Greenhouse gas (GHG) emissions have already warmed our planet about 1°C above pre-industrial levels. Without much stronger action to cut emissions, average global temperatures are expected to rise more than 3°C by the year 2100, harming human health, threatening crop yields, raising the sea level, and inflicting far more economic damage than COVID-19.
Contributor: John Sterman
03 Feb 2022
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According to a simulation model1 developed by MIT's John Sterman, together with non-profit organization Climate Interactive, governments and corporations can limit the damage of greenhouse gases by doubling down on green technologies and diversifying away from fossil fuels. Here, Professor Sterman maps out his “3 Point Perspective” on reducing climate change as part of Barclays Asia Forum 2021, our flagship client event series in Asia Pacific.
1. Technological breakthroughs won’t save us
Optimists count on major breakthroughs in new zero-carbon technologies (e.g. nuclear fusion) to solve climate change. But breakthroughs cannot be scheduled. And even if there is a major breakthrough, it will take decades to create working prototypes, demonstrate safety, obtain approvals, build the supply chain, and scale up for global execution—even without local community opposition to deployment. All the while, continuing fossil fuel use would keep releasing carbon dioxide (CO2) into the atmosphere, worsening climate change for a century or more. The simulation below shows global warming well above 3°C by 2100—even if there’s a major breakthrough in 2025. Just as a dollar today is worth more than a dollar in 2050, cutting emissions today is more valuable than cutting in 2050. Effective solutions for climate change focus on cutting emissions as quickly as possible, without illusory offsets2.
Barclays Asia Forum 2021 brings together a range of policymakers, business leaders and visionaries to discuss how to step back from the brink and start meeting in the middle.
2. There are solutions, and all nations must contribute
There is no single, silver bullet solution for climate change. But there are “silver buckshot”— actions that, together, can cut emissions fast enough to give us a chance of limiting warming to no more than 2°C above pre-industrial temperatures. Carbon dioxide from burning fossil fuels is the largest contributor to climate change. Eliminating coal, the most carbon-intensive fuel, is essential.
Renewables must be incentivised to fill the gap as we cut fossil fuels. The transport, building, and industrial sectors must decarbonise and become much more efficient. We must stop deforestation, and rapidly cut emissions of methane, nitrous oxide, and other non-CO2 GHGs. These actions will not only mitigate global warming, but can limit extreme weather, deadly heat, and crop failures, slow sea level rise, and improve air quality—boosting economic growth, lowering healthcare costs, and building a stronger, more resilient society.
Developing nations correctly note that developed nations have contributed the largest share of emissions to date and demand that they cut emissions, while their pledges in Paris and Glasgow allow them to keep using fossil fuels. However, even if all developed nations could instantly cut their emissions to zero, developing nations’ pledges would still cause warming well above 2°C (see below), harming everyone, especially the people of developing nations, who have the least resources to adapt. Every country must cut as aggressively and as soon as possible. Developed nations have both the duty and self-interest to provide emerging states with the technology, investment, and funding to do so.
3. Use tools that preserve freedom and opportunity
Energy-efficiency and carbon pricing are especially important tools in the fight against climate change.
Improving energy efficiency in transport3, industry4, housing5, and commercial6 buildings is critical. What people want and need is to be warm in winter, cool in summer, have light when it’s dark, enjoy equitable access to meaningful employment, education, healthcare, and other opportunities. Boosting end-use efficiency7 is the fastest, safest, and cheapest way to cut emissions and provide people with what they want and need.
Carbon pricing8 is particularly effective. Pricing carbon pollution creates incentives promoting efficiency throughout the economy, speeds the transition from fossil to renewable energy, and stimulates innovation for sustainability. Most importantly, it preserves freedom of choice—individuals and companies are free to choose how they live and operate, but face fossil energy prices closer to their true costs.
To avoid the regressive impact of a carbon price, the revenue should be returned to the people as a “carbon dividend9.” Developing countries and the disadvantaged everywhere will benefit because their carbon footprints are lower than those of the privileged. Cynics say it is politically impossible to implement carbon taxes or prices. In fact, 65 nations10 or subnational entities already price carbon, covering more than 20% of global emissions. Coverage and prices need to increase, but anything that exists is possible.
So, is there hope? The climate crisis is real and demands immediate action. It’s not too late, but there’s no time to waste. Not only do we have the means to cut emissions, it is in our economic and business interest to do so. The greatest dangers are denial, despair, and delay. Hope is not the naïve belief that a technological breakthrough will save us. Hope11 is the stance that what we do, individually and collectively, matters—backed up by action. We’ve met tougher challenges before12. Let’s get moving.
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About the expert
Director, MIT System Dynamics Group
John Sterman is the Jay W. Forrester Professor of Management at the MIT Sloan School of Management, Professor in MIT’s Institute for Data, Systems and Society, and director of the MIT System Dynamics Group and MIT Sloan Sustainability Initiative. Professor Sterman has published over 200 works spanning corporate strategy and operations, energy policy, public health, and climate change. Author of award-winning books and papers, he pioneered the development of interactive “management flight simulators” of corporate and economic systems, which are now used by governments, corporations, and universities around the world. These include the C-ROADS and En-ROADS energy and climate policy simulations, developed in partnership with the non-profit, Climate Interactive, used by policymakers, negotiators, business and civil society leaders, educators and the public around the world.
Professor Sterman is an elected fellow of the American Association for the Advancement of Science and has been recognized for his work with an honorary doctorate and numerous other honours, including eight awards for teaching excellence at MIT. His work is often featured in the media, from the New York Times, Washington Post, and National Public Radio to China’s CGTN. Professor Sterman holds an AB in engineering and environmental systems from Dartmouth College and a PhD in system dynamics from MIT.