Is the planet really warming up? Just ask the corporations that stand to make—or lose—billions because of "climate exposure."

A journalistic collaboration on climate change.
April 19 2010 11:32 AM

Betting on Change

Is the planet really warming up? Just ask the corporations that stand to make—or lose—billions because of "climate exposure."

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 To make corporations true partners in tackling climate change, Lubber thinks investors need to push for basic changes in the way their companies function. CEOs whose bonuses are based on bumping next-quarter results will make short-term decisions. Those who are paid based on reducing carbon usage will make long-term ones—investing in technology and processes that reduce greenhouse gases. "If they're compensated for producing 86 percent more widgets, they'll do that. But if they use less fuel, they ought to be compensated for meeting their carbon-reduction goals." 

 In the short run, though, there's probably only one force that will get today's blithe firms to snap to attention, and that's legislation. If Congress actually puts a price on carbon, it'll hit the world of industry with tsunamic force. At minimum, it would probably goose the price of electricity and make emissions-heavy industries instantly less profitable. (Indeed, this is one of the things the SEC and many investor groups are urging firms to do: calculate how badly they'll be shellacked if new regulations make carbon expensive.) Not everyone will be a loser. The McKinsey study calculated that alternative-energy firms will do quite well (for obvious reasons), but so will less-predictable sectors like the construction industry, as people rush to retrofit buildings with extra insulation and energy-saving rebuilds. The farsighted firms—and the ones who work on the colder fringes of the world—can see the future clearly, because they're living it. But with the stroke of a pen, Obama can bring it a lot closer. Whether it's a melting Arctic or a bold new law, the biggest forces shaping industry are, as it were, man-made.

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This piece was produced by the Climate Desk collaboration.

Correction, April 19, 2010: Due to a typographical error, this article originally stated that the company's revenues were boosted by more than $500 million. (Return to the corrected sentence.)

Clarification, April 22, 2010: This sentence originally referred to the materials going "north and west" from Korea to Russia. While that is true—as the crow flies—it was needlessly confusing to readers, as was a reference to the trip's final destination in Nigeria. The sentence has been simplified. (Return to the revised sentence.)

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Clive Thompson is a longtime contributing writer for the New York Times Magazine and a columnist for Wired. He is the author of Smarter Than You Think: How Technology Is Changing Our Minds for the Better.