Part Two of a four-part series. Part One can be found here.
As the consequences of the COVID-19 pandemic continue to unfold, insights are emerging on how to repurpose what's been learned for the benefit of climate change mitigation. To date, most of the focus on the pandemic-environment nexus has been short-term. A number of environmental activists, for example, have recommended that temporarily reduced air pollution levels be made permanent through regulatory controls. Conversely, the Trump administration has used the pandemic as an argument to issue an open-ended suspension of the enforcement of environmental laws.
These examples reflect the battle lines being drawn for an even larger conflict that is emerging over climate change policy.
Three key facts
Three key facts highlight the growing stakes in play for climate change decision making.
First, many parallels exist between arguments that deny the existence of climate change and the assertion that COVID-19 is a large-scale hoax designed to reduce personal liberty, confiscate the purchase and use of weapons and alter the traditional American way of life.
Using Facebook and YouTube as principal social media organizing platforms and Fox News as a megaphone to broadcast their views, "denialists" have proven their ideology to be adaptable across multiple issues, including climate change, stratospheric ozone depletion and vaccinations against communicable diseases. Recent Washington Post investigations have reported linkages among groups that organize and financially support denialist demonstrations. Some of these groups also fundraise in behalf of the Trump re-election campaign.
As the consequences of the COVID-19 pandemic continue to unfold, insights are emerging on how to repurpose what's been learned for the benefit of climate change mitigation.
Second, a principal argument used against greenhouse gas controls — that they rely upon data and protocols developed by scientific experts — has garnered substantial public support when applied to combating the COVID-19 pandemic.
This result occurs because individual citizens understand that their personal well-being is at risk. Thus, they are more receptive to receiving guidance on how to mitigate this risk from medical professionals that they know of and trust. Also, the medical advice provided is both direct and practical — shelter-in-place, wear a mask, maintain social distancing. A similar opportunity exists to provide more specific climate change mitigation advice from independent scientists and professional bodies directly to citizens whose awareness of climate risks continues to grow.
Third, there is overwhelming evidence that both the coronavirus pandemic and climate change damage were knowable and preventable. Numerous scientific reports, intelligence community assessments and public pronouncements from well-known public health or technology authorities such as Bill Gates warned, over a period of years, of the probability of a pandemic. The inability to respond to these warnings represents a system-level failure on the part of those responsible for protecting public health.
A similar failure towards a system-level set of risks is unfolding with accelerating climate change. Over the past three decades, an elaborate evidence-based system has been in place for evaluating scientific data, modeling temperature changes and effects as varied as the melting of polar ice caps, sea level rise, heat waves and droughts and the spread of disease vectors.
Unlike their health scientist counterparts, climate scientists have encountered a longstanding, organized campaign of skepticism and denial — funded by dark money business interests — about their peer-review procedures and their conclusions. This has resulted in direct harassment of both Individual climate scientists and established scientific bodies such as the Intergovernmental Panel on Climate Change, and has directly slowed policymakers' and civil society's ability to respond to life-threatening climate risks.
COVID-19 outcomes for climate change planning
At this juncture of managing the COVID-19 crisis, three significant outcomes have emerged that can inform responses to the climate crisis:
- People have connected their personal well-being to expectations of government action. They expect the institutions of government (and civil society organizations) to act on their behalf by defining essential economic activities, providing needed medical infrastructure (hospital capacity, critical supplies and tests) and maintaining civil order.
- Governmental officials, medical professionals and citizens have embraced the need to "bend the curve" for COVID-19 incidence and mortality.
- Citizens believe they have a responsibility to each other by sheltering in place, frequently washing their hands, maintaining appropriate distances, limiting their mobility and wearing masks outside of their homes. This has occurred for reasons of self-interest but also stems from moral and ethical values and notions of good citizenship.
Actions to bend the climate curve
Public support for a goal to "bend the climate curve" can be built but will require national and International efforts to limit/reduce future greenhouse gas concentrations in the atmosphere and contain a worldwide temperature increase to between 1.5 and 2 degrees Celsius over the next few decades (the two pre-eminent metrics for measuring success in bending the curve).
Three types of actions are required to achieve this goal: policy initiatives that can acquire sufficient political support to be enacted within the next two years; interventions by investors on climate governance; and behavioral change through moral and ethical appeals to individuals and groups.
Policy actions should be guided by the "Bill Gates Principle": People should not waste idealism and energy on a policy that will not cause any reduction in the use of fossil fuels. Policy actions should encompass regulatory, tax and budgetary actions. They include:
- Rejoining the Paris Climate Accord, with the objective of renegotiating more ambitious climate targets and timetables with added transparency.
- Setting a U.S. objective of decarbonizing the economy through a policy of net-zero carbon emissions by 2050 across all major industry sectors. Appropriate interim objectives also should be established. For example, the U.S. government and the utility industry should establish a goal for phasing out coal-fired power plants by 2030. The Obama administration’s Corporate Average Fuel Economy standards should be maintained and periodically updated.
- Removing all energy subsidies, including those for solar and other renewables. The latter have achieved a level of market competitiveness and will succeed in gaining expanded access to various energy markets. Fossil fuel companies, a growing number of which are heavily indebted or experiencing reductions in their customer markets, should compete in the future only on a market-clearing basis and not as rent-seeking enterprises.
- Avoiding transfer of public funds to large, carbon-intensive companies. Innovation potential is higher when funds are directed at new technology development rather than larger, more heavily capitalized firms with existing access to credit markets.
Investors have become increasingly active in engaging multinational companies on their environmental, social and governance (ESG) commitments. Their influence is greatly strengthened by the performance of ESG or sustainability fund investment portfolios when compared against traditional benchmarks such as the S&P. Moving forward, investors should be:
- Intensifying engagement with CEOs and corporate boards on climate governance and commitments. Increasing synergy involving Climate Action 100+ (and allied partners) advocates, ESG-focused investment firms, individual analysts and shareholders have achieved some impressive gains in recent years and should accelerate. Shell Oil Company's April 16 declaration to become a net-zero emissions energy business by 2050, followed shortly thereafter by a similar announcement by French oil giant Total, are examples of such engagement. Investors should espouse that all Fortune 500 companies achieve net-zero carbon emissions by 2050 with interim, transparent reporting benchmarks established for 2030 and 2040.
- Advocating the elimination of deferred carried interest. This refers to the preferred tax treatment received by hedge fund and private equity fund managers. Current rules treat carried interest income as a long-term capital gain (taxed at a U.S. rate of 23.8 percent) rather than as ordinary income (subject to a rate of 39.6 percent). This favored tax treatment is completely artificial, and benefits investors primarily interested in accumulating short-term gains rather than longer-term focused portfolios such as investments in sustainable energy. Carried interest deferral also contributes greatly to social inequality.
- Recommending that the financial transaction tax (FTT) be raised. Presently, each stock transaction is taxed at a rate of 2 cents per $1,000. Raising the FTT to $1 for each $1,000 of transactions will disincentivize high-frequency trading, create fairer markets, encourage longer-term possession of stocks and lessen inequality.
Persuasive facts directly engaging citizens must accompany policy and investor actions if a growing public awareness of climate change is to mobilize an aggressive movement to support greenhouse gas reductions. A citizen mobilization strategy should include:
- Expanding philanthropic support for grassroots citizen participation to distill climate change science into usable, actionable knowledge. This can be done by establishing academic fellowships, research centers and grants to develop position papers and other content; training citizens to participate in government decision making; and multiplying citizens' voices at the grassroots levels and through social media. Leading philanthropists should pool their resources, using nonprofit, tax-deductible organizations, to invest at least $1 billion annually within the next two years and subsequently. Unlike the "dark money" contributions of foundations, whose aim is to weaken health and environmental protections and sow political divisions, the sources of pro-climate change philanthropy should be completely transparent.
- Convening community climate risk commissions to evaluate risk scenarios, the resilience of current infrastructure (drinking water systems, the electricity grid, subways and bridges). The outcome of this effort — ideally a collaboration of local governments with universities, nongovernmental organizations, progressive businesses and interested citizens — would be the development of a community climate plan to identify key local risks and recommended priorities and budgets for their resolution.
- Expanding the moral and ethical rationale for climate actions. The moral basis for reducing climate risks includes: self-preservation of humans and ecosystems that sustain all life forms; expanding economic opportunities that broadens the middle class, expands the social safety net and rewards investors; creating a fair and more equitable society; and protecting the earth for future generations. Coupling moral arguments with expanded economic opportunities (job creation, purchase of newer and cleaner products, investing in companies with highly rated environmental, social and governance portfolios) can unleash powerful incentives at market scale to transform enterprise management and consumer behavior to better manage climate risks.
Contemporary society already has entered the era of system-level risk from climate change. By way of context, scientists evaluating the onset of the COVID-19 pandemic have concluded that mitigation measures taken in January-February were far more effective in avoiding disease incidence and mortality than later initiatives to self-isolate and shut down non-essential economic activities.
In a similar fashion, delays in implementing climate mitigation and adaptation measures across the globe will result only in more draconian setbacks to life as we’ve come to know it. Leadership consists of mobilizing governments, businesses and citizens to support initiatives that can begin to bend the climate curve in the next two years.