The Profit Motive: The Key to Solving the Climate Crisis

By Manav Bansal

Progress has been slow. Even with younger generations voicing their concerns in the streets, public officials open their ears during campaign season only to appear deaf when it's time to legislate. Legislators become paralyzed by the pressure exerted by lobbyists supporting the interests of corporations and industries that are profiting while fueling the climate crisis.

     Businesses have been asked to curtail their carbon emissions. Although some strategies, such as the carbon tax, have been implemented, carbon dioxide emissions continue to rise. As a result, new ideas need to be implemented on the global stage. While education surrounding the impact of climate change and individual and collective accountability remains essential, there is one fundamental change that must occur. 

     Corporations have a moral responsibility to reduce carbon emissions. While the economic solution in the past has generally promoted tax breaks and concessions for decreasing the company’s carbon footprint, corporations will be most enticed to implement significant solutions if those solutions are profitable. Only they can create tangible and sustainable change that can translate into enough of an effect to alter the current trajectory.

I came upon this idea as I was working at the Climate Museum on Governor’s Island in New York this past summer.  I pass by a picture every day as I am giving my tours, but one day I took a harder look at it. The photograph depicts a child holding a simple sign (Planet > Profit). The obvious interpretation is that we need to put the planet before profit, but maybe the reverse holds true, and in order to really drive change the conversation and the sign need to change (Profit>>Planet). Profit drives action.

  This frame of mind, though perhaps counterintuitive to some, is the critical philosophical and pragmatic paradigm shift needed for an effective and impactful response to climate change. Society needs to acknowledge the fact that profit drives change. History has proven it to be true. St. Thomas Aquinas, who ranked greed among the seven deadly sins, warned that trade which aimed at no other purpose than expanding one’s wealth was “justly reprehensible” for “it serves the desire for profit which knows no limit.” It wasn’t until 1705, when Bernard Mandeville proposed the concept that “private vices yield public benefits,” that a contrary approach was contemplated. While the term “vices” implies bad behavior, and subsequent philosophers and economists have softened this term, the fundamental concept remains: personal gain can drive public benefits. It stands, therefore, that profit facilitates notable change. So why would driving solutions for climate change be any different? If we could use that thirst for material gain as an effective strategy to mitigate the effects of climate change, while also amplifying the response to the crisis, in the end, all will benefit.

     Fossil fuels are ubiquitous. They are embedded in each and every aspect of society, from the manufacturing of consumer products to taking a shower at home. The world’s largest banks are continually financing the fossil fuel industry, even after the 2016 Paris Agreement, which sought to limit global temperature rise to well below 2 degrees Celsius. $1.9 trillion has been donated to the fossil industry since this landmark treaty. That represents more money than is currently in U.S. circulation. But why? It all comes back to the words on the young kid's board. Profit. The reason carbon emissions are still rising is because the fossil fuel industry still has so much money to make through the production and distribution of fossil fuels. But we could use this idea of profit to help create a more effective response to climate change. What people need to realize is that there is a substantial amount of money to be made by leveraging solutions to climate change, such as the increased adoption of renewable energy sources and the use of carbon capture. The demand is here for these clean energy sources. Right now in the United States, only 17.1% of electricity comes from renewable sources. However, to limit our increase in temperature to 1.5 degrees, 60% of electricity in the U.S. needs to come from renewable sources by 2050. While there is an immense disparity between those two numbers, they can still be achieved if companies adopting these solutions were more profitable than those using traditional fossil fuels. If affordable alternatives were offered to an increasingly educated and conscious society, demand would increase and drive the increased need for supply. 

     The fact is that the persistence of the profit motive will be the true driver of continuous change. If politicians and corporations alike can realize how much money can be gained from the utilization of clean energy and more sustainable practices, their efforts to mitigate the effects of the climate crisis will be much more enhanced and thus more effective. The fossil fuel industry needs to be presented with new compelling technologies.  These cannot just be solutions to appease the environmentalists but real solutions. As their current resource is, in fact, limited, a longer-range perspective is needed. In the next 50 years, oil and natural gas will have run out; coal in the successive decades. Thus, if these industries could start to transition into a market where carbon is captured instead of released into the environment, not only will they attain immense profit, but they will be contributing to initiatives to combat the climate crisis in a critically timely fashion.  The additional benefit from a public relations perspective will also drive profit to them.

In the end, the environmental issues we currently face are a bystander effect of the profit motive. We need to flip the equation so profit drives positive environmental change. Investing in these innovative technologies and disseminating knowledge regarding their potential positive impact is needed to catalyze change. One such solution is hydrogen fuel cells which have the potential to be the universal energy source for cars. This technology allows carbon-free fuel to be shipped safely around the world and penetrate both developed and emerging markets. Most importantly, it only releases water as a product. The hydrogen is stored and shipped in ammonia that is then cracked and purified back into hydrogen. Hydrogen, itself, can be produced through renewable energy sources such as solar and wind, adding to the long-term sustainability of the resource. In addition, while this fuel costs a little more than current fuel sources, it powers cars for twice as long. Renewable hydrogen has the prospect of being competitive with fossil fuel-based production, facilitating decarbonization, both in the energy and transport sectors, while creating new export opportunities. Therefore, hydrogen fuel cells may be a key solution to shifting the profit motive, and as a bystander effect, carbon emissions will go down and the climate change trajectory impacted (Profit>>Climate). 

The key will be a multi-pronged approach.  Society needs to incentivize industries to decrease carbon emissions, make alternate energy sources more profitable than fossil fuels, and incentivize both artificial and natural carbon capture. In terms of the consumer, additional taxes for the use of non-renewable energy sources and social stigmatization around failure to exhibit behaviors that will limit global warming could also help drive behavior change. These steps, along with continually educating society, will be the only chance we have to save future generations. Public officials are hearing but they need to listen, act, and legislate. This is the most urgent call to action of our time. Act now.