Combating climate change could yield societal change
Black businesses must be part of the solution
IT IS HARD to miss the urgent calls to do something about global warming. The Paris Agreement, Greta Thunberg, President Biden’s infrastructure legislation — the unusual climate patterns and the destruction they cause serve as a call to action from every corner.
But climate change is not just about climate. It’s also an opportunity to address economic disparity. This is something that keeps getting missed by everybody from Boston Mayor Michelle Wu to Gov. Charlie Baker to Sen. Ed Markey.
There will be billions, if not trillions, of dollars spent to address aspects of climate change. This could be a game-changer, or just another missed opportunity, for the Black community.
According to a report from Morgan Stanley, it will cost anywhere from $300 billion to $50 trillion to address global climate change over the next two decades. This is money that will be spent for a good cause. And, as much as possible, it should be spent with BIPOC businesses.
The state’s cannabis business should not be the only social equity business supported by the state.
The Morgan Stanley report focuses on five areas: renewables, electric vehicles, carbon capture and storage, hydrogen, and biofuels. There are few Black-owned companies in these areas, which has to change if African Americans are going to participate in a meaningful way in the green economy.
The government could help Black businesses start or expand businesses in these growth areas. (Guaranteed contracts that could be used for financing would be one way to go.) During COVID, the government awarded contracts to businesses that had little or no experience. Emergency declarations meant mayors and governors could and did give out no-bid contracts to businesses that had no prior experience. Too often these declarations are only used to help white businesses,.
The government spent over $2.5 trillion on the pandemic. This crisis created an opportunity for CIC Health, a company run by White executives that did not exist before the pandemic and had no prior experience in healthcare. Not only did the firm receive a contract from the state for testing, but it was able to leverage that contract into ones with 14 other states.
The state should create an inventory or directory of every Black-owned company in the environmental cluster in the Commonwealth, discuss their needs in relation to growth, and develop an implementation plan to address the challenges. Those needs could include grants, patient capital, and employee training. We have to look at these crises as opportunities to deal with other social and economic challenges. The climate crisis could be the biggest opportunity for economic development for Black businesses or the biggest missed opportunity of the century.
We need to apply the “Massport Model,” which is now a Kennedy School case study, to all environmental projects across the state. The Massport Model calls for a 25 percent diversity, equity, and inclusion requirement and recommends that diversity efforts include equity participation; workplace and supplier diversity; wrap-around services to enhance the effectiveness of workforce and supplier diversity efforts; and a strong performance metrics and accountability system. The Massport Model was used with remarkable success in the development of the new $550 million Omni Hotel in the Seaport, and Massport has used it on other projects.
Elizabeth Turnbull Henry and L. Duane Jackson have called for the Massport Model to be used for wind energy procurement, which would require a $4-5 billion investment.
Diversity needs to be a part every aspect of these projects from investment and ownership to development, construction, operations, and ongoing maintenance. Demand for Black businesses to meet diversity requirements will increase the supply. Majority companies will partner with Black companies to increase their supply, so as a team, they are more competitive.
After spending billions if not trillions addressing climate change, we need to make sure two things happen. First, we must mitigate environmental hazards and harness environmental opportunities, even if they do not help us achieve carbon neutrality. Second, we need to use this opportunity to reduce the wealth gap by providing investment and equity opportunity for people of color, even if that is just employee ownership. The all-out effort to mitigate climate change is an opportunity to reduce wealth disparity, or will it be another missed opportunity?
Ed Gaskin is the executive director of Greater Grove Hall Main Streets.