Latin America is Leading the Charge in Renewable Energy

While the U.S. leaves the Paris Climate Agreement, Latin America is leading the charge in renewables

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By:  Tyson Guajardo, Lynx Global Intelligence

 

Following President Donald Trump’s withdrawal from the Paris climate agreement, many citizens of the world were left furious and in a state of uncertainty about our planet’s future.  Despite the universal outrage which surfaced from a large magnitude of individuals and organizations alike within the United States, this largely symbolic retreat does not at all indicate the end of the green future narrative.  In fact, it is possible Mr. Trump’s withdrawal has actually incentivized climate activists more than ever before to push businesses towards committing to renewables and clean energy.  The alliance of mayors from 292 cities across the United States (1), as well as the partnership of 10 states including New York, Washington and California are a beacon of hope for many who are at odds with POTUS.  Hundreds of businesses in America led by giants such as Google, Apple and Facebook (2), are also dedicated to tackling the threat of climate change, with or without the federal government’s blessing.  Opportunities for American firms to invest in renewables can be found all over the world, with most other nations willing to lend a helping a hand in some capacity.

For example, Latin America, where there is a combined population of more than 600 million, has great potential for investors looking for the current hot spot in alternative energy.  The region as a whole has one of the highest rates of renewable energy consumption in the world (3).  In 2016, both Costa Rica and Uruguay ran almost entirely on renewables for several months, while in 2014 Latin America collectively generated 53% of its electricity from renewable sources (in comparison to a world average of 22%) (4).  In Brazil and Paraguay, most electricity is hydro powered (5) and Chile has recently become a leader in solar energy.   In Latin America, mergers and acquisitions in the sector have doubled over the last 12 months (5).  There is no other area on the planet that can claim to be as successful in this regard.  Moreover, an intergovernmental organization known as the International Renewable Energy Agency has stated that close to every Latin American nation has created goals supporting a greener future (5).  These nations are willing to collaborate with private investors for the benefit of their economies, which will become more dependent on renewables in the future as most of the world shifts its focus in this direction.

Lynx Global Intelligence is currently engaged in a solar power project in Peru and can also help your organization lead the charge (pun intended) in the alternative energy revolution while simultaneously generating (oops, there’s another one) more revenues.  We partner with South American businesses to help preserve the future of our planet for our children and grandchildren.  For more information, contact us to see how we can help.     http://www.lynxglobalintelligence.com

 

 

 

 

  1. https://www.curbed.com/2017/6/1/15726376/paris-accord-climate-change-mayors-trump
  2. http://money.cnn.com/2017/06/05/technology/business/businesses-paris-climate-agreement/index.html
  3. http://www.iadb.org/en/topics/energy/se4allamericas/renewable-energy,17688.html
  4. http://www.economist.com/news/americas/21711307-power-andean-sun-latin-america-set-become-leader-alternative-energy
  5. http://knowledge.wharton.upenn.edu/article/bright-outlook-renewable-energy-latin-america/
  6. http://www.renewableenergyworld.com/articles/2015/08/why-renewable-energy-in-latin-america-is-a-winner.html

The Paris Climate Agreement and Future Business Implications

Pursuing the goals of the Paris Climate Agreement will ensure businesses long-term success while allowing them to participate in the reshaping of the economy while saving the environment.

By:  Jenya Sakaeva, Lynx Global Intelligence

 

In light of recent political events, the environmental future of the United States, and consequently the world, may look quite bleak. Fortunately, as the saying goes, every cloud has a silver lining. For the planet’s climate, this silver lining could be businesses big and small leveraging their power for global good. While the Trump Administration has yet to formally withdraw from the 2015 Paris Climate Agreement, the executive orders to date signify the United States’ noncompliance with the goals set forth to prevent global temperatures from rising another 3.6 degrees Fahrenheit. This is a point when scientists have agreed the Earth will be irrevocably locked into “a future of severe droughts, floods, rising sea levels, and food shortages” [1].

Pursuing the goals laid out in the COP21 Paris Agreement will set businesses on a course of action that will lead to sustained success. In Lynx’s previous post, https://tinyurl.com/mnqbq9q, we outlined the ways in which corporate social responsibility and ethical business practices bring long-term prosperity to those who participate in them. Addressing climate change is a part of corporate social responsibility.

Why should businesses uphold the Paris Climate Agreement?

 A changing climate poses many risks to business. First, there is the risk of depleting natural resources that are either raw materials in a company’s product, or necessary to the process of manufacturing or shipping those products. There are tangible, physical risks associated with damage to facilities or manufacturing centers from a more extreme and volatile climate and weather events. Of course, there are financial risks that lack of natural resources or extreme weather will result in. Market risks in the form of shifting consumer preferences, behaviors, and demand are equally prevalent. Additionally, companies face reputational and regulatory risks for poor performance in climate related endeavors.

The Paris Climate Agreement is historic in terms of the goals set and number of countries that have committed to take them seriously. This reflects the global understanding of the multitude of issues stemming from climate related problems. The time to act is now.

In the words of some of our economy’s biggest players, “Implementing the Paris Agreement will enable and encourage businesses and investors to turn the billions of dollars in existing low-carbon investments into the trillions of dollars the world needs to bring clean energy and prosperity to all” [3].

The Paris Climate Agreement creates a global landscape in which business opportunities are plentiful. As the world economy and political powers move towards achieving reduced emissions and capping temperature rise, businesses will see a need to change their practices to support their country’s commitment to the agreement. Evaluating the strategic decisions now can put you ahead of the curve, but failing to adjust just means a more turbulent transition further down the road. Aside from political agendas impacting businesses and the Paris Climate Agreement, there are also economic, social and technological reasons to begin honoring the agreement sooner rather than later.

According to a business briefing on the topic by Cambridge University, “Companies such as GE, Unilever, Nike, IKEA, Toyota and Natura are already reaping the benefits of offering ‘green’ products and services, a market which has grown to over $100 billion” and “Unilever’s purpose-driven brands are growing at twice the rate of the rest of their portfolio and if GE’s Ecomagination was a standalone business, it would be a Fortune 100 company.” [4] Additionally, there are many economic opportunities to invest in renewable energies and new technologies, while oil prices may vary globally and contribute to higher energy prices.

Socially, consumers are increasingly more aware of the sustainability efforts and initiatives of the companies they purchase from and their behaviors are shifting to favor those businesses with more commitment to the environment. Patagonia is a classic example of a company that embodies the ideals of the Paris Agreement within the core functionalities of its strategy, and is rewarded for that by consumers. On the other hand, businesses that ignore these social patterns often witness consumer backlash and reputational damage.

Technology is already a rapidly evolving field in which some businesses have seen immense success. In order to reach the goals set forth in the Paris Agreement, many more technological advances will have to bridge the gaps between where we are now and where we aim to be. This presents businesses with huge potential. New business models, like the circular economy, have begun to emerge as an innovative response to dealing with climate problems. “Smart” technologies are becoming more customary in our daily landscape, from wearable technology to transportation solutions, and even smart cities. Also, the role of big data will only grow as the world tries to understand how to enact technological changes and incorporate them into society.

While the political approach to the Paris Climate Agreement remains uncertain in the United States, the rest of the world remains committed to the deal. As we know, neither climate nor the economy exists independently in one country or another. We live in a global world and a global economy, and businesses that realize the opportunities within the goals of the agreement will be successful in the long-term across many different aspects.

 

 

[1] https://www.nytimes.com/2017/03/28/climate/trump-executive-order-climate-change.html?_r=0

[2] http://www.cisl.cam.ac.uk/publications/publication-pdfs/A-New-Climate-for-Business.pdf

[3] http://www.lowcarbonusa.org/

[4] http://www.cisl.cam.ac.uk/publications/publication-pdfs/A-New-Climate-for-Business.pdf