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Henry Paulson: financial crisis mistakes being repeated in handling of climate change

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The former US secretary of the Treasury who sat in office when the housing bubble burst in 2007/08 has warned that the world is making the same mistakes in the handling of climate change as it did in the run up to the financial crisis. 

In an article published in the New York Times, Henry Paulson writes that we must act now to curb climate change – “a crisis we cannot afford to ignore” – before it is too late.

“We are building up excesses (debt in 2008, greenhouse gas emissions that are trapping heat now). Our government policies are flawed (incentivising us to borrow too much to finance homes then, and encouraging the overuse of carbon-based fuels now)”, he says. 

“Our experts (financial experts then, climate scientists now) try to understand what they see and to model possible futures. And the outsize risks have the potential to be tremendously damaging (to a globalised economy then, and the global climate now). 

Paulson, also a former chairman and CEO of Goldman Sachs, adds, “If there’s one thing I’ve learned throughout my work in finance, government and conservation, it is to act before problems become too big to manage.”

As a solution, Paulson, now chairman of the Paulson Institute, which works to promote sustainability around the world, calls for all US politicians to support the introduction of a price on carbon. 

He suggests that such a “fundamentally conservative” strategy would appease even the doubters within his own Republican party, empowering the market to tackle the cause of climate change.

“Few in the US now pay to emit this potent greenhouse gas into the atmosphere we all share. Putting a price on emissions will create incentives to develop new, cleaner energy technologies […] and create jobs as we and other nations develop new energy products and infrastructure,” he says. 

These comments echo those made recently by US president Barack Obama. In a recent interview, Obama said, “If there’s one thing I would like to see, it’d be for us to be able to price the cost of carbon emissions. 

“We’ve obviously seen resistance from the Republican side of the aisle on that. And out of fairness, [there are] some Democrats who’ve been concerned about it as well, because regionally they’re very reliant on heavy industry and old-power plants. 

“I still believe, though, that the more we can show the price of inaction — that billions and potentially trillions of dollars are going to be lost because we do not do something about it — ultimately leads us to be able to say, ‘Let’s go ahead and help the marketplace discourage this kind of activity’.” 

Obama’s administration recently unveiled new guidelines to cut pollution from power plants, in an ultimately popular move expected to bring net climate and health benefits of up to $82 billion (£48 billion). 

A group of 128 global companies – including Unilever, Starbucks and Nike – and 49 investors worth $800 billion in assets – including F&C Management and Impax Asset Management US – have signed letters in which they “applaud” the guidelines. 

Polling shows that the American public also supports the policy, as concern about climate change grows around the world.

Photo: Fortune Live Media via Flickr

Further reading:

Carbon bubble: Obama admits world cannot burn all known fossil fuel reserves

Obama emissions plan could boost investment in renewables

Poll: 70% of Americans support Obama’s power plant rules

US move to cut emissions will deliver private investment ‘certainty’

Obama to unveil plan to cut pollution by 25%

Environment

4 Common Items That Can be Reused Again and Again

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reuse reduce recycle plastic bottles etc
Shutterstock Licensed Photo - By Vanatchanan | https://www.shutterstock.com/g/vanatchanan%20buahom

As a society we are getting much better at taking our obligations to the world and environment around us more seriously. This is undoubtedly a good thing! The effects of climate change are beginning to manifest across the world, and this is turning the issue from an abstract threat into a very real danger. Trying to introduce some greener, more eco-friendly practices into your life isn’t just a great way of doing something beneficial for society and the world around you. It is a wonderful way of engaging positively with the world and carries with it numerous psychological benefits.

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Being a greener, more ecologically friendly person doesn’t require any dramatic life changes. Breaking or making a few small habits is all it takes to make your life a greener one. In this article we look at one of the easiest, yet most effective green practices to get into: reusing everyday items.

Jars and Containers

Glass and metal are widely recycled, and recycling is a good thing! However, consider whether any containers you buy, whether it’s a tub of ice cream or a jar of coffee, can be washed out and reused for something else. Mason jars, for example, can be used to store homemade pasta sauce and can be washed for future use. Once you start thinking about it, you will find endless opportunities to reuse your old containers.

Soda Bottles

An ice-cold soda is a wonderful treat on a hot day, but buying soda can get expensive, and the manufacturing and distribution of the drinks themselves isn’t great for the environment. However, by holding on to your old soda bottles and repurposing them as water bottles, you can save money on drinks, or use them to measure out water for your garden.

Plastic Bags

Most of the time groceries come in paper bags, which are better for the environment than the plastic alternatives, but they are less durable and thus harder to reuse. Whenever the store places your items in a plastic bag, hang onto it so you can reuse the bags again. If you want to take it one step further, consider looking into buying some personalized recycled bags. These bags are designed to last for a long time and are made of recycled materials. They look striking and unique, they’ll turn heads, and maybe even attitudes!

Seeds

If you’re a keen gardener, then you will already probably know how to reseed your plants in order to ensure a fresh crop after each plant’s lifecycle. If you have space in your garden, or haven’t yet tried your hand at gardening, then consider planting a small vegetable plot. Growing your own veggies means that you’ll be helping to cut back on the emissions generated by their transport and production. The best part about growing your own food in this way is that, by harvesting properly and saving the seeds, you can be set up with fresh vegetables for life!

Reusing and recycling common household items is an easy way to make your world a little bit greener. Once you start looking for these opportunities you’ll realize that they’re everywhere!

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Environment

These 5 Green Office Mistakes Are Costing You Money

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eco-friendly green offices
Shutterstock Licensed Photo - By Stokkete | https://www.shutterstock.com/g/cyano

The sudden interest in green business is very encouraging. According to recent reports, 42% of all companies have rated sustainability as an important element of their business. Unfortunately, the focus on sustainability will only last if companies can find ways to use it to boost their ROI.

Many businesses get so caught up in being socially conscious that they hope the financial aspect of it takes care of itself. The good news is that there are plenty of ways to go green and boost your net income at the same time.

Here are some important mistakes that you will want to avoid.

Only implementing sustainability on micro-scale

The biggest reason that brands are going green is to improve their optics with their customers. Too many businesses are making very minor changes, such as processing paperwork online and calling themselves green.

Customers have become wary of these types of companies. If you want to earn their business, you are going to need to go all the way. Bring in a green business consultant and make every feasible change to demonstrate that you are a green organization from top to bottom.

Not prioritizing investments by long-term ROI

It isn’t realistic to build an entirely green organization overnight. You will need to allocate your capital wisely.

Before investing in any green assets or services, you should always conduct a long-term cost benefit analysis. The initial investment for some green services may be over $20,000. If they don’t shave your cost by at least $3,000 a year, they probably aren’t worth the investment.

Determine which green investments will have the best pay off over the next 10 years. Make these investments before anything else. Then compare your options within each of those categories.

Implementing green changes without a plan

Effective, long-term planning is the key to business success. This principle needs to be applied to green organizations as well.

Before implementing a green strategy, you must answer the following questions:

  • How will I communicate my green business philosophy to my customers?
  • How will running a green business affect my revenue stream?
  • How will adopting green business strategies change my monthly expenses? Will they increase or decrease them?
  • How will my company finance green upgrades and other investments?

The biggest mistake that too many green businesses make is being overly optimistic with these forecasts. Take the time to collect objective data and make your decisions accordingly. This will help you run a much more profitable green business.

Not considering the benefits of green printing

Too many companies believe that going paperless is the only way to run a green organization. Unfortunately, going 100% paperless it’s not feasible for most companies.

Rather than aim for an unrealistic goal, consider the option of using a more environmentally friendly printer. It won’t be perfect, but it will be better than the alternative.

According to experts from Doranix, environmental printers have several benefits:

  • They can process paper that has been completely recycled.
  • They consume less energy than traditional printers.
  • They use ink that is more environmentally friendly.

You want to take a look at different green printers and compare them. You’ll find that some will meet your needs as a green business.

Poorly communicating your green business strategy to customers

Brand positioning doesn’t happen on its own. If you want to run a successful green business, you must communicate your message to customers as clearly as possible. You must also avoid the appearance that you are patronizing them.

The best approach is to be clear when you were first making the change. I’ll make an announcement about your company‘s commitment to sustainability.

You also want to reinforce this message overtime by using green labels on all of your products. You don’t have to be blatant with your messaging at this stage. Simply provide a small, daily reminder on your products and invoices.

Finally, it is a good idea to participate in green business seminars and other events. If your community has a local Green Chamber of Commerce, you should consider joining as well.

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