Challenges to Tackle Climate Change
"I don't think it's realistic to say that people are utterly going to change their lifestyle because of concerns about climate." This is a statement from tech billionaire Bill Gates—also the founder of Breakthrough Energy, an investment fund for climate technology and innovation. According to him, most people won't alter their behavior in ways they find less comfortable. This barrier is called "green premiums," which are the main factor driving slow progress on climate change. Therefore, to tackle the problem, finding new, alternative ways that are more accessible to everyone might be the answer.
Green Premium is the cost difference between doing something conventionally in a method that emits greenhouse gasses and doing the same thing in a decarbonized way. For instance, if one runs an airplane with clean biofuels instead of conventional jet fuel, it will cost about 140% more to eliminate one's emissions from flying a large jet. The high price difference affects the low adoption rate of clean alternatives as most green infrastructure requires massive investment. Therefore, to accelerate the use of green energy, our priority should be to eliminate these high Green Premiums so low that even developing countries with growing energy needs and relatively scant financial resources will adopt zero-carbon ways of doing.
THE 3 LEVERS FOR CREATING NEW ALTERNATIVES
Creating better technological alternatives where it is the same price or cheaper compared to conventional things they are using to accomplish the same goal climate-consciously is a promising option. To lower Green Premiums, there are actions needed from these three levers.
Governments: policies to increase funding for clean-energy R&D that will lead to innovative new products from the private sector. They could also require a certain amount of electricity or fuel to be generated in zero-carbon ways or by putting a price on carbon emissions.
Companies: committing to buying and using cleaner alternatives, investing in R&D to reduce the cost of clean-energy products they can provide, and supporting the clean-energy entrepreneurs.
Individuals: showing there’s demand for cleaner alternative products will drive investment in research, which helps decrease the price and ultimately makes clean products more affordable and available for everyone.
For example, at the government lever, Singapore invested $87 million in water technology research and support at the Nanyang Environment and Water Research Institute. As companies and individual levers, one interesting example is the action of United Airlines in purchasing a large amount of sustainable aviation fuel (SAF). The carrier also allows its customers to select the percentage they would like to contribute to SAF used in the flight they are taking, allowing individual contributions to tackling climate change.
Lastly, as altering people’s behavior is challenged by the Green Premiums, companies should focus on eliminating these high green premiums to achieve the goal of zero-carbon emissions. By investing in creating better technological alternatives to make combatting climate change more accessible to everyone, green premiums will eventually fade away.
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