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General Electric’s Quest To Help Mitigate Climate Change Utilizing Profitable Solutions

Updated on September 2, 2016

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General Electric’s Quest To Help Mitigate Climate Change Utilizing Profitable Solutions

According to the United Nations Framework Convention on Climate Change (UNFCCC) (2013), global greenhouse gas (GHG) emissions have been increasing ever since the pre-industrial period. Moreover, from 1970 to 2004 global greenhouse gas (GHG) emissions have significantly risen by seventy percent (UNFCCC-Mitigation, 2013). Due to this, climate change is expected to impact General Electric’s future operations, therefore participating in a voluntary greenhouse gas emissions’ program is a large step for the company as it continues in its journey to be part of mitigation solutions.

Recently, World Wildlife published “The 3% Solution: Driving Profits through Climate Reduction.” Within the publication, contributor and CEO of the Carbon Disclosure Project (CDP) Paul Simpson discusses that, “…with the increasing frequency and severity of extreme weather events, and a growing understanding of the long term economic costs of climate change and fluctuating energy costs, business leaders and government are recognizing the imperative to mitigate climate change” (World Wildlife, 2013). This proactive solution is to put an actual price on current carbon emissions. Simpson explains that in the past thirty years $2.6 trillion worth of damage has occurred as a result of environmental disasters (World Wildlife, 2013). This type of prevention is a worthy reason to infer that heavier regulation of global greenhouse gas (GHG) emissions is likely in the near future.

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Additionally, World Wildlife’s, “The 3% Solution: Driving Profits through Climate Reduction” (2013), discusses the opportunities stating, “…companies that step confidently into this future will reap great near-term rewards and help shape the future of business (p.4). This makes sense because as companies become more energy efficient and profitable, less greenhouse gas emissions will be released and that is healthier for the planet making it more sustainable. It seems to be a win, win situation; however, as World Wildlife points out in their publication, “…policy changes – like pricing carbon emissions – are needed if we are to efficiently see change across the entire economy by 2020 and stay on course thereafter” (World Wildlife, 2013, p. 4).

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According to “The 3% Solution: Driving Profits through Climate Reduction,”…the goal for the United States, “…breaks down to about a 3% average annual reduction by all U.S. companies” (World Wildlife, 2013, p. 4). What this means for corporate America is that in order to keep the long term effects of climate change from becoming irreversible a reduction of 3% greenhouse gas emissions annually by 2020 will be essential. This hefty goal of staying below 2°C globally will require policy changes in the United States (World Wildlife, 2013, p.6).


There is no doubt that actions speak louder than words, and that General Electric is a good example of this practice. For instance, GE is featured in World Wildlife’s “The 3% Solution: Driving Profits through Climate Reduction” because it has “set ambitious carbon reduction targets” (World Wildlife, 2013, p.19). Moreover, General Electric understands the immense current and future profitably in sustainable practices and development within its corporation. This advantageous position includes, but is not limited to General Electric’s position as a stakeholder during future global greenhouse gas (GHG) emissions policy formation. For instance, General Electric set a goal to reduce emissions one percent companywide; however, “…realizing the opportunities in front of them…” raised the goal energetically to “…25 percent absolute reduction against the same 2004 baseline” (World Wildlife, 2013, p.19).

The International Debate on Climate Change

Where should General Electric side on the debate of an international climate change program that mandates companies and countries reduce their greenhouse gas emissions through an economic mechanism? General Electric is currently taking a proactive approach to mitigate the impacts of global greenhouse gas emissions.


In addition, World Wildlife’s publication “The 3% Solution: Driving Profits through Climate Reduction,” standards are currently being met by General Electric while generating profits. Reasonably, this is why General Electric raised their greenhouse gas emissions goals from 1 % to “…25 percent absolute reduction against the same 2004 baseline” (World Wildlife, 2013, p.19). General Electric was exceeding its own expectations, profitably and realized the opportunities that sustainable practices can provide to its bottom-line.

Besides GHG regulation’s effect to General Electric’s bottom-line, there is corporate social responsibility and the positive image that GE is achieving by embracing current changes to greenhouse gas emissions standards. Inarguably, General Electric should maintain this positive image to its patrons, customers, government, NGOs and investors. According to World Wildlife, this signals, “…a company’s commitment to doing its part” (World Wildlife, 2013, p.19).

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Shaping Policy

Another reason for General Electric to continue to strive to reduce greenhouse gas emissions is the EPA’s mandatory GHG reporting, which require, “emissions-intensive industries directly emitting over 25,000 tons of CO2-equivalent annually to disclose those emissions” (EPA, 2013). Policy, which restrains GHG emissions, will continue to be written in order to establish sustainability. This will likely include, “…, policy changes – like pricing carbon emissions” (World Wildlife, 2013, p.19).

It appears that General Electric is in support of the mandate requiring corporations and nations to lessen their greenhouse gas emissions through a monetary mechanism. As mentioned above, GHG policy changes will occur and it is better if GE continues to set enthusiastic goals staying ahead of the changes and even exceeding them. This indicates that General Electric is a serious stakeholder regarding reducing global greenhouse gas emissions. This gives General Electric a larger say than other corporations, which are skirting the issue of climate change, when future environmental policy is formed.

References

The 3% Solution: Driving Profits through Climate Reduction. (2013). World Wildlife.

United Nations Framework Convention on Climate Change. (2013). Mitigation.

United Nations Framework Convention on Climate Change. (2013). Kyoto Protocol.

© 2014 Suzanl

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