The Challenge - We're Behind
1 billion tons of CO2. That’s the global emissions reduction target we need to hit to keep us from a 1.5 C – 2.0 C increase in our average temperature. That would effectively require us to reduce our global emissions by 7.6% every year until 2030 and about 2% thereafter.
Unfortunately, we’re behind. Most developed nations like the EU, US, and Japan are reducing emissions while many of the developing countries in the rest of the world are increasing emissions. The COVID-19 lockdowns resulted in a 7% global reduction in CO2, close to our target. If there’s any silver lining in the pandemic – this is it. The pandemic has taught us how steep the cuts must be in order to meet our goals.
Emission Cuts at Any Price?
Some people have taken the position that we must make emissions cuts at almost any price, even if installing certain renewable technologies causes electricity prices become unaffordable for some. When pressed about what our poorest communities do in hot summers and cold winters when they can no longer afford heat or air conditioning, the attitude is almost that some sacrifices must be made. One’s view of the current climate situation must either be truly dire, almost despair, or simply cruel to have this view.
My Optimism - Cooperation & Innovation
I’m still optimistic that a pandemic-free world can meet these goals. My optimism comes from my hope in our ability as people to cooperate and our ability to innovate. As I’ve talked with people in different industries and beliefs about climate change, one thing is clear – everyone is working towards emissions reductions now. The financial community is finally actively engaged (even if sometimes lacking a good understanding in my opinion), especially after the $7 trillion asset manager BlackRock made climate change a key part of its investment strategy. Now we have the main functions working the problem – scientists/engineers on the technology, the financial community on financing, and media companies actively marketing the problem.
Not everyone is working towards the same goals yet. There are still divisions about the role of fossil fuels in our future economy and their place in energy production or transportation, let alone the timing of major shifts. Are fossil fuels only transitory? Does the fossil fuel industry have a long-term future, irrespective of our ability to find more (the U.S. still has 250 billion short tons of recoverable coal per the EIA, enough to power U.S. coal plants for over 400 years).
Developed Nations Show A Path Forward
Fortunately, many developed nations have shown the world a pathway to grow economies while still reducing emissions. Data from 2019 from the IEA shows that from 2018 – 2019 the EU reduced emission by about 150 MT CO2 and the US by 140 MT. These are short of the goal, but progress is more likely to look like an S-curve as new technologies are adopted more than a straight line. Many of these reductions come from technological advances such as combined cycle natural gas power plants, solar, wind, and others. These are technologies that developing nations can immediately adopt, bypassing the emissions growth that many of the developed nations experienced.
And technologies keep advancing. As I’ve studied emerging energy technologies, the playing field is becoming more diverse with numerous new technologies either recently commercialized or on the cusp of commercialization. Fortunately, most of the climate temperature projection models aren’t factoring in the amount of innovation I think is possible.
Knowledge of New Technologies Critical for Commercializing Them
Like Bill Gates , I’m optimistic in our ability to accelerate innovation to solve this problem. Unfortunately, most new businesses fail, and the U.S. are not used to new industrial technologies as digital has dominated the stage. Investors and marketers will need to really expand our thought processes, understanding, and teams to be able to accurately assess and invest in the right start-ups. Policy makers and society as a whole will need to understand these technologies and how our energy system generally works, otherwise we’ll only allow certain technologies to grow. I’ve seen too many grants and tax incentives that specify “solar” or “wind” when another zero-emission technology could benefit from the same incentive which was the intention. I believe it’s simply lack of knowledge about what’s out there that leads to such barriers to accelerating low-carbon innovation (this is also my main concern about Bill Gates’s green energy venture company Breakthrough Energy).
That’s one of the main reasons I’ve started this blog – to shine light on some of the many new technologies that are working to solve serious problems and to help us as voters, investors, and employees make informed decisions to do what we can too.
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