How Governmental Sustainability Policy Can Speed the Transition to a Cleaner Economy

In the next several days, Jossey-Bass will publish a new book I have co-authored with my Columbia University colleagues Bill Eimicke and Alison Miller. It is entitled: Sustainability Policy: Hastening the Transition to a Cleaner Economy. The book is an effort to describe what government is already doing and what the U.S. government should be doing to partner with the private sector to build a sustainable economy--the role that government should play in moving us from an economy that is destroying our ecosystems to one that will work to sustain them. In my 2011 book, Sustainability Management, I tried to define the sustainability problem as an issue of organizational management. Sustainability management remains a critical part of the equation.

Sustainability management is simply the latest step in the evolution of the field of organizational management. Twentieth century managers were concerned with finances, human resources, information, production, performance, marketing, strategy and globalization. Today's managers must also pay attention to the use and cost of natural resources, the cost of waste production and disposal, and the environmental impact of organizational outputs and waste. These physical dimensions of sustainability can no longer be ignored. They are an increasing percentage of an organization's cost structure.

But organizational management is not enough. It is necessary, but it is not sufficient. Some of the work needed to make the transition to a sustainable economy requires governmental action and public policy. We need to invest public resources in earth observation, technology, organizational capacity and public policy to build our capacity to produce enough to support human civilization while maintaining a healthy, productive planet.

In our new book, we make the case that we do not know precisely how to develop a sustainable economy, but we are on the road to figuring it out. No single policy can achieve sustainability. It is not simply a problem of climate change. Sustainability requires attention to water, waste management, toxics, energy, ecosystems maintenance, endangered species, peace and security, along with a host of other issues. Government needs to act aggressively to bring about change through the tools at its disposal. Here in the United States, there are a variety of sustainability policy options available at the national, state and local level.

At the federal level, we need funding for the technologies that will transform the economy. We need to work on renewable energy, agriculture, water treatment, waste management, more efficient transportation systems and a more sustainable built environment. We also need to fund the basic earth science needed to better observe and analyze the earth's conditions. We need to know more in order to understand what we can do to use the planet productively and what practices need to be avoided. We also need to redesign the tax code to promote sustainability in large organizations, small businesses, localities and households. Finally, we need investment in infrastructure: smart grids, mass transit, water and waste management. (And no, I am not expecting any of this out of the next Congress...)

Fortunately, we have a federal system where American states can act without the federal government. States have at their disposal many of the same tools and mechanisms that the federal government has, and lately some states have been willing to deploy them. For example, although Congress hasn't adopted comprehensive climate change legislation, the nation is still on its way to significant reductions in greenhouse gas emissions. Many states have been actively encouraging renewable energy and energy efficiency. Regional cap-and-trade systems, such as the northeast states' Regional Greenhouse Gas Initiative (RGGI) are well underway. So are requirements that power utilities meet Renewable Portfolio Standards (RPS) that force them to add renewable energy to their power mix. New York State and California have dedicated funds for energy efficiency projects. Several states have developed "green banks" to help businesses generate the capital needed to invest in sustainable operations. Others are using the state tax code to encourage clean investment. Over 30 states have developed climate action plans to help mitigate and adapt to climate change. States like New York, where we live, are investing in more resilient infrastructure built to withstand extreme weather events. Our book provides a number of case studies of innovative state level policies now underway.

We also focus attention on local government, especially mid-to-large size cities. Cities are important agents for sustainability due to their population size, environmental impact and direct service delivery role. Most of the actual work of government is done at the local level. Local governments are responsible for schools, police, fire fighting, transportation, land use, water and waste management--not to mention parades and fireworks. The federal and state governments make policy and collect and distribute revenue, but for the most part, the real work of government is local. There are of course exceptions. At the federal level we have the military, foreign diplomacy, immigration, national parks and prisons. At the state level we have some universities, state highways, state troopers and (once again) prisons.

City-level sustainability initiatives, such as PlaNYC 2030, tend to be integrated into local economic development efforts and often enjoy a high level of non-partisan support. Many local leaders have come to understand that sustainability drives economic growth. Green initiatives attract business, tourists, and new residents. People can see and experience local level sustainability initiatives because they have an immediacy not typically seen at other levels of government. In New York City you can see the bike-sharing stations, the new bike lanes and the three types of trash and recycling baskets out on the street. Efforts at energy efficiency can be seen in lower utility bills. Federal or state governments fund some sustainability initiatives, but local governments typically implement them.

After identifying examples of local-level sustainability initiatives, our book discusses sustainability metrics and the process of transitioning from the current throw-away economy to a renewable one. In our view, it is important is to stop discussing sustainability like it is a grim, unpleasant lifestyle: that sustainability requires denial and reduced consumption. Economic consumption will change, but so will our preferences, like the re-urbanizing young folks that choose to live in the city and rely on mass transport, renting cars only when they need them. They don't miss sitting in an SUV stuck on the freeway--or being stopped for drinking while under the influence after dinner at a suburban restaurant.

The key question is, how do we get from here to there? How do we make the transition to a renewable, sustainable economy? Trying to make people feel guilty for their consumption is a losing strategy. A positive vision of a sustainable lifestyle includes entertainment, physical fitness, education, creativity, exciting ideas, social interactions, healthy and flavorful food and drink, exploration, travel and fun.

But this transition will not take place through market forces alone. Government intervention in the economy is as American as apple pie. Remember, we needed:
  • Federal tax policy and mortgage insurance to stimulate home ownership;
  • Land-grant colleges to develop farm technology and agricultural extensions to teach farmers how to use these new methods of farming; and
  • Federally funded research to develop the Internet, GPS and cell phones.

The list could go on. I know it is not politically popular to acknowledge that we need a public-private partnership to make the transition from the current economy to a sustainable one--but we do.

The transition to sustainability will require technologies for renewable production. To reiterate: We need a government to formulate and implement the policies that will provide incentives to develop and use that technology. We need government to fund the science that enables us to increase our understanding of human impact on ecosystems. And we will need government rules to ensure that new technology protects, rather than destroys, natural systems.

In my view, the transition to a renewable economy has begun. We are starting to see a slow change in culture, norms and values about consumption and lifestyle. Our demand for a clean economy and for breathable air, healthy food and drinkable water is stimulating the development of new technologies. These technological changes result in economic change that, in turn, causes social change; social change then creates the context for political change. This cycle may not be inevitable, but it has begun. Our new book discusses the role of government and public policy in hastening the transition to a renewable economy.

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