The Sustainable MBA

The long view: Enter President Trump

FlickrMax Goldberg

This is part 2 of a 2-part series.

Donald Trump’s election comes in the midst of rapid progress around the sustainability agenda. We face dizzying growth in clean energy and the emergence of a small but growing business army fighting for the circular economy. Furthermore, cities small and large are incubating vibrant and inclusive economies in a world where local is increasingly possible and desirable.

How will President-elect Trump affect these trends?

Clean energy

Forty years of U.S., German and Chinese policy have pushed us past the economic tipping point on key technologies including wind, solar and electric vehicles. They have gotten us closer on energy storage. For the next four years, U.S. national policy no longer will be a significant driver for these or other critical technologies, including smart grid. 

Overall, rapid progress on clean energy will ­­­­­­continue without U.S. national support, but not as fast as it needs to be. Of greater concern, U.S. withdrawal from the international climate process, including the climate deal struck in Paris, may cause the whole agreement to unravel if other nations walk away from their commitments and fail to show up in 2020 with the deep cuts mandated by the Paris Agreement. 

On the other hand, China, Germany and India — along with a number of U.S. states — may continue leading in the policy environment. Some EU politicians already have threatened a carbon tariff against the U.S.

Finally, disregarding the presidential outcome, future U.S. policy pushes on climate were going to be weak. Significant new U.S. action will require legislation and thus a major realignment in support of clean energy in American politics. Despite an emerging conservative coalition including military and business leaders and evangelicals in favor of climate action, such a shift in Republican thinking would have been highly unlikely under a polarizing Hillary Clinton administration. 

By inviting intense backlash, Trump has perhaps brought a clean energy realignment that would include some Republicans closer. If so, there is the possibility for serious bipartisan policy support for clean energy in the 2020s.

Trump’s presidency will show clearly in the geologic record if under his watch the Paris Agreement unravels, the Germans, Indians and Chinese step back from climate commitments and the renewable energy revolution fails to accelerate over the next decade. A lost decade of rapid renewables growth will mean additional global warming, acidic oceans and more sea-level rise. Eventually, as the globe continues to heat up, the world will reengage, but Trump’s damage to the earth could be permanent — on the order of 10,000 years.

Circular economy

Sustainability means no inherent conflict between "doing good" and "doing well" and doing both through radical innovation in production and delivery. The business case for sustainability has a strong, practical beachhead in most major corporations, both in Europe and America. Will Trump’s presidency undermine or strengthen the efforts to develop a proto-circular economy? 

The first possibility is that sustainability goes out of fashion. The second option is that sustainability efforts stay constant, as businesses face uncertainty about interpreting regulatory changes, fear short-lived regulatory changes, worry about consumer backlash and are still dealing with Europe’s stricter regulatory regimes. The third road sees business sustainability efforts redoubling consumer and millennial worker concern for mission emerges. Young people’s commitment to social entrepreneurship is very likely to accelerate in the face of radical changes in social policy. 

All three of these trends likely will occur, depending on the degree to which regulatory compliance is driving sustainability efforts. The circular economy will continue to advance in companies where the motivation has taken on a business logic of its own.

Community revitalization

Community revitalization is driven by cities that can best capture the opportunities for localized production. The old economy of high-wage manufacturing jobs is gone, so localities need good governance to take advantage of what an IT economy offers while managing through the next wave of robotics-driven job loss that IT is also teeing up.

Under Trump, a reduction in federal funding and explicit support for sustainable development may be made up in the very short run by access to infrastructure spending. Will the Trump administration impact the political capability of cities to foster inclusive economies? As with business, the pendulum could swing both ways. In more polarized communities, sustainable city initiatives could become stigmatized and politically vulnerable. On the other hand, the withdrawal of federal support could drive more creative and far-reaching work in places with the political will. 

To sum up, the Trump administration will likely do the most immediate damage around the clean energy imperative — not because Trump can derail it, but because he can slow it down at a critical time for Earth’s future. If business sustainability efforts falter significantly in the subset of companies where regulation is still driving innovation, circular economy innovation may slow in the short run. And city efforts to foster revitalization through localization may slow in cities facing polarized and divisive politics.

If Trump fails quickly and is voted out in four years, these negative trends may be short-lived. In fact, by galvanizing opposition, the sustainability agenda may come roaring back stronger. Recall that President George W. Bush was barely re-elected as a war-time president. Even so, 2000-2008 was a time of innovation and rapid growth for the business sustainability movement.

Sustainability versus tribalism

In 1992, Benjamin Barber published the essay "Jihad versus McWorld." Barber argued that the world was torn between the twin forces of a cosmopolitan but destructive globalization and the backlash from the people uprooted and left behind economically and culturally by this globalization.

"McWorld" was about open borders, expanded trade, hyper-mobile capital and rising inequality yet a commitment to western norms of human rights. Barber called the opposition to McWorld "Jihad," but I think tribalism is a better word. As evidenced by Brexit and Trump’s election, the backlash is global.

Sustainability is the third way between unrestrained globalization and 21st century tribalism. In the Trump years, reinventing an economy that, like nature, depends on difference and thrives on diversity is critical. In 2017, we are in a new short-run race but not against runaway climate change or population growth outstripping resources.

It is rather at the state and local and company level: to grow and show a vision of human well-being in a just and prosperous economic system that can serve those alive today and future generations. Now more than ever, we have to bring to life a sustainable business vision powerful enough to short-circuit the strong and rising pull of tribal politics.