Carbon Advantage, Competitive Advantage

by Dave Douglas (Business Week Article).  "Considering carbon offsets? Companies can get a better return by offering products and services that improve sustainability for others.  Business is about competition. Successful companies win customers and take market share from rivals. Climate change is different. Ultimately we'll either all win or all lose. If the effects of climate change end up depressing the global economy, no one's quarterly results are going to look good. On the other hand, if we collectively get to a more sustainable global economy, we'll all have the opportunity to compete and succeed in growing markets."

The article is on target in terms of the boot-strapping systems effect individual companies' efforts can have on pushing the economic system towards sustainability.  However, the description of "carbon advantage" does not really reference carbon per-se, but the competitive advantage arising from core business innovation that  increases resource and energy efficiency and produces new green products and services -- the more general "sustainability" advantage. At this point, the world needs BOTH actions:  (1) firms internalizing the external cost of their carbon emissions by paying for an offset and (2) innovating in their core business to eliminate the need to purchase an offset and reap the larger competitive advantages of sustainability innovation. Taking the first action increases the value of taking the second action! Further, new initiates need to address the systems-level innovation required so that firm-level innovation will shift the economy to sustainability.  This innovation in new institutions or institutional initiatives could be government, public-private, or purely private, but they are essential.  Firms will not - cannot - undertake this type of innovation, and it is essential for sustainability success.  The source of the sustainability crisis in the first place is a range of key phenomenon being outside the price system and outside the concept system of individuals, firms, regulators, and the economic system itself, except when they manifest too late to respond, as the costs of increasingly severe and frequent weather events, the destruction of the biospheric conditions that support a relatively low-cost and benign environment for human habitation, the individual health effects of air, water, and food pollution and toxicity, etc.