Is Global Warming Bad for American Business?
James Surowiecki, one of my favorite business writers, has a piece in the New Yorker about climate change legislation and the hooplah it's causing at the Chamber of Commerce. This is a simple story. The Chamber of Commerce doesn't like regulation of any kind, and accounting for the negative externality of carbon emissions unquestionably requires regulation. The real question is why all of a sudden climate change regulation is something that many companies support.
He writes that
Partly, it may be a matter of self-interest; Exelon, for instance, has big investments in renewable energy. But it may reflect a calculation that global warming is simply too big an issue to get wrong, both economically--few companies are really going to benefit from the melting of the polar ice caps--and from a public-relations point of view.
I don't know if I buy that last sentence. "Few companies are really going to benefit from the melting of the polar ice caps" is a bit flippant, because (1) Global warming has been a reality for a while, and we haven't exactly seen a green revolution in the Chamber of Commerce and(2) Many of these companies aren't going to see a windfall from cap-and trade regulation, either. He goes on:
We assume that lobbies always recognize what's best for their members. But they don't, and, in the case of climate change, they may very well be missing what the companies that have resigned in protest have seen: global warming isn't just bad for the planet; it's bad for business.
Is global warming bad for business? I'm staring at that question now and coming up with nothing. Maybe -- maybe -- there's a multinational company out there blaming a fall in revenue on a sequence of unpredictable weather patterns somewhere in the world that a team of scientists tied to global warming. But the companies that resigned from the Chamber -- energy companies like Exelon, and Apple -- probably have reasons that are just as self-interested as the companies that object to climate change reform. The energy companies probably sense that they can transition their technologies ahead of the market and win with cap-and-trade, and Apple's probably playing a PR game.
But that doesn't make cap-and-trade "best" for the economic fortunes of the rest of the Chamber of Commerce. It's possible to support climate change regulation, as I do, and acknowledge that there are companies who might lose. Self-interest is what companies do. Public interest is what the government does. In a few months, we'll see who wins.