The all-hands-on-deck urgency of COVID must be applied to the climate crisis
The COVID-19 pandemic has taught us many lessons. It has made clear that to address a crisis we must recognize it as such. Denial is not a lifesaving response. If recognized, a crisis spurs collective action. Crisis accelerates scientific innovation and the rate of societal, economic, industrial transformation and shift. Such lessons are useful as they seek to confront the epochal planetary challenge of climate change.
What part must our leaders play as they prepare for the U.N. Climate Change Conference in Glasgow this November?
The first step is to forever banish denial. As Mark Carney, the U.N. Special envoy on finance and climate change stressed on Twitter, net zero is not a slogan, it is a scientific certainty. The science is overwhelming. The global temperature today is 1.2 degrees Celsius above pre-industrial levels and headed towards 2.4 degrees Celsius by 2050 if we fail to act more aggressively. The carbon dioxide (CO2) in the atmosphere stands at 419 parts per million, a level not seen in over 800,000 years.
The world’s Alpine glaciers are melting. The Arctic Sea Ice is shrinking and will disappear in decades. Huge parts of California, Siberia, and the Brazilian rainforest are torched by wildfires each summer. Government leaders must stop denying reality and recognize the crisis for what it is: A staggering threat to global ecological sustainability. In November in Glasgow, leaders must commit to aggressive ambitious steps each year to get to net zero.
Leaders must, in 2021, lay out the glidepath from a polluting present to a green tomorrow. By setting national goals, waypoints, expectations, requirements, incentives, and penalties, governments acting together can make the seemingly impossible possible. Let us be clear — this path through the green transition is steep and will be resisted by the polluters, oil companies and coal barons, the ignorant and the unwilling. But when the crisis is recognized as such and underscored by action and policy goals, it can transform into real opportunities for our children and grandchildren.
Just as our governments invested $15 trillion and counting to beat back COVID-19, sustain economies and accelerate vaccine development, we all can take up the economic challenge of climate change by leveraging the state, the private sector and our economies. It is the combination of public and private, corporate and individual actions that will speed transformation — no one action can achieve the common goal.
What does this look like? It means implementing green industrial policies in the U.S., Europe and China. This has already begun. It means shifting to renewable energy sources, solar wind, hydro, nuclear and hydrogen. Today solar and wind are competitive without subsidies in much of the world. Rapid shift to renewables must continue and accelerate especially in the U.S. and China. President Biden has taken crucial regulatory steps already. China’s President, Xi Jingping is beginning to pull the levers of People’s Republic of China state power.
It means speeding the electric vehicle (EV) transition, with incentives, phase-outs and new infrastructure. EV sales are accelerating and Europe and China are leading the way with sales leaping 41 percent in 2020 despite the pandemic. The number and breadth of choice of models is growing and growing in the U.S. too as General Motors, Ford and others manufacturers commit to the shift. EVs are often faster, easier to maintain and quiet. I expect five years from now many of us, a majority in some nations, will have made the leap to electric vehicles. Other transport sectors will make a net zero shift too, from trucking, to shipping.
Every economic sector must be urged to make the transition and must be incentivized and pressed by shifts in policy and practice. From agricultural production, to industrial processes, to construction, to airlines — no part of our economies will avoid transformation due to pressures of net zero. Leaders meeting in Glasgow must set the long-term goals.
However, it is businesses, investors and workers who are amplifying the shift. Businesses like Spanish utility Iberdrola, which is harnessing wind and solar to become one of the most successful utilities in Europe. Firms like General Electric building the world’s largest offshore wind turbine. Companies like British beer maker BrewDog, which is growing rapidly based on a net negative business strategy; for every ton of CO2 they produce they remove two tons from the atmosphere. It is being driven by asset managers like BlackRock, who backed the dramatic board shake-up at Exxon. It is being spurred by pension plans like CalPERS, which has disinvested in coal industries.
Today, major companies the world over are being pressed by their investors, but also by their boards, CEOs and employees who increasingly demand firms begin to plan for net zero and what it requires. To be sure, there will be firms that still traffic in pollution and environmental degradation. But they will not attract the best talent. Those laggard firms will see climate risks jump, costs rise and equities underperform. Stranded assets will mount and firms that fail to adapt fast must go bust.
The shift from brown to green is taking place: During COVID-19, environmental, social and governance (ESG) investments saw inflows as other sectors saw outflow. Moreover, ESG outperformed on the downside as well as during the rebound.
A necessary greening of globalization has begun. Investing for the long-term in 2021 requires investing mindful of the unfolding green transition and burgeoning opportunities. Smart CEOs are already reaping the benefits of farsighted strategies and plans. The opportunities of this multi-decade reseeding will be immense and transformative. “Green Globalization 2.0” is not a dystopian hell — it is a reimagining, reseeding and regrowth of our economies.
I believe we are approaching a narrative, investment and policy break point. Leaders meeting in COP26 must commit to Green Globalization 2.0 to underscore it is real, dynamic, urgent and gathering pace. In doing so, leaders can harness markets to net zero and pull forward innovations and breakthroughs.
Change business and personal choices. Make the impossible possible. Spur breakthroughs in our economies and societies as we all commit to the transition. At Glasgow we can make a shift. We can all recognize the climate crisis for the real and present danger it is. The time to act is now.
Dr. Stuart P.M. Mackintosh, PhD. is executive director of the Group of Thirty. His third book, “Climate Crisis Economics – The Net Zero Transition,” will be released in September 2021.
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