By Olusegun S. Ehinfun
At the 2020 World Economic Forum (WEF) Davos, Switzerland Greta Thornberg, Vanessa Nakate and other climate activists changed the game on climate change by putting forward a forceful argument with long-lasting resonance amongst the youth globally. There exists an inter-generational challenge which was all too clear, through the duelling and varying viewpoints expressed between ex-President Donald Trump and Thornberg.
The effects of climate change affect younger people and those living in developing economies much more as other developing countries (China, India) are making progress on global warming reduction, relative to a decade ago, which is still not enough. Developed nations in the West and the USA are historically the largest emitters and polluters, however the private sector, cities, states are reducing emissions. To solve these challenges, collaborative approaches are required by developed economies, while developing countries must be open to bold solutions. Their economies must be viewed as veritable partners. In turn they ought to get on board with sustainable actions through a public- private sector partnerships (PPP).1
Concrete Actions
The young populations living in developing economies of the emerging and frontiers markets are going to be disproportionately affected by Climate Change. They have been successful in their advocacy efforts for better ‘green policies’ so far. This must be translated into concrete actions. For instance, in Wales, the appointment of a ‘Future Generations Commissioner’, Ms. Sophie Howe, with statutory powers to represent the ‘unborn’ citizens of Wales was a pioneering concept globally . Canada, Israel, and Hungary are other countries trying to adopt this model. 2
Multinational companies (MNCs), Investment Banks (BlackRock, Fidelity, Goldman Sachs and even Oil companies (Royal Dutch Shell, Chevron- Texaco), Tech Firms have all undertaken to be carbon negative. Blackrock’s CEO, Larry Fink “said his firm would avoid investments in companies that ‘present a high sustainability-related risk’.” 3 Microsoft also says it would be ‘carbon negative’ by 2030. 4 Laudable. Wise. Perhaps strategic in the short term, however it must be sustainable in order for it not to be perceived as ‘greenwashing’. The ‘kids’ are ahead of the ‘adults’ in this regard. Youths in 2022 are wary of such promises.
For instance, Starbucks aims to make its packaging reusable, investing in better waste-management practices, its latest plan towards becoming environmentally conscious. 5 The efforts of Starbucks in looking into alternative dairy as a way of reducing its carbon footprint. Commendable and perhaps impactful in the short run. This corporate model has to be modified and fine-tuned to deliver holistic and sustainable solutions. An increase of research and development budgets in green energy innovations, like the recently discovered (Nuclear) Fusion Energy innovation/ breakthrough at a laboratory in Abingdon, Oxford creating safe, low-carbon energy. Rather than splitting atoms to create energy, which is what happens in nuclear-powered stations (Fission Energy), this entails forcing hydrogen atoms together in a cloud of gas many times hotter than the centre of the sun. There is no long-lived waste left behind. “The Joint European Torus (JET) is an experimental fusion machine in Oxford.” According to Professor Ian Chapman “the results of the latest tests are a “landmark”. However, commercial viability of the technology is still some years away.” 6
Risks & Challenges
Catastrophic climate change is doing damage to the environment: Australian Wildfires in 2020 Canadian wildfires, erosion of rivers in Madagascar and Lake Chad Basin, floods in Northwest Europe, natural disasters are hard to prevent and reverse. The attempts by the United Nations (UN) Inter Governmental Panel on Climate Change (IPCC) to keep climate change under one and a half degrees (1.50) of temperature rising 7 is looking incredibly difficult, according to climate scientists. “This report tells us that recent changes in the climate are widespread, rapid, and intensifying, unprecedented in thousands of years,” Ko Barrett, vice chair of the IPCC and senior adviser for climate at the National Oceanic and Atmospheric Administration, said. Climate change “is already affecting every region on earth in multiple ways,” Barrett said. “There’s no going back from some changes in the climate system.” 8
Solutions
The Challenge has to be confronted through innovations: green energy, carbon capture/storage, geo-engineering. Not to mention the policy of planting over 350 million trees by governments like in Ethiopia. 9 A solution proposed by Professor Lawrence (Larry) H. Summers involves carbon pricing and the removal of subsidies by governments. He believes that the climate discussions at the WEF avoided the problem. When asked if private investments could make the difference on climate change, he averred : “I think most of what you heard (at Davos) is a pretty total avoidance of the real problem, and if this kind of thing is the focus, the problem is going to get worse. Three things need to happen, if the world is going to make progress (on climate) none of which was mentioned.”
We need: (1.) “To scale back the hundreds of billions of dollars we spend on fossil fuels, and fossil fuels subsidies; we (also) need to have governments stop subsidising fossil fuels, and their ability, and their use. (2.) much more investments by governments in clean energies, and the way governments need to get revenues to make that investment is by levying taxes and having the people of such organizations represented (at Davos), paying more taxes, none of them are willing to say that. (3.) to tax things that are bad. Right now, we have a world that are more oriented towards taxing things that are good, like work and savings and we need to tax the things that are bad. Like putting emissions into the air. So as long as the word tax and subsidies are outside the conversation, and it’s all just (that) we will feel better if we do this, the world’s not going to make progress in solving this problem. The idea is that in the 20 or 30 years we are supposed to get the (current) levels of emissions to zero. We haven’t even achieved the modest goal of stopping emissions from growing year after year. So, we need to get serious, not rhetorical about this.” 10
Conclusion
At Davos, analysts were surprised that one of the issues which did not make the agenda was carbon pricing. Most economists would posit about putting a price on emissions. Across governmental levels, international climate change experts and national economic policy planners are having a big debate about carbon pricing and carbon tax.
Therein lies the challenge for advocates of market-based solutions on climate change policy. How to balance the demanding needs of growth within western economies, and especially the developing economies, largely dependent on the burning of fossil fuels. President Macron found out all too well after he implemented onerous carbon pricing measures, this ultimately led to months of protests by the gilets jaune. 11 This is a generational challenge that has to be tackled with bold, innovative solutions. Globally, the young are no longer waiting for ‘men in suits’.
Olusegun Ehinfun
Olusegun Ehinfun is a management consultant with Global Business Dynamics Consultancy and the author of : ‘Oil & Water: Corporate Social Responsibility (CSR) – An Elixir for solving societal challenges.’
He can be reached on: @globalbizdynam1
olusegunehinfun@globalbusinessdynamics.com
Bibliography:
- Jafar M., ‘To Tackle Climate Change, Developing Countries Have to Get on Board’, National Opinion, theNationalnews.com, The National, 2020.
https://www.thenationalnews.com/opinion/comment/to-tackle-climate-change-developing-countries-have-to-get-on-board-1.966803 - Balch O., Meet the World’s First Minister for Future Generations, theguardianonline.com, The Guardian, 2 March 2019.
https://www.theguardian.com/world/2019/mar/02/meet-the-worlds-first-future-generations-commissioner - Sorkin A.R.(2020), DEALBOOK: BlackRock C.E.O. Larry ‘Fink: Climate Crisis Will Reshape Finance.’ “In his influential annual letter to chief executives, Mr. Fink said his firm would avoid investments in companies that “present a high sustainability-related risk.” New York Times Publication, Published Jan. 14, 2020.Updated Feb. 24, 2020.
https://www.nytimes.com/2020/01/14/business/dealbook/larry-fink-blackrock-climate-change.html - Smith B.(2020), President & Vice Chairman Microsoft, ‘Microsoft will be carbon negative by 2030’, Microsoft On the Issues, Microsoft Blog, Jan 16, 2020.
https://blogs.microsoft.com/on-the-issues/2020/01/16/microsoft-will-be-carbon-negative-by-2030/ - Bloomberg Quicktake (2020), ‘Starbucks is Looking into Alternative Dairy as a Way to Reduce its Carbon Footprint’. @Bloomberg Quicktake, January 22, 2020.
https://twitter.com/quicktake/status/1219937787698348032?s=27
Paul Roberts (2020), ‘Starbucks is Aiming to Make its Packaging Reusable and Invest in Better Waste-management, as Part of the Company’s Latest Plan to become More Environmentally Friendly’, Business, Local Business, The Seattle Times, Jan. 21, 2020, Updated Jan. 23, 2020.
https://www.seattletimes.com/business/starbucks/starbucks-unveils-new-sustainability-push-aiming-to-slash-waste-water-use-and-carbon-emissions/
- Clarke T.(2022), “UK scientists set new record for generating energy from nuclear fusion with reaction ’10 times hotter than the sun’”, Science and Technology Editor, Skynews.com, Sky News, 2022.
https://news.sky.com/story/uk-scientists-set-new-record-for-generating-energy-from-nuclear-fusion-but-commercial-application-still-years-away-12536956 - The Intergovernmental Panel on Climate Change (IPCC, 2021), Special Report : Global Warming of 1.50 (Degrees)
https://www.ipcc.ch/sr15/ - Irfan U., Leber R.(2021), ‘UN Climate Report: IPCC Says Humans Caused “Unequivocal” Warming’, The Devastating New UN Report on Climate Change, Explained. Vox.com, Vox
Aug 9, 2021.
https://www.vox.com/22613027/un-ipcc-climate-change-report-ar6-disaster - Osborne S.(2019), “Ethiopia ‘Plants More than 350 million Trees’ in One Day, Officials claim to have broken world record”, News, World, Africa , The Independent, Monday 29 July 2019.
https://www.independent.co.uk/news/world/africa/ethiopia-trees-plant-world-record-abiy-ahmed-a9025896.html - Bloomberg TV News Live, 2020., “Wall Street Week” Full Show, (Panel Discussion) (01/10/20) Bloomberg, January 11th, 2020.
https://www.bloomberg.com/news/videos/2020-01-11/wall-street-week-full-show-01-20-20-video - Chrisafis A. (2018), ‘Who are the gilets jaunes and what do they want? What began as a fuel tax protest by French drivers now appeals to wider anti-government sentiment.’ theguardianonline.com, The Guardian, 7 December, 2019.
Global Business Dynamics 
Excellent write-up! Wondering what your view would be regarding the news report below
https://www.cbc.ca/news/politics/carbon-tax-climate-change-1.6404598#:~:text=The%20Canadian%20Taxpayers%20Federation%20estimates,have%20frequently%20opposed%20carbon%20pricing.
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Thank you 🙏🏾. Much appreciated.
The article by David Thurton is quite detailed, objective and self explanatory. The main thrust of most carbon tax regimes is to change behaviour and the negative impacts/externalities associated with it which ultimately contributes to climate change( experienced by some consumers and citizens). The success, impact and effectiveness of such interventions is largely dependent on how it is implemented. I can see that the Canadian system of rebates payments is fairly equitable. This is in stark contrast with what President Macron tried to do in implementing France’s carbon tax regime – which was referenced in my piece.
On the whole, given the ‘cost of living’ pressures, post-pandemic economic dynamics and the ongoing Russian invasion of Ukraine, it is challenging to implement any carbon pricing regime in any good year. Let alone in the year these afore-stated externalities are occurring in the 1st quarter of a single fiscal year.
In sum, one is of the opinion that there will never be a better time to reverse climate change via climate action (as it is) via a combination of: government policies, industry practices, changes in personal habits and consumption (which the carbon price is meant to moderate) and implementation of concrete, sustainable mitigation and amelioration efforts across the piece globally. Just yesterday scientists at the UK Met Office posits that :
“ The year the world breaches for the first time the 1.5C global heating limit set by international governments is fast approaching, a new forecast shows.
The probability of one of the next five years surpassing the limit is now 50%, scientists led by the UK Met Office found. As recently as 2015, there was zero chance of this happening in the following five years. But this surged to 20% in 2020 and 40% in 2021. The global average temperature was 1.1C above pre-industrial levels in 2021…” 1
In the light of this afore-mentioned alarming conclusion, it is imperative and urgent that carbon pricing and other associated policies be intensified, in a more even-handed, considered and considerate manner. Towards preventing damaging climate externalities such as: intense fires (Western Canada in 2020), damaging monster floods ( Western Europe – Netherlands, Germany, Belgium in 2021), drying up of rivers in Madagascar and Lake Chad Basin areas in Africa.
Reference:
1. ‘Climate limit of 1.5C close to being broken, scientists warn; “The probability of one of the next five years surpassing the limit is now 50%, up from 20% in 2020”
By Damian Carrington, The Guardian, Environment editor. Mon 9 May 2022 17.00 EDT
@dpcarrington
Available at:
https://www.theguardian.com/environment/2022/may/09/climate-limit-of-1-5-c-close-to-being-broken-scientists-warn
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