15 results
Conclusion: Speaking With One Voice
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 171-174
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Summary
It is accepted on every continent that we must transition the global economy to net zero. Other than widespread targetsetting, there is not much coherence in global policy-making. Every time we pick up a book on climate change we go straight to the section on what to do about it. Our typical reaction is disappointment. Recommendations range from banal suggestions that we should “find our individual purpose” to implausible ambitions for a complex global carbon tax. A frustration with these proposals helped to motivate us.
This book is all about what to do. We don't need to convince anyone of the urgency. All the major economies of the world are trying to reduce emissions. There is also a clear and emerging consensus on what needs to be done. It doesn't involve a complete overhaul of every individual's lifestyle. It doesn't involve the end of capitalism, reductions in incomes, or huge taxes. We need to start by making two things happen quickly: make electricity sustainable, and run everything off electricity. Everyone should know this, and help make it happen.
Our critique is directed at a lack of realism in the current tactics. Realism about human psychology, business and politics. Human beings only change behaviour if their options are cheaper, more convenient and socially normalized. Businesses only change behaviour if they make more money, or if it's made illegal. Policies should follow the golden rules: effective, simple and non-partisan. Far too much energy in climate mitigation is going into efforts that misconstrue these realities.
Supercharge Me is a manual to rapidly collapse emissions. Currently, we are not investing fast enough to halve emissions by 2030 and prevent an increase in global temperatures above 1.5°C. If the policies we describe are implemented, this goal is within range, and shorter timelines are realistic. We are not saying it is easy to electrify everything. It requires huge global investment to overhaul the capital base of the global economy. What we are saying is that it is very doable and already happening, in some cases quite quickly. We have most of the technology we need.
An investment boom on this scale is very likely to make most of the global population better off, and the states that fund it will be wealthier. Given the scale of the threat, and the vast ancillary benefits, we need to move much faster.
1 - Supercharging: What is it?
- Eric Lonergan, Corinne Sawers
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- Book:
- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 9-34
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Summary
“A striking difference between commitments under NATO, and commitments under the Kyoto Protocol is the difference between commitment to actions and commitment to results.” Thomas Schelling
Eric: What is “supercharging”?
Corinne: Supercharging is an action plan to accelerate the decarbonization of the global economy. It is based on realistic assumptions about the motivations of individuals, businesses and governments. Serious targets are now embraced by Europe, the United States, China, and India. The goal is to prevent the earth's temperature from rising more than 1.5°C. A huge amount is happening, but the current trajectory of decarbonization falls far short of this ambition. The striking omission is a coherent framework for action. Supercharging is not about targets, but actions. At every point, we ask: What can be done to reduce emissions rapidly, based on a realistic view of how individuals, businesses and politics work? Highly complex global carbon taxes, or trivial advice on lifestyle changes, don't cut it. Taxes which work in the textbook often fail in reality, global lifestyle shifts don't even appear in theory. We need to refocus every area of policy to replicate the extreme successes in pockets of the world where rapid growth in sustainable energy is occurring, and where consumers are voluntarily switching purchasing decisions en masse. There are already successes in parts of China, India, Europe and the United States which prove that we have the technology and the resources to collapse emissions. If these models are replicated, if we supercharge the global economy, we will not only have sustainable economies and cleaner air, there are also very good reasons to believe that we will have higher incomes.
Eric: History shows that technology-led transformation of our economies greatly improves the quality of our lives and our living standards. The green transition should be no different. This is not idealistic. There will be some losers, particularly owners of fossil fuel assets. Fortunately, in most of the world these assets are largely in the hands of three groups: thugocracies, theocracies, and a fraction of the “1 per cent”. The overwhelming majority of the planet need not worry about the value of these assets falling towards zero.
Corinne: In order to supercharge the world, we need a clear diagnosis of the problem, a theory of change, and very smart policies. How would you summarize the problem?
Eric: Climate change is sometimes described as a “wicked problem”.
Index
- Eric Lonergan, Corinne Sawers
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- Book:
- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 213-221
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Contents
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp v-vi
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7 - Why This is Not a Book About Trees
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 157-170
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Eric: “Planting trees could be the number one super-weapon in tackling climate change.” This was the headline-grabbing summary of a research paper published in the journal Science recently. Greta Thunberg put the conclusions in context: we need trees, but we really need to keep fossil fuels in the ground. Trees and methane are two notable omissions from our discussion so far. Let's start with trees, and then take on cows. So far, there is a clear structure to our argument: work out how significant a contribution every sector is to man-made emissions, assess how tractable it is to solutions, and then apply EPICs, smart regulations or other smart policies. So, what contribution do forests make to global emissions?
Corinne: Everything we have argued for so far involves reducing how much CO2 we emit into the atmosphere every year – restricting sources of carbon. There is a separate class of factors which can absorb CO2 from the atmosphere. These are natural “carbon sinks”, such as trees, soil and oceans, and man-made technologies, such as carbon capture and storage. Forests sit in this category. Everyone knows we need to stop the deforestation of the tropics. If you have ever purchased a “carbon offset” when you book a flight, this may well have involved planting trees.
Eric: How should we think about nature-based carbon sinks compared to all the emissions we are trying to abate?
Corinne: It is very hard to measure the effect of carbon sinks with accuracy, so the range of estimates is very wide. Oceans are estimated to capture between 25–30 per cent of annual emissions. Forests absorb somewhere between 5 and 15 per cent of man-made emissions. To put both in context, the steel industry alone generates 8 per cent of global emissions. So Greta's summary is correct. Trees are good, but we cannot rely on capture, we need to keep the fossil fuels in the ground.
Eric: If forests absorb so much less than oceans, why do we hear so much more about planting trees than protecting the oceans?
Corinne: There is a huge amount we can and should be doing to protect oceans: eradicating plastic and microplastic pollution, heavy metal pollution, overfishing. These are extremely important to the health of the oceans and the preservation of biodiversity, but the ocean's specific ability to absorb carbon emissions is largely out of our control.
6 - Supercharge the World
- Eric Lonergan, Corinne Sawers
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- Book:
- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 133-156
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Corinne: We have tried to ground supercharging in pragmatism. We have proposed policies consistent with an honest take on political, social, psychological and economic reality. Before we describe our proposals to supercharge the world, we need a blunt assessment of the constraints on global policy-making. Global politics often feels like a chaotic set of events that don’t make sense, but we can observe some very common threads. Our friend, Mark Blyth, describes the world pithily: “The era of neoliberalism is over. The era of neo-nationalism has just begun.” You and Mark discuss the emergence of the era of nationalism extensively in Angrynomics. One way to make sense of politics is to think in terms of trends and the incentive structures that politicians are operating under. The simplest incentive politicians have is to get elected. Let's discuss what neo-nationalism is, and how it influences that incentive to get elected.
Eric: In representative democracies where elections are often swayed by the votes of relatively small minorities, using nationalism to swing a decisive minority of the electorate is an obvious strategy for politicians to exploit. It is also striking that a political system like China’s, which does not hold national-level elections, also harnesses anti-other ideology (usually anti-America) to unify and motivate the domestic population. Tribalism is a motivating instinct which is very easy to switch on. We see this within advanced economies like the UK, we see this in former communist countries like Poland and Hungary, and we see this in emerging economies like Turkey and Russia. Trump's “Make America Great Again” adds nostalgia to Berlusconi's slogan, “Forza Italia”. Tribalism is an electoral and political strategy either to disguise the true agenda, or to compensate for an intellectual vacuum.
Corinne: How does this compare to the era of neoliberalism?
Eric: The era of neoliberalism broadly refers to a period from the early 1980s until the mid-2000s. It was defined by a shared set of economic beliefs across the western developed world, and from the late 1980s, across former communist countries as well. This period was defined by a consensus in economic policy, devolving control of industry to the private sector, increasing the role of markets in labour and product markets, and retaining a narrowly-defined role for the state.
Corinne: The role of the state being technocratic governance of economic policy, with varying degrees of welfare provision.
Frontmatter
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp i-iv
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3 - Money Gets the Message
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 59-80
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Corinne: Eric, you have analysed the effects of the environmental wave in financial markets. Can you give us a snapshot of what you see, and why you think it is happening? Then we can get to the crux of the matter. How do we harness these forces for supercharging the green transition?
Eric: A focus on environmental investing has gripped financial markets, particularly in Europe. Huge changes are occurring, in a way that is very similar to your description of corporate change. There is evidence of environmental factors affecting stock prices and bond yields. You identify this as a motivation for companies to change behaviour. I couldn't agree more. CEOs and boards obsess on their stock price, not least because it affects their personal finances.
Corinne: Why is this happening now?
Eric: There are three reasons. Social norms are changing, regulatory changes have been introduced, and stocks perceived to be environmentally friendly have outperformed the market.ESG stands for “Environmental, Social and Governance”, and has become the buzzword in finance for investing with a conscience. The trend completely mirrors your description of the change in corporate culture. The shift in beliefs in the past two years has been rapid. It feels similar to the dot-com boom when in the space of a couple of years something that was originally the domain of geeks started to dominate all discourse. The same thing has happened with green investing. Two years ago, clients rarely raised the issue of sustainability within investment portfolios. Now it comes up in every meeting. If we go back ten years, the only serious work in this area was in the area of “impact investing”.
Corinne: Impact investing targets the social return as well as a financial return.
Eric: That's right. Prior to 2019, investors who were focused on the environmental and social effects of investments were operating in a niche. The big change is in public markets. Public markets include the stock market and the bond market, where securities are listed, priced and traded. Outside of the banking system, public markets are by far the largest part of the financial sector. The value of global stock markets exceeds $100 trillion. Bond markets, where the world's largest businesses and governments borrow, are even larger than this. Pension funds, insurance companies and international investors invest trillions of dollars globally in these markets.
4 - Supercharge the Individual
- Eric Lonergan, Corinne Sawers
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- Book:
- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 81-100
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Corinne: The more you think about climate change, the more you start thinking that you need to change everything in your life. Even when I’m on my smartphone, I can't help thinking: How much energy was used to make this? How much fuel was consumed to mine the metals, or transport the components from China, California, Malaysia, Taiwan? How much energy is required to heat the Apple store? How much electricity is used to charge the battery? It is hardly surprising that many climate activists conclude that everything in our behaviour, habits and lifestyles needs to change. This also makes the challenge feel insurmountable. At the other extreme, the Canadian climate economist, Mark Jaccard, has written that the focus on the need for individual lifestyle change is a myth.
Eric: Individual lifestyle decisions are often a central element of “solutions” in climate campaigns. This approach often reads more like a wish-list than a focused strategy for social change. The real challenge is delivering a huge global investment drive to make electricity sustainable and electrify all energy use. The implicit view of psychology is also naive. Changing behaviour is not as simple as responding to ethical arguments and lists in books. And yet, as we mentioned in Chapter 1, there are some important areas where we may not be able to rely on either investment or new technology, and we do need to change behaviour. In which case we need a realistic understanding of social change and behavioural psychology.
Corinne: The typical to-do list says “eat less meat”, “car share” and “consume less”. On the fuzzy end of the spectrum, we’re advised to practice mindfulness, plant trees, and work to find our purpose. There's something fundamentally unhelpful about much of this, which is worth being blunt about. Even the engaged, informed and the motivated don't change their behaviours like this. I have a guilty history of susceptibility to fast fashion. I have to fight the thrill of filling a digital basket with cheap fashion goodies, the big bag arriving, and new outfits galore. You get a serotonin hit from it. Marketing strategies play on the precise psychological traits that Dan Ariely describes. I’ve managed to quit fast fashion now, but I still struggle to wean myself off the odd burger. The recommendations in books like How To Avoid A Climate Disaster, or The Future We Choose, are spot on.
2 - Corporate Philosophers
- Eric Lonergan, Corinne Sawers
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- Book:
- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 35-58
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Eric: When it comes to climate change most people think capitalism is part of the problem, that the profit motive pays no regard to the planet. So, Corinne, when did this change?
Corinne: During lockdown.
Eric: Your view is that an irreversible culture change is occurring. Is that right, and if so why?
Corinne: If you had told me five years ago that in 2022 most major financial firms and banks would have signed up to getting their “financed emissions” down to net zero by 2050, that the big oil companies would be transitioning to renewables, that consumer goods companies would have started the hard work of reducing emissions across their supply chains, I would not have believed you. Well, they are. We need to understand why, we need a concrete measure for what they’re doing, and we need to work out how to supercharge the process. This culture change means that the private sector is primed to be highly responsive to smart policies. That's the opportunity, we must not miss it.
Eric: So why has global capitalism suddenly woken up to the reality that it is destroying the planet?
Corinne: Rebecca Henderson opens her book Reimagining Capitalism with a quote from the biologist Edward Wilson: “We have paleolithic emotions, mediaeval institutions, and godlike technology”. That is not something we are going to change. So if we are to accelerate this transformation of the economy, we need to shift incentives in a way that is realistic about how human beings operate. This same insight holds for corporations.
Eric: Are businesses also motivated by paleolithic emotions?
Corinne: Yes. The corporate version is profit and loss. That’s the key operating logic of business – making money.
Eric: So explain the relationship between responding to the climate crisis and making money. Why has business decided that cutting emissions will boost the bottom line? Isn't the opposite more plausible, that there's a tension between profitable growth and acting on climate?
Corinne: That framing is too simplistic. Three discrete forces are at work, all of which affect company profits and the incentives of senior executives. Share prices are already being impacted by environmental factors. This is a huge motivator. Stock prices determine companies’ ability to access capital for funding their businesses, the cost of making acquisitions, and many executives’ remuneration is linked to the stock price.
Acknowledgements
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp vii-x
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Notes
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- 20 January 2024
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- 24 February 2022, pp 175-212
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5 - Supercharge the Nation
- Eric Lonergan, Corinne Sawers
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- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 101-132
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Eric: Let's summarize the argument so far. We have discussed the rapid cultural changes in global business, and the ESG wave in financial markets. Europe appears to be advancing most rapidly in both these areas, but the effects are being felt globally, and are spreading. Politics is also catching up. China, under Premier Xi, the United States, under President Biden, and India, under Prime Minister Modi, are also shifting rapidly. There is a consensus that we all need to move faster. We have outlined a set of principles for smart policy-making to accelerate the transition.
Corinne: Yes, we have shown that the best policies are simple, effective and non-partisan. We have provided a framework for categorizing the challenges specific to climate change: simple maths, mini-Musks and herding sheep. We have also provided concrete proposals, such as contingent carbon taxes, EPICs aimed at the relative price of green substitutes, green sectoral trade agreements, all of which aim to tilt the playing field in favour of sustainable businesses that are driving the decarbonization of our economy. We have explained how to mitigate free-riding and greenwashing in financial markets. We concluded from these discussions that the effects of policy interventions will be amplified because financial markets and global business are primed to respond to EPICs and regulations.
Eric: In line with expert consensus, our diagnosis puts sustainable electricity at the heart of the global strategy to collapse carbon emissions. A rapid acceleration of investment in wind, solar and other alternatives, as well as infrastructure for energy storage and transmission is needed to get us close to 1.5°C.
Corinne: The evidence suggests that this is substantially a “simple maths” problem, an economic challenge. In other words, we have the technology and the physical resources, the challenge is to create an extreme incentive structure that rapidly changes behaviour. If the cost of capital can be reduced, and a smart regulatory framework put in place, halving emissions by 2030 is within reach. Although the private sector is best placed to deliver these new industries and investments, the EPIC levers we describe are almost entirely in the hands of the nation state.
Eric: Bill Gates apologises for using the word “policy” in his book. We maintain that any climate strategy that does not put national policies at the heart of its decarbonization objectives will fail. So, how do we supercharge the nation?
Introduction: A Failure of the Mind
- Eric Lonergan, Corinne Sawers
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- Book:
- Supercharge Me
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- Agenda Publishing
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- 20 January 2024
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- 24 February 2022, pp 1-8
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“If our poverty were due to famine or earthquake or war – if we lacked material things and the resources to produce them, we could not expect to find the Means to Prosperity except in hard work, abstinence, and invention. In fact, our predicament is notoriously of another kind. It comes from some failure in the immaterial devices of the mind, in the working of the motives which should lead to the decisions and acts of will necessary to put in movement the resources and technical means we already have. It is as though two motor-drivers, meeting in the middle of a highway, were unable to pass one another because neither knows the rule of the road. Their own muscles are no use; a motor engineer cannot help them; a better road would not serve. Nothing is required and nothing will avail, except a little, a very little, clear thinking.” John Maynard Keynes (1933)
There are many great books on climate change, but very few address what we need to do, in a convincing way. Personal “todo” lists suggesting we eat less meat, buy an electric vehicle, and fly less, seem trivial relative to the challenge of climate change. We need serious policies at the individual, corporate,national and global levels, which can rapidly accelerate the pace of change.
There is also a lack of clear thinking. A collapse in global CO2 emissions does not require a complete change in how we live our lives, or a huge increase in taxes. It requires ending our dependence on fossil fuels. This presents us with an enormous investment challenge. Most of the world's electricity, transport, buildings and industry are powered using fossil fuels. We need to power them with renewable energy. If electricity is generated with zero emissions, and transport, buildings and industry are all powered by electricity, global emissions would fall by around 75 per cent. This is the greatest reallocation of capital in human history. We should be doubly angry if we don't rise to the challenge – investment is the means by which we become wealthier.
The quote above from the economist John Maynard Keynes was written during the Great Depression. Keynes observed that mass unemployment was a “failure of the mind”. History has proven him right.
Supercharge Me
- Net Zero Faster
- Eric Lonergan, Corinne Sawers
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- Published by:
- Agenda Publishing
- Published online:
- 20 January 2024
- Print publication:
- 24 February 2022
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Almost everyone agrees on the need to transition the global economy to net zero. But how do we do it? And how do we do it faster? If you feel demoralized, depressed or confused about the climate crisis this book will provide answers - and ones that don't involve punishing lifestyle changes, the end of capitalism, or a much higher tax bill.
Supercharge Me is grounded in relentless realism about how governments, businesses and individuals actually behave. It draws lessons from what has worked so far: extreme positive incentives and smart regulations. Through a series of fast-paced dialogues, the authors introduce practical ideas for change that will embolden activists, reinvigorate the disheartened, and reframe the climate crisis as an opportunity.