It’s Time for a Consumer Approach to the Climate Crisis
A carbon price is the only way to nudge individuals and companies toward low-carbon choices. It's time for brands and consumers to adopt one for themselves.
Black Friday started on Monday this year, according to the advertising, which gave Americans a full week to indulge their consumer habits—interrupted only by the occasional mouthful of turkey. As in past years, few consumers were thinking about the link between their consumerism and climate change. In spite of the warnings, the companies that make all of those new socks and blenders and touchpads still have little incentive to stop.
This is a problem. The UN’s latest Emissions Gap Report offered the latest stark notice that world economies have utterly failed to respond to the climate crisis at the level necessary. Global greenhouse gas emissions have risen 2 percent annually since 1992 with no signs of stopping. Emissions are now at such a high level that stabilizing the climate requires bending the curve nearly ten percent downward and keeping it there for decades.
There is simply no precedent for such a pivot.
Until now, global efforts to reduce climate pollution have emphasized policy. This year, masses of diplomats and politicians gathered in Madrid for COP 25, the annual climate change conference, and began negotiating as they have since 1992. And based on precedent, they will get nowhere.
The New York Times editorial board wrote that corporate action under consumer and investor pressure may contain our best hope for the moment. Nearly every business in the world contributes to climate change. Eighty percent of their emissions are unpriced, meaning there is no financial penalty for emitting them. This must change.
Unfortunately, policy plans for carbon pricing will face delay and dilution by the political economies of implementation. Climate policy is sweeping policy, and sweeping policies are hard to promulgate. The Obama administration’s 2014 proposed climate regulations — later rescinded by the Trump administration — would not have taken effect until 2022, an eight-year implementation period. The Kyoto Protocol included ten years before the first compliance requirements started.
Since it will take years for government policies to establish a carbon price, it’s time for all companies to adopt one themselves. Corporate agility is precisely what’s needed at this moment. Companies budget in fiscal years and operate in quarters, and they are notoriously skilled at mobilizing capital, which is exactly what’s needed for change. The IPCC projects that between $1 and $3 trillion per year in investments is required to avoid the worst effects of climate change.
Three trillion dollars is a lot of money. But moving the trillion dollar climate problem to the point-of-sale makes it seem far more affordable. A typical company emits around 400 tonnes of greenhouse gases for every million dollars of revenues. At a carbon price of $10 per ton, that’s equivalent to a half a percent of revenues, or 40 cents on an $80 dress shirt — a price that nearly any company can afford. Pennies on a product, but billions of dollars across an industry.
Unlike the steep hurdle of building political support and implementing a government-mandated carbon price, consumer demand can profoundly influence companies to decide to pay this price to address carbon emissions - immediately. And it must.
At the forefront of mounting consumer taste, a growing list of progressive companies have already adopted this approach. From Allbirds to Reformation, Etsy to Seventh Generation, Lyft to Netflix, companies are investing larger and larger amounts in dealing with their carbon pollution, even when governments aren’t forcing them. They are inviting consumers to take notice and share their stance — a prudent move at a time when more than half of Americans believe climate action is necessary.
Corporate investment in carbon-reducing projects comes at a good time. The last quarter century has witnessed massive technological leaps in clean energy, helping to reshape the power grid of the future. Now is the time to scale these zero-carbon technologies, while massively tapping every conceivable means of sequestering carbon within plants, trees, and the soil.
With capital flowing at a fraction of the necessary scale, scientists warning that we have a decade to take evasive action, and exactly zero viable climate policies under debate, aggressive and immediate action is desperately needed.
There’s an outside chance that COP 25 could sow the seeds for sweeping policies that take effect by 2030, but the odds are too low and the timing is too far off. As the holiday shopping season begins, consumers and businesses need to recognize that meaningful action against climate change is right at their fingertips, can be mobilized quickly, and costs far less than they imagine.
Originally published on Medium December 3, 2019
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Austin Whitman is the CEO of The Change Climate Project. He started working on climate and clean energy 19 years ago and believes companies and individuals can make a huge difference for the climate if they're just shown how. When he's not engrossed in organization-building, he's probably with his family or being an amateur at one of his many hobbies.
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