Sustainability Initiatives and National Competitiveness by William Bohnett

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How do various sustainability initiatives on climate change mitigation relate to goals of enhancing national competitiveness? A first reaction might be that they all do, and that is certainly true on one level. Any tree-planting campaign, properly done, is a mitigator of global warming- an overriding planetary goal- and in a national context may fairly be said to improve its competitiveness. Similarly, widespread early adoption of electric passenger vehicles- an important component of reducing CO2 emissions globally- doubtless would be seen as a competitiveness plus. For our purposes, let’s call these examples first-order effects. But on closer analysis, do they meaningfully produce enhanced competitiveness? Are there second-order associated effects that might more directly and impactfully do so?

In my view, climate sustainability is necessary but not always sufficient to materially enhance competitiveness. Three examples will be used to illustrate this proposition, involving: 1) two contrasting tree-planting scenarios, 2) different strategies for providing renewable energy in rural Africa, 3) the quickening pace of vehicle electrification viewed through the lens of urban transport policy.

First, though, how to account for climate change mitigation in the context of the foregoing “necessary but not always sufficient” contention. The necessary portion is easy. In the overwhelming judgment of science, the world must transition as rapidly as possible to a sustainable energy system free of fossil fuels. All countries have agreed to do so as per goals for each to be met by 2030 and beyond. The Paris Accord mandate in effect turns contemporary analysis on its head. Because of oil abundance, the most competitive energy economies today become inexorably less so with each passing year barring a transition to clean energy. How efficiently and quickly the shift to renewables takes place in the coming decades will considerably influence the competitiveness of each economy.

On to the three examples. First, trees here in the US. Take replanting trees lost to fires and other causes in national parks. Using our nomenclature, such a program of enhanced climate-appropriate replanting is necessary for any basic sustainability effort towards climate mitigation. That is a first-order effect, necessary but not in any meaningful, primary sense improving the economy’s productive capacity.

Imagine a possible second-order program instead — an aggressive and geographically widespread initiative to plant trees in urban heat islands. Those city neighborhoods typically have the least tree cover and highest poverty rates. Further, make an integral part of the effort to train at-risk youth and provide a career path in the field. A critically-needed first-order success in an era of rapid warming plus second-order benefits in employment, health outcomes, and quality of life-all potential competitiveness pluses.

Next, renewable energy strategies in rural Africa, a fraught challenge in many regards. Over 600 million people live off the grid across Africa, with some countries stringing poles but many not. Small-scale solar can and is filling the gap. The IEA estimates by 2040, mini-grid and off-grid power will constitute 47% of power generation in sub-Saharan Africa. This is a rare “no-brainer” solution replacing kerosene and other non-renewables and the first-order win for climate mitigation. Probably the problem retarding sustained progress is last-mile distribution. Distances are long, infrastructure poor and corporate investment lagging because of low-profit potential. That said, the conversion is happening, and a modest improvement in CO2 emissions is achieved.

What could vault this first-order energy success into a second-order human factor productivity enhancement? Put directly, projects which deliver measurable progress towards the UN’s 2030 Sustainable Development Goals. There is no better multiplier effect for a properly done solar, wind, or hydro project than having it coupled with as many SDGs as can be well executed. Solar installations for remote health centers, renewable energy improving women farmer productivity, and solar light for learning in off-grid areas. The list is endless, principally lacking only the will and creativity. The benefits to the competitiveness of developing economies would be immediate, significant and trajectory-changing.

Lastly is how creative urban transport policy could be coupled with rapid vehicle electrification in the next ten years to provide massive second-order benefits. That vehicle electrification is now proceeding steadily and quickly is a given, and first-order CO2 emission reductions will be correspondingly reduced. Now, ask the question from nine years hence. Has this time been used wisely to replace the gasoline present with a cleaner and healthier urban future-more dedicated bike lanes, congestion pricing, more streets freed from traffic? If this transition isn’t used to reinvent urban transport, an enormous opportunity will have been wasted. Simply replacing fossil-fueled vehicles with a like number of renewable ones yields only first-order success-necessary but not sufficient by itself to fundamentally transform cities into more humane, livable, and, yes, competitive ecosystems.