Sierra Magazine

Is the Greening of Business for Real?

"There is one and only one social responsibility of business," economist Milton Friedman wrote in the New York Times Magazine in 1970, "to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game."

Such thinking defined the stereotypical us-against-them tension between businesspeople and environmentalists for decades. Corporations rolled along, crushing any person, place, or endangered frog standing in the way of quarterly returns, while groups like the Sierra Club tried to put on the brakes, lobbying state and federal governments for regulation and educating consumers about business excesses.

Green-conscious companies such as clothing manufacturer Patagonia (annual revenue: $260 million), commercial carpet maker Interface ($1 billion), and Whole Foods ($4.6 billion) long ago proved that a business can thrive by paying attention to the environment as well as to Adam Smith's "invisible hand" of financial self-interest.

Back then it pretty much took a mountaintop epiphany for a CEO to see the benefits of going green. No more. Now, with energy costs soaring, supplies of raw materials becoming more tenuous, and regulations -- particularly in regard to climate change -- transforming business, companies are finding ingenious ways to reduce their risks and costs and increase their profits. A sequel to the 1987 movie Wall Street might find bare-knuckle trader Gordon Gekko imploring, "Green is good."

Wringing More Money From Less

Today companies are taking steps that "didn't make sense three years ago," says Daniel C. Esty, an environmental law professor at Yale University and coauthor of Green to Gold (Yale University Press, 2006), which discusses the competitive advantages a company can reap by adopting environmental strategies. Among the most "head-slappingly obvious" steps a business can take, he says, is to reduce energy use and boost efficiencies. For example:

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When Will Global Warming Reach a Political Tipping Point?

Presidential candidates traditionally blow off the environment as an issue. But can they continue to dither as the world heats up?

"What should be the nation's top concern?" When pollsters pose such a question to voters, few, historically, have answered "the environment." Yet when asked specifically about how important global warming will be to their vote for U.S. president in 2008, more than half of respondents to a CNN/Opinion Research Corporation poll last May answered "extremely" or "very." To learn how the quadrennial mash-up of politics and the environment will play out this election year, Sierra turned to four expert observers:

Matt Stoller is a Washington, D.C.-based political consultant and blogger who writes frequently for Open Left, MyDD, and the Huffington Post. He's worked for the campaigns of (successful) New Jersey gubernatorial candidate Jon Corzine (D) and (unsuccessful) Connecticut senatorial candidate Ned Lamont (D).

Michael Bocian is a vice president at Greenberg Quinlan Rosner Research, a D.C.-based polling and strategic consulting firm. He heads the company's environmental and conservation practice.

David Orr teaches environmental studies at Oberlin College and is the author of five books, including Earth in Mind and Ecological Literacy.

Newt Gingrich was the speaker of the U.S. House of Representatives from 1994 to '98 and architect of the Contract With America -- an effort criticized by the Sierra Club and other environmental groups. More recently, Gingrich has written (with Terry L. Maple) A Contract With the Earth, a plea for bipartisan environmentalism, and is chair of the nonpartisan organization American Solutions for Winning the Future.

Sierra senior editor Paul Rauber orchestrated the conversation by e-mail last October.

Q: How will global warming figure in the 2008 presidential election?

Newt Gingrich: Whoever wins will have a sound and realistic approach to climate change. Democrats have an advantage in developing solutions because their primary voters care more about the issue and because they are more comfortable dealing with environmental issues, which have been largely a liberal area of dialogue for the past generation. Republicans have to play catch-up in developing answers other than no.

Our research at American Solutions indicates that, by a very substantial margin, Americans prefer entrepreneurship to bureaucracy and innovation to litigation. The Republican nominee should be able to develop strong solutions to climate change that emphasize science, technology, innovation, and incentives. These will prove surprisingly popular compared with the tax increase-government control-bureaucracy and litigation model that has dominated for the past 30 years.

Michael Bocian: Mr. Gingrich is correct that the public clamors for innovation. Our polling shows that Americans feel our country is failing to lead on energy and global-warming solutions, yet they believe we have the technological know-how to lead, and we must harness it. Mr. Gingrich is also correct on the importance of incentives. But any purely voluntary solution fails to address the seriousness of the problem. Americans believe we need strong standards if we are to succeed. Setting strong standards and enforcing them require real accountability.

David Orr: The Republican Party has not done its homework on the biggest issue of our time and has persistently chosen ideology over science, even going along with the Bush administration's crude attempts to quash the evidence. The time to avert the worst is very short. To do so, we will have to create something akin to the government-business-public partnership in WWII. This will necessarily include lots of things Mr. Gingrich has opposed in the past: government regulation, taxation to change market incentives, and lots of R&D on renewables and efficiency. It will also require attention and money -- so no more wars fought for phony reasons.

Matt Stoller: Global warming may not figure directly in the 2008 race. Consider that Al Gore received only a small bump in approval ratings for his Nobel prize and continues to have high disapproval ratings. He is the political figure most closely associated with climate change, yet according to some polls, almost half of Democrats don't want him to run for president. I'm using Gore as a proxy, but there are other obvious signposts. There was no climate-change backlash from Katrina in 2005, and no candidates are making the issue the centerpiece of their campaign. Even with wildfires in the West and drought in the Southeast, I'm seeing most action take place at the local level disconnected from the federal government.

Global warming is one in a bucket of issues, along with Iraq, civil liberties, executive overreach, economic inequality, global financial instability, and corporate corruption. They are all of deep concern to a newly energized progressive movement and must be solved together. Climate change isn't a major political issue yet, but it will hit the national radar in a few years, ferociously.

Q: Given the impending end of the Bush era and a wave of Republican retirements from Congress, the 2008 election seems likely to produce a major political realignment. How should the new Congress and president address climate change?

Orr: Public opinion on climate change is at or just past a tipping point. In my view, the standard for effectiveness of any policy solution has five parts. The policy should aim to solve problems, not just switch them. The metric must be carbon eliminated per dollar spent. The solutions must be effective immediately, not, say, 50 years from now. They should be repairable, redundant, and cheap. Overall, the policy must "solve for pattern," in Wendell Berry's words: It must become the linchpin for security, economy, equity, and environmental quality.

The cheapest, fastest, and smartest approach in the near term is energy efficiency. Next we need a distributed energy system based on renewable energy -- not coal and nuclear. We do not know yet how to sequester carbon from coal-fired power plants or how to deal with the toxic byproducts of burning coal; nuclear amplifies the danger of terrorism and requires massive subsidies, and we still don't know what to do with the radioactive waste. Coal and nuclear are problem switching, not problem solving. Behind the scenes, however, well-funded lobbies are pushing hard for them, while the public interest in smarter choices is more diffuse and far less organized.

Stoller: This is really an organizing problem. There's a new economy coming, and new legislation should help shape its contours. We need to make sure that those who win in the new economy do so by reducing carbon and that the new wealth is widely shared so that a strong incentive is spread across many interest groups that know and cooperate with each other.

Bocian: Four components: first, higher fuel-efficiency standards, far bolder than those recently passed by the Senate. Second, mandates to produce more of our energy from alternative sources. Third, a cap-and-trade system that limits carbon pollution and uses market forces to do so most efficiently. And fourth, incentives for people to buy hybrid cars, install solar panels, and use energy-efficient appliances.

Gingrich: Americans are concerned about global climate change, but they want legislation that does not expand the size and severity of federal control of business enterprise. American businesses want to be part of the solution, and they have good ideas that are being implemented. Our business community is already ahead of the American government, so government must become a facilitator of innovation. The federal government could enact creative legislation that keeps businesses on task as we work to develop clean and sustainable alternatives to petroleum. Americans will elect candidates who support real changes in energy policy and market-based innovations that will lead the world to import clean American technology.

Q: Many analysts say the most straightforward way to address climate change is through a carbon tax, but conventional wisdom holds that such a tax would be political suicide. Is this true? What will it take for the public to back strong action on global warming?

Bocian: Americans are already willing to take bold action to address global warming and energy independence. But no one is asking them to do that, and someone needs to.

Even so, a carbon tax is a hard political pill to swallow. If the estate tax was renamed the "death tax," the carbon tax will become the "breath tax." Conservatives will say that liberals want to tax you from the first breath you take until after you've drawn your last.

So even if a carbon tax is the best policy option, it isn't the best political option. Fuel-efficiency and renewable-portfolio standards aspire to something better -- innovation and technological prowess. While a carbon tax may yield similar results, it sounds like it penalizes ordinary people. Even the hard-to-explain cap-and-trade system avoids that stigma.

However, if a carbon tax is the only way out of the global-warming crisis, we could reframe it. At the very least, we could call it a corporate carbon-pollution fee, making clear that the targets are corporations, not people, and pollution, not breathing.

Gingrich: Tax incentives will work better and faster than tax penalties. To dramatically change carbon emissions, the incentives need to be significant, essentially the most robust incentives we can afford. Such incentives are likely to work most effectively with advancing automotive technology.

Stoller: Why not start by taxing private jets and helicopters to pay for job training in green industries?

Global warming is a rich person's problem. If you're poor, you have more to worry about than melting ice caps or weird weather. You have transportation problems, health problems, food problems, educational problems, etc. Do you really need an energy tax on top of that to assuage the worries of wealthy elites who are so well-off that all they worry about is Arctic ice melts in 70 years? A carbon tax, as currently framed, really is a call for sacrifice to benefit rich people.

A better strategy, instead of pushing for a specific solution to global warming, is to push for a socially just society and use global warming in that framework. This means attacking the perception and reality that elites don't have to sacrifice when everyone else does. So you tax something that is a very obvious use of carbon by rich people, like private jets, and use the capital to expand training programs for "green-collar" jobs.

Orr: These are our policy tools: cap and trade (favored by business), carbon taxes (favored by most economists), education, and moral suasion.

Real solutions will require a combination of all of these. On taxes, Oliver Wendell Holmes once said they are the price we pay for civilization. Taxes have been made into a phony issue while the administration off-loads the enormous national debt onto our kids. This is morally wrong and economically stupid. We need politicians courageous enough to discuss this honestly. While they're at it, they could explain why income distribution now is roughly as unequal as it was in the late 1920s.

Q: Have the Bush years fundamentally altered the dynamic of the environment as an issue in electoral politics? With the near extinction of environmentally minded Northeast Republicans, is the environment in danger of becoming a purely partisan issue?

Stoller: The political crisis of the Bush years has turned environmentalism from a niche electoral issue into a piece in a larger ideological story. For progressives, there's no difference between the bad-faith politics of Iraq, the deniers of global warming, and the "Terry Schiavo" social extremists. All three represent betrayals of our core value system, and we are building tools and institutions in response to these betrayals.

This is a historic turning point similar to the late 1970s. Back then the political architecture shifted toward conservatism; now the Iraq debacle and the Internet have made progressive politics workable again. This will strengthen those concerned with environmental justice and weaken those who engage in business-friendly triangulation.

The end of fig-leaf Republicans, which is really what moderate Republicans were, is part of this reorganization. These Republicans are being replaced, not just by Democrats but by progressives. Bipartisanship isn't bad, per se, it's just tangential to coming up with a progressive solution to climate change that creates stakeholders across all sectors of American society.

Bocian: After pro-environment candidates and environmental groups succeeded in making environmental issues work in political campaigns, Bush's advisors realized they needed to change their titles, if not their tunes. Thus the Clear Skies initiative made the air dirtier, and Healthy Forests paved the way for clearcutting.

This makes it important for environmental advocates to sharpen the differences. Fortunately, energy and global warming make it easier to do so, because the differences are so stark. We believe America can solve these problems by investing in alternative energy and energy efficiency.

Our opponents shrink before the challenge. They say it will hurt the economy; we say it will reinvigorate the economy. They say the technology doesn't exist; we say we've been making cars and electricity with the same old technology for 30 years -- we must provide the incentives to develop new technology.

Gingrich: Conservatives are embracing an entrepreneurial, market-based environmentalism that fits with their core values. Liberals and conservatives will find common ground on the environment in a century where everyone is a mainstream environmentalist.

Orr: The Bush years, not to put too fine a point on it, have been the worst of our nation's history. The Republican Party, including all of those currently running for the party's presidential nomination, went along with a long list of outrages without a whimper of dissent. Democrats have been pretty spineless on the war, debt, and spying, but at least most are aware of climate change and the environment as issues. We are still waiting, however, for a semblance of leadership adequate to the times.

Union Heavy Embraces Green Energy as Crucial Vision for the Future

A glistening wind turbine stands outside the Great Lakes Science Center in Cleveland -- the city where the world's first electricity-generating windmill was built in 1888. The new machine weighs 26 tons and has kept 40,000 pounds of climate-changing carbon dioxide emissions out of the atmosphere.

Gazing skyward, United Steelworkers president Leo Gerard was impressed. "Twenty-six tons!" he marveled, mentally calculating how many manufacturing jobs that equaled -- before he learned that this particular machine was built in Denmark. "That seems pretty dumb," Gerard said. "We figure out how to make it work. And then someone in another country makes something of it and ships it back to us."

The scene occurred last fall, when Gerard, 60, was on a three-day, three-state barnstorming tour with Sierra Club executive director Carl Pope. The two men were trumpeting their joint interest in clean-energy solutions at events in St. Paul, Minneapolis, Cleveland, Columbus, and Philadelphia. They encouraged elected officials to support wind and solar power and energy efficiency as ways of creating jobs, pumping up the U.S. economy, and fighting global warming.

Standing side by side, Gerard and Pope are a study in opposites -- Gerard is enormous beside the short, slim Sierra Club leader. Gerard is brash; Pope is circumspect. One is from a small town in Canada, the other from a big city in the United States; one went to night school, the other to Harvard University. "Leo is about as different from me as anybody can be," Pope says, "except in the way he thinks."

Gerard's United Steelworkers union -- the largest industrial union in North America, representing 1.2 million workers in the United States and Canada -- has been fighting for clean workplaces and communities since the 1960s. It helped pass landmark U.S. legislation regulating air and water pollution and toxic waste, as well as "right-to-know" laws, which require companies to tell the public how much pollution they are releasing. "We need to put an end to the lies, the myths, the hysteria, that say you can have either a clean environment or good jobs," Gerard says. "You can have both, or you have neither."

When Gerald was growing up, his father worked as a miner in Ontario, Canada. Inco, the company that owned the mine, also ran an adjacent smelter that was the dirtiest in North America. The eldest of five kids, Gerard grew up in an Inco town, lived in an Inco house, and went to an Inco school. When sulfur fumes from the smelter wafted through his home, his father would say, "That's the smell of jobs." Gerard ran track in high school and says he was 16 years old "before I realized you didn't have to suck in sulfur while you were running."

Gerard's father belonged to a miners' union and held shop-steward meetings in the family basement. His mother served sandwiches and coffee while Gerard sat on the basement steps, taking it all in. He describes himself as an "irreverent" youngster, impatient with high school. "The stuff they were teaching me was how to have a good memory. I resented the system because I thought it marginalized people," he says.

At 18, Gerard went to work at the smelter. "After a few years I decided that I'd like to do something different," he says. "So I started going to night school. There was a part of me that wanted to be an economics professor." When he was offered a basketball scholarship to attend college full-time, though, he sat down and did the math.

"I was making half-decent money. At the end of four years, I would have been about 25 grand worse off if I accepted the scholarship. So I said to hell with it," he says. "I figured it would take me eight years to get my education through night school, but so what. All that time I'll be earning money."

That was the plan, but in 1977, the Steelworkers offered Gerard a job doing fieldwork based in Toronto. "And there you go," he says, ticking off a series of union jobs that eventually led to his election as United Steelworkers president in 2001. Instead of teaching economics, the irreverent kid who had yearned to become a professor was in a position to change the economic future of North America.

The full name is such a mouthful -- the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union -- that Gerard's union is simply called the United Steelworkers (USW), for the people who founded it in 1942.

This diverse group is deeply engaged in the key issues facing U.S. and Canadian workers: healthcare, pensions, and "offshoring," the trend toward moving North American industries and jobs overseas. It is also working for broader, longer-term goals such as worldwide standards to protect industrial workers, worker-friendly pension-fund investments, and the union's ground-floor membership in what the Steelworkers see as North America's emerging clean-energy economy.

While promoting the union's causes, Gerard can be intimidating. Once when it was his turn to speak at a steel company's shareholder meeting, the lights suddenly went out. "This is no time to be f -- -ing with the lights," he barked. "Get them back on or somebody's going to beat the sh -- out of you." Suddenly the room brightened, and Gerard was able to say his piece.

Another time Gerard encountered an armed guard at the entrance to a contract-negotiating session. "Why are you here?" Gerard recalls asking. "I was hired for protection," the man said. "I went berserk," Gerard says. "I told him, 'I'm not turning my back on you and that gun. Tell your boss I'll meet him over at the Holiday Inn. If he's not there in half an hour, I'm leaving.'" In a few minutes, the meeting reconvened at the new venue.

Gerard took a softer approach at a 2001 meeting with three of President George W. Bush's top lieutenants: Treasury Secretary Paul O'Neill, U.S. Trade Representative Robert Zoellick, and Commerce Secretary Donald Evans. The administration knew he wasn't a friend -- the union had backed Al Gore the year before. But steelworkers are concentrated in the battleground states of Ohio, West Virginia, and Pennsylvania, and, as reporter Steven Greenhouse explained in a June 2001 New York Times article, "Aspirants for national office ignore his union at their potential peril."

Cheap steel imports were on Gerard's mind that day. Since 1998, 18 U.S. steel companies had filed for bankruptcy and 23,000 workers had lost their jobs, partly because of steel coming in from overseas. Gerard introduced eight laid-off workers to O'Neill, Zoellick, and Evans: "I want you to see the human face of your inaction," he recalls telling Bush's men. "I want you to see a 50-year-old guy who two weeks ago was able to feed his family and two weeks from now won't be able to."

A few months later, the president imposed tariffs on foreign steel -- a major victory for Gerard. But Bush eventually withdrew the tariffs in response to complaints from multinationals and the World Trade Organization, and the bankruptcies and job losses have continued. Says AFL-CIO president John Sweeney: "Gerard is leading the union through some of the most troubled times American manufacturing has ever faced."

On the first day of their clean-energy tour, Gerard and Pope met with media, workers, environmentalists, and the Twin Cities mayors at the United Auto Workers Hall in St. Paul. Across the street is the sprawling plant that once provided 2,000 high-paying jobs making Ford Ranger pickups. Ford turned down workers' entreaties to convert it to building high-mileage hybrid vehicles and announced the plant's closure in 2008. Gerard was not pleased. "Don't tell me that a car made in America can't get 30 or 40 or 50 miles per gallon," he said. Gerard and Pope's appearance made the local papers that day, as did the alternative they support: converting the old Ford plant into a wind tower and turbine factory.

That night, at a gathering of labor activists and environmentalists in Minneapolis, Gerard railed about national politics. "We're living in an upside-down society where even Richard Nixon would look like a liberal," he said. "You want to make a list of thieves? Tom DeLay, Bob Ney, and Duke Cunningham -- Old Dukie Boy. What did they do? Put your mind back. Don't get amnesia."

When a woman in the audience yelled, "Don't forget Abramoff!" Gerard shouted back, "Abramoff? That son of a b -- -- will be swingin' pretty soon." Looking slightly sheepish, he added, "My language gets a little salty when I'm upset. But, sisters and brothers, this isn't about us anymore. This is about the kind of future America deserves to pass on to its kids and grandkids."

After a standing ovation, Gerard sat down, put his hands in his lap, and bowed his head. The fireworks were over. At that moment, in soft brown trousers and a neatly pressed blue Steelworkers shirt, he looked more like an altar boy than a gladiator. When the rank and file approached the stage, he rose for a hearty round of backslaps and hugs. "I'm glad he's on our side," one woman said.

Two days later, enthusiastic steelworkers thronged a lawn near Independence Hall in Philadelphia. A banner proclaimed "The Road to Energy Independence: Renewables Now!" next to a photograph of two children walking near a wind turbine, with Old Glory waving in the background. Gerard, Pope, and Pennsylvania governor Edward Rendell (D) were lined up to speak. As Gerard approached the microphone, some of the steelworkers in the audience chanted, "Le-o! Le-o! Le-o!" Smiling fondly, he said, "You guys embarrass me."

Gerard married his high school sweetheart, Susan, 38 years ago. When he's on the road, he calls her every day. She was the superior athlete in high school, he says: "She's a bit more of everything than I am -- more militant, more impatient, more environmentally friendly." He's also on the telephone almost daily with his two twentysomething daughters, Kari-Ann and Meaghan.

Says the Steelworkers' Ohio chief, David McCall: "He's a big, heavyweight teddy bear."

Although the barnstorming tour focused on clean-energy jobs of the future, the union is still working hard to clean up existing workplaces. "Roughly 60,000 workers die each year in this country from workplace accidents or from diseases caused by workplace chemicals," says union environmental specialist Diane Heminway.

Steelworkers remember the "death fog" from local zinc and steel plants that blanketed Donora, Pennsylvania, in 1948, killing 20 and injuring 6,000. They learned from the time the Provo, Utah, mills shut down for six months during a labor dispute in the 1980s, and hospital admissions for children with pneumonia, pleurisy, bronchitis, and asthma declined by half. More recently, a mill in Pueblo, Colorado, was releasing so much pollution inside the plant that "our members couldn't see their hands in front of their faces," says Heminway. A Steelworkers lawsuit in 2000 forced the company to invest more than $25 million in pollution-control equipment.

In 1990, the Steelworkers published a 34-page manifesto called "Our Children's World." Its message was simple: "We cannot protect Steelworker jobs by ignoring environmental problems." Ahead of its time, the report also warned of the "catastrophic consequences" of global warming. When the document was presented at the Steelworkers' annual meeting, it was not an easy sell.

Some of the workers from the coke ovens (where the raw material for steel is processed) feared that too much environmental purity could threaten their jobs. "Some guys from Cleveland, Pittsburgh, and Gary tried to storm the stage," Gerard recalls. "But we went at them. We said if you don't clean up, you won't be there. And if coke isn't there, the steel mill isn't there."

"We don't say there is never a jobs-versus-environment conflict," says Michael Wright, the Steelworkers' director of health, safety, and environment. "Conflicts may exist, but fighting cleanups is not the way to solve them. Our job is to find solutions that protect both jobs and the environment."

More recently, the union's environmental policies have been questioned by some members of the Paper, Allied-Industrial, Chemical and Energy Workers International Union (PACE), which merged with the Steelworkers in 2005. Paper workers, including loggers and mill workers, are still smarting over environmentalists' efforts to protect the spotted owl in the Pacific Northwest in the 1980s. They don't think much of the Sierra Club's stand against commercial logging in national forests either.

Gerard is undaunted by such squabbles. "We aren't going to be united with the environmental movement on every issue," he says. "But we are going to be united 80 or 90 percent of the time. Let's work on that unity rather than let our enemies exploit the divisions."

Pope admires the Steelworkers as one of "maybe a dozen large organizations in this country that actively promote small-d democracy -- the idea that ordinary people, given information, can make better decisions than the elites." The union encourages its members to participate in the political process by staffing phone banks and walking precincts, and even excuses its staff from ordinary duties on election day, when the organization goes on "hot idle" (a term that usually refers to a steel furnace on hold).

Gerard sees his alliance with the Sierra Club as a step toward a new political majority. "There's a vacuum of leadership in this country," he told a group of Club leaders last year. "The Democratic Party has lost its way. Carl and I are forming a strategic alliance, getting people to talk with each other."

Both Gerard and Pope were delighted with the outcome of last fall's election: a congressional majority that is far friendlier to both their causes. In February, they reunited in Washington, D.C., to meet jointly with the newly elected Democratic senators. "These guys wanted us to help them develop clean-energy legislative proposals," Pope said. "This is part of their vision of how to get the country moving again."

More heartening news followed. In late February, the Minnesota legislature passed a law that will bring thousands of megawatts of wind power -- and a blast of new jobs -- to the state's windy rural areas. The Twin Cities mayors set up a joint green manufacturing commission, backed by their economic development offices, the Steelworkers, the Sierra Club, and a local paper mill. And Pennsylvania is now a clean-energy hub, with Spanish wind-turbine maker Gamesa establishing three plants on the site of an old U.S. Steel works in Bucks County.

Gerard's dream of a thriving U.S. clean-energy industry has moved a few steps closer to reality. He is not surprised. "We are not promoting some kind of fuzzy, left-wing, feel-good stuff that Rush Limbaugh will love to attack," he says. "This is sound social and economic policy. This gives my grandkids a shot."

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