When calling for climate action, it is
fundamental that the economics work; money talks. In the past, economics have
been a major conflict towards sustainable developments, so what has changed to
allow for economically sound climate action?
The profitable investments in fossil fuels made the transition to green
alternatives difficult as investors have favoured traditional fossil fuel usage
due to high returns over the lower returns of sustainable alternatives. In
addition, many global economies were and are supported by their fossil fuels
exports and a move away from these commodities threatens to send these
countries into recession. It is no secret that fossil fuel companies have in
the past and continue to lobby politics against participating or promoting
green movements, pretending to withdraw their funding to parties, and locking
them in to dirty fuel based growth. In a nutshell, fossil fuel investments
boasted high returns with little concern for a shift in consumption patterns as
promoted by politics. The role of politics in sustainable development is a
topic I will cover in the next few weeks, here I would like to focus on how a
lack of supportive policy has lead to unfavourable economics and hence little
to no sustainable development in the past.
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In 2012, the top 40 mining companies earned a profit of 13 cents per every US$ spent. However, since 2011, oil prices have dropped drastically as a result of over supply and investment uncertainty giving renewables a market opportunity to compete. |