A sustainable strategy for global growth
By allowing polluting industry to pollute for free they gain competitive advantage and put clean competitors out of business
The global economy in the 21st century faces two key interrelated challenges. The first is poverty and increasing inequality. The second is ecological self-destruction and accelerating climate change.
A strategy for sustainable global economic growth is the means to end poverty and ameliorate inequality, while making economic growth require ecological improvement. This is a market-based strategy catalyzed by government leadership in establishing new market rules helping guide consumption, production and investment decisions.
A sustainable global growth strategy is predicated on stimulating enormous productive global investment flows in energy, transportation and industry to build the productive infrastructure of a sustainable ecological future.
In 2008, many trillions of dollars was swiftly expended to save the global financial system and bail out the bankers. In 2014, a sustainable and prosperous future for all our families is the question on the table.
Unlike 2008, the Treasury doesn't need to madly cut checks. What we need is government leadership for new market rules where economic growth means ecological improvement. The goal is an increase in sustainable jobs and wages for workers, in profits and earnings per share for business and investors. New market rules and ecological consumption taxation can replace income taxation and serve to unleash national and global investment in a sustainable future.
This is good for the United States. This is good for China. It's good for both the industrialized and the developing world.
It's not rocket science to require replacement of polluting coal plants, for example, with non-polluting energy. It does not require carbon taxes. It can be done, as the Obama administration is attempting, through limits on emissions.
Or it can done by requiring an increasing percentage of non-polluting energy to be sold by energy suppliers, so-called renewable portfolio standards. A renewable turn will lead to enormous investment and sustainable job creation in an energy system that has zero fuel costs.
By allowing industry to pollute for free they gain competitive advantage and put clean competitors out of business. This is Adam Smith 101. If market economies are to survive and to prosper, it must be through the practice of an industrial ecology with the goal of zero pollution and zero waste. All outputs of production become inputs for other processes.
Automobile companies like Subaru already proclaim that their cars come from landfill-free plants, and GM is committed to landfill-free factories. Walmart's three sustainability goals are to be 100 percent supplied by renewable energy, to create zero waste and “to sell products that sustain people and the environment.”
New market rules will make Walmart's and GM’s job much easier. By phasing out pollution for free, sustainable goods will cost less, gain market share and become more profitable. Balance sheets in the 21st century and quarterly earnings reports can and must lead the way toward an ecological future.
This path must be global. Global trade rules require imports to meet national ecological standards, or pay duties to end pollution subsidies. We must transfer technology to developing nations and invest to help them build their own low polluting ecological growth futures and create a virtuous global growth circle based on productive prosperity for all.
Implementing an ecological global growth strategy should be job one for government in partnership with workers and business. We can build through our economic and technological prowess a prosperous, fair and sustainable global future. That can and must be the future for capital in the 21st century.
Roy Morrison of Warner is director of the China International Working Groups and a member of Greater Boston Capital Partners, LLC.
