To we green-minded types, President Obama's emphatic inaugural address statements on climate change were welcomed with open ears. Looking ahead, most analysts predict that the EPA will flex its regulatory muscle to stem emissions, and others see the distinct possibility of Obama using executive power to install a cap-and-trade system for power plants.
In a new HuffPo article, Amy Larkin, author of Environmental Debt: The Hidden Costs of a Changing Global Economy, outlines two climate action weapons that should be added to Obama's arsenal:
First, patent pooling has been used since the 19th century to spur innovation in industry to support either a wartime emergency or a financial debacle. I believe that climate change qualifies on both counts. And the Securities and Exchange Commission has new rules that require public corporations to disclose their climate change risk. These rules are new (2010) and currently vague, but have the potential to begin the incorporation of external costs as well as long-term impacts into corporate P&Ls and balance sheets.
At several of America's most iconic corporations, from General Electric and IBM to Cisco and Google, massive investments are being made in renewable energy research. But the scientists working on these projects are sworn to secrecy in order to protect their companies' investments. Patent-pooling, an agreement between two or more companies to cross license patents, is a way around this silo effect. Since the 19th century, patent pooling has spawned numerous technological breakthroughs since then, including the DVD, the patent rights of which are shared between Hitachi, JVC, Matsushita, Mitsubishi, Philips, Pioneer, Sony, Thomson, Time Warner, and Toshiba. Applied to renewable energy, Larkin argues, patent pooling would accelerate our transition out of fossil fuel dependence.
In the world of accounting, a quiet revolution is brewing. Puma, the sportswear company, released the first-ever Environmental P&L in 2011 and showed that if it actually paid the true costs of its environmental impact it would have reduced its profit by 75 percent. Meanwhile, the Global Reporting Initiative and many other financial groups are designing a new accounting paradigm that includes environmental and social costs into plain vanilla financial reporting.
These are just two options of many, writes Larkin:
If President Obama is serious about averting the worst effects of climate change, it is time to think big. Nothing except for nature can transform the world as swiftly as can business -- for better or for worse.
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