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Wall Street is getting the climate-change message loud and clear. That's because corporate giants such as Dow (DOW), BP (BP), Shell, General Electric (GE), Wal-Mart (WMT), and DuPont (DD) have accepted the scientific consensus that global warming is real and that human activity contributes to it.
But on Main Street the message is barely heard. That's got to change. If only out of self-interest, small business owners—whatever their politics—should take a look at climate change. That's because a political, as well as a scientific, consensus is beginning to form. And unless that consensus includes them, small businesses will be ignored (at best) and undermined (at worst) by programs to address climate change.
Most Democrats have already accepted the scientific consensus. But now so do a growing number of Republicans. "We know that the surface of the Earth is warmer, and that an increase in greenhouse gases caused by humans is contributing to the problem," the President stated last year. And a scientific study commissioned by the Bush Administration and released May 2, 2006, says that there is "clear evidence of human influences on the climate system."
GROWING LIST. A shift is also occurring among Republicans in Congress. Representative Bob Inglis, a South Carolina Republican who heads the U.S. House Science Research subcommittee, says "There are more and more Republicans willing to stop laughing at climate change and who are ready to get serious about reclaiming their heritage as conservationists."
In addition to Inglis, the list of Republicans now paying serious attention to global warming includes senators Pete Domenici of New Mexico, the chairman of the chamber's Energy Committee, Mike DeWine of Ohio, Lindsey Graham of South Carolina, and Representative Jim Leach of Iowa.
In this altered political climate, it's increasingly likely that a mandatory program to reduce greenhouse gas emissions will come to pass. This prospect of further government regulation is one reason small business owners should pay attention. But it's not the only one. Small firms could well be among the hardest hit victims of climate change.
PASS THE SYRUP. Extreme weather events, for example, can wipe out an entire region's small businesses in one fell swoop. And they can't readily bounce back from disruptions caused by natural disasters. Look at the impact of Hurricane Katrina on small businesses in the Gulf Coast region, where they constituted the backbone of the economy.
Some industries that consist almost entirely of small businesses are already feeling the heat. In Vermont, for example, where the maple syrup industry is an integral part of the economy, cold-loving maple trees are yielding less sap due to warmer winters. An analysis of syrup production over the past eight decades shows a decline in every New England state except Maine, also the only state to buck the warming trend.
Proponents of actions to curb greenhouse gas emissions should be pressed to factor small businesses into their analyses on the rationale that because they operate on close margins, small businesses are likely to be disproportionately hurt by rising prices for electricity, natural gas, and gasoline and thus may oppose mandatory action as counter to their interests. That could mean a setback, as small business is one of the most powerful lobbying forces in Washington and state capitals.
BUSINESS DEVELOPMENT. There's been virtually no research on what global warming means for small business, even though 23 million U.S. small businesses constitute one-half of the economy. We need to know more.
There is some good news for small businesses, however. To start with, reducing energy waste in U.S. homes, shops, offices, and other buildings must, of necessity, rely on tens of thousands of small concerns that design, make, sell, install, and service energy-efficient appliances, lighting products, heating, air-conditioning, and other equipment.
What's more, devising technological fixes to curb greenhouse gas emissions must rely on the capacity of small business innovators and entrepreneurs to produce "clean-tech" breakthroughs in photovoltaics, distributed energy, fiber-optic sensors, and the like.
START NOW. Finally, every single small business in the nation can profit by making its own workplace more energy-efficient. According to the EPA's Energy Star Small Business program, small firms can save between 20% and 30% on their energy bills through off-the-shelf cost-effective efficiency upgrades. The job consists largely of installing the same few simple devices—programmable thermostats, for example—over and over again in millions of small business workplaces.
The upshot is this: If scientists are right about a warming world, all of us, big businesses, small businesses, and consumers alike, are going to have to adjust. The small business community would do well to take up the challenge now, while there is time to deliberate and to craft cost-effective responses it can live with.
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