On our journey to net zero, the biggest obstacle to reaching our destination
is people. The world’s population is not on a level playing field; and
regardless of the levers pulled to address the problem, the consequences of
climate change are not distributed equally.
The consequences of clinging to the status quo are, however, distributed without
prejudice. One only needs to catch a glance at the orange haze across any major
city skyline on a hot summer day to know what they are seeing is not good.
COVID-19 served as a stark wake-up call — underscoring how interconnected
our world is in terms of our public health, supply chains and our impact on the
earth. We marveled at how our urban environments can quickly rebound to cleaner
air and clearer skies when human activity is restricted, which offered an
encouraging glimpse of what could be achieved with concerted efforts towards
sustainability.
The world’s national powers have finally begun to acknowledge the necessity of a
clean-energy
transition
and have begun the decades-long process of shifting from fossil fuels to
renewable
and
circular
energy solutions.
But we are not merely a world of nations; we are a world of human beings — and
neither nations nor their populations live on equal footing. As nations,
policymakers, regulators and corporations continue to reimagine ways to
sustainably power our daily lives, they should also prioritize the human element
in forging a just transition that properly considers the interdependent nature
of all societies, cultures and economies. Simply put, everybody is connected;
let’s use that interconnectivity to all of our advantages.
Opportunity, innovation and the price thereof
Prior to the industrial revolution, energy consumption was mostly renewable
wind- and water-powered; but progress crawled and life expectancy was low.
Unlocking the power of carbon-based energy sources released unimaginable
opportunity and an explosion of innovation. Developed nations have made
incredible advances in science, technology, healthcare and rising standards of
living; yet, every aspect of progress drains natural resources — some finite and
others renewable. The monumental advancements in industrialized nations over the
past century-and-a-half has come at a cost, but these nations are not the only
ones that have received the bill.
Can renewable energy enable progress in developing nations?
We now find ourselves at a crossroads. Societies that have benefitted from these
technological advances don’t want to give them up, and societies on the upswing
are eager to catch up. Developing nations are seeking the same better
healthcare, automation and economic opportunities that world powers have long
been enjoying. All of this creates an increased demand for energy and fossil
fuels
at the exact same time we are trying to phase them out. Fossil fuels are
currently the most efficient way to keep up and catch up.
Renewable energy sources have made significant advances over the past three
decades but don’t come close to satisfying the burgeoning demand. Our global
initiatives must consider the future of developing
societies
as we strive for net zero.
Good intentions vs constant crises
Following the mainstream media on this topic will give you whiplash. With the
best of intentions, nations across the globe sign formal commitments for
ambitious climate
targets.
Local governments launch recycling programs, aiming to reduce landfill
expansion. Corporations announce sustainability mission statements with
published targets that reflect well on the brand.
Then, reality shows up. We have been living in an era of perpetual crises and
disruption.
Global economic events force nations to delay spending money on reaching climate
targets to meet the demands of voters for social safety net expansion, jobs and
everything in between — taxpayers want police protection, teachers need to get
paid, and public health systems need to function as promised.
Reconciling contradictory forces on the road to net zero
Then, there is the challenge in reconciling the urgency of cutting GHG
emissions
with profitability. Corporations have invested billions to find solutions to
reduce resource consumption in their production processes and reduce waste from
their products. Here again, the reality of consumer demand for faster, newer,
safer and cheaper goods often doesn’t square with using less energy to produce
them.
Electric vehicles are an excellent example: They may not need petroleum to run,
but they do require oil-based products to manufacture — which requires the
pumping of more oil. These vehicles are powered by
batteries,
which require the mining of critical metals such as lithium — which expends
large amounts of heat, water, energy; and yes, produces emissions. It’s a cruel
fact that even when you try to be “green,” carbon-based fuels are at the source
of just about everything.
Understanding market dynamics and trade-offs for better decision making
The interdependent nature of our global energy, materials and consumer products
markets and supply chains requires a new level of precision data management.
Perhaps the answer lies with following the energy molecules and chemicals that
go into everything we use.
In recent years, the ability to track and trace the
production, distribution and consumption of goods around the globe has become
very sophisticated. Plenty of businesses have emerged to meet market demand to
understand the complex ecosystems that put food on our
table,
power our
cities
and provide the materials to build our
infrastructure.
With this data, consumers and governments can make better decisions about the
trade-offs of their choices and policy decisions. Moreover, corporations can
reflect the social and environmental cost of these ecosystems on their balance
sheets and accurately forecast what trade-offs people are willing to make to
reduce reliance on fossil fuels.
The road to a just energy transformation
This energy transformation crossroads is a chance for humanity to do it right
this time. There are no quick fixes.
Imagine a scenario where the world’s two largest economies (China and the
US) collaborate with the oil majors of the Middle East to find a
sustainable economic solution to operate within planetary boundaries. Such a
coalition could harness the available resources to create a comprehensive
strategy that balances economic growth with environmental stewardship and
ensure a just transition for
all.
The data is available to make sense of it all — now, we need the will of the
people to make it happen.
By fostering a shared commitment to sustainable development that is interwoven
with social equity, we can pave the way for long-term, profitable solutions that benefit
both current and future generations worldwide.
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CEO, ICIS
Jeff Skelton is CEO of ICIS — a provider of information and analytics for the global commodities markets.
Published Nov 27, 2024 7am EST / 4am PST / 12pm GMT / 1pm CET