A cascade of discouraging developments continues to interfere with efforts to combat advancing climate change. The failure of COP27 to phase out fossil fuel commitments and hold nations more accountable for their emissions. The increase in coal consumption in Asian and European markets. Expanding investments in fossil fuel infrastructure. Political pressure from ultra-conservative U.S. senators and state chief financial officers to discourage investors and companies from relying upon market forces to implement investment decisions. These are but a few examples of domestic and international pressures to slow the decarbonization of the global economy.
And yet … might these and other developments represent the inevitable short-term tactics of economic and political interests whose influence is receding amidst a more fundamental transition away from fossil fuels?
When arrayed against the technological, economic and political forces now in play, I’ve become more of an optimist about humanity’s ability to dodge the more serious climate impacts forecasted for future decades and beyond.
My optimism is not a blank check for the political reordering of society or unconstrained spending. Rather, the case for climate optimism deepens when factoring in five fundamental transformations that are already underway and gaining momentum:
1. Public opinion is embedding climate actions in our political expectations. While public awareness of climate change has been building for some time, two additional factors stand out. First, the American public increasingly believes climate change should be a top priority of President Joe Biden’s administration. About 42 percent of all U.S. adults reached this conclusion. Younger voters (ages 18-29), who participated in the recent midterm elections in record numbers, endorsed this priority by 54 percent, according to an Earth Day 2022 survey by the Pew Research Center.
Second, extreme weather is changing Americans’ views about the need for action to address climate change. This is especially true of adults who have been personally impacted by extreme weather in the past five years and see climate change as a crisis or major problem (77 percent), concludes a June NPR/Robert Wood Johnson Foundation/Harvard T.H. Chan School of Public Health opinion poll. While Americans are not yet ready to significantly modify their own lifestyles to address climate change, they have crossed the important threshold of expecting political leaders to respond to a problem of increasing national urgency.
2. Critical investments at greater scale are being made. The Congressional approval of approximately $370 billion for climate and energy investments in the 2022 Inflation Reduction Act, additional funds obtained from the 2021 Infrastructure Investment and Jobs Act, and the 2022 CHIPS and Science Act all support a decade-long planning horizon for major technology and infrastructure innovations on a scale never before achieved. One focal point of this effort lies within the U.S. Department of Energy’s Loans Programs Office. Led by highly regarded entrepreneur Jigar Shah, this office oversees the planning and implementation of over $40 billion that builds a bridge to commercial financing for technologies that are ready to scale for clean energy solutions. This initiative, combined with federal grants, commercial loans from investment banks and private equity support, will provide abundant capital to underwrite an array of innovative concepts and ready-to-market solutions.
3. Government policy is slowly catching up. National policy initiatives have been proposed to report and reduce methane from oil and gas operations (U.S. Environmental Protection Agency); update the estimation of the social cost of carbon that the federal government will use across a number of policy applications (EPA); and require publicly traded companies to report on their greenhouse gas emissions as part of their fiduciary responsibilities to investors (Securities and Exchange Commission). These actions are in addition to the ongoing upgrading of energy-efficiency performance standards for appliances, buildings and transportation vehicles, and the September approval by the U.S. Senate of the Kigali Amendment to the Montreal Protocol, which will further phase out stratospheric ozone-depleting, hydrofluorocarbon-based compounds in a variety of air conditioning and refrigeration applications.
The case for climate optimism deepens when factoring in 5 fundamental transformations that are already underway and gaining momentum.
Parallel to these federal actions are an array of state and local mandates and programs. These include phasing out the use of gasoline-powered automobiles by 2035, setting a more stringent low-carbon fuel standard, and streamlining siting and permitting of renewable energy projects (California); transitioning from fossil fuels to electrification in buildings, and eliminating fugitive methane emissions in agriculture, waste and energy sectors (New York state); and continuing a rapid transition away from coal to renewable electricity and encouraging alternatives to driving (Colorado).
4. The private sector is beginning to mobilize more serious decarbonization business plans. "Business needs selfish reasons to be green," wrote financial editor Gillian Tett in the Sept. 21 Financial Times. Today, the number of enterprises responding to government tax credits, loan guarantees, grant opportunities and other financial incentives continues to multiply beyond such corporate leaders such as Unilever, Walmart and Trane Technologies. What to watch for in the future is less the net zero 2050 declarations but rather the board-level discussions and approvals of credible decarbonization plans with interim milestones accompanied by capital allocations; extending sustainability targets and governance across the supply chain with measurable results within specific time frames; producer-customer collaborations that yield both innovative solutions, and reduced carbon footprints across a variety of product and service categories; and adjusted compensation packages that incentivize executives and managers to solidify decarbonization and other sustainability commitments as a core business objective.
What is emerging from this plethora of business activities, beyond more vibrant and systematized experimentation, is the search for competitive advantage at market scale. Some big bets are evolving, such as the attempt to develop climate-friendly sources of hydrogen, and we won’t know for another decade or longer how many of them will pay off. The larger-scale application of talent and money increases the probability that — whether motivated by selfishness, principle or government policy — good results will occur.
5. The rate of carbon emissions growth is slowing. The concentration of carbon dioxide in the atmosphere reached an average monthly level of 421 parts per million in May. While this number will continue to rise, the rate of emissions increase has begun to slow, according to the Global Carbon Budget, because of a decline in the rate at which human activity generates carbon dioxide. A generation ago, greenhouse gas emissions increased by about 3 percent a year compared to less than 1 percent annually in recent years. Overall, the amount of energy required to produce a unit of GDP has fallen by over 25 percent since 2000, based on an analysis by The Economist.
Attaining big societal goals requires multiple generations of commitment. In this respect, climate protection has parallels to the ongoing campaign to strengthen human rights ...
The greater urgency to protect carbon sinks is occurring at a critical time. The election of Luis Inacio Lula da Silva as President of Brazil provides important political leadership to protect the Brazilian rainforest. This month also begins COP15 for the 2022 U.N. Biodiversity Conference in Montreal, where the focus will be on developing a new 10-year global biodiversity framework to create a nature-positive future at a time of rapidly declining plant and animal species. While COP27 received most of the world’s political and media attention, COP15 is of parallel importance and can provide significant momentum towards biodiversity protection.
Remaining focused on climate change mitigation and adaptation will be enormously challenging at a time of geopolitical disruptions that inhibit essential collaboration among major emitting countries, domestic political conflicts over intergenerational equities and values, and the persistence of a number of rent-seeking enterprises that seek to freeze or even expand the fossil fuel status quo.
Attaining big societal goals requires multiple generations of commitment. In this respect, climate protection has parallels to the ongoing campaign to strengthen human rights and the previous victory of democracies over communism.
A common denominator of seeking to achieve long-term goals is that the benefits are not principally realized by generations of people doing the heavy political lifting. Whether for selfish or moral reasons, the greater mobilization of coalitions that can yield climate progress is an essential reaffirmation of our common humanity and the ability of people to govern themselves.