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Costs of climate change spur greening of business

Climate concerns are pushing corporates to do good by doing well. Meanwhile, new research puts a number on the ecological impact of rich country lifestyles on poor ones.

By / January 24, 2008

From the time the words "global climate change" were first uttered, it was inevitable that there would be an economic dimension to the issue – the price of global warming and the cost of adapting to it.

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Over the years, it's also become clear to some experts and activists that rising temperatures are affecting different parts of the world differently. Researchers this week reported on what they claimed was the "first systematic global analysis," quantifying the environmental impact on poor countries of the high consumption levels of richer countries. While, for example, greenhouse emissions from low-income countries cost $740 billion in damages to rich countries, they in return have imposed $2.3 trillion of damage, reports The Guardian.

" 'At least to some extent, the rich nations have developed at the expense of the poor and, in effect, there is a debt to the poor,' said Professor Richard Norgaard, an ecological economist at the University of California, Berkeley, who led the study. "That, perhaps, is one reason that they are poor. You don't see it until you do the kind of accounting that we do here.' "

In all, the researchers claim, the burden of the environmental "footprint" of high-income nations falling on low-income countries is greater than their entire financial debt, or about $1.8 trillion. NBC reports:

" 'We think the measured impact is conservative. And given that it's conservative, the numbers are very striking,' said [lead researcher Thara] Srinivasan ... ."

This ethical quandary is one reason corporate leaders can think of themselves as doing good while also doing well in business terms – at least to the extent that they reduce waste, conserve energy, and produce greener goods and services. The Economist reports:

"For some companies the gains to be had from cutting waste and improving energy use are very large. United Technologies Corporation (UTC), whose products range from aerospace to air-conditioning systems, has reduced its carbon footprint by 19% over the past ten years even as it has doubled its output, according to George David, the CEO. 'We've had an explosion of doing more with less,' he says."