After disappointing results in Copenhagen (2010) and Durban (2011), the world awaited Rio+20 with far less anticipation than we had for the Euro 2012 semi-finals, the successful crossing of Niagara Falls by Nik Wallenda, or the return of lunch blogger Martha Payne. Sustainable business, like all other business, has been riveted by the electoral politics of Greece and France and the more or less fictional pronouncements of G20 finance ministers. It was never likely that Rio+20 would change anything.

We know that the international discourse about sustainability will not reverse decades of inaction, that governments will not likely guide us from economic and environmental disaster into a new world order of hope and quality of life. Our deep cynicism is well founded; we have seen too many pronouncements fail.

Yet there is no human who does not prefer to live in hope. No business wants to discount its calculations of the net present value of future income streams by the absence of a future. No political leader wants to see the local impact of economic and environmental decline.

How is it that time and again we are unable to achieve what so many of us want? Why can we not achieve an agenda which is likely the only way forward into prosperity?

At the recent conference of the International Society of New Institutional Economists, Shi-Ling Hsu presented a paper looking at why we cannot get the answer right. In Physical, Human, and Social Capital as Barriers to Environmental Policy Change, he theorises that “environmentally harmful products and practices persist because firms and people have so much invested in their persistence”. We lock in unsustainable technologies and ways of life because capital is too expensive to write off without threatening the viability of a firm or a consumer. Oil companies and coal mine operators cannot afford to lose the value of their investments. State-owned enterprises are no less dependent on the value of carbon deposits than are for-profit companies.

Fishing villages and logging towns around the world want to maintain their livelihoods which depend on the extraction of decreasingly available stocks. Families who are making large mortgage and loan payments on suburban homes and cars are not easily convinced to leave their commitments and reinvest in housing and transport with a smaller carbon footprint.

Hsu suggests that we are locked into our carbon-hungry lives and our extractive livelihoods by specific and pervasive public policies which favour the creation and stability of capital. Grandfathering the use of old technology allows firms and their customers to get by with processes and equipment which are far worse than their replacements. Tax credits for extractive industries slow the movement of our economies into more sustainable industries. Capital gains taxes provide incentives to retain capital long past its “best before date” to avoid triggering tax penalties.

Too often firms must retain their holdings in assets that unnecessarily deplete natural resources or burn carbon in order to maintain healthy balance sheets. They cannot easily invest in new capital when governments allow them generous tax concessions on outdated technology.

We can better align incentives so that business will move out of the status quo and into more sustainable methods. Governments need not continue to support and subsidise outdated industries and processes. Instead, they might identify “environmentally-stranded capital” and let it be written down to zero over a relatively short period of time – if it is taken out of operation forever. If we really want companies to change, we must demand accelerated write-off schedules for investments in coal mines and trawlers.

One way forward is through better accounting standards. GDP+, the UK environment minister’s proposal to enter natural resources into a national chart of accounts, had the potential to resolve some of the tension between the desire of business to innovate and capital policies which lock us into old technology. When a nation assigns a value to its natural resources, it may be more likely to drop incentives which encourage resource depletion. Nick Clegg took the proposal to Rio. After appeals by Clegg and Joseph Stiglitz, the final text of the conference recognised the need for “broader measures of progress to complement GDP”. It referred the problem to the UN Statistical Commission.

Until our various legislators and regulators reconsider their capital-related policies, we will have fewer financial incentives than we need. Until we stop being rewarded for maintaining old equipment, investments and industries, we have little reason to reinvest or to favour the substantive change which Rio+20 might have brought. Without fixing financial regulations and accounting schemes, we cannot easily fix the earth.

Alison Kemper teaches management at York University and has worked with the Michael Lee-Chin Institute for Corporate Citizenship at the Rotman School since 2005. Her professional background is in advocacy and NGO management.

Roger Martin is dean of the University of Toronto’s Rotman School of Management and is academic director of the school’s Michael Lee-Chin Family Institute for Corporate Citizenship. His research work is in integrative thinking, business design, corporate social responsibility and country competitiveness. His most recent book is Fixing the Game.

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Before last year’s triple disaster in north-east Japan, Tsuchiyu Onsen drew tens of thousands of tourists in search of the recuperative qualities of its piping hot spring water.

Almost 18 months after the nuclear accident at nearby Fukushima Daiichi power plant, that same natural resource is about to turn this spa resort into a trailblazer for the country’s push towards renewable energy.

By spring 2014, Tsuchiyu, 9 miles (15km) from Fukushima, will be generating 250 kilowatts of electricity – about a quarter of the city’s total needs – at a geothermal plant hidden away in the surrounding mountains.

The plant will be the first to be built inside a national park, a controversial move that only became possible after the environment ministry recently relaxed regulations on developing protected areas.

If all goes to plan, the project could not only help the town become self-sufficient in power generation, but revive its role as a tourist destination after visitor numbers plummeted amid lingering fears over radiation. In the past, hot-spring operators have been among the fiercest opponents of geothermal energy, an obvious source of energy given Japan’s huge subterranean reserves of volcanic water.

Many fear the plants would affect the flow and quality of the water, which is pumped up from the depths and then cooled for the benefit of Japan’s enthusiastic bathers.

In Tsuchiyu, however, where half a dozen hotels remain closed with earthquake damage, spa owners are among the new geothermal generator’s keenest backers. “The plant won’t affect the water quality or the temperature,” said Kazuya Ikeda, general manager of the Tsuchiyu Onsen Tourist Association. “We have surveyed opinion in the town, and no one has raised any objections.”

The move also makes economic sense. Under a new feed-in tariff system introduced last month, utilities are required to pay premium prices for renewable energy – 42 yen (34p) per kilowatt for geothermal power.

“The structure itself will be quite small and unobtrusive,” Ikeda added. “And with the feed-in tariff, we should be able to cover our initial costs in about seven years.”

The 300m-yen (£2.5m) facility will use water pumped from below ground and combine it with an ammonia-like substance with a lower boiling point than water to propel a turbine.

Resistance to geothermal power, coupled with the pre-Fukushima faith in nuclear, means that until now Japan has failed to tap into a resource that energy experts believe has huge potential. Its 18 geothermal plants account for 0.2% of electricity output, according to the trade and industry ministry, and no new plants have been built for a decade.

Scientists believe the sector’s share could rise enormously thanks to the feed-in tariff, new subsidies to fund feasibility studies and test-drilling, and official recognition that nuclear’s heyday has passed.

According to one estimate, Japan’s gGeothermal capacity could reach 24m kilowatts – the third biggest in the world after the US and Indonesia – compared with less than 550,000 kilowatts now. Tsuchiyu has other compelling reasons to embrace geothermal power. Visitor numbers dropped dramatically after the Fukushima nuclear disaster, and while a recovery is under way, fears of radiation persist, even though recorded levels here pose no health threat.

Profits from the venture will be used to repair three damaged hotels and rebuild three others that were destroyed in the earthquake.

In the long term, Ikeda believes Tsuchiyu will become a model for other small towns struggling to find clean and stable sources of energy, while experts debate if nuclear has any role to play in Japan’s future energy mix.

If the experiment works, it should allay anxiety among other Onsen operators about potential damage to hot-spring water flows – the financial lifeblood of countless similar resorts around Japan.

Eventually, the geothermal plant will be capable of generating 1,000 kilowatts, according to Ikeda. That is a tiny fraction of the capacity of just one of Fukushima Daiichi’s now crippled reactors. But with opposition to nuclear restarts unlikely to waver, towns such as Tsuchiyu have no choice but to turn to alternatives, he said.

“If it hadn’t been for the nuclear disaster, we would never have given this project a second thought.”