who he says are friends of his -- "flunk" the science.

There's also been a fascinating back and forth which includes the authors and Nobel laureate economist Paul Krugman. In short, Krugman is not pleased and he lays out some devastating concerns about the mental exercise the authors have undertaken ("We're not talking about the ethics of sumo wrestling here; we're talking, quite possibly, about the fate of civilization. It's not a place to play snarky, contrarian games").

The brouhaha is truly unfortunate on many levels. It's not that having a discussion of geo-engineering is a bad thing -- we should explore and assess many options. But the real problem is that the authors of SuperFreakonomics -- and even the big critics who have gotten sucked into it -- seem to have taken too narrow a view of the problem. Although the authors clearly believe that there is too much climate-change hype, they seem to agree that there's a warming problem (or why propose a solution -- the main point of the chapter -- at all?). But the focus of the discussion is entirely on a way to counteract the effects of greenhouse gases, as if there are no other issues related to our reliance on fossil fuels.

Instead, let's just think about the business benefits of changing our products and processes to reduce carbon emissions, regardless of the atmospheric benefits. How will changing to a lower-carbon economy help companies? Well, there's real money involved here -- energy and other resources are getting fundamentally more expensive over time as demand around the world rises and supply gets harder to find. Oddly, the SuperFreakonomics authors acknowledge this Econ 101 supply problem in passing with the statement: "In just a few centuries, we will have burned up most of the fossil fuel that took 300 million years...to make." So why wouldn't we want to move away from a declining resource?

Put really simply, it saves money to reduce greenhouse emissions. It makes businesses more competitive to use less energy and to help customers do the same. It also creates jobs in a wide range of industries that help build a low-carbon economy -- from the obvious solar panel builders and installers to the less sexy home weatherizers, electric vehicle manufacturers and mechanics, and building efficiency consultants and experts.

The countries and companies that decouple themselves from fossil fuels will slash their costs and increase profits mightily. In fact, as Robert Kennedy, Jr. pointed out in a speech recently, the countries that have already reduced their reliance on fossil fuels -- such as Iceland, with its geothermal energy, and Sweden, with a carbon tax driving down energy use as the country grew -- have made their economies richer and more stable. (Yes, Iceland then bet its wealth on bad investments at the heart of the financial crisis in 2008 and bankrupted itself, but that's another story.)

As many have repeatedly argued, we also place ourselves at great risk globally by continuing to pour money into oil markets. We send hundreds of billions of dollars a year to parts of the world that tend to include our enemies (and is a waste of money no matter whom it goes to). And we place ourselves at personal risk -- the National Academy of Sciences just estimated, conservatively, that fossil fuels cost $120 billion per year in health costs and cause 20,000 premature deaths (that's more than six 9/11s if you're counting).

So while we find new ways to pour attention on "contrarians" and have a debate that most of the rest of the world has already stopped having, we risk our health, fall further and further behind the countries we compete with (China and Germany, for example, in renewables), and become more indebted to countries that may not be friends.

Solving climate change is not really about asking people to hold hands and sing "Kumbaya," but about political will and making it easier for business to create the low-carbon solutions we all need. Regardless of the climate science, the benefits of action and the costs of inaction for business are astronomical -- and worth superfreaking out about.

[This post first appeared on Harvard Business Online and on HuffPo -- see the comments...]

The anger and energy of the climate skeptics is at a fever pitch lately. The breaking story that the Wall Street Journal loves so much is about one climate research center in the UK that may have been unwelcoming to contrary opinions. So the conspiracy theorists are all over this and are making the case that there's a global scientific hoax. I can't stomach diving into whether one research center in the entire world acted somewhat inappropriately to shut out opposing, angry views.

But I do always find the "debate" on warming totally surreal since you don't have to buy the complicated climate models to just look out the window (proverbially). Glaciers all over the world are melting, noticeably, and quickly.

See this little video and discussion of the decline in Himalyan ice (a water source supplying over a billion people) on Climate Progress here.

I'm unclear on what people think is going on. If you put a glass of ice water outside and the ice melts, you know it's warm out there. It's really not much more complicated than that.

And yet the anger at people who want to do something about this serious problem, and even (gasp) profit from the shift, continues to rise (I've even received hate mail for fairly innocuous commentary on how good it will be for business and national competitiveness to wean ourselves off of oil and carbon).

I prefer to think that the level of animosity is a sign that the debate really is fundamentally over. This is the death throes of an outdated perspective. Let's hope it dies quickly. Let the angry, bizarre commentary begin...

For some reason I can't understand, Mr. Skeptical Environmentalist Bjorn Lomborg keeps getting space in places like the Wall Street Journal and Time to peddle his drivel. The Journal has given Lomborg a weekly op-ed for about 6 weeks to talk about how we shouldn't really tackle climate change.

Here's how each of these weekly missives work. Lomborg picks out one person in a country to talk to and asks them how much they care about climate change. Yesterday, he told us that a very poor person living near Mt. Kilimanjaro doesn't care so much about melting glaciers, but cares more about education about HIV. Last week we learned that a very poor person living near Himalayan glaciers that are melting, which will create vast water and food shortages, also cares more about pressing daily issues of local poverty. Earlier, a very poor person living in Africa told Lomborg we should tackle malaria directly rather than take on climate change. Wow, these are real surprises.

Lomborg's sole purpose in life seems to be creating false arguments that nobody is really making and then knocking them down. In the malaria article, he makes it sound like all the government, NGO, and business work to battle climate change is intended solely to stop the spread of malaria (which may become more prevalent as warmer weather makes things more hospitable to mosquitoes at higher latitudes). So, he says, the potential investment of trillions of dollars to create cleaner, more efficient economies is an expensive solution for malaria. Treated bed-nets are much cheaper.

Well, yeah, no kidding, Bjorn.

As if anyone is saying that reducing carbon is just about malaria, or water supplies in Asia, or only any one of the many specific issues Lomborg splits up into little targets and compares to the whole (inflated) price tag. And, by the way, who said that tackling climate change is separate from helping the poorest among us? The issues are all integrally related and the poorest are being hit hardest by climate changes already. Lomborg always seems to be arguing against some phantom Birkenstock-wearing Greenpeace activist chained to the bulldozer of progress...in the 1970s.

The logic and arguments for decoupling our economies from carbon have evolved tremendously and include national competitiveness and job creation, healthier air, eliminating reliance on fuels from parts of the world that fund terror, and reducing dependence on volatilely-priced, and declining, resources that will raise the cost of doing business over time. This is why many important capitalists such as Jeff Immelt at GE (but not the US Chamber of Commerce of course) are making the business case for climate action.

You'll notice that none of these other reasons actually depend on believing fully in the science. And they make for more prosperous economies, which can help the poor the most. And guess what, we have to walk and chew gum at the same time -- we have to think holistically and tackle issues in a synchronized way.

But overall, what I really love is Bjorn Lomborg taking his argument for helping the poor to the skeptics of the world and going through the Wall Street Journal -- as if this is the crowd lining up to send development money to countries for food, water, and bed nets. Who is he speaking to?

Perhaps the real question here is this: What the heck is wrong with the Wall Street Journal? Today, they pick up Lomborg's arguments hook-line-and-sinker and offer an assemblage of greatest hits on not taking action. But yesterday was really hilarious.

They printed one op-ed -- in a series of daily, relentless lamenting about climate science -- laying out how climate skeptic bloggers (who almost all have no climatology or geology or any -ology background) have dismantled the idea that the actual measured data show an increase in GHG gases (the famous "hockey stick" chart) or any warming at all. Yet, in the same issue of the paper, the WSJ printed a truly helpful, excellent article looking at the main arguments/myths from the skeptics and comparing them to what the scientific community is really saying. The very first comparison is this one...

WHAT THE SKEPTICS SAY: The Earth isn't warming -- at least not to any extent that could actually be called a "crisis." And some data even suggest that the Earth is getting colder. The planet may have grown warmer over the course of the 20th century. But that warming stopped more than 10 years ago, and since 1998 the trend shows less warming or even cooling...

THE RESPONSE: It's true: By most measures, average temperatures this decade seem to have plateaued. But this isn't evidence of a cooling planet. Partly, it's a result of picking an exceptionally hot year -- 1998 -- as a starting point..the long-term trend since the mid-1970s shows warming per decade of about 0.18 degree Celsius (about 0.32 degree Fahrenheit)...The '00s still have been exceptionally warm: The 12 years from 1997 through 2008 were among the 15 warmest on record, and the decade itself was hotter than any previous 10-year period. While 2008 was the coolest year since 2000 -- a result of the cooling counterpart of El Niño -- it was still the 11th-warmest year on record. And 2009 is on track to be among the five warmest.

The Journal is as schizophrenic as the population I suppose, but the op-ed pages are totally out to lunch. We need good reporting now about what we know, and what we don't -- not ideological blustering. And we need to stop creating false tradeoffs between helping the poor and helping the planet, as if the poor -- and all of us -- don't live and breathe on that planet.

This first appeared on Huffington Post.

[If this was forwarded to you and you'd like to sign up for Andrew's blog via email, click here]

Just a quick link to my monthly e-letter. This one is a bit different. I look at four (of many possible) scenarios for business after the big climate talks in Copenhagen. For each I give a quick rundown of what the world will look like and how business might need to respond.

http://www.sustainablelifemedia.com/files/webform/documents/ecoadvantagestrategies12072009.htm

Also, a note on my last post. I think many of you did not receive it as I changed the name of the RSS feed and didn't realize it would mess up delivery. I've changed it back until I figure out a better way to migrate the name. To sign up for my blog via email, click here.

So here's the link to my last post on some of the absurdity in the climate discussions lately.

NEWS FLASH FROM BJORN LOMBORG AND THE WSJ: WE SHOULD HELP POOR PEOPLE

Happy New Year all (ok, I'm a bit delayed, but I entered the new year and promptly got really sick -- lost over a week in there). So let's start fresh now!

Anyway, I took a bit of time at the end of 2009 and early 2010, with a couple weeks' perspective, to think about the stories that really grabbed me in 2009. The top 10 is below, but see my brief write-ups and logic on each at my e-letter site here.

1) Copenhagen fails or does it?
2) The debate over climate science rages on (in the U.S. at least)
3) The EPA steps in
4) Wal-Mart keeps the pressure up (and saves the rainforest?)
5) Domino's employees deliver a new kind of openness.
6) IBM starts building a "smarter planet"
7) GM goes bankrupt
8) Some of our biggest capitalists get serious about carbon
9) China emerges as a green tech leader and the world's biggest emitter
10) The bottom of the pyramid becomes a source of innovation

And the bonus, theater of the absurd, wacky story...
10 1/2) Forbes names Exxon green company of the year

[A post from December from Harvard Business that i forgot to post here...but it's still timely!]

No matter what happens in Copenhagen, or in the follow up meetings in Mexico and elsewhere, the world is warming. It's happening today, and even the majority of skeptics seem to agree on that point (often the debate is whether humans are behind it and how much money we should invest in "fixing" the problem). But the very real changes we're already seeing are prompting many in the climate-watching world to talk about not just reductions in emissions but "adaptation."

What used to be seen as a dirty and defeatist word is now a central discussion point, even in Copenhagen. The G77 (the developing world) is demanding significant aid from the rich countries not to help them combat climate change, but to help them adapt to it. Just a couple weeks ago, President Obama said he sensed some consensus around mobilizing "$10 billion a year by 2012 to support adaptation and mitigation in developing countries."

Given the cold reality of a warming planet, adaptation is now a strategic issue for countries and companies alike (whether or not they realize it). The changing climate can mean many things, but includes, according to an important report from the state of California, threats to ocean and coastal resources and land, water management challenges, major changes to agriculture, and stress on transportation and energy infrastructure. In California alone, $2.5 trillion of assets will be exposed to extreme weather and wildfires, costing many billions a year.

For companies the same basic issues apply. Specific industries, such as agriculture, face massive change. But all companies will find impacts up and down their value chains from weather, changing water availability, and temperature shifts. But just laying out doom scenarios and risks doesn't help much. So let's look at a couple of excellent (and short) reports on adaptation and business.

Some big institutional investors, with the guidance of the consultant Acclimatise, recently released "Managing the Unavoidable" (register for free to download it here or get the similar 2008 report on similar topic here). A few key findings struck me as dead on and important:

1. Climate change adaptation is starting to receive more management attention but management systems and processes are much less developed than those for climate change mitigation. Basically, most companies are not thinking about this, with a few exceptions — Coke comes to mind since it's been mapping water availability for years. But they are in the minority.

2. There appear to be significant weaknesses in companies' risk assessment processes. They say that "incremental changes are being under-emphasized" (we all focus on extreme weather events rather than 'creeping' changes) and "indirect impacts on business models are being neglected" (we focus on risks to our own fixed assets and haven't looked at supply chain disruptions). Meaning, even if you don't think you rely on water in an arid region, someone in your supply chain might.

3. Companies are more concerned about risks than opportunities. While it may seem cold to talk about how to profit from a warming planet, it's a reality that there will be winners in this. More importantly, we actually need companies to pursue solutions to greatly reduce human misery. And, yes, there will be profits.

And this brings me to the second report that's worth a look. "The New Adaptation Marketplace" from global NGO Oxfam lays out some helpful categories and sample companies that stand to profit from the changes to come. These include, water management (Pentair, Siemens), energy supply (GE), insurance (Swiss Re), climate change information and consulting services (ICF International), and of course agriculture projects (CH2M Hill).

On the last one, consider one of my clients, Bayer, which has a sizable crop sciences business. In its last annual report, Bayer identified drought-tolerant plants as a major investment opportunity. Clearly, the world needs to keep food volumes growing, even on a dryer, warmer planet. The companies that can solve this kind of problem will grow and win share.

Or think of the more extreme needs that might arise and the entrepreneurial opportunities. As some smart people have pointed out, cutting carbon won't be enough — we'll need to drag it out of the sky. Imagine what new technologies we'll need to do that.

From my conversations with Oxfam, clients, and other corporations, I can tell you that most organizations — including ones that already have products that will help with adaptation — are not yet thinking clearly about the risks and opportunities from climate change. Are you?

It's been a couple months since the global climate negotiations in Copenhagen. Whether you're a fan of a global cap on carbon emissions or not, it's important to think about what COP15's failure means (that a global agreement is going to be unlikely in the near term) and what it doesn't mean for business (that companies will be off the hook for tackling carbon emissions).

The climate negotiations brought together committed activists and world leaders, but led almost nowhere; instead, the gathering only highlighted and revealed some major structural hurdles getting in the way of a multinational agreement.

So it might seem that near-term regulatory or policy pressure on companies is unlikely. But actually there are some significant sub-national initiatives affecting business as usual that every company should know about. The pressure to measure, be transparent about, and reduce carbon is still on.

First, even without a global carbon trading system, other major multinational cap-and-trade systems are in place or in the works, including the EU's trading program, which has already been running for a few years. In North America, three separate carbon trading programs are in the process of setting regional caps covering states that include half the U.S. population (and provinces with three-quarters of Canada's). And city-level initiatives like the Mayors' Climate Protection Agreement are driving new local rules and fomenting competition among municipalities to cut emissions.

Second, within the U.S., the Environmental Protection Agency is not sitting idly by either. The series of climate-related rules that the powerful EPA has announced in the last year began with the National Climate Reporting Plan, which forces the largest 10,000 facilities in the country to measure and report their carbon emissions. This new system has much in common with the Toxics Release Inventory (TRI), a very public, and mandatory, database of toxic pollution by facility mandated by the federal government in the 1980s. TRI raised awareness within companies about their own footprints and drove aggressive efforts to reduce toxic pollution (along with cost and risk) that continue to this day. The same awakening about the carbon pollution companies cause -- and the financial costs of this form of waste -- even without an agreement from Copenhagen..

Going well beyond the regulated transparency of the reporting plan, the EPA recently declared greenhouse gases a public health threat. After a 2007 Supreme Court ruling that basically said CO2 could be regulated, the EPA's "endangerment finding" was no surprise. What's still unknown is what it will mean for business.

So far, virtually all the action -- from the regional trading schemes to new EPA rules -- has been aimed mainly at utilities and the biggest factories. What does all this activity mean for the average company?

The caps and efforts to reduce utility emissions could result in higher energy prices. Any business that, well, uses electricity will be affected. And the EPA's intentions for the longer term, while up in the air, are getting clearer. There is almost no chance that forced transparency for the big guys is the end of what the EPA will do. One glimmer of what will come: rules newly proposed in 2009 (in conjunction with the Department of Transportation) to reduce emissions from light-duty vehicles.

The bottom line is that business must still plan for rising restrictions on greenhouse gases by legislative means or by regulation. Despite the confounded state of international climate policy negotiations, companies will continue to face new mandates to measure, report, and reduce their carbon emissions.

[This post originally appeared on Harvard Business Review]

What do you call a group that uses large snowstorms to deride the scientific evidence for climate change? Fox News I guess.

The absurdity of pointing out that there's snow in the winter -- in one part of the world mind you -- and using that to say that climate change is a hoax is breathtaking.

Especially when, at the same time, Vancouver is shipping in snow for the Olympics...you see, some places get more snow, some get less. That's weather, not climate.

Anyway, if you don't laugh, you cry. Only comedy can do justice to this insane line of logic.

The Daily Show points out that it's hot in Australia...

...and Colbert make the logical extension that when it's dark, the sun must have been destroyed.

I must have done something wrong to someone today because I feel like I'm in some kind of surreal dream. The day started well with a great event hosted by Xerox in Dallas, talking sustainability with some leaders in the field. Then I ended up in two bizarre conversations during my travels home. This post is my personal therapy session to work it out.

First scene: In a car to the airport with a senior exec from IBM who basically leads the company's very successful "Smarter Planet" projects with customers (helping companies and cities with traffic flow, water management, carbon reduction, etc, etc).

The car service had provided us Ford Excursion -- from a sustainability event -- so that should've been my first tip on something being awry in the universe. Anyway, my colleague and I are talking about green, climate, the inexplicable vitriol and anger of climate deniers, Al Gore, etc. And the driver looks in the rear-view mirror and intiaties this conversation.

Driver: (Laughing): You guys don't believe this climate hoax do you?
Me: (Also laughing) Are you kidding? You're kidding right?
Driver: No, you know, it's a hoax
Me: (Not laughing) Why do you think that?
Driver: There's no evidence.
Me: Actually there's massive evidence, decades of it in fact [see a cool video on the basics of the incontrovertible science and physics of it all here...]
Driver: (Arrogantly) What about those climate emails? Those didn't happen?
Me: Yes, they happened, but they didn't disprove the decades of science.
Driver: They falsified records
Me: Actually they didn't. You should read some of the emails — they didn't falsify records at all.

End scene.

I really had to wonder what kind of small, tiny bubble of friends and media consumption you have to live in to find it astonishing to meet people who believe the 95% of scientists that see climate change as a real problem. Disagreeing with that view is one thing, but laughing at people like they're aliens is another and shows me just how divided we've become where we can surround ourselves with echo chambers...

On to conversation #2

I'm minding my own business on my flight home and right when we're getting ready to land (I almost made it), my seat-mate decides to strike up a conversation (it's always dangerous when they make you turn off electronics — so much silence to fill). Here's conversation #2.

Guy on Plane (I'll shorten that to GOP): What do you do?
Me: Work with companies on environmental issues, speak, write, consult, helping them with green business strategy (ya da ya da)
GOP: You mean recycling? (my first clue this was not going to go well most likely)
Me: No, a whole range of things from product development and innovation to c-level strategy to executive education and training what do you do?
GOP: I'm in the energy business. Private equity investments.
Me: Oh, what kind?
GOP: Oil, gas, coal — really diversified
Me: No renewables investments?
GOP: No, we don't invest in things that need government subsidies. Wind and solar and such are so uneconomic. [here's where I want to point to an article I just saw today about governments spending $500 billion on fossil fuel subsidies]
Me: Huh.
GOP: We do some work educating. We have a site, plantsneedCO2. We educate government people on what CO2 is. [It's here where I discovered that at 10pm after a long day I didn't even have the energy to ask, "oh, what does CO2 do?" — but check out the site. It's real and informs us that we need MORE CO2 not less.]

The conversation went on, but that's about all I can stomach to convey. I seem to have run out of steam to have a discussion with people who are this far gone. Bring on legitimate debate about what to do about the challenges we all face, or about the right policies and government action (or whether government or markets alone should do it). But people like this cannot have a real conversation. I just wonder what I did to deserve running into two in short order.

Thanks for listening. Deep breaths.
Onward...

We are coming out of our long, national nightmare. One of the dirtiest political fights in memory is over (sort of). But if you think the health care debate got rough, wait until President Obama and Congress turn to energy and climate -- which they're most definitely going to do.

You see, the worst claims about health care -- that it's a huge expansion of government power or, okay, let's say it, a plot to kill Grandma -- were never based in reality. What we've ended up with is actually a fairly mild bill, including access to coverage for millions more people and restrictions on the harshest practices of insurance companies. But it's not remotely a government program. The so-called "public option" did not even end up in the bill. There is no new giant government health care program beyond the existing giant government health care programs that people seem to love (like Medicare).

But putting a price on carbon and changing our energy mix over the next generation? That kind of law will be a large program by definition. To tackle an economic externality -- those pesky costs to society that are not currently priced into markets -- you do have to get muddy, and it most likely will entail an awful lot of mud-slinging.

So many of the complaints about a cap-and-trade law that we will hear over the coming months will be different from the health care claims in one very important aspect: they will actually have some basis in reality. A cap will affect the cost of all energy and thus all aspects of our lives. It will, for some, raise the cost of doing business. There will be winners and very definable losers in a new energy and carbon regime. When it comes right down to it, there will be blood.

Those who produce mainly fossil fuels could be in trouble. Businesses that operate inefficiently will see their costs rise -- fast -- compared to the competition's. Companies that stick with a portfolio of less sustainable, more energy-intensive products -- anywhere in their value chain -- will face life-threatening challenges (think GM in 2008 when oil hit $145 a barrel).

I believe strongly that decoupling our economy from carbon will benefit us greatly (regardless of the debate on climate change). The benefits include...

• lowering our costs and increasing our profitability and resilience

• costing much less than inaction on climate (see the famous Stern Report for the macro-economics on this)

• reducing our reliance on fuels from parts of the world that fund our enemies

• making us healthier as we reduce air pollutants

• making us more competitive globally in the great race to multi-trillion-dollar environmental technology markets

Those impacts will not be felt equally across all aspects of the global economy. As we invest in efficiency, the sector that provides our energy will not fare well if it doesn't adapt. But the general position of organizations like the U.S. Chamber of Commerce that climate action is bad for business is absurd; these groups are placing the interests of one sector -- albeit a large and powerful one -- against the interests of all the others that will benefit from higher efficiency and lower operating costs.

So, in the place of death panels killing grandma, we'll have stories of how high energy prices will make heating homes in winter expensive... and, you guessed it, kill grandma. These arguments will ignore the countervailing levers of energy efficiency, retrofits, and weatherizing that will lower energy costs overall. And instead, we will hear (mostly made up) stories of businesses that will go under from new carbon laws.

But in this case, unlike with health care scare tactics, there will be some gems of truth hidden in the argument. So, yes, it will get ugly, but I have hope today that the forces of reason -- and the voices of the companies representing literally trillions in revenue that want climate action and more regulatory and market certainty -- can win out.

[This post originally appeared on Harvard Business Online]

On the heels of one of the most active weeks in Presidential history, President Obama has confounded his supporters on the green side of the spectrum and opened up major areas of the U.S. coastline to offshore oil drilling.

The reaction to the decision has been in some cases predictable, but often surprising -- the New York Times came out in favor today. Of course key environmental leaders are dismayed (see this helpful, quality debate on the Times blog featuring varying perspectives from leading thinkers).

But I've been scratching my head and I'll admit that I'm completely confused by this decision, or at least by its timing. I can only come up with a few plausible reasons the President would support this, but none make real sense to me. Please comment and offer other reasons. Here are some lines of logic that some may support...

Answer One: President Obama, like all politicians, is 'in the pocket' of big oil and big industry.

This is way too easy an answer and is just part of the 'a pox on both your houses' attitude that's growing in the country. Yes, all politicians are beholden in different ways to different donor groups, but I don't think anybody can say with a straight face that Obama has tried to do just what some industries and donors want.

Answer Two: This is a political maneuver to buy Republican (and energy-state Dems) to the coming climate and energy bill debate.

This answer has the most currency right now. But I have two problems with its logic. First, the timing is odd. Why announce you're giving up one of your better negotiating positions before the real climate debate heats up? Why not hold that in reserve to get those votes you need? Or -- if can go out on a naive imaginary limb here -- why not hold it over the oil companies' heads to get some concessions -- like much higher fees for access, reduced subsidies elsewhere for fossil fuels, or demanding that they stop spending money on undermining climate science.

The timing just seems oddly nonstrategic, but, as environmental strategist Will Sarni pointed out (via a mini Facebook debate amongst my colleagues), it's just like the public option in health care -- Obama gave it up early on.

Second, and this should be obvious given the way health care went, Obama is not going to get any Republican votes on anything -- Senator McCain made that pretty clear by stating recently, "There will be no cooperation for the rest of the year." So maybe Obama is looking to shore up weak support for cap-and-trade in the Democratic ranks -- that makes some sense.

(As a funny side note on politics, has anyone noticed that he's opened up drilling pretty much around Republican stronghold red states? It's as if he's saying, "ok, you want a world of 'drill, baby, drill'? Then you can have it on your coastlines.")

Answer Three: The President and his Interior Secretary Ken Salazar actually believe this is a good decision and will help us achieve a measure of energy independence.

This answer actually seems the most believable to me, but it seems even more odd. I'm going to vastly oversimplify the economics and market structure of fuels here, but isn't oil fundamentally a fungible, global commodity? Meaning, even if we dig off our own shores, it's not exactly like it comes only to us. We're not operating a state-run oil company. If ExxonMobil digs up the oil, it basically enters the global market, continuing our addiction to oil and propping up what Thomas Friedman calls the "petro-dictators" around the world.

And even if the oil only came to our refineries and cars, there's nowhere near enough oil out there to make us independent anyway. True energy independence -- if that's even a worthy goal -- is only feasible through distributed generation, meaning a solar panel on every roof and wind turbine in every neighborhood. That's the energy shift we need to be moving toward as fast as possible, so I hope we use the rights and tax revenue to help support renewable energy.

In the end, I suppose this decision came from a bit of all three (and mostly the latter two). I welcome your comments on other plausible reasons, and please let me know if my Econ 101 assessment of global oil markets is fundamentally off-base.

(Sign up for Andrew's blog, via RSS feed, or by email right to your in-box)

Earth Day week is filled with announcements, events, and parties -- way too much for any one person to follow. I spent the week in DC, speaking at the EPA, moderating a plenary session at the Creating Climate Wealth event (from the Carbon War Room), and then ending my time with a White House reception for Earth Day -- which was awe-inspiring, frankly, as I had never been to the White House and that whole "leader of the free world thing" is fairly impressive.

I wanted to share some random snippets of interesting things I heard along the way...

- In preparing for the EPA speech, I read EPA Administrator Lisa Jackson's speech from last month at the National Press Club. Please read it. It's about innovation and a new kind of regulatory approach. Key quote: "I'm done with the false choice between the economy and the environment."

At the Creating Climate Wealth Conference...
- Kathleen Rogers, President of Earth Day Network: "the theme of the 40th anniversary of Earth Day is green business"

- Jigar Shah, CEO of the Carbon War Room: "Energy waste and illogical decision-making are huge wealth-creating opportunities", "Climate change is not a sacrifice...it's not like the 70s where we ask, 'what are we willing to pay for clean water', but it's now 'What are we willing to do as a species [to build a better world] for our children and grandchildren?'"

The panel I moderated included Sir Richard Branson, former Costa Rican President Jose Maria Figueres, Waste Management CEO Dave Steiner, Pegasus Capital founder Craig Cogut, and Sara Greenstein, a top exec from Underwriters' Laboratories...

- Sir Branson: "Protecting natural resources and reducing carbon emissions are the greatest entrepreneurial opportunity in history"; "We can't rely on 'the end is nigh' language...it's not nigh if we all work together to scale up low-carbon solutions"

- President Figueres: "There is no planet B!". In politics, he said, "The long-term perspective is the next election. The short-term is the next poll." In Costa Rica, he had a single term, by law, so he was able to pass a carbon tax in the 1990s! And on land-based carbon assets..."As long as the price of a tree standing is less than the price of a tree cut for timber, we won't save the forests."

- Dave Steiner described the 4.5 lbs of waste we each produce...every day. He said it's all carbon really as it breaks down into methane. Waste Management now powers 1 million homes with methane gas.

- Craig Cogut described one seemingly 'boring' business he's invested in that replaces shipping pallets with more sustainable alternatives. Some of the biggest food companies and retailers are signed on.

- Sara Greenstein explained the role UL plays in setting standards around the world (every U.S. home has 100+ UL labels on products). The company began by setting a standard for how light bulbs should work at the World's Fair they were introduced at (in the 1890s). In essence, it's going to be hard to launch and scale new technologies -- like a smart grid -- without some agreement on standards and certifications to ensure the whole system works

At the evening event at the conference, Branson spoke again, but we also heard from the former President of Ireland, Mary Robinson, about climate justice, as well as speeches from the founder of Earth Day, Dennis Hayes, and the Secretary of Commerce, Gary Locke. A couple gems...

- Dennis Hayes told us that a National Academy of Sciences study said there was enough evidence of climate change to start working on constraining CO2 emissions...in 1979. Sigh.

- Secretary Locke: "The Chinese are spending $9B a month on the clean economy...the longer we wait, the further behind we fall to China, Spain, Germany."

Another panel on the 2nd day of the conference featured Reed Hundt, former head of the FCC; Reid Detchon, VP of Energy and Climate at the UN Foundation; and Sunil Paul, a leading cleantech venture capitalist and founder of Spring Ventures. Some very interesting stats from them...

- Reed Hundt talked about the investment in and creation of mobile and data networks. Between 1997 and 2007, the private sector -- without any government money -- spend nearly $1 trillion. Hundt said that "if we spent the same amount in the same time period [on clean energy], we'd have a 100% clean grid." He also talked about the need for long-term low-cost financing (this is where govt can help) and his Coalition for Green Capital.

- Reid Detchon, talked about California's holding flat the energy use/person over years vs. the constant rise everywhere else in the country. The 'wedge' between those two trends "is expense and cost."

- Sunil Paul had a bunch of great stats on scale of the challenge to take billions of tons of carbon out of the atmosphere (and he launched the Gigaton Throwdown to tackle the problem). By his calculation, we need about $8.4 trillion investment in the next 10 years to reach the climate stabilization goals scientists tells us we need. And the capital has to come from the private sector which has $125 trillion in assets (vs. $300 billion in philanthropy and $18 trillion in government). And finally, from Sunil, a thought on making new technologies easy and scalable..."saving the world should be mundane."

Overall, Creating Climate Wealth, and much of the discussion I heard around Earth Day in D.C. was about business and growth. Clearly Earth Day has expanded its reach from being a personal protest mission for millions of Americans to being a chance to step back and think and talk about what kind of world we want. Let's hope the conversation continues.

In case you missed it, Senator Lindsay Graham, who has been a lone voice of reason on climate from the right side of the aisle, has threatened to derail the climate discussion and the bill that's supposedly coming out this week (some elements of the bill, as described by Senator Kerry, here). His problem is the Democrats' sudden interest in putting immigration issues in the forefront.

So, is he brave because he's saying, "Enough delay on climate, let's get going on legislation"? Or is he being an arse (in nicer British terms) by putting his feelings/agenda first and threatening an entire legislative discussion that the world is depending on?

As my colleague Will Sarni says, Graham's "brave to balk, an arse to withdraw."
I tend to agree -- it's a bit of both. But I'm (naively and optimistically) leaning toward brave. The fact is, I sort of agree. The administration has put health care, financial reform, jobs, nuclear disarmament, and a few other things ahead of pushing through an energy and climate bill. Those other priorities are all important, but we missed the international deadline in December which derailed the Copenhagen meetings. It's time to act now before the 2010 election.

Who knows what all this maneuvering means for business. I think most companies are still expecting climate regulations in the coming years, but the timing and specifics continue to be up in the air.

Your thoughts?

Al Gore wrote an article in the New Republic this week making an interesting connection between the oil spill and the continuing polluting of our atmosphere with carbon dioxide (thanks to Jason Scott for sending me the link).

I suggest everyone read this piece. It's an important wake-up call. Here are a couple of the most cogent quotes. First, comparing the spill to the CO2 "spill" into the atmosphere...

The continuing undersea gusher of oil 50 miles off the shores of Louisiana is not the only source of dangerous uncontrolled pollution spewing into the environment. Worldwide, the amount of man-made CO2 being spilled every three seconds into the thin shell of atmosphere surrounding the planet equals the highest current estimate of the amount of oil spilling from the Macondo well every day. Indeed, the average American coal-fired power generating plant gushes more than three times as much global-warming pollution into the atmosphere each day—and there are over 1,400 of them.

Second, the reason we have so much trouble understanding the climate issue...

One important difference between the oil spill and the CO2 spill is that petroleum is visible on the surface of the sea and carries a distinctive odor now filling the nostrils of people on shore. Carbon dioxide, on the other hand, is invisible, odorless, tasteless, and has no price tag. It is all too easily put “out of sight and out of mind.” Because the impacts of global warming are distributed globally, they often masquerade as an abstraction. And because the length of time between causes and consequences is longer than we are used to dealing with, we are vulnerable to the illusion that we have the luxury of time before we begin to respond.

I also read last night the first chapter of Bill McKibben's very important new book, Eaarth. It's a long look at what's happening to the planet today. As McKibben says, climate change is not a future threat, or a threat of any kind...it's reality. We're living on a new planet, he says, and it's not one we're used to. I can't do justice to all the facts he throws into the ring, so I'll just say, please read this book. I'll likely come back to this when I finish the whole thing (which I sure hope will get more positive).

We all need to get more educated on the nature of the challenge and look facts in the eye...

[This appeared first on my Harvard Business Review blog]

Pepsi recently demonstrated its commitment to reducing its environmental impacts up and down the value chain with two rapid-fire announcements about new initiatives. The old-school approach to greening is to focus on operations within the proverbial "four walls." But Pepsi, like other leaders, is approaching sustainability more holistically, with much greater impact.

I recently spoke with Tim Carey, Pepsi's Director of Sustainability for Beverages in the Americas, about two big initiatives in which he's playing a key role.

First, on the downstream side, Pepsi looked for ways to raise the recycling rate of beverage containers from a relatively paltry 34% to 50% or higher. Working with GreenOps, a division of Waste Management, Pepsi launched a new program called "Dream Machine." These "reverse" vending machines, now being placed in high-traffic areas such as gas stations and stadiums, take back those often-abandoned and often-unrecycled empty bottles and give users points toward rewards from sponsors or local merchants.

But Pepsi has gone beyond those relatively minor incentives to add on a social mission. The program will also help fund Pepsi's donation to a group called Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), which trains vets at business schools around the country. Pepsi expects that the combined immediate points and larger mission will drive new, greener customer behaviors — and help solve one of the beverage industry's most intractable value chain problems.

Second, Pepsi has embarked on a very unusual supply chain effort to reduce the carbon emissions associated with its Tropicana orange juice. After conducting a full life-cycle analysis of the product line, the company was relatively surprised to find that the biggest portion of the carbon footprint was found not in manufacturing, or distribution, but actually back in the agriculture stage — primarily the result of the heavily natural-gas dependent process of making fertilizer (see chart).

The analysis showed Pepsi execs where the largest impacts were, and thus where they'd get the biggest bang for their buck on carbon reductions. The company started working with suppliers and farmers to find new ways to make and apply fertilizer. For example, instead of using natural gas from as far away as Russia (which then requires shipping heavy fertilizer across the world), Pepsi is using biomass from closer to home. Wood waste and agricultural by-products are two sources, but execs are hopeful they can also use the large number of their own orange rinds left over in manufacturing, which would fully close the loop.

The company is also working with scientists on the root chemistry of orange trees, applying fungi and bacteria to increase the uptake of nutrients. All that techno-speak means that the trees will need less fertilizer in total, which means less manufacturing and shipping of that fertilizer and, voila, a smaller footprint.

A 100-acre test run of these new methods of working with new, low-carbon fertilizer is underway. A few years from now, Pepsi and its suppliers will know what's working and what isn't.

But here's the best part: the cost of these changes to consumers and growers will be about zero. And it had to be. Let's face it, this kind of carbon reduction isn't easy to convey to consumers, so the market benefit may be small for now. So the sustainability team needed to find ways to lower the fertilizer footprint without causing any additional cost to suppliers or farmers. How did they do it?

By focusing its efforts on the real footprint — identified through a solid lifecycle analysis and good data — Pepsi found the approach with the highest payback. As sustainability exec Tim Carey put it, "It's not unusual to spend tens of millions of dollars removing some carbon from a manufacturing process at returns that can be 10% or less...or we can take 15% of total carbon out in the fertilizer step without costing anything."

The impacts of these tests — and future rollout — will not be small; Pepsi buys a fairly shocking one-third of the Florida orange harvest. And the recycling work could shift millions of bottles out of landfills. Pepsi's full value chain view on sustainability is deep green stuff — this is how you implement green thinking.

(Sign up for Andrew's blog, via RSS feed, or by email right to your in-box)

I'm really not one to pile on the President for perceived failings. God knows he has a tough job. And after all, let's remember what the alternative to Obama could be, or what came before.

But tonight's speech on the oil spill was a real disappointment for those who believe a clean energy future is perhaps the only path to job growth, public health, national greatness, and freedom (from dependence on a ecologically and economically destructive fossil fuels).

The President showed that he gets how big a mess the Gulf is and he's changing leadership at the agency that oversees the industry. That's all well and good.

But when it came to reducing the future risk of these kinds of catastrophes, the prescriptions were in short supply. Obama called for accelerating the transition to a clean economy. That's fantastic. But how can we possibly move fast without a price on carbon? (Uber-capitalists John Doerr (Kleiner Perkins) and Jeff Immelt (GE) said it best in "Falling Behind in Green Tech")

How could Obama not use this opportunity to call on us to do some hard things? Imagine if he had asked us to use less oil, accept higher prices for fossil fuels, support legislators that make the hard calls (raising people's gas prices is about the hardest thing a politician can do).

After 9/11, it's been said many times, President Bush only asked us to shop...and nothing else. Obama seems to be making the same mistake.

He did suggest we need a moon shot to get to clean energy and get off the oil. And he harkened back to America's ability to build tanks and planes in WWII. But those examples of American success are 40 and 70 years ago.

What's scary about the speech tonight is that it almost could've been any President in the last four decades. They've all sat in the Oval Office and said 'never again' and 'we're going to find a new energy future.' And yet, here we are, using more fossil fuels than ever.

In the end, the President suggested we all "pray" for courage and the people of the Gulf.

It's truly a shame that that's the only thing he asked us to do.

Russia is in the middle of the worst heat wave in its recorded history. The droughts have destroyed millions of acres of wheat. Russian farmers will harvest about 70 million metric tons of grain this year, down an astonishing 27 million tons. Yesterday, as the New York Times reported, Russia banned all exports of wheat.

According to the Times, Russian exports represent 17 percent of the global grain trade. Wheat prices have already leapt 90 percent since June, and this sudden restriction in supply won't help.

When I think about the forces making the pursuit of sustainability unavoidable, I often try to categorize or separate them to get a handle on what's going on. I think about climate change, water issues, natural resource constraints, greening the supply chain, and on and on, as problems in and of themselves. But this story from Russia shows how they're all inextricably linked.

The United States has been unable to pass a climate bill and factions of this country are in deep denial about the reality of climate change and how it will impact business, society, and our day-to-day lives. These real-life impacts in Russia are a stark reminder that nature, and the physics and chemistry of planetary change, don't care about our political battles.

But how do we draw these connections for everyone? The environmental movement, and even the growing business lobby that's behind climate legislation and action, have not done a great job showing people how our prosperity is threatened by inaction.

I know it's difficult for the average person to believe, but how we use energy and what we drive actually connects directly to the price of bread. And it doesn't really take that many "degrees of Kevin Bacon" to connect the dots.

We drive energy-inefficient vehicles which spew carbon dioxide...which captures heat in the atmosphere...which greatly increases the odds of record droughts and heat waves...which destroys crops and reduces grain supply...which raises the price of wheat and thus bread.

Part of the problem with the discussion on climate change is that it doesn't feel as tangible as other environmental challenges such as water and air pollution. It feels remote and not part of our daily lives. Somehow we need to make these seemingly bizarre connections between what we drive to the store and what's available once we get there.

If we don't start seeing the systematic challenges and tackling them, the system will come crashing down on us.

The day after the climate bill failed in the U.S. Senate, the New York Times' conservative columnist Ross Douthat gave his take on "The Right and Climate" in a piece that on the surface sounded reasonable. Maybe it was best that the bill didn't pass, he says. While he displays some bravery in calling out the climate change deniers, who remain almost entirely on the right, for "making a spectacle of their ignorance," he nevertheless himself betrays a much greater ignorance about what climate change means for us and our economy. Douthat espouses the dangerous idea that doing nothing to combat climate change is the best course for business and for the world.

In doing so he relies on a set of arguments against the pursuit of a clean economy that have little basis in fact and mainly defend the untenable status quo. The overall pitch has two main parts: (a) promoting a clean economy through the use of market mechanisms like cap-and-trade is a perversion of free markets, since the renewable energy industry shouldn't need tax subsidies if it's a real business; (b) going green will cost jobs and hurt the economy. Let's look at both ideas.

First, the notion that fossil fuels do not rely on subsidies is absurd. A new analysis from Bloomberg New Energy Finance compares the roughly $45 billion of global government subsidies for renewable energy (mostly tax breaks) to the $557 billion of subsidies for fossil fuels in 2008 alone. That 12-to-1 ratio of dirty-to-clean subsidies is surely understated. Let's just say that the International Energy Agency, which calculated that larger number, is not a liberal think tank, and it is measuring only the most literal subsidies. In reality, the market for energy is not currently "free" at all. So if putting a price on carbon helps us support new industries of the future, drive innovation and, say, preserve the ability of the planet to support our species, it seems like a good deal.

Second, this general notion that green will hurt the economy is simply the easiest defense of doing nothing. This concept — that that there's some tradeoff between economic development and what he calls a "growth-slowing regulatory regime" — is the heart of Douthat's argument. This idea is so very dangerous since it keeps us tied to the past, and abdicates leadership to other countries that are pursuing the real growth and prosperity agenda.

The most thorough studies — such as the well-regarded Stern Review on the Economics of Climate Change — tell us that the cost of ignoring climate change (including the possible devastation to our species) will be far higher than addressing it. Using less energy and material, or switching to electric vehicles and renewable energy, will help everyone from homeowners to businesses save money. As one CEO said to me, "I don't know about climate change, but it seems pretty clear that producing less carbon is better than producing more."

And the flashy side of this "kill the economy" argument remains the odd notion that a green agenda will kill jobs. Of course it will destroy some old-school jobs, but clearly the move to a clean economy will create jobs as well — millions of them. Installing insulation and solar panels, building wind turbines, and managing buildings for energy efficiency are just some of the obvious ones. Every industry that makes components for these new sectors will also have new markets and customers.

So what part of the economy is actually hurt by the race to clean economy? Which companies will lose jobs? In essence, only one sector, oil and gas, will truly get hit. If everyone uses less in general, and switches from fossil fuels overall, then of course those companies that only provide fossil fuels will shrink-unless they decide to play a role in the new energy economy).

But the big mistake is that protecting these particular jobs, and keeping us pinned to the status quo, does not represent a path to growth. Consider this: at the macro level, the world produces roughly 85 million barrels of oil per day. Nobody reputable seems to think that the number will rise much if at all; in fact, "peak oil" theories have gone quickly from fringe to mainstream (even Kuwaiti scientists recently predicted a global peak in the next five years).

My point is that even with optimistic numbers, fossil fuels are not a growth industry, and not a job creator. Relying on that sector is not a path to prosperity for the world or for the United States. Creating new technologies and products, building greener buildings and businesses, and just plain using less energy to do it all: those actions will make almost all companies more profitable — just not the ones providing only fossil fuels.

Our current path, and commitment to doing nothing, is in effect protecting one sector at the expense of all the others...and risking our planet and economy as well.

(This post first appeared at Harvard Business Online.)

(Sign up for Andrew's blog, via RSS feed, or by email)

According the metaphorical story that opens Nassim Nicholas Taleb's The Black Swan, until the discovery of Australia, everyone in the Old World knew that all swans were white. Years of empirical evidence proved it — nobody had ever seen anything but a white swan.

It came as a shock then when the sighting of a single black swan destroyed such a simple theory. All it took was one example to overthrow the status quo.

The world faces some big shocks in the realms of sustainability and climate change, and the ways of thinking about the future described in Taleb's book will come in handy. In Taleb's view, a Black Swan event...

• Lies way outside the realm of regular expectations — it's an outlier
• Carries extreme impact
• Seems explainable after the fact

The event that perfectly fits this bill, and the reason Taleb's book is so vital today, is the financial meltdown of 2008. It fits all three definitions.

The subprime mortgage market was predicated on the idea that housing prices nationally would continue to go up; after all, they always had. This conclusion represents one of the logical fallacies Taleb shows we all fall into where we "preselect segments of the seen and generalize from it to the unseen: the error of confirmation." Falling housing prices and subprime mortgage defaults certainly lived up to the "extreme impact" test, since they brought down the world economy. In retrospect, many pundits and analysts provide some explanations for the mass delusion that swept the financial world, the government, and homebuyers (see Michael Lewis' amazing The Big Short for a look at the few people who saw the collapse coming).

When I think about the challenges of sustainability, I see Taleb's principles and dynamics all over the place. From this point forward, two Black Swans will shape our world. First, we face an extreme outlier with unimaginable impact in the reality of climate change — it's the ultimate Black Swan. But we will require the appearance of another Black Swan to get us out of the hole we've dug.

Black Swan 1: Climate change itself. What really makes for a Black Swan is the fact that massive numbers of people are sure it can't be true. Even in the face of overwhelming evidence of climate change and resource constraints — the two heavy-hitter forces driving sustainability — many people struggle with believing any of it.

And it's not a big surprise that it's hard to believe. In our entire human history since the last Ice Age, our climate has not changed enough to threaten the viability of the species. So we make the error of confirmation and assume that it won't change that much going forward. We also make another of the logical errors that create problems: the narrative fallacy. We look for a story that makes sense of the facts in front of us. Look at this from a skeptic's point of view. The resource-constraint doomsayers throughout history, such as Thomas Malthus in the late 1700s and many in the modern environmental movement, have, it seems, been wrong. So the predictions of devastation will be wrong again, right?

Unfortunately, we're feeling the effects of the climate change Black Swan today. Russia burns, Pakistan and Nashville flood, and 2010 is the hottest year in recorded history. (Every climate scientist would, at this point, give the caveat that no single weather event can be ascribed to climate change, but the pattern is bad. Personally, I'm getting tired of the caveat, since it's useless — of course long-range climate models don't predict the weather, but the climate is changing before our eyes.)

So what will get us out of this mess?

Black Swan 2: Worldwide action. We'll need to change so much about the way the world works as to make it nearly unrecognizable. Imagine companies creating radically new energy supplies, entirely electric transportation systems, and non-toxic and completely recyclable products. Picture massive increases in resource efficiency, waterless manufacturing and agriculture, and everyone engaging in tough, heretical conversations about our consumption and what it means to live a good quality life.

The kind of collective will and action we'll need to create not only new markets and products, but also new lifestyles, is unprecedented. In human history, when has any group faced limits and made the changes necessary to survive and thrive? I'd be happy to hear an example, but if you follow to the work of Jared Diamond of Guns, Germs, and Steel and Collapse fame, the answer is basically never (think Easter Island).

Taleb addresses climate change in the second edition of his book and answers those who want to use his theories to do nothing: "The skepticism about models I propose does not lead to the conclusion endorsed by anti-environmentalists and pro-market fundamentalists. Quite the contrary: we need to be hyper-conservationists ecologically, since we do not know what we are harming with now. That's the sound policy under conditions of ignorance and epistemic opacity." That's his fancy way of saying that the Black Swan of climate change has so much downside, we need to be very careful. But to handle this challenge, we'll need to do something we've never done and it thus seems impossible as well. That's the second Black Swan here.

In that sense, though, Taleb's work gives me hope — the unexpected not only can happen, he says, it's really the only thing that ever changes history. Which Black Swan will hit first? Will it be climate devastation and resource shortages ... or collective action to create more profitable, healthy, and sustainable companies, communities, and countries?

The first Swan has left the gate and we have some catching up to do, but I'm betting on the second.

(This post first appeared at Harvard Business Online.)

The New York Times reported today that the U.S. Military is aggressively pursuing "Less Dependence on Fossil Fuels." Why does the military care about going green? Because the cost in money, resources, and lives to bring fuel to Afghanistan and Iraq is just too great. A few of the mind-blowing statistics in this article:

• Fossil fuel is the number one thing the military imports into Afghanistan (30 to 80 percent of convoy loads)
• The military spends $1 per gallon of gas, but can then spend up to $400 more per gallon to get it to forward operating bases
• For every 24 fuel convoys, one soldier or civilian working on transport was killed

This last fact is truly tragic. The Times got this number from an amazing analysis by the Army Environmental Policy Institute. According to this chilling report, in 2007 alone, 170 people lost their lives on fuel caravans (and another 68 on water transport). The study then goes on to provide hope in the form of calculations on how many lives can be saved by investing in thin-film solar to complement generators in forward bases.

The military has realized over recent years that our reliance on fossil fuels is a direct threat to our military in operation, but is also a larger national security threat. The contrast with our political failings to tackle climate and energy holistically could not be more stark. As the Times put it,

Even as Congress has struggled unsuccessfully to pass an energy bill and many states have put renewable energy on hold because of the recession, the military this year has pushed rapidly forward. After a decade of waging wars in remote corners of the globe where fuel is not readily available, senior commanders have come to see overdependence on fossil fuel as a big liability, and renewable technologies — which have become more reliable and less expensive over the past few years — as providing a potential answer.

The military is seeing how much of a liability oil really is to our war efforts. It's not a big leap to say that reliance on fossil fuels is a liability to our health and economy as well. But you'd think the security argument would be enough.

Military leaders at think tanks like CNA and very well-respected security experts such former CIA head Jim Woolsey (see his recent WSJ op-ed) have been making the case for years that we need to get off of fossil fuels (in particular oil, which props up dictators and funds terror).

I wish I understood why the security argument has not united our politicians on both sides of the aisle to create comprehensive legislation which puts a price for carbon and provides incentives to promote new technologies and support entrepreneurs (the stimulus money is a very good start, but is not in place for the long term).

Luckily for our soldiers, the military is not waiting for us to get our act together on a political or industiral level and is just pushing forward to find new energy solutions. Bravo.

(Sign up for Andrew's blog, via RSS feed, or by email)

Right before the big election last week, I found myself thinking about beliefs and what people are absolutely sure they know, regardless of the facts. Two stories that appeared on the front page of the New York Times on the same day, demonstrated Americans' remarkable ability to kid ourselves.

- First, a story about how virtually everyone in America — and especially the anti-tax advocates — thinks their taxes have gone up or stayed flat under President Obama. They don't realize that taxes actually went down for, as the article says, "95% of working families." That cut to nearly everyone's withholding tax was a pivotal part of the stimulus bill.

- Second, a story titled, "In Kansas, Climate Skeptics Embrace Cleaner Energy," about a Midwestern non-profit, the Climate and Energy Project, that has gotten people to reduce energy use and emissions...by not mentioning climate at all.

The first story is a microcosm of every accomplishment the Democrats managed to keep hidden from the American public, but I'll leave real comment on that phenomenon to the politicians and economists.

But the second story is right up my alley — it's about how to motivate people to pursue the societal and economic benefits of going green. The Climate and Energy Project is cleverly avoiding the climate debate and thus any discussion at all that triggers arguments about the really bad misinformation out there (the article, for example, points out the shocking statistic that only 48% of people in the Midwest agree that there is actually warming going on — whether you think it's human-caused or not, temperature measurements are clear on this point).

Instead, Nancy Jackson, Chairman of the Climate and Energy Project, has hit on three alternative arguments to going green: personal thrift, the benefit to the community of promoting green jobs, and a religious appeal to "creation care." The program has targeted everything from home weatherization to getting the community to lobby Siemens to build a wind plant in the region. They've also gotten towns to compete with each other to save energy.

Their success has been remarkable; according to the Times, "energy use in the towns declined as much as 5 percent relative to other areas — a giant step in the world of energy conservation, where a program that yields a 1.5 percent decline is considered successful."

This group's work goes to the heart of a critical debate moving through the climate policy world. I recently took part in a meeting of green thought leaders to discuss why the climate bill in the U.S. failed this summer and what we can learn. We all asked ourselves, what's the right messaging to reach Americans? The only real divide in the room was over the question of whether to talk directly about climate change.

On the one hand were respected thinkers who said, "You can't solve climate without talking climate." On the other side came the argument that talking about saving money, jobs, the economy, and other drivers of action would do the job. Although I think that we probably have to talk climate change to policy makers, when it comes to reaching everyday Americans, I tend to fall into the latter group (see "8 Reasons You Should Cut Carbon (Aside from Climate Change)").

The lesson in Kansas is clear to me: it does not really matter if you believe in climate change. The logic of decoupling our country, our businesses, our communities, and even our homes from carbon, and from oil in particular, remains incredibly strong. At the macro level it's about national competitiveness, national security, and not relying on declining, ever-more-expensive resources.

But this applies on the personal level as well. Who doesn't want to save money and use less energy? Who wouldn't want their town to depend on locally-created, free energy?

For businesses wondering how to promote their green initiatives and products, I see lessons in how to talk to both consumers and employees. For employees, the best motivators are proven cost savings, good data, and competition. The Kansas program used all of these to great effect.

When talking to consumers, the lesson seems to be to use whatever combination of these works, plus throw in some values and religious mores, if that fits the audience. A call to save mother earth for purely environmental reasons might work well in Berkeley, but in Kansas make the subtle shift to talk about creation care, or don't go down that road at all.

So even though I titled this piece a bit sarcastically, the Kansas program works so well because it IS based in reality -- the savings you can yield, the jobs you can attract to your town, and the connection to religious values you can feel are all real. It's just not the reality of climate change.

The end result is the same — people are saving money and energy and starting to build a new economy. And if we move down the path to a cleaner world, who really cares how?

(This post first appeared at Harvard Business Online.)

(Sign up for Andrew's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

The world is meeting in Cancun this week to talk climate change. Is there any hope of a large-scale agreement on capping emissions around the world? Most pundits would say no.

Why can't we agree to do something? The answers are varied and all contain some truth. There are, for example...

* The inherent challenges of tackling a problem so diffuse and long-term with responsibility laying with all 7 billion of us
* Psychological barriers to change
* A media that paints all issues as having two equal sides even if it's 99 to 1
* Powerful, vested interests in the old, fossil-fuel-based economy
* The fact that the U.S. has no federal climate policy, which makes global negotiations nearly impossible. (And with the recent U.S. election bringing to power more climate deniers, we're moving further away from ever having a federal policy.)

All of these problems, and many more, contribute to the repeated failure of global climate summits. But the hurdle that keeps coming up year after year and is perhaps the hardest to get over is the radical difference in perspective between the developed world and the up-and-coming powerhouses of China, India, and Brazil.

I spoke at a meeting of corporate execs in Beijing a couple of weeks ago and got a glimpse of these different viewpoints. Before my talk, a Chinese academic gave an overview of climate science and policy. He spoke in Chinese, so I understood little (ok, none) of the language, but the charts he put up were crystal clear...carbon dioxide levels over time, commitments for greenhouse gas (GHG) reductions by country, and so on.

But first he set the stage with a chart that gets to the core of the issue. It's data that we rarely discuss in the West, but seems to be pretty important over there. I'm talking about the cumulative CO2 emissions, by country, since the industrial revolution.

In his version, China was responsible for a tiny sliver. I looked up the numbers myself and created the pie chart below - it may not be perfect, but it's close enough. China is responsible for about 8% of the historical emissions from 1850 to 2002, but clearly the developed world is primarily responsible for the climate problem to date.

------------------------------------------------

------------------------------------------------

This historical responsibility is irrefutable. But at the same time, the projections for emissions growth show that the new economic powers will be contributing the lion's share going forward. According to the International Energy Agency, China will be responsible for over one-third of the worldwide growth in energy demand over the next 25 years (full pdf report here).

This reality about future responsibility has been very convenient for those who want to drag their feet on climate action; it was one of the main reasons President Bush used to avoid climate negotiations. Why should we join the Kyoto Protocol, he'd say, if China and India don't have responsibilities?

This is not a new debate, especially to anyone who has watched the climate policy world at all. But I still found it useful to be reminded of the historical figures. It's sort of surprising to see it in hard numbers...and it explains so much.

Here's the crux of the problem: When the West/North says, "you will be the largest emitter going forward, so you have to cut back" and the East/South says, "you created the problem, so you should go first," they're both right. Can you think of a tougher situation for negotiation than when both parties are absolutely correct and yet their positions are so far apart?

But the reality is that Nature doesn't care who started this. When you find yourself in a boat that's leaking and sinking, you start bailing. You can't spend too much time worrying about who poked the hole. So while I believe the developing world's moral position is unimpeachable, it doesn't matter. The science will win, and the data tells us that putting any more carbon in the air is incredibly dangerous for our species. So everyone has to change.

I'd like to think that the world is moving away from these old debates, but they're still seething not too far from the surface. China's negotiating position in Cancun, according to the New York Times, is that the West should cut emissions, pay for the shift to a cleaner economy, and provide technologies to developing countries. Again, this is sort of hard to argue with - everyone must bail out the boat, but the responsible parties can pay for buckets. But given the fiscal and political realities in the developed world, us paying more for anything seems remarkably unlikely.

So my hope is what it always is: the business community will take the lead from the governments of the world and continue investing in and implementing clean technologies, regardless of the success or failure of the global negotiations.

Given how deeply felt the convictions are on every side - and the fact that they're all based in reality and truth - hoping for the business world to lap the policy world may be the only reasonable hope we have.

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

At this year's climate summit in Cancun, Mexico, policy negotiators from all over the world gathered for two weeks to try and salvage global climate negotiations. In short, there were some successes, but mostly in the realm of funding adaptation, rather than actually cutting emissions, which is a bit like funding life boats on the Titanic (as I wrote about a couple weeks ago, there are many important reasons why climate negotiations have failed to accomplish what we need them to for so long).

But, anyway, in parallel to what must have been incredibly frustrating policy meetings, the business community gathered at the same time. I believe that business may be succeeding where policy is failing.

I attended one of the new entrants into the green business event game, the World Climate Summit. A quick background on the players: the Summit was thrown by a new organization dedicated to green business leadership, with events aided mightily by friend and colleague, the uber-connected Aimee Christensen.

I was there mainly to help out with the Gigaton Awards, an event modeled as a mini-Oscars for green business (Note: I was asked to emcee the affair, but I'm not officially linked with any of the organizations behind it). The force behind the Awards was originally Sunil Paul, a clean tech investor and entrepreneur. Sunil created the Gigaton Throwdown, a challenge to the world to find solutions to reducing carbon emissions at the scale of a billion tons (for context, the world emits 48 gigatons, and scientists say we need to cut at least 14 gigatons from business as usual scenarios by 2020 to have a 50/50 shot at keeping temperatures stable). According to Sunil's team, this level of cuts should be the new measure of success for industries and countries alike.

The Awards were an offshoot of Sunil's initiative, but were thrown in conjunction with the Carbon War Room (CWR), an organization founded by Sir Richard Branson and led by solar entrepreneur Jigar Shah. CWR's goal is also to find large-scale technologies and strategies for tackling climate change.

The point of the Awards was to heap praise on companies that are actually cutting emissions in order to inspire others. I won't go into detail on how the companies were nominated and winners selected, but in short it was based at first on concrete emissions reductions.

Not surprisingly for the first year of a green business award show, the nominees were a who's who of green leaders. In the end, Nike, 3M, Suzlon, Vodafone, Reckitt Benckiser Group, and GDF Suez took down prizes for their respective sectors. And 3M, which has been doing pollution prevention for 35 years now, took the end-of-night Gigaton Award for Best in Class.

Frankly, given the challenges of climate change and the policy failures of recent years, it was nice to celebrate business and the work it's doing. This is hard work and many of the executives representing their companies are in fairly thankless positions.

All that said, it's clear that these Awards were just a beginning. We're not at gigaton scale by any stretch. The winners have made cuts on the millions of tons at most. Gigatons have to happen at the industry and value-chain level, and that is the work that the CWR is doing.

There was one industry announcement in Cancun that demonstrated what real scale looks like. Coke's CEO Muhtar Kent, representing the Consumer Goods Forum and its Board of 50 CEOs, announced some monumental goals for the sector. These include...

(1) no net deforestation around the world (think sugar and palm oil plantations)
(2) a phase out of hydrofluorocarbon (HFC) refrigerants which contribute greatly to global warming.

Combined, these goals are in the gigaton scale range.

So when companies get together across value chains, they can think very big. The Awards were about individual achievement, but the whole day at the Summit was geared toward bringing companies together.

And at the end of a long day of meetings, it was great to add a dash of fun and style. The honorary Award winner, Ted Turner, had the best speech of the night. He established that this battle to green the economy and society is in fact a battle. He said that people who are working hard on what they know is right will always beat the people who know in their hearts that what they're doing is wrong. He ended with this rallying cry:

"We're right. They're wrong. We're going to win...BIG...and SOON!"

How refreshing to come out with fighting words so simply. You know, business is nothing if not pragmatic. Driving change and convincing people that green is good for business requires logic, facts, examples...but also passion, emotion, and yes, cheerleading. What's wrong with celebrating every now and then?

(This post first appeared at Harvard Business Online.)

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

Here's my attempt to capture the most important stories that affected the greening of business in 2010. To keep this to blog length, it's going to be quick, so see the links for more on these stories.

The first five are macro-level issues that affect the context for business:

1. The climate bill dies in the U.S. Senate. Any hope for a national approach to tackling the largest challenge facing humanity petered out pathetically this year (see the complete, sad tale in a Pulitzer-worthy New Yorker article). Unfortunately for every other country, this is a global story. When the U.S. can't get its act together, the world can't create global policies, and thus the Cancun meeting last week resulted in some nice agreements to raise funds for adaptation -- arranging the deck chairs on the Titanic, anyone? -- but no binding targets on carbon.

2. Nature strikes back/Climate change is real. Ironically, given the rising debate in the U.S. on the science, the world got hotter, a lot hotter, this decade and this year. Russia saw its worst drought in 1,000 years (video), and Pakistan was overcome by flooding (video). Scientists will always give the caveat that you cannot blame climate change for any single weather event, but let's get real - this is what devastating climate change looks like on the ground. These weather events also directly affect resource availability, bringing me to my next point...

3. Resources get very tight. The drought in Russia destroyed 40% of its wheat crop, so Putin pulled wheat -- 1/6 of the global trade in the crop -- off the global market, driving up wheat prices. The floods in Pakistan helped double the price of cotton. And I could write a book on the topic of rare earth metals, those precious elements that make nearly every green technology possible and go into every iPhone. China mines 95% of these metals, and it needs them all now, making the U.S. "vulnerable to rare earth shortages." We're also vulnerable on fossil fuels. We learned from the massive spill in the Gulf of Mexico that readily accessible oil is a thing of the past -- we don't dig one mile under the ocean for the heck of it. So most natural resources are getting more scarce, from oil to metals to crops. Smart companies like Hitachi are trying to find solutions, such as its new plan to develop rare earth recycling technologies.

4. China, China, China. Did I mention rare earth metals? Or the rise of the world's largest solar producer from a manufacturing base of nearly nothing a few years ago? Or how about China's unparalleled (and some would say illegal) support for its renewables companies, which has the World Trade Organization fretting about trade barriers? China is very serious about its green ambitions, with support from the very top, and the business community is taking note.

5. Renewables are for real and moving fast. Ok, there's some good news. The market for renewables is growing fast. About 45% of Portugal's electricity comes from renewables, and this is up from 18% in just five years. Germany, not really the sunniest country in the world, added 1% of its electric needs in solar in 2010 alone (it took 10 years to get the first 1% online, and just 8 months for the second 1%). No wonder HSBC says the market for clean tech and climate change solutions will top $2.2 trillion by 2020.

Now for the company-level stories:

6. Supply chain pressure continues to rise (a.k.a., Wal-Mart doesn't slow down). Even coming out of the recession, this was a big year for green supply chain announcements. In February, Wal-Mart said it would eliminate 20 million metric tons of GHG emissions from its supply chain. Then in October, the retail giant announced it would double the amount of locally-grown produce on its shelves (and former sustainability exec Matt Kistler indicated this year that products getting higher scores in its Sustainability Index would get more shelf space). We also saw big announcements from P&G and Kaiser Permanente on supplier scorecards, IBM greatly increasing its demands on suppliers, and Pepsi using detailed carbon lifecycle data to make suppliers rethink how they grow Tropicana oranges.

7. Zero is the new black. Companies seem to be tripping over themselves on the path to "zero waste." GM announced that 62 of its plants now send zero waste to landfill, and UK retailer Marks & Spencer reached a 92% diversion rate on the way to its zero goals. And Sony one-upped everyone by setting a goal of zero environmental impact across its operations by 2050.

8. Big goals were back. Recession-schmecession. Sony wasn't the only one setting aggressive targets. Panasonic said it wanted its GHG emissions to peak by 2018 and it would greatly increase sales of eco-products. Unilever has probably gone the furthest, announcing it would double sales by 2020, but halve total environmental impact (among other big goals). Unilever's leaders are serious about driving these plans into the operations of the whole company.

9. Electric vehicles storm the market. The Nissan LEAF was just named 2011 European Car of the Year, and GE announced it would buy 25,000 electric cars. Since the auto industry is one of the biggest in the world, there will be ripples from this movement. Enough said.

10. Small guys can do it too. It's easy to get caught up in the tales of giant companies. So one of my favorite stories of the year is a simple example of eco-efficiency and savings from 10-employee Bowman Design with just 2,000 square feet of office space in Southern California (where else?). See founder Tom Bowman's description of his company's path to a 65% reduction in GHG emissions and $9,000 savings annually (ok, I'll admit that I didn't mind that Tom name-checked my book Green to Gold in his article, but I don't know him).

11. (Bonus!) The Military gets serious about green. Honorable mention to the government and military, which is technically not "green business". But they're not kidding around, from plans to greatly reduce reliance on oil and diesel in Army operations, to Navy sustainability plans and test flights of planes running on biofuels. Go military green!

Looking Forward to 2011

No list would be complete without utterly over-confident predictions of the future. It's obvious that the pressures/themes above will continue to get stronger in the coming year. In particular, and in addition...

• Supply chain pressure will evolve and get more sophisticated (such as retailers who said in August they would not buy fuel from Canadian oil sands). This shift will be partly driven by...
• A data explosion around green is brewing. Companies will know more than ever about their impacts up and down the value chain.
• Water will become a very big topic for business (it began this year, but there will be some great stories in my 2011 wrap up a year from now). My first couple of blogs of the New Year will look at water strategy.
• Biomimicry, the design principle that suggests looking to nature for great ideas, will gain currency
• Energy innovation will be the order of the day (e.g., the Paris metro station that captures body heat to warm a nearby building)

But here's my final, shocking prediction: climate change policy won't matter (much). Even though the failure of the bill was my #1 above, #2 through 10 tells me that for business, the logic of green does not depend on believing in climate change, or in having a law in place. The natural resource, supply chain, innovation, and profit drivers are just too strong.

Business will be getting a lot greener in every sense of the word, no matter what political battles are waging. We're going to stop debating climate in the business community and just focus on the larger case for prosperity, for companies and countries alike.

I'm sure I missed many, many great stories. Please share your favorites here, and have a merry green new year!

(This post first appeared at Harvard Business Online.)

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

The official analysis from NASA and the National Oceanic and Atmospheric Administration (NOAA) is in. The global average surface temperature for 2010 tied the record set in 2005.

New York Times Graphic

You'd think this hard data might slow some of the most pernicious rumors from the climate denial crowd, particularly the canard about it not getting hotter since 1998 (the previous warmest year). But unfortnately for the discussion in this country, 2010 was not particularly hot HERE. In the contiguous U.S., it was the 4th hottest summer and 23rd hottest year.

It's easy for people to get confused when they hear these numbers or feel some cold winter temperatures in their area. But, to put this in perspective, the 48 states take up about 3.0 million square miles, compared to 57.5 million sq.mi. of global land area and 197 million sq.mi. of total surface area. What i'm saying is that it wasn't a particularly hot year for less than 2% of the area of the globe...but an area that has enormous influence over the global debate.

And the skeptics will still latch onto 1998, even though 9 of the 10 hottest years on record have come since 2001. But the facts will win out...

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

The forces driving the business world toward sustainability are vast, powerful, systematic…and growing. In recent months, we’ve witnessed massive climate disruptions everywhere from Russia and Pakistan to Brazil and Nashville. Resource constraints are a reality, with serious discussions about peak oil, peak coal, peak coffee, and, well, peak everything. Technology-driven transparency is creating a mad rush to capture product and company sustainability data, and companies continue to push new demands aggressively up their supply chains.

And the mega-force to beat all – the relentless rise of population and living standards in the developing world – continues unabated. So how will we provide a good quality of life to what will be 9 billion people on a resource-constrained planet?

In short, we need some very large changes to “business as usual,” requiring radically new ways of thinking.

Over the past couple of years, I’ve written frequently (in my last book Green Recovery in particular) about the need for “heretical” innovation – that is, asking very hard questions that challenge the very nature of a business or product. I wrote recently about two companies, Waste Management and Xerox, in the middle of deep transitions. From hauling waste and getting paid by the ton, to managing recycling streams and helping customers achieve zero waste goals. Or from selling as many printers as possible to helping customers reduce the number of devices and do less printing over all. Asking customers to use less of their core products – that’s heretical.

Some will point out that this is similar to the concept of “servicizing”, and of course it is. But I believe there’s a deeper heresy at work than just turning a product into a service. After all, Xerox could offer outsourced printing services and try to print as many pages as possible. It’s the combination of service and talking openly to customers about using less in total that makes it novel.

So I have a paradoxical task in mind: figuring out how to systematically and logically ask illogical, wacky, heretical, leapfrog questions. I’m looking for ideas from the assembled knowledge and experience of the sustainability leaders reading this.

My three main questions are:
1) How do we cultivate a culture of heretical innovation (how do we make it ok to ask wacky questions)?
2) How do we identify and support the true innovators, intrapreneurs, and heretics in even the largest organizations?
3) Is sustainability-driven innovation fundamentally different than ‘regular’ disruptive innovation, and how?

On the first question at least, I have a few broad ideas. Here’s a starting list for budding corporate heretics:

• Start with value-chain data to identify big risks and opportunities. With solid data, managers can focus limited resources on tackling the real footprint and drive toward new ideas and questions. For example, Pepsi’s Tropicana brand is experimenting with low-carbon fertilizer after discovering that growing oranges was the biggest part of its GHG footprint. And more famously, P&G launched Tide Coldwater to address the largest (by far) portion of detergent lifecyle emissions, washing clothes in hot water.

• Use open innovation. The hottest concept in innovation today is inviting people in to solve your problems. P&G has opened up its innovation pipeline to anyone with a good product idea. A few companies are sharing some of their best ideas (and patents) with the world – as Nike and others do with GreenXChange – and then hoping for reciprocal karma.

• Try “co-creation” (the second hottest concept in innovation and a subset of open innovation perhaps). IBM has had great success in recent years with “Innovation Jams” that allow all employees and customers to throw ideas into the mix. Cross-fertilizing people from radically different disciplines, and from outside the organization as well, can lead to some novel questions.

• Show personal leadership (walk the talk). Have senior execs take part in jams and brainstorms. Let them publicly generate wacky ideas and support pilot projects to explore them.

• Systematize innovation. 3M and Google famously set aside a portion of everyone’s time for whatever strikes their fancy. More companies should emulate this practice, but also make a point of focusing specifically on sustainability pressures.

• Award the wackiest ideas, even the ones that don’t pan out. Some public pats on the back and recognition for employees who show bravery and try new things can go a long way.

• Create competition. Sharing data on sustainability performance internally can drive real competition and learning across divisions or products. Or utilize public prizes, like the famous X Prize or the $1 million Netflix Prize.

All of these paths can help us regularly ask the toughest, most interesting questions. Only then can we match the scale of innovation to the scale of the sustainability challenge.

These are just a few ideas (after all, this is a blog, not a book). There are many more. So please send me your thoughts on how to drive breakthrough innovation and how to find the heretics in the organization. Finally, any examples of heretical questions within your organizations are very welcome. (andrew@eco-strategies.com).

(This post first appeared on Corporate Eco-Forum's site.)

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

Well, the great national nightmare is over. President Obama released his long-form birth certificate on Thursday. This settles the issue...again. I could go on about how depressing it is that it all came to this.

But my point in this quick blog is just to say that the vigorous discussion about how the media covered this topic sounded eerily familiar to me. For example, here's ABC's Jake Tapper quoted in a Huffington Post story...

“One of the biggest problems is how many reporters have treated this as if it’s a subject for debate and not just a lie,” Tapper said in an interview.

“Instead of covering this the same way you would cover someone saying that the earth is flat -- just a demonstrable untruth -- too many reporters and anchors have allowed this to become ‘critics say X,’” Tapper continued.

Just imagine if Tapper were discussing how the media covers climate change? Wouldn't it ring true? Granted, global climate models are infinitely more complicated than, say, a Certificate of Live Birth. But doesn't that make clarity from the press about how solid the data is -- and how broad the scientific consensus is -- even more important. When the media "debates" whether it's actually getting hotter over the last century -- a fact -- it really makes it hard to discuss more complicated topics.

And when they place thousands of scientists on one side and equate their views with basically a paid spokesperson for a think tank or particular industry on the other, they propagate a lie.

It was good to see a bit of media gut-checking going on today. We do have serious problems (and no, the budget isn't the only one), and we need focus and fact-based discussions. Sustainability is hard enough without false equivalence and lazy journalism mucking up the works.

In my work, I always say it doesn't matter whether you believe in climate change or not. The things businesses and our country would do to tackle carbon are things they should do anyway for both profitability and competitiveness. But not debating climate science all the time doesn't mean we have to accept falsehoods either.

I recently attended my home association’s annual meeting, a gentle community affair that focused on reviewing our budget. Only one line item was way up this year – after a record winter in Connecticut, snow removal fees rose 30%. No big surprise.

But I was shocked to learn from the association president that the snow levels and fees would be “back down to normal next year.” Apparently all climate changes would be remedied by December of this year. Phew.

I considered chiming in on the true uncertainty about climate “weirding” and how we could get no snow next winter…or a lot more. But since it’s a relatively small part of our budget, I figured I’d just let the chips fall where they may.

In this case, the level of denial about where we’re really headed as a planet is of little consequence. But what happens when large cities or countries make investment and planning decisions based on either science or denial?

The New York Times just reported on Chicago’s impressive plans for climate adaptation. I spoke last year at an event in Chicago and a climate expert from the Union of Concerned Scientists showed one of the more powerful slides I’ve ever seen on climate impacts (see below). Over time, Illinois will find itself feeling more like the 2010 version of east Texas. As the Times pointed out, models indicate that Chicago will see 70 or more days per year over 90 degrees (vs. 15 each year over the last century).

The Times article is a fascinating look at how one city is grappling with this possible scenario. The city is shifting to more permeable pavement and planting hardier species of trees (over the last 30 years, they’ve already shifted about one growing zone).

In comparison, witness the sad display of lack of leadership from Texas Governor Rick Perry last month. Facing record droughts, the Governor suggested everyone pray for rain. Faith is fine, but not to the exclusion of actual preparedness.

This divide is starting to play out on the national and global scale. As I’ve written about many times, the U.S. is falling behind on clean economy spending and investment versus China, Germany, Britian, and many others. As Yale 360 (a wonderful publication) reported recently, the U.S. ranks 17th on clean tech spending as a percentage of GDP (Denmark is #1).

The global levels are hard to compare of course, but preparedness in our communities? That’s easy to imagine and the differences are tangible. The unprepared will be struggling with heat, floods, water shortages, and much more. Over time, the gap between states and cities that are ready and areas that are in denial could make the country’s current blue/red divide seem quaint.

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

In a powerful essay in The New Yorker that's mainly about President Obama's dismal record on tackling climate change, Elizabeth Kolbert -- one of the best writers on climate science around -- lays out in stark terms what's gone on with the weather of late.

This is the best round-up I've seen. It seemed worth a quick 'check this out' blog. Here's the passage...

"In mid-May, the President met with Memphis residents who had been left homeless by the flooding of the Mississippi River, and, not long before that, he toured sections of Tuscaloosa, Alabama, that had also been flattened by a tornado. Meanwhile, even as the President was consoling the bereaved in Joplin, residents in Vermont were bailing out from record-high water levels around Lake Champlain; Texas was suffering from a near-record drought that could cost the state more than four billion dollars in agricultural losses; and officials at the National Oceanic and Atmospheric Administration were forecasting that the 2011 Atlantic hurricane season, which formally began on June 1st, would once again be “above normal.” (The 2010 season was tied for the third most active on record.) The news from abroad was, if anything, more worrisome. Last week, the Chinese government estimated that more than four million people were having trouble finding drinking water, owing to a drought along the Yangtze River. The French agricultural minister warned that an exceptionally hot, dry spring would reduce that country’s wheat harvest. And in Colombia more than two million acres of land have been submerged after almost a year of nearly continuous rain. “Over the past ten months, we have registered five or six times more rainfall than usual,” the director of Colombia’s meteorological agency, Ricardo Lozano, said."

Just to repeat, that's 5 TIMES more rainfall, not, say, 5% more.
Anyway, for the rest of Kolbert's piece, please go to the New Yorker site here...

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

Last week I wrote about how eating less meat was the best way to reduce your food's carbon footprint. But what do you do if you want to be a responsible corporate citizen and you sell fast food? Well, I think your company would look a lot like Max Burgers, based in Sweden.

I recently spoke to Richard Bergfors, the CEO (and son of the founders) of this unusual 44-year-old "fast" food chain. With 3000 employees and about $200 million in revenue, Max Burgers is a great example of how a midsize company can carve out a profitable niche through a focus on sustainability — even in an unexpected sector.

In 2000, the company set a new strategy focused on the word "fresh." The leaders looked closely at every ingredient and reduced fat, salt, and sugar, and eliminated genetically modified organisms (GMOs) and trans fats. The menu got healthier, with multiple side options besides fries, 10 drinks with no added sugar, and a selection of darker, healthier breads. The company now sources 100% of its beef and chicken — and 90% of all its product — locally.

To explore its broader climate impact, the firm started working with Swedish thought leaders Natural Step, which, not surprisingly, identified beef as the biggest problem for the company (80 to 85 percent of the footprint). Bergfors acknowledges that industry-wide climate-friendly beef is still a long way off, so Max Burgers plants trees in Africa to offset its carbon footprint. New stores also use solar panels for 15 to 20 percent of electric needs.

But perhaps the most surprising thing this company does is try to influence its customers to buy less meat. Quick reminder: the chain is called Max Burgers. This counterintuitive strategy is the kind of heresy I love — asking customers to use less of your core product. Max Burgers accomplishes this by adding more non-meat items to the menu, prominently displaying climate footprint data in store (there's transparency for you), and suggesting customers buy chicken, fish, or veggie sandwiches periodically (a là Meatless Mondays).

In 2004, a golden marketing opportunity came along with the launch of the documentary Supersize Me, which followed director Morgan Spurlock as he ate only McDonald's food for 30 days. Max Burgers decided to launch a tongue-in-cheek "Minimize Me" campaign. A customer, much like Subway's famous Jared, ate only Max Burgers for 90 days and lost 77 pounds. Two years later, the company re-ran the promotion with multiple people competing on the Max-only diet.

The result of all these efforts is a more sustainable burger chain that's telling everyone to eat less meat, and doing so profitably. The mix of non-beef products is 30% higher than it used to be. But the profit margins are very high.

Bergfors reports that his stores are averaging 11 to 15 percent profit margins versus 2 to 5 percent at the big name competitors. He says Max Burgers is the most profitable, fastest growing chain in Sweden, expanding at 20% per year (and 5% same store sales growth) in a flat market. Granted, higher-end niche brands generally do have higher margins, but this is not an overly small company, and it doesn't seem to be sacrificing anything with its "minimize me" strategy — quite the contrary.

Of course a family run company always has more leeway to act on values (see Patagonia, the prime example). As Bergfors told me, "we've always done things a bit differently — the goal is greater than to just maximize profit." But it's still a business, and in the next breath he said, "we're profit driven and like to make a profit like everyone else...but we don't put profit first...we don't have to maximize profit and we can care for people and the planet we're living on."

But given Max Burgers' profit levels, it seems that maximizing all value, not just profits, can be darn good business.

(This post first appeared at Harvard Business Online.)

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

In the midst of the debt ceiling debacle, the House recently found the time to vote on (and fail to pass) a bill that would've repealed the so-called "light bulb law" that raised energy efficiency standards for lighting. The mandate was considered by authors of the repeal attempt — and apparently by 233 House representatives — as a "government intrusion."

Hear, hear! I'm tired of all these higher government standards. I want to retain the "freedom" to buy a refrigerator that uses as much energy as possible (and runs on coal you can shovel into the front), buy clothes and furniture as flammable as possible, purchase food without any safety standards and take my own darn risk of e.coli. Oh, and I want drive my car without that annoying life-saving seatbelt.

Kidding aside, this vote was absurd. If the bill hadn't been brought to the floor under some arcane two-thirds majority rule, it would've passed. The House has continued its attack by trying to defund enforcement of the bill. This is a really bad idea.

It may seem heretical in today's anti-government mindset, but I'll say it: many regulations and standards are very good for business. Here are a few reasons that the continued attack on the light bulb bill makes no sense, and in fact, why we should be passing a lot more laws like it:

1. Government standards, and particularly energy efficiency standards, are, well, standard.

Quick history: President Bush, who I think was a Republican, signed an energy bill in 2008 which raises efficiency standards for all new light bulbs starting in 2012. And the anti-freedom Congressman who put those standards into the bill: Rep. Fred Upton, also a Republican (he has now, as the Times put it, "reversed his position on the standards he authored").

In short, before recent hyper-political times, this country passed bipartisan safety and energy standards for decades on everything from boilers to cars and trucks to heating and cooling systems.

Critics claimed this particular law was the end of the incandescent bulb. But the bill does not pick technologies; it says how much energy the bulbs can use. It's the classic and most effective use of government mandates: set the standards and let the market decide how to meet them.

2. Efficiency standards drive innovation and save lots of money.

To be fair to critics, the standard did effectively rule out most incandescent bulbs at the time it passed. But then something totally expected happened: companies got creative. As the New York Times reported on July 5, "Incandescent Bulbs Return to the Cutting Edge." Apparently, some people didn't get the message that regular bulbs were dead. Instead, companies like Philips — while innovating around the new CFL and LED technologies — took the 100+ year-old bulb and made it 30% more efficient and last three times longer.

This pattern in common in industries affected by efficiency standards. Look no further than the dramatic innovation in refrigerators. Art Rosenfeld, the godfather of California's energy efficiency movement, likes to show the powerful chart shown here (from NRDC's David Goldstein). Due in large part to aggressive efficiency standards, the energy use and price of new refrigerators has plummeted — all while the size more than doubled. The innovation has saved consumers many billions of dollars.

(Note: Rosenfeld's work has been at the core of California's amazing record of holding per capita energy use flat for 40 years while the rest of us increased energy use 50%).

3. The companies most affected by these standards aren't complaining that much anymore. (Hint: higher product quality and efficiency makes companies more competitive)

One of the biggest battles over efficiency is often waged around automobile miles per gallon targets. The creativity of the auto industry over the last decade or two has been driven (sorry) by higher oil prices at times. But high standards on vehicle miles per gallon around the world have been even more effective (see page 18 of this UN report for chart comparing EU, Japan, China, and the trailing US on mpg standards).

The U.S. is in this game also — the Obama administration is proposing a new rule that would force automakers to raise their fleet average to 56.2 mpg by 2025. The Washington Post reports that this rule could save us 4.7 billion barrels of oil and $705 billion over the next 20 years. Even with these benefits, we'd normally see the auto companies fight hard, and there's always haggling. But this time it's a bit different. GM has broken from the pack and indicated that it would figure out a way to meet the standard. As GM's North America President, Mark Reuss put it recently:

It's our job to [figure out] what it takes to do it. The auto industry does not get easier. It always gets tougher. That's the challenge and that's what our jobs are. If even-stricter guidelines require billions more in investment, so be it. It's not an either/or thing. It's how we get there with cars and trucks that consumers really want to buy at a [price] that doesn't put unreasonable cost on them.

GM, after lagging for many years on product efficiency — a strategy that basically killed the company in 2008 when oil prices spiked — seems to get it now. As Reuss indicates, high standards push companies toward what consumers will demand. And in a world of expensive energy and tight resource supplies, they'll want cars that sip fuel.

In short, those who complain that higher expectations on energy efficiency will "kill jobs" or be destructive to industry aren't giving our business leaders much credit. Companies can and will innovate. It's in their best interest for many reasons, including the fact that the rest of the world continues to raise the bar. Multinational companies need to keep up to stay competitive.

And it's in our vital national interest to continue getting more efficient as quickly as possible. While energy efficiency standards may not be a complete solution, they have represented a rare bright spot in the nearly defunct national energy and climate policy realm. So let's stop the silly votes, move forward, save everyone some money, and help drive innovation.

(This post first appeared at Harvard Business Online.)

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

I believe in science and facing facts or, to borrow words from an important awareness-building event today, I believe in “climate reality.” I'm donating my Twitter feed and this blog space to point people to the Climate Reality Project , Vice President Gore's latest attempt to light a fire under everyone about our climate.

In my work, I try to convey the benefits of going green to executives around the world. I generally avoid talking about climate change, at least in the U.S. where it's such a political hot potato. So instead I demonstrate how profitable it is to reduce your footprint (including carbon), regardless of the science on climate change.

My basic logic is this: decoupling our companies and economy from fossil fuels, and oil in particular, is just good business. By reducing energy use and carbon pollution, companies save money, reduce the risk that comes from relying on volatilely-priced fuels, and reap the benefits of taking part in the clean economy, which will drive innovation and generate vast wealth. But it's also a matter of national security (which is why the U.S. Navy is greening itself faster than any company I know). So, no, it doesn't matter if you "believe" in climate change.

But every now and then, I have to state clearly what I believe. Saying "it doesn't matter" is true, but it's not leveling with everyone about the depth of the challenge.

So here's my belief: The scientific evidence that the earth is warming and humans are the primary cause is vast, overwhelming, and very convincing. We are destabilizing our one home, and it's endangering our economies, communities, and even our species. The fundamental change in how the planet works – which has begun already with record droughts, floods, heat waves, and storms – is larger than we realize..

I think a lot about what a "real" approach on climate would mean for business, which will play a pivotal role in finding and spreading solutions to our energy and climate challenges. While many companies have begun the hard work, they need to step up their game.

On the day-to-day level, that means setting much more aggressive carbon reduction goals (80 to 100% reduction by mid-century or sooner). A few leaders, such as Wal-Mart, P&G, and Sony have set 100% renewables (and/or "zero impact") as goals. The rest of the business world needs to follow, and truly lay out a path to get there.

On the larger level, companies need to pursue what I call "heretical" innovation that rethinks business models and provides goods and services with dramatically reduced environmental footprint (see my blogs on this, here and here).

I see a deep parallel in all of this with one of strategy guru Jim Collins' major principles in Good to Great: "Confront the brutal facts." Collins makes a compelling case that businesses won’t succeed if they don’t tell themselves the truth.

The same logic applies to each of us as individuals, and to all of us collectively as a country and planet. It's time to confront our brutal facts -- our climate reality -- and get moving.

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)

Yes, it's December again somehow: time to look back on what we've learned and oversimplify into a handy list. Here's my take on the 10 big stories in sustainability and green business this year:

1. The usual sustainability drivers got stronger
Ok, this one is cheating a bit, but on a fundamental level, the top themes in green business haven't actually changed too much (see the 2010 list). So, rather than take up valuable list real estate with these perennial favorites and big-picture drivers, I'll quickly list them in one big bucket of mega-trends:

• The rise of the consumer around the world, related to...
• China, China, and China. From relentless demand for resources to bamboo-like 9% growth to vicious competition for the technologies and industries of the future, China will be the big story for a long time.
• The greening of the supply chain. Big organizations keep asking more of their suppliers.
• Increased demand for transparency and its close partners, (a) the quest to define and develop useful sustainability metrics and (b) the growing sustainability data explosion.
• The military continues to lead the way on energy and climate.
• The ongoing failure of policy at a global level (with the important exceptions of some successes/workarounds such as new mileage targets for cars and trucks and a carbon tax in Australia).

These drivers underpin a number of stories from 2011, but a few new themes came out as well. Here's the rest of my top 10 stories, with callouts for companies and examples that typify the trend.

2. Malthus strikes back: Coca-Cola takes an $800 million hit on commodity costs
Coca-Cola was not alone in facing increasing costs in 2011; one of my clients, Kimberly-Clark, took an earnings hit from record pulp prices. These companies are notable victims of a new reality: resources are constrained and input prices are fundamentally rising.

For over 200 years, from Thomas Malthus to the Limits to Growth gang, many people have made the case that it won't be long before we'll run out of food, energy, materials, and on and on. It's an idea that has enthralled many, but has seemed to be wrong. But this year, something felt different as we hit 7 billion hungry, striving humans on the planet. While "running out" isn't really the right phrase, it's clear that delivering many commodities to market is getting harder and more expensive (we don't dig for oil a mile under the ocean for the heck of it). And the dangerous mix of supply crunch and rising demand is only increasing, across nearly all commodities.

In January, China "seized" its rare earth metals (meaning it wouldn't export them anymore). In June, the New York Times declared a warming world hostile to food production. The best analysis of the resource scarcity mega-trend came from asset manager Jeremy Grantham. His analysis of commodity availability on a finite planet is compelling, thorough, and absolutely fascinating. Here's the gist: after 100+ years of fundamentally declining resource prices, the data show a rising trend for nearly every input into our society. Business as usual is no more.

3. Climate Change Arrives: Texas weather triumphs over (some) ignorance
Climate change is here. The list of "once-in-a-century" storms, floods, and droughts this year is too long to list. I know, I know — no single storm or season "proves" climate change. Was a year like 2011 possible in a world without climate change? Of course. But please. Was a year like 2011 likely? Not at all. In the words of climate scientist Jim Hansen, we've loaded the dice in favor of extreme weather events.

From Thailand to Pakistan to Texas, some areas are deluged with water, while others have absolutely none. Please look at the numbers for how dry and hot Texas was this summer (I'll wait). The data speaks for itself: Texas' heat was literally off the charts this year. What was once temporary drought is looking more like permanent change. For another angle on a changing "normal," read Jeff Goodell's piece in Rolling Stone on "Climate Change and the End of Australia." Finally, if the immediacy of the "look out the window" method of gauging climate change didn't work for some, at least one major climate skeptic changed his tune based on longer-term data. Richard Muller ran the models himself and discovered that, surprise, the thousands of scientists before him had gotten it right. It's probably wishful thinking, but I believe the climate debate is actually over (and a solid majority of Americans agree).

4. High-profile "failures" shake up clean tech: Solyndra has its day in the, um, sun
What can one say about the failure of solar company Solyndra? It certainly has become a media darling for clean tech skeptics. Soon after this quasi-fiasco, a few other stories seemed to indicate that corporate America was backing off of green tech. Google stopped its high-profile pursuit of cheaper-than-fossil-fuel renewables, and California utility PG&E quietly pulled the plug on its carbon offset program. In my view, none of this is all that distressing. So one technology and company failed miserably (and perhaps the government made a bad investment choice). And some initiatives didn't work out as planned. So what. Whether it's government money, venture capital, or corporate initiatives, you gotta place lots of bets to get some winners. These were all experiments, and you always learn from what doesn't work. But the real reason I'm not too worried is that...

5. ...clean tech is rising fast: Renewable investment tops fossil fuels for first time
Markets have a remarkable way of sorting the wheat from the chaff. While the overall carbon emissions news is not good, the renewable energy market is growing very fast. The sector is larger than most people realize, with clean tech investment hovering around $200 billion globally. Total investment in new power generation is a good indication of where we're headed, and for the first time renewables beat fossil fuels globally. Right now, the U.S. and China are entering a trade battle over solar subsidies, which tells me it's a real market now. They wouldn't be arguing if the prize were not very large.

5b. Nuclear on the outs

Following the nuclear meltdown in Fukushima, Japan, the once-resurgent nuclear industry is flatlining: generation actually fell globally in 2011, with Germany alone shutting down 8 gigawatts' worth. In September, Siemens, one of the world's largest nuclear power plant suppliers, exited the business. CEO Peter Loscher declared Germany's plans to move aggressively toward renewables "the project of the century."

6. Water rising — both literally and as a serious issue for business: Honda's supply chain gets slammed, Levi's gets creative
A list of floods that devastated lives, homes, and countries this year would be tragically long. So it's no wonder that business started to wake up to the serious danger that storms and shortages present to their operations, both from direct damage to property and from massive production interruptions (i.e., "business continuity"). Think back to the January floods in Australia which covered an area larger than France and Germany combined. The extreme weather seriously disrupted coal production, one of the most important economic engines in the country. At the microeconomic level, consider what Thailand's floods have done to the market for disk drives, or to supply chains for Honda and Toyota (which are dealing with a double flood hit from the tsunami as well).

On the use side of the water issue, companies with products that depend on water in production (beverages) or in use (shampoo, apparel) are also seeing the writing on the wall and getting creative. Levi's announced a low-water jeans production method, Unilever started asking customers to shorten showers, and beverage companies are working with farmers and NGOs to drive water use down throughout the value chain (see my last blog, co-written with Andy Wales from SABMiller). In 2011, the phrase "water footprint" became a lot more common.

7. Value chain and transparency partnerships growing: The apparel industry bands together
One of my favorite new partnerships is the new Sustainable Apparel Coalition, an impressive mix of powerful retailers, apparel manufacturers, and NGOs. The group is leveraging extensive data from Nike and the Outdoor Industry Association on supplier sustainability performance (energy, water, toxicity, etc.) for "every manufacturer, component, and process in apparel production." The goal: to reduce negative environmental and social impacts of the $1.4 trillion market for clothes and shoes.

The larger trend here is the continued growth of "open" — open data and open innovation, including new value-chain business partnerships and cattle-call contests inviting in any and all ideas. The movement has been building for years, from P&G opening up its product development pipeline early in the 2000s to the launch of the GreenXchange for sharing green patents early in 2010. But the trend accelerated this year, with GE's expanded Ecomagination Challenge and other coalitions and open competitions.

8. Valuing and internalizing the externalities: Puma Calculates its Environmental P&L
A few very cutting edge companies are starting to ask some deeper questions about the value they create and destroy in the world. Puma, in a surprise leap to the front of the sustainability leadership pack, commissioned TruCost and PwC (full disclosure: I have a partnership with PwC) to assess the value of its total environmental impacts from operations and supply chain, including carbon pollution, water use, land use, and waste generated. The total: 145 million euros. In a similar vein, Dow Chemical launched a 5-year, $10 million partnership with The Nature Conservancy to "value nature" (so called "ecosystem services") as an input into their businesses. It's unclear what companies can do with these numbers since externalities are by their nature, well, external to the regular P&L. But it's the beginning of something very important — companies are starting to understand the real value and costs of their businesses, to themselves and to society. Watch this space.

9. The people speak: Keystone and OWS
Speaking of getting companies and governments to think longer term about value and costs to society: against all odds and expectation, the protests against the Keystone XL pipeline from Canada — led most prominently by uber-environmentalist Bill McKibben — were successful (for now). And what can one say about Occupy Wall Street? The movement is, in part, about this larger question of value and values. Do we value the right things (equity, fairness, justice) or just promote growth and profit above all? Currently, our businesses are driven entirely by quarterly profits. Pursuing the short-term payback can cause a firm to deviate wildly from actual, long-term, sustainable profitability. This disconnect was bound to stir some passions eventually. Whatever your politics, ignoring or dismissing this movement is a big mistake. The concerns underpinning the anger out there stem from concern about what's good for the long-term, and what's truly sustainable. None of these questions are going away.

10. A path to sustainable consumption begins to emerge: Patagonia asks us to buy only what we need
Perhaps the most heartening business story of the year came from perennial thought (and action) leader, Patagonia. Its Common Threads campaign/business model questions consumption at its core. The company announced that it would take back its clothing and refurbish, resell, reuse, re-whatever. The website proposes a grand bargain - we make clothes that last, and you don't buy what you don't need. A holiday ad got more specific and demanded we "Don't buy this jacket." Patagonia is testing new ground and it's not a gimmick — it's a sign of the future.

Looking Forward to 2012 and beyond: New business models coming
Patagonia has always been at the leading edge; it was one of first companies to buy organic cotton or to turn recycled plastic into fleece. Now it's showing the way to new business models. I've written about this kind of heresy before, but the few examples out there are generally B-to-B (Waste Management, Xerox). Patagonia's move is a warning shot over the bow that the consumer-facing consumption question is coming. The near future will hold more questions about how businesses can and should operate in a resource-constrained, hotter, drier (or wetter) world. And companies will increasingly question the wisdom of focusing on quarterly profits. It won't all come to fruition in 2012, but it's on its way.

As usual, I'm sure I'm missing many great stories in my list. I look forward to your suggestions. Happy holidays and Happy New Year!

(This post first appeared at Harvard Business Online.)

(Sign up for Andrew Winston's blog, via RSS feed, or by email. Follow Andrew on Twitter @GreenAdvantage)