Hi Arjun. I was on holiday when I first read your post, but wanted to make a few observations if I may.
1) SoH crisis and net zero
Very few people in 2021 were arguing for net zero primarily based on geopolitical and energy security concerns. Sure it was a supporting argument in favour of reducing reliance on fossil fuels, but climate concerns - limiting global warming to 1.5°C - was the main driver. It's worth recapping that the IPCC concluded that global carbon dioxide emissions would need to decline by about 45% from 2010 levels by 2030 and reach global net-zero around 2050.
I think the bigger issue will be whether the SoH crisis forces a change similar to that observed after the 1970 oil crises. As Carlye highlight in a recent report, when energy security concerns were at the top of governments agendas (1973-1993), clean energy capacity (renewables and nuclear) was added at a rate 30 basis points faster than during the period they term the Net Zero era (2014 to 2024).
Sometimes the more powerful narrative for change is tugging on the strings that matter to people and those in charge in the short to medium term. If so we might see policies that are tied to achieving multiple objectives: affordable and secure energy needs, cleaner air, and lower carbon emissions.
2) No company (or country) is a net zero island
The organising economic principle has been for individual companies and countries to pursue net zero by 2050, irrespective of their ability to do so, or indeed whether it makes sense economically. I agree that this was taken too far, and that what we're now beginning to see is a more sensible approach. Tough on carbon, but tougher on the causes of carbon emissions.
We're starting to see a move towards companies addressing what they can control, and now being incentivised to push for systemic change on issues that are beyond their control. For example, electrification is one pathway to industrial decarbonisation, but an individual company can do little to invest in the infrastructure necessary to achieve this.
More broadly, at the country level, there's a case for countries who have invested in decarbonisation to sell their expertise to those parts of the world where there is a bigger bang per buck. Countries such as India where emissions are expected to rise rapidly, but the gains in terms of CO2 emissions avoided are much higher than those available domestically to countries like the UK, Germany etc.
Carbon markets have a role in incentivising and facilitating this transfer of economic value in return for carbon abatement, both at the company and country level. But at the moment, jurisdictions such as the EU are moving far too slowly, only recently signalling a role for international credits sometime in the late 2030's.
3) Economic development and lower pollution
Yes, economic development is correlated with improvements in clean air and water quality, but that doesn't mean its a given that this will be the case in the future. The most notable gains in the past have been when a groundswell of public dissatisfaction forced governments to enact policies to curb pollution.
Think of the Great Stink of 1858 London and almost a century later, the Great Smog of 1952. Both events prompted the authorities to improve the city's sewage system and enact rules that restrict burning of the most polluting types of coal, respectively. More recently, Beijing's 'airpocalypse' of 2013 led authorities to impose strict pollution limits and forced an overhaul of the practices of heavy industry.
Moreover, while the USA has been a star economic performer in recent years, pollution standards have been loosened or withdrawn entirely. My point is that you need 'activists' in whatever shape or form that represents to make the case and pressure for change. It doesn't just happen, and it can easily reverse if no one is there to hold government to account.
Thanks, Arjun. I greatly enjoyed my time in the Indian Guides. They are less damaging than the Net Zero activists, but in my view the small, activist minority that considers it wrong to name organizations or things after Native Americans or their groups has had a notable negative impact on the quality of life in the US.
Thank you Paul! I remember learning about Native American history, including some of the horrific realities they faced from the settling of this nation. It was all good to learn. I don't understand this new perspective of removing Native American naming.
Hi Arjun. I was on holiday when I first read your post, but wanted to make a few observations if I may.
1) SoH crisis and net zero
Very few people in 2021 were arguing for net zero primarily based on geopolitical and energy security concerns. Sure it was a supporting argument in favour of reducing reliance on fossil fuels, but climate concerns - limiting global warming to 1.5°C - was the main driver. It's worth recapping that the IPCC concluded that global carbon dioxide emissions would need to decline by about 45% from 2010 levels by 2030 and reach global net-zero around 2050.
I think the bigger issue will be whether the SoH crisis forces a change similar to that observed after the 1970 oil crises. As Carlye highlight in a recent report, when energy security concerns were at the top of governments agendas (1973-1993), clean energy capacity (renewables and nuclear) was added at a rate 30 basis points faster than during the period they term the Net Zero era (2014 to 2024).
Sometimes the more powerful narrative for change is tugging on the strings that matter to people and those in charge in the short to medium term. If so we might see policies that are tied to achieving multiple objectives: affordable and secure energy needs, cleaner air, and lower carbon emissions.
2) No company (or country) is a net zero island
The organising economic principle has been for individual companies and countries to pursue net zero by 2050, irrespective of their ability to do so, or indeed whether it makes sense economically. I agree that this was taken too far, and that what we're now beginning to see is a more sensible approach. Tough on carbon, but tougher on the causes of carbon emissions.
We're starting to see a move towards companies addressing what they can control, and now being incentivised to push for systemic change on issues that are beyond their control. For example, electrification is one pathway to industrial decarbonisation, but an individual company can do little to invest in the infrastructure necessary to achieve this.
More broadly, at the country level, there's a case for countries who have invested in decarbonisation to sell their expertise to those parts of the world where there is a bigger bang per buck. Countries such as India where emissions are expected to rise rapidly, but the gains in terms of CO2 emissions avoided are much higher than those available domestically to countries like the UK, Germany etc.
Carbon markets have a role in incentivising and facilitating this transfer of economic value in return for carbon abatement, both at the company and country level. But at the moment, jurisdictions such as the EU are moving far too slowly, only recently signalling a role for international credits sometime in the late 2030's.
3) Economic development and lower pollution
Yes, economic development is correlated with improvements in clean air and water quality, but that doesn't mean its a given that this will be the case in the future. The most notable gains in the past have been when a groundswell of public dissatisfaction forced governments to enact policies to curb pollution.
Think of the Great Stink of 1858 London and almost a century later, the Great Smog of 1952. Both events prompted the authorities to improve the city's sewage system and enact rules that restrict burning of the most polluting types of coal, respectively. More recently, Beijing's 'airpocalypse' of 2013 led authorities to impose strict pollution limits and forced an overhaul of the practices of heavy industry.
Moreover, while the USA has been a star economic performer in recent years, pollution standards have been loosened or withdrawn entirely. My point is that you need 'activists' in whatever shape or form that represents to make the case and pressure for change. It doesn't just happen, and it can easily reverse if no one is there to hold government to account.
Thanks, Arjun. I greatly enjoyed my time in the Indian Guides. They are less damaging than the Net Zero activists, but in my view the small, activist minority that considers it wrong to name organizations or things after Native Americans or their groups has had a notable negative impact on the quality of life in the US.
Thank you Paul! I remember learning about Native American history, including some of the horrific realities they faced from the settling of this nation. It was all good to learn. I don't understand this new perspective of removing Native American naming.