4.0 going forward
Long ignored as a bi-product of the world economy, greenhouse gas emissions are now regarded as a serious liability by progressive governments and businesses alike. And at some point that liability will be translated into an effective carbon price
Narration: But concerns over meltdown of the climate are overtaking any concerns about economic meltdown.
Mindy Lubber: The collective will from all corners of the world to tackle this issue is palpable. Unlike anything we’ve seen before. The leaders of the financial community, from Goldman Sachs to Levi-Strauss are here with us today making clear committments and calling for policy changes that will be enduring. It is not just words, it is actions. Major US banks, six of the banks, join with us to call for strong policy in Paris, as well as pulling out of carbon intensive investment. We saw City [Bank] put a $ 100 billion on the table for a clean energy future, and Bank of America $125 billion. And we stood with apparel companies from Levi-Strauss to Eileen Fisher whose CEOs are now on the record saying they will hold themselves accountable for addressing climate, and they will support climate policies in ways they never have before. And global food companies, ten CEOs stood with us two weeks ago, calling for action in Paris that has very specific details around the price on carbon and moving forward. And we need to see the ratchet mechanisms, the so-called “Let’s review this every five years”, because as the science changes, the data changes, and the world changes, we will need to adjust as the world does. Put simply, if governments can provide billions of financing, and deliver an ambitious final agreement, it will send the right market signals, and we will then see investors and business unlock the very real trillions of dollars a year we need to build a sustainable economy.
Narration: And those in a position to build a sustainable economy know that it is a tall order, and there’s no silver bullet.
David G. Victor: There are literally a million different things in any modern economy that need to happen to make big reductions in emissions over a 30, 40, 50-year period which is the time scale that’s relevant here.
One thing governments can do is send a clear price signal
. And as a compliment to prices, we need sometimes direct regulation as well. We need information schemes, because sometimes companies don’t change from one kind of technology to another kind of technology because they just don’t know. That’s especially true for households. People who run households are busy, they’ve got kids, they don’t have time to go off and do full dissertation on every new technology that becomes available. And so one of the things we’ve learned is that if government wants new technology to be diffused into the marketplace more rapidly, it can help provide information, direct incentives and subsidies in some cases, and so on, and so it’s that whole suite of policies, where prices are at the centre, but there are complimentary policies as well that really ultimately change behavior.
4.1 key takeaways
Well the fundamental difficulty is that fossil fuels are presently the cheapest energy. But they’re cheapest only because they don’t pay for their cost to society. So we should put a tax, a fee, on fossil fuels. And frankly we should distribute that money to the public
uniformly so the people who burn less than average amount of fossil fuels would actually get more in the dividend than they would pay in increased energy prices. And in that way we could move toward clean energies, because clean energies and energy efficiency could then compete with the fossil fuels and we would gradually move off of fossil fuels to the clean energies of the future. Which we’re going to have to do anyhow at some point. Fossil fuels are finite.
There’s a famous definition of the difference between an optimist and pessimist. James Branch Cabell
once said that the optimist thinks we live in the best of all possible worlds and the pessimist fears this is true. [laughs] And so, in that sense I’d admit to being a pessimist. You know this isn’t the world we want. What we have now, it better not be the best of all possible worlds because we’ve got to make it better. And so in that sense, that’s a legitimate fear, but I don’t think that should paralyze us.