Stick It To Carbon, Not The Man.

Editor’s note: The following is excerpted from Climate Shock (2015) by Gernot Wagner, Lead Senior Economist, Environmental Defense Fund, and Martin L. Weitzman, Professor of Economics, Harvard University. Published here with permission from Princeton University Press.

Gernot & MartinTwo quick questions:

Do you think climate change is an urgent problem?

Do you think getting the world off fossil fuels is difficult?

If you answered “Yes” to both of these questions, welcome. You’ll nod along, occasionally even cheer, while reading on. You’ll feel reaffirmed.

You are also in the minority. The vast majority of people answer “Yes” to one or the other question, but not both.

If you answered “Yes” only to the first question, you probably think of yourself as a committed environmentalist. You may think climate change is the issue facing society. It’s bad. It’s worse than most of us think. It’s hitting home already, and it will strike us with full force. We should be pulling out all the stops: solar panels, bike lanes, the whole lot.

You’re right, in part. Climate change is an urgent problem. But you’re fooling yourself if you think getting off fossil fuels will be simple. It will be one of the most difficult challenges modern civilization has ever faced, and it will require the most sustained, well-managed, globally cooperative effort the human species has ever mounted.

If you answered “Yes” only to the second question, chances are you don’t think climate change is the defining problem of our generation. That doesn’t necessarily mean you’re a “skeptic” or “denier” of the underlying scientific evidence; you may still think global warming is worthy of our attention. But realism dictates that we can’t stop life as we know it to mitigate a problem that’ll take decades or centuries to show its full force. Look, some people are suffering right now because of lack of energy. And whatever the United States, Europe or other high emitters do to rein in their energy consumption will be nullified by China, India and the rest catching up with the rich world’s standard of living. You know there are trade-offs. You also know that solar panels and bike lanes alone won’t do.

You, too, are right, but none of that makes climate change any less of a problem. The long lead time for solutions and the complex global web of players are precisely why we must act decisively, today.

What we know is bad, what we don’t is worse

If you are an economist, as we are, chances are you answered “Yes” to the second question. Standard economic treatments all but prescribe the stance of the “realist.” After all, economists live and breathe trade-offs. Your love for your children may go beyond anything in this world, but as economists we are obligated to say that, strictly speaking, it’s not infinite. As a parent, you may invest enormous sums of money and time into your children, but you, too, face trade-offs: between doing your day job and reading bedtime stories, between indulging now and teaching for later.

Trade-offs are particularly relevant on an average, national or global level. And they are perhaps nowhere more apparent on the planetary scale than in the case of climate change. It’s the ultimate battle of growth versus the environment. Stronger climate policy now implies higher, immediate economic costs. Coal-fired power plants will become obsolete sooner or won’t be built in the first place. That comes with costs, for coal plant owners and electricity consumers alike. The big trade-off question, then, is how these costs compare with the benefits of action, both because of lower carbon pollution and because of economic returns from investing in cleaner, leaner technologies today.

Economists often cast themselves as the rational arbiters in the middle of the debate. Our air is worse now than it was during the Stone Age, but life expectancy is a lot higher, too. Sea levels are rising, threatening hundreds of millions of lives and livelihoods, but societies have moved cities before. Getting off fossil fuels will be tough, but human ingenuity — technological change — will surely save the day once again. Life will be different, but who’s to say it will be worse? Markets have given us longer lives and untold riches. Let properly guided market forces do their magic.

There’s a lot to be said for that logic. But the operative words are “properly guided.” What, precisely, are the costs of unabated climate change? What’s known, what’s unknown, what’s unknowable? And where does what we don’t know lead us?

That last question is the key one: Most everything we know tells us climate change is bad. Most everything we don’t know tells us it’s probably much worse.

Stick it to carbon

“Bad” or “worse” doesn’t mean hopeless. In fact, no prediction of climate outcomes or damages can stand without being prefaced by a version of the words unless we act. We don’t venture predictions only to see them become true. We talk about where unfettered economic forces may lead in order to guide them in a more productive, better direction. And guide we can.

Increasingly intense hurricanes, more floods, more droughts, not to say anything of rising temperatures and rising seas are what we know is happening and will continue to happen. Tallying those effects — at least the bits we can put a dollar figure on — results in a minimum cost of $40 per ton of carbon dioxide we pump into the atmosphere today. But on average, the world isn’t considering anything close to these costs. The average global price is closer to negative $15 per ton, considering the massive fossil fuel subsidies in many countries.

None of that yet includes the truly frightening low-probability events. There’s a huge difference between a likely sea-level rise of 0.3 to 1 meters (1 to 3 feet) by the end of this century and eventual possible extremes of 20 meters (66 feet) or more in future centuries. And it’s debatable whether we can describe any of these extreme scenarios as “unlikely” or “low probability” to begin with. By our own, conservative calculations, there’s about a 1-in-10 chance of eventual global average warming in excess of 6 C (11 F), something that can be described only as “catastrophic” for society as we know it.

It would be easy to conclude that capitalism is the problem. Capitalism is indeed at the core of the problem. Or rather: misguided market forces are.

One seeming solution would be to simply change our ways — voluntarily change our behavior to be greener. If only we slowed down, went back to the land, and generally did more with less, climate change would be a thing of the past. Not quite. The math on voluntary action simply doesn’t add up. And the calculus of changing capitalism as we know it — however desirable that may be as an independent goal — is daunting, to say the least. It also confuses the issue.

Some, like author Naomi Klein, call for “taxing the rich and filthy.” That’s a nice turn of phrase. One might agree that we probably should be taxing the rich more. But that’s a different problem entirely. First and foremost, we ought to be taxing the filthy. Instead of “sticking it to the man,” the point is to stick it to carbon.

Far from posing a fundamental problem to capitalism, it’s capitalism, with all its innovative and entrepreneurial powers, that is our only hope of steering clear of the looming climate shock.

That’s not a call for letting markets run free. Laissez-faire may sound good with the right French accent — in theory. But it can’t work in a situation in which prices don’t reflect the true costs of our actions. Unbridled human drive — erroneously bridled drive, really — is what has gotten us into this current predicament. Properly channeled human drive and ingenuity, guided by a high enough price on carbon to reflect its true cost to society, is our best hope for getting us out.

Published on Ensia.com on February 25th, 2015. Continue reading in Climate Shock, available at booksellers everywhere.

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It Can(‘t) Be Done

I recently read the inspiring story of how Farmers Electric Cooperative, one of the smallest utilities in the country, overcame some formidable financing challenges to develop the biggest commercial solar project in Iowa.

Rock-uphillThe example called to mind a comment made by Lisa Jackson, Vice President of Environmental Initiatives at Apple and former Administrator of the U.S. EPA, during the closing plenary of GreenBiz’s VERGE conference earlier this fall. She told the audience that, at Apple, the best way to get something done was to say “it can’t be done.”

This idea, of conquering seemingly impossible obstacles, is one I’ve seen reflected in a number of new advances in corporate sustainability, including many discussed at the conference and others from our own work. Each demonstrates how entrepreneurs (and intrapreneurs) are harnessing major environmental and social challenges to create real solutions: Read more

SXSWEco Day One Epiphanies, Head-scratchers, and Bravery Awards

SXSWEcoThere is so much going on at SXSWEco this week that it would be impossible for one person to do a comprehensive wrap-up, so please take this commentary as a slice of a very big pie. And, note that my particular slice is viewed through a very marketing- and business-oriented lens. Still, as an EDF’er working with the private sector, I’m always looking to share new, pragmatic ideas and business cases for saving the environment. I think the most pleasant surprise of SXSWEco Day One was that so many others feel the same.

But first a head-scratcher. Why is it that the regions that are the most climate and socially vulnerable (Southern U.S.), are also home to some of the biggest climate science-denying politicians? Many thanks to Dr. Robert Bullard of Texas Southern University for so eloquently tying environmental justice to social justice; for me this was a necessary epiphany for how we think of building resilience in the face of climate challenges.

At EDF we believe that the corporate sector can thrive by valuing, protecting, and improving the environment, so the session on Creating Climate Wealth held a ton of appeal. Ann Davlin and Jigar Shah threw out business scenarios for environmental impact like candy from a parade float. I managed to grab a few choice nuggets: Read more

The Business-Policy Nexus: The Next Frontier for Corporate Sustainability Leadership

Tom Murray, VP Corporate Partnerships, EDFAs we approach the 25-year anniversary of EDF’s work with the corporate sector, it’s an opportune time to reflect on our successes and plan for the work ahead.

Over the years we have worked with McDonalds, Walmart, FedEx, KKR and many others to integrate sustainability into their operations, strategy, and supply chain management.  Together, we have kick-started market transformations in sectors including fast food, shipping, retail, private equity and commercial building energy efficiency.  While we’ve made great strides, there remains a huge distance to go in order to fully protect our natural resources, clean up our dirty energy system, and turn the corner on global greenhouse gas emissions in time to avoid the worst impacts of climate change.

Looking ahead, the opportunity and need for more aggressive private sector leadership has never been greater.  Moving from environmental progress today to full scale solutions tomorrow will require a new type of corporate leadership. This next step will require a willingness to align corporate sustainability operations, strategy AND policy.

Voluntary corporate efforts have made a difference and will continue to be a critical pathway for innovation. But this is not sufficient to meet the size and scale of the challenges we face.  Businesses must take the next leadership step – helping to shape and support the smart regulatory and policy changes required to preserve the natural systems that people, communities and companies need to thrive.

Simply put, the bar is now higher for companies that want to lead on sustainability.

 Corporate Leadership and Sustainability over time

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Lasers, circuit boards and a $30 sensor: innovative solutions to the methane problem

This post originally appeared on EDF Voices.

The technologies we see today didn’t all start out in the forms we’re used to. The phones we carry in our pockets used to weigh pounds, not ounces. Engineers developed hundreds of designs for wind turbines before landing on the three-blade design commonly seen in the field.

innovation

(Missy Schmidt/Flickr)

Fast forward and now we're looking at a drunk-driver-and-alcohol sensor that was converted into a methane leak detector. And a sensor purchased off the web for less than $30 that was transformed into a monitor that fights off greenhouse gases.

I was excited to see the diversity of technologies such as these moving forward in the Methane Detectors Challenge.

Environmental Defense Fund’s initiative with seven oil and natural gas companies—including Shell and Anadarko Petroleum Company, the latest two to join—seeks to catalyze a new generation of technology for finding methane leaks in the oil and gas sector – a powerful contributor to climate change.

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An Antidote to Plastic Addiction

Credit: Plastic Disclosure Project

Credit: Plastic Disclosure Project

Take a moment to think about the things you use and throw away every day that are made from plastic: an empty shampoo bottle, the container from your salad at lunch (and the little container for the dressing), that pen that won’t work. And what about those things you’re holding on to in the depths of your closet, inevitably destined for the dumpster? That overused pair of sneakers, your old broken flip phone, a keyboard that hasn’t been used in a decade?

Plastic has transformed the way we live and enabled innovation in countless sectors, but simultaneously has contributed to one of the largest waste problems facing the planet. The challenge right now is that it’s no one’s responsibility to track plastic. The material just gets passed from production, to building products, to consumers, and ultimately to waste facilities or worse, into ecosystems like the ocean.

The United Nations Environmental Programme (UNEP) has developed one initiative to tackling this enormous problem, called the Plastic Disclosure Project. The project’s goal is to encourage companies to track the amount and types of plastic used in their operations and supply chain in order to optimize and reduce the related environmental impact.

Why should companies take the responsibility of tracking their plastics? To answer this question, UNEP published a report in partnership with Trucost, which quantifies the full cost associated with plastic used in the consumer goods industry. That amount is more than $75 billion per year. Yes that’s billion with a "b," and per year.

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Can a Climate Change Film Be As Memorable As TERMINATOR?

by Alex Duff, Corporate Affairs Manager, Kingfisher – Net Positive

Can you tell a story about climate change that’s as memorable as Terminator, Aliens, The Abyss, True Lies, Titanic or Avatar?  James Cameron, the acclaimed director of all of those blockbusters, clearly thinks it’s worth a shot given his involvement in a nine part docu-series that had its premier screening in London this week.  He’s not alone – a long list of movie stars, movie makers and many others have joined him in creating "Years of Living Dangerously" which has already been launched to critical acclaim in the USA.

Hollywood glamour

Whilst we weren’t at the Leicester Square Odeon, there was no red carpet and not a Hollywood movie star in sight, for those of us in sustainability more familiar with finding our stories knee-deep in a peat bog or skip-diving, the London premier held at the Soho Hotel certainly provided more than a glimpse of Hollywood glamour.  Perhaps more importantly though, it served as a powerful reminder of how clever interventions and effective storytelling can reach an audience beyond (excuse the pun) "The Usual Suspects."

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No Water Means No Beer, and Other Insights from an LA Water Conference

Beer lovers – now that I have your attention – let’s talk water. Nowhere in the country is water more critical an issue and looming risk than in my home state of California… critical to farmers, utilities, businesses, and yes, even breweries.

Officials touring San Luis Reservoir in 2013, which supplies water to Silicon Valley, is at historic low levels, only 17% full. (Source: Patrick Tehan/Bay Area News Group)

Officials touring San Luis Reservoir in 2013, which supplies water to Silicon Valley, is at historic low levels, only 17% full. (Source: Patrick Tehan/Bay Area News Group)

The current drought has brought a host of challenges for our growing state, including more wildfires, collapsing delta ecosystems and fisheries, decaying infrastructure and declining water quality. While California is on track to reduce carbon pollution due to our progressive climate and energy policies, our water challenges are the elephant in the room.

So it was inspiring to attend a daylong event convened by the Pacific Institute in Los Angeles, where leading corporate, nonprofit and technical water experts honed in on water stewardship and shared innovative solutions to the business and environmental challenges we face with regard to water scarcity.

The companies represented there – including AT&T, Deloitte, MillerCoors and Veolia – see water scarcity as a current business risk, as well as a critical component to economic growth in California, the Colorado River Basin and around the world. The World Economic Forum even ranked water crises as the third most pressing global risk for 2014. “Often, the greatest risks come from conditions over which the company has the least influence,” noted Jason Morrison of the Pacific Institute, whose Water Action Hub offers a powerful guide with tools and resources for collective action.

The day’s far-reaching discussion would be impossible to capture in a single blog post, so I'll highlight here just a few of the challenges and solutions that stuck with me after a full day of information sharing.

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EDF Climate Corps fellows – right where they need to be

EDF Climate Corps on Years of Living Dangerously

Watch the episode featuring
EDF Climate Corps
Monday May 26th at 8 pm on Showtime

When the producers of Years of Living Dangerously – Showtime’s groundbreaking new series about climate change – were looking for a story of hope, they turned to EDF Climate Corps. The series, which brings the reality of climate change into your living room every Monday night, does not spare the viewer the devastating impact on people of wildfires, superstorms and droughts. But it also shows how people can be part of the solution to climate change. The three EDF Climate Corps fellows featured in this Monday’s (5/26) episode are protagonists in that story of hope. They show how saving energy benefits both the environment (by cutting carbon emissions) and the bottom line.

One exchange that Showtime caught on camera goes something like this:

Jessica Alba:  “Can you can walk into any organization and tell them how to save energy and money?”

Climate Corps fellow:  “Yes.”

EDF Climate Corps fellows are turning up in all kinds of interesting places this year. In January, Tyrone Davis joined the first lady to watch the State of the Union address. This month, fellows will appear on television to give people hope about solutions to climate change. And this week, we announced the 2014 class of Climate Corps fellows – 117 top grad students chosen from close to 700 applications – all going to where the biggest opportunities are to save energy.

EDF Climate Corps Working in Key Geographies

This year, we’ll have six Climate Corps fellows in China, now the world’s biggest emitter of greenhouse gas. About two-thirds of our 117 engagements will be in the nine U.S. states that consume over 50% of the nation’s energy. And 16 of those will be in Chicago accelerating progress toward the city’s 20% energy reduction goal.

EDF Climate Corps Helping Key Sectors 

Climate Corps fellows continue to work in large commercial buildings like the Merchandise Mart in Chicago. But we’ve also expanded the sectors in which we work to include manufacturing (with Legrand, Lockheed Martin and Owens Corning), cities (Baltimore, Boston and Los Angeles) universities (Clark Atlanta and the University of Texas Southwest Medical Center), data centers (RBS Citizens and Comcast), utilities (Pacific Gas & Electric), and even military bases (US Army at Fort Bragg).

EDF Climate Corps Tackling Diverse Projects

The 2014 class of Climate Corps fellows are working on a wider range of projects than ever before. About half will be working on building energy efficiency. The rest of the projects include:

  • Energy strategy, data management and employee engagement
  • Water efficiency – implementing the unique toolkit that EDF developed with AT&T
  • Supply chain logistics – integrating our expertise in green freight and operating more efficient warehouses

EDF Climate Corps is recruiting, training and deploying the sustainability leaders of tomorrow; a viral solution that gives us hope that we can bend the curve on carbon emissions and avoid the worst impacts of a warming world. But don’t just take my word for it. Tune into “Years of Living Dangerously” on Monday May 26th at 8pm on Showtime. See for yourselves how our fellows helped Caesars Entertainment Corporation, Texas Southern University and Office Depot scale their energy management efforts.

 

Also of interest:

Years of Living Dangerously: Two producers, coffee and a vision for climate action

Behind the Showtime cameras with EDF Climate Corps fellows

EDF Climate Corps, creating a new generation of leaders

 

The 2014 Skoll World Forum: Always Act

Skoll World Forum logoSe hace camino al andar – the road is made by walking,” said Yves Moury of Fundacion Capital, quoting Spanish poet Antonio Machado. He went on to explain that the poet was telling us to find new ways to think and to act. “Always act,” he exhorted, “the road is made by walking.”

I identified with this call to action as the unofficial theme of the 2014 Skoll World Forum. The presentations, the side conversations and even the general spirit of the Forum underlined this. Here is a sampling of some of the more provocative actions and articulations I heard:

  • In the opening plenary, Sir Richard Branson, founder of the Virgin Group, argued that the world needs more CEOs to stand up to their shareholders.
  • Also in the opening plenary, Arif Naqvi, founder of private equity firm The Abraaj Group, emphasized the importance of a broad definition of stakeholder engagement because as he put it, “you can’t have islands of excellence in an ocean of turbulence.”
  • Jason Saul of Mission Measurement presented a framework that promotes deriving a cost/outcome across what he deems is 132 outcomes in the world.
  • Jeff Bradach of Bridgespan Group raised not only organization-centric pathways to scale, but also field-centric ones that would argue for strengthening a constellation of organizations.
  • Feike Sijbesma, chairman and CEO of Royal DSM, emphasized that more than shareholders have to be a company’s priority in “future-proofing a business” as he traced the company’s transition from a coal mining company to a chemical company to its current framing as a life sciences company.
  • Mike Barry of Marks & Spencer shared in a side conversation that in 10 years their most important strategic partner might be a healthcare company as they think about a frame of wellness rather than products.
Malala Yousafzai

Malala Yousafzai

Finally, as a tour de force at the Forum were the words of Malala, the 16-year-old Pakistani girl who survived a Taliban assassination attempt as she advocated for education for girls. She spoke passionately and eloquently with a poise way beyond her years as she proclaimed, “Education is more powerful than any weapon.” Although she was specifically speaking about education for girls, her message is really universal whether speaking about individuals, investors or companies.

As I reflect back on the Forum, I’m inspired to continue challenging companies to always act, innovating to protect the planet.