Let Profit be the Motivator

Most of the world is driven by power and profit so let’s use those noble ambitions.

We seemed to forget that we live in a world of finite resources. We are in a small boat in the ocean of the universe. I recently read a fun book, “Solar” by Ian McEwan, that was as crazy fun as it was insightful.  Let me quote and paraphrase a few paragraphs.

Coal and oil, amazingly cheap energy sources, have made our civilization, lifting hundreds of millions out of poverty subsistence levels.  In the past 200 years, Europe, North America and parts of Asia and South America have thrived, now along comes India, China, and Africa.  We barely understand how successful we have been.

This is an outstanding way to look at the world and realize without cheap efficient power we could have never lifted our civilization out of an agrarian society.

But oil will run out.  Peak production is within the next 10 – 20 years. Prices will rise, production slows down. Politically unstable regions control supply, but worst, is we are pumping tons of CO2 into the air. We either slow down and stop or face economic and human catastrophe in grand scale within our grandchildren’s lifetime.

We are beyond the point of being able to model change to the environment and climate, all we know is that it will change and has become unstable. Look at the Arctic ice melt predictions.

“The planet is sick…….  Curing the patient is a matter of urgency and is going to be expensive, perhaps as much as 2% of GDP or far more if we delay treatment.”

No one really knows how much it will cost or how solve the problems, but we do know entire industries must adapt and change processes and that cost can not possibly be measured.

“How do we slow down and stop while sustaining our civilization and continue to bring millions out of poverty.  Not by being virtuous, not by going to the bottle bank or turning down the thermostat, or buying a smaller car.  That merely delays the catastrophe. ……. This matter has to move beyond virtue.  Virtue is too passive, too narrow.  Virtue can motivate individuals, but for groups, societies, a whole civilization, it’s a weak force.  Nations are never virtuous though they might think sometimes they are.”

A big slap in the face. But this does not mean we should stop mitigation efforts. We need to slow down the negative externalities, so we can figure out the solutions. And, no, we are not as virtuous as we think we are.

“For humanity en masse, greed triumphs virtue. So we have to welcome into our solution the ordinary compulsions of self-interest, and celebrate novelty; the thrill of invention; the pleasures of ingenuity and cooperation; and the satisfaction of profit.”

Ok, now this points to a solution that we can understand! It is little Gordon Gekko-ish “greed is good,” but it is true. Only by strong market forces — market demand — will people be willing and able to develop and invest in the solutions that are needed. Nothing scales without a profit. It will only be viewed as charity. Profitable ventures attract more capital that drive the impact we seek. We need these drivers to create change, and we need government policy to back off the outdated regulations that prevent change and put in place new accelerators that enable change.