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Capitalism combats pollution.

I didn't get invited to The Wall Street Journal's ECO:nomics Conference in Santa Barbara, CA, USA in March and I can't figure out why. I'm the only voice of reason in the ongoing debate on "Emissons vs. Efficiency" and "Capitalism vs. Environment." Honestly, I understand both sides. I understand we don't have a level playing field and never will. The fossil guys have a distinct advantage: capital investment, political/lobby power, large employment base, huge tax contributions and so on. Is it any wonder they are where they are, and the renewables, the "newbies," where they are? They needed my sage advice at the conference.

The Environmental Protection Agency (EPA) sent administrator Gina McCarthy to promote the government's latest version of the Clean Air Act to reduce carbon emissions. More on that later. On the other side, T. Boone Pickens was telling us why oil is a good investment because the price will climb to $70 a barrel by the end of 2015, and to $90--100 by the end of 2016. Then you had the solar and wind guys clamoring for everyone to listen to the virtues of their energy, expensive as hell, but clean, for sure. (Did anyone ever think about you and me, the little people who have to pay for all the auxiliary equipment to make clean air: installation of scrubbers, more efficient bag houses to collect air particles, wind turbines, solar panels, and the like)?

I couldn't have gone to the conference anyway. I was in Europe, where I'd been asked to attend the Grand National "Sheepstakes" with Prince Charles and Camilla at Ascot. Unfortunately, maybe fortunately, I had to decline because of business commitments. (I do work ... sometimes). Nevertheless, I did watch and listen to the press trashing poor Charles. Prince Charles has been preaching about the need for energy savings for years. As it happened, just two days before the Grand National Sheepstakes, he had recorded a video message urging people to switch off their lights for one hour in support of Earth Hour. On the day of the Sheepstakes, he flew via helicopter to Ascot, an 80 mile trip, instead of using his chauffeur-driven Jaguar and was accused of "double standards." Hah! Listen to this one.

While Sarah Holt of CNN focused on the Sheepstakes, James Tozer and Tanda Steer of the Daily Mail focused on the Prince's hypocrisy. The prince and the duchess of Cornell flew to Ascot from his home, Highgrove. His critics said this was another example "of his failure to adjust his lifestyle to match his green rhetoric." "It is unnecessary extravagance" according to the organization, Plane Stupid! Wait, this gets better. Experts said that going by car (his armor-plated Jaguar, mind you) would have produced 0.06 tons of carbon dioxide, compared to 1.3 tons for the helicopter flights. Plane Stupid went on, "turning off your lights or even replacing them with energy efficient bulbs is a drop in the carbon ocean compared to the emissions from flights."

All of this to watch the Sheepstakes, which included the likes of Woolly Jumper, Red Ram and Sheargear. They have to jump over gates without unseating their knitted jockeys. This is for real. The competition is watched by thousands. The betting huge. All this, the Prince and Duchess included, to watch wooly jumpers at the Grand National Sheepstakes. Carbon footprint, C02, sheep jumpers, thank goodness I had to send regrets. It would have been the end of my image, my career.

But, I didn't go, and this increase in carbon dioxide leads me to the essence of this column, how capitalism combats pollution. First, the update on the Obama White House effort to cut greenhouse gas pollution by nearly a third over the next ten years.

Many of you may remember that global leaders agreed to meet in Paris in December of this year to forge a "climate change accord." Last November, when President Obama visited Chinese President Xi Jinping in Beijing, they both agreed to create plans for reducing greenhouse gas pollution prior to the December meeting. The concept was to demonstrate leadership to the rest of the world by the two largest generators of greenhouse gas. Mr. Obama said the United States would cut emissions by 26 to 28% by 2025, while Mr. Xi said that China's emissions would drop by 2030. (Is that equivocation!) Both countries were trying to lead by example.

Naturally, the Republicans take the opposite approach and oppose every effort to reach climate change goals by reducing fossil fuel. President Obama knows that the Republican-controlled Congress will not approve any kind of climate change legislation, so he will rely on Executive Authority. This includes proposed EPA Regulations, which require emission reductions from coal-fired power plants. Senator Mitch McConnell, majority leader, called the proposed EPA Clean power Plan, a "war on coal" and "an abuse of executive authority." Between President Obamas commitment to emissions reduction for the Paris Accord and the battle here at home on his proposed Clean Air Act, the current administration is taking on the fossil boys. This is no small task and, I guess, it's a bit analogous to his social platform.

I don't agree with the solution for greenhouse gas reduction that is proposed by Mr. Obama. He wants to take on the big boys, the fossil industry and the Republicans. I think that's stupid and more of an ego trip than anything. Further, he won't win and will cause more damage and waste more time and money than ever.

I am reminded of an interview that CBS News conducted with former treasury secretary Henry Paulson. Paulson, if you remember, became known as "King Henry," as he doled out billions during the depression of2008. What many of you might not know is that Paulson is a lifelong conservationist who is convinced that both China and the US need to solve the issues of greenhouse gas generation. "If they're (China and America) not successful in dealing with their environmental problems and dealing with climate change, it's going to hurt us all." In Paulson's book, Dealing with China, he explains that he had lost his "sense of joy and purpose." Paulson had a lot of critics and he goes on to explain that he learned to deal with it because of his grandchildren: "A little granddaughter crawling up on your lap and saying,' Papa! Your hair! You don't have any hair!" He told her it had melted. Paulson found his purpose: "I want my children and my grandchildren to grow up in a safe world, I want them to grow up in a world that is prosperous, that's got a clean environment ... I am an optimist that we can make it work." Regardless of political persuasion, he's also a capitalist. He is going to gift most of his $800 million net worth to conservation. And that's my point: capitalists and capitalism can save the planet!

Look at the issues that we have created with industrialization over the last 200 years. Not the least are water scarcity, pollution, climate change, access to good nourishing food and affordable energy, all of these exacerbated by an exploding growth in population. "Here's the thing, though: where there are problems to be solved, there's money to be made. And, where there's money to be made, we awaken one of the world's most powerful forces for change: capitalism!" (Matthew Fitzmaurice, Ensia Magazine). Today, the businesses that develop practical and affordable solutions to burdened resource problems will end up being the most profitable. Forget about sustainability, even though I preach it. A business that targets solutions to problems that are not going to go away (famine in Africa, drought in California) is a smart business. Resources, or the lack thereof, is an economic driver for a successful business and as we continue to put stress on these reasons, we will create economic opportunities for those who create solutions, hence capitalism, pure and simple.

Look beyond the obvious

The companies that provide effective solutions to burdened resources will provide superior risk adjusted returns to their investors as business and governments accelerate their solutions spending out of their own economic self-interest. And because the products, technologies and services these companies provide are common solutions to global problems--and therefore are exponentially repeatable --these investments will have amplified positive impact on global resource scarcity issues.

Too often people have a narrow view of these solutions, thinking only of solar panels and windmills. But solutions are enormously diverse: They include, among many others, agricultural drones that monitor soil conditions, smart irrigation technology that delivers water only where and when it's really needed, more efficient distributed energy generation and component suppliers that make cars use less gas.

As a whole, the human race has a poor track record when it comes to altruism. Although a great many saints among us spend- and even sacrifice - their lives to help others, most of us are hard pressed to take care of ourselves and our families. We have a much better track record when it comes to investing money in our own self-interest, which has fueled the unprecedented innovation, economic and life-expectancy growth of the past century. (More Matthew!)

I really believe in this. I think, more than ever, there's an alignment between the well-being of the planet, caused by burdened resources, presenting an incredible opportunity for investment in "practical" solutions. I'm not so sure that wind and solar are practical

and realistic. I do know I could have helped the folks in Santa Barbara. (I also have a favorite wine that you can only buy in Santa Barabara.) I am glad that I had to decline the invitation from Prince Charles to attend the Sheepstakes. And, finally, if Mr. Obama would change his approach he would have a lot more opportunity for success. Capitalism and environmentalism can work hand in hand.

Another Letter from the Earth.

Calvin Frost is chairman of Channeled Resources Group, headquartered in Chicago, the parent company of Maratech International and GMC Coating. His email address is
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Title Annotation:LETTERS FROM the Earth
Author:Frost, Calvin
Publication:Label & Narrow Web
Geographic Code:1U9CA
Date:May 1, 2015
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