Sep 23 2008

Climate Change: A Trillion Dollar Opportunity for Business

General Motors Vice Chairman Bob Lutz took a lot of heat for his claim last February that global warming is a "total crock."  (He defended his claim on The Colbert Report earlier this month.) Needless to say, his credentials as a climate scientist leave something to be desired.

But as many bloggers and other commentators have noted in his defense, Lutz is also the major force within GM behind development of the Chevy Volt, a plug-in hybrid electric vehicle, and a variety of other hybrid models that promise improved gas mileage and thus reduced CO2 emissions.

"My thoughts on what has or hasn't been the cause of climate change have nothing to do with the decisions I make to advance the cause of General Motors," he wrote in response to critics.

As a business leader, at least, Lutz appears to be well attuned to the forces that will shape GM's future success in the marketplace. That's just as well, because a new study by The Climate Trust, an independent company set up by the British government to accelerate the country's move to a low carbon economy, reports that automobile makers have two-thirds of their value at risk if they fail to position their products and companies for a low-carbon world. Other major economic sectors face similar risks and opportunities.

In a statement accompanying the report, Tom Delay, chief executive of the Carbon Trust, said:

Climate change will cause a revolution in business and our findings should act as a trillion dollar wake up call to the investment and business communities.  Companies and investors that prepare now and develop new strategies will reap the commercial rewards of the move to a low carbon economy. The financial risks of inaction are just too vast to ignore.  We can see a trillion dollars of company value change, with leading, well-positioned companies gaining and badly positioned or slow companies losing out.

He added:

We have a short window of opportunity to act but at present business and investor actions are way out of step with the need to tackle climate change. They must be urgently re-aligned by developing new business and investment strategies and by working with governments to develop policy frameworks that reward early and effective action to rapidly reduce carbon emissions.

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