Private sector pledges may be more promising than the government’s efforts to address climate change.
On the surface, pledges by the government and some (but certainly not all) corporations are consistent. For example, the administration has pledged the United States will reduce greenhouse gas emissions 50 to 52 percent below 2005 levels by 2030 and be net zero by 2050. Similarly, Microsoft pledged to be carbon negative by 2030 and to remove from the atmosphere all the carbon it has emitted since its founding by 2050, United Airlines pledged to reduce its greenhouse gas emissions by 100 percent by 2050, and Dow pledged to be carbon neutral by 2050.
But making pledges is much easier than keeping pledges, and the progress made so far by the government and corporations is mixed.
The government had a good record on environmental laws in the 1970s and 80s. During those decades, laws affecting clean air and water, toxic substances, endangered species, and what became known as superfund sites were enacted.
But since then, efforts to enact climate policies have been stymied. The government has subsidized certain lower-carbon technologies but has not legislated reductions in greenhouse gas emissions. In the absence of new climate laws, the executive branch has been forced to rely on laws enacted for other purposes to try to limit greenhouse gas emissions. These efforts are inconsistent and limited by legal challenges. Until new laws are enacted, progress toward fulfilling the government’s climate pledges cannot be relied on.
In the private sector, trends are more positive. Historically, the private sector resisted regulation and climate action. But now corporations like Microsoft, United Airlines, and Dow are making commitments that address climate change beyond those required by laws or regulation. Government is no longer the only factor they are considering. Corporations are responding to broader factors: a multitude of stakeholders.
Some politicians deride these corporate actions as “woke capitalism.” But it demonstrates the difference between the constituencies of politicians and corporations. Simply put, congressional candidates are beholden to relatively narrower factions, or primary voters of one political party, while corporations are beholden to broader factions, including employees, customers, and shareholders across the country and around the world.
Yes, voters are pressing the government to address climate change. But they are generally pressing like-minded politicians to support relatively partisan climate agendas, which is not breaking the stasis that has existed for 30 years. I think a carbon tax that addresses multiple issues—climate change, the need for tax reform, and trade barriers—could break the political logjam. But this may be years away, and we unfortunately do not have a lot of time.
In the meantime, we should be open to and encourage the possibility that corporations will lead efforts to address climate change and the government will follow. For example, instead of unsuccessfully pursuing legislation that forces bad actors to change, the government could endorse good actors and legislate to avoid free-riding and backsliding.
This approach would undoubtedly require a change in mindset. But the government’s response to climate change to date has been inadequate, and leadership is emerging in the private sector.