It can only be good news to the world that some of the United States' top multinational corporations have joined in the fight against climate change. As part of a White House initiative, the new American Business Act on Climate Pledge campaign, 13 of the country's largest firms - including Google, Apple, Coca-Cola and Walmart - have committed US$140 billion (S$193 billion) towards reducing their carbon footprints through new low-carbon investments and new renewable energy. Importantly, President Barack Obama will announce a second round of pledges in the autumn. The initiative is commendable as it will help boost clean energy projects and other low-carbon solutions globally.
There is now little doubt among countries that human activity is causing climate change - increasing temperatures, extreme weather and rising sea levels, all a threat to human survival. Despite this, there is still little agreement on how to go about fighting it and how much responsibility individual countries should bear. It is encouraging that the world's two largest emitters, the US and China, have come to an agreement on their commitments to reducing emissions of greenhouse gases. But it is still uncertain whether the deal to be thrashed out in Paris at the end of the year will be an effective one. Even if an agreement is reached, measures may not be adequate. Governments will need to contend with different interest groups, including big business.
It is thus significant that the Americans are leading the way by mobilising private corporations - which are powerful agents of change - to invest in green technologies, products and energy sources. Their contributions will count collectively as 1 per cent of MNCs account for half of the world's R&D spending and MNCs as a whole account for a quarter of global gross domestic product. If they were to allocate some of their R&D funds to green technologies and products and insist that their facilities or those of their suppliers reduce their greenhouse gas emissions, the results could indeed ripple across the global economy. The question is how to mobilise MNCs who are generally not altruistic. Businesses are not blind to the risks that climate change pose to their supply chains. They can also be swayed by policy certainty which they can then plan ahead for and by the choices that environmentally conscious consumers make.
This is how even individual efforts can add up to make a difference. Many might think their tiny efforts amount to just a drop in the ocean. Yet, the choices people make can move markets. If more consumers demand greener products like LED lamps or highly energy-efficient appliances, the corporations will make them. If more people insist on knowing the provenance of products to determine their carbon footprint, more businesses will be motivated to make climate as well an essential factor of production.
This article was first published on August 6, 2015.
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