With the upcoming COP26 and the increasing costs of mitigation and adaptation, one asks what does it take to tackle climate warming in the US?
The rich governments need nudging. In the first year of the Covid-19 crisis, they hoarded the vaccines for themselves and have not lived up to their 100 billion pledge to help the poor countries in climate warming. There is not much trust in developing countries that climate change is a collective matter that we are going to solve together, although developed countries have begun to recognize the issue and recently have increased both Covid-19 and climate aid.
The US government must also initiate meaningful domestic climate programs to be a credible international actor. Initiatives favoring climate improvement may have to be given higher priority over other domestic objectives. The free-rider problem exists with COP26 and some participants will probably drag their feet. Reciprocal trade tariffs on climate unfriendly imports may help. The world is not perfect, and if the US wishes to lead, it will have to be generous and flexible.
The fossil fuel industry should acknowledge its historic role in the carbon dioxide build-up and start to be part of the solution rather than the problem. The industry may need compensation for labor losses, in exchange for leaving more resources in the ground.
Consumers should recognize that they have the opportunity to give new meaning to their consumption. The emerging consumer philosophy consists of the four R's, reduce consumption, repair, reuse, and recycle. It may become a way of life for those who adhere to it regularly. It does raise numerous issues though: the extent to which this will be viewed as a threat by the advertising industry and others 'guiding' our purchases, and whether or not the reduced consumption will be compensated by higher quality (and higher prices). Psychologists tell us that relationships are fundamental to our happiness, but consumption continues to play an important role.
Republicans need to recognize that it is in their interest to save the planet. They share many objectives at the national level and need to reconnect to the conservation movement. Democrats need to help the Republicans recognize their reciprocal interests and develop programs together. Some social programs may have to take second priority to climate warming.
In any case, the social problems and climate change are interrelated and their improvement will help reduce gender and income inequality. This can help break the isolation that some groups have been facing while concentrating on their identity and related problems.
The financial industry has the responsibility to make investments in climate improvement possible. It is essential to disclose the climate-related actions that companies are taking. To date, we have no standard information about the companies' climate activities in the world's most important financial market, evidently located in the US. In 2017, the Task Force on Climate-related Financial Disclosures (TCFD) published its final recommendations, providing a framework for developing more effective climate-related financial disclosures through existing reporting processes. The framework specifies the overall governance, company strategy, risk management, and disclosure of metrics and targets used to manage the climate-related risks and opportunities.1
It has the approval of G20 and 110 regulators and governmental entities, but it is voluntary. However, this year Switzerland will require a version of TCFD for all companies listed on its exchange. Therefore, it is time that the Securities and Exchange Commission defines the public disclosure of climate activities for the listed companies. Investors have the right to know the climate activities and impacts of the companies they invest in. This transparency would also discourage the recent reported activities of Apple, Amazon, Disney, and Microsoft that are supporting groups fighting climate legislation, despite their own promises to combat climate warming.2
The other essential area is to enable pension funds to invest in companies and funds advancing climate mitigation and adaptation. Climate risk certainly is a systematic risk that the funds need to consider. The capital managed by pension funds was $19 trillion dollars in 2019, an amount equivalent to 88 percent of the US Gross Domestic Product. It is also necessary that the municipalities, which historically have financed about half of the infrastructure, be given the possibility to finance green infrastructure with taxable bonds like the successful but expired Build America Bonds, thereby competing for pension funds and other capital.3
The tech industry seemingly is concentrated on using artificial intelligence to guide our consumption. Given the short-term consequences, this is understandable, however, we risk ignoring long-term phenomena such as climate change and the relevant technological solutions it may require. Industry should define, along with governments, our long-term climate research objectives and programs. This also applies to traditional industries such as steel or cement that may utilize advanced technological processes in the future.
Naturally, the energy infrastructure must favor renewables and retire coal, oil and gas-fired systems as rapidly as possible. A decentralized model, with energy communities that sell different energy supplies at different times between and among themselves, will be possible. The more rapid the substitution, the higher the infrastructure costs, however, the climate costs are less and the health benefits are greater.
Youth should fully realize that it is their future that we are creating and take their growing responsibility in the relevant decision making, just like in Pre COP26 and the climate improvements in many of our cities. Climate change presents an opportunity to redesign the system and to reach for a planetary sense of community.4
1 Task Force on Climate-Related Financial Disclosures, 2017, Final Report, June.
2 Milman, Oliver, 2021, Apple and Disney among companies backing groups against US climate bill, October 1, The Guardian.
3 Baneman, Roger, 2021, How to Make Two Vital Tax Incentives Even Better Part II, March 30, Natural Resources Defense Council Expert Blog.
4 Francescato, Donata, 2020, Why We Need to Build a Planetary Sense of Community, Community Psychology in Global Perspective, Volume 6, Issue2/2, p 140-164.