I’m not going to write a long post today, because taking a dive into how our society can effectively respond to climate change would take a treatise or two. It would require a discussion of the UN Framework Convention on Climate Change — the agreement struck in 1992 at the Rio Earth Summit — and cover the Paris Agreement, which the Biden administration reentered. All that is for starters.
It also requires an understanding of how the US government will prepare our nationally-determined contributions (NDCs) required under the Paris Agreement, and how that translates to policy change. A review of President Biden’s Executive Order on climate change, signed on his first day in office, provides a road map. In short, addressing climate change will be baked into all federal agency action and, presumably, budget priorities.
This translates to a number of policy changes, including incentives and dis-incentives for certain activities and behavior. I see the focus on three primary areas:
- Electrification of our power generation sector, with a de-emphasis on fossil fuels and increased development of renewable energy sources such as wind and solar.
- Decarbonization of end-user activities, which entails a broad range of initiatives from residential energy efficiency, reconfiguring global supply chains, and broader adoption of electric vehicles. There are a tremendous number of approaches in this category, some of which are discussed in Drawdown, a resource worth reviewing.
- Carbon sequestration. This leg of our climate change response holds some interesting potential, with a range of efforts including forest conservation and adoption of regenerative agricultural practices to enhance the capacity of farmland as carbon sinks. Technology will play a significant role, evidenced by Elon Musk’s $100 million XPRIZE for carbon capture and sequestration tech.
The private sector is playing an increasing role. Over the past few years we’ve witnessed a growing movement for divestment from the fossil fuel sector, combined with an increased emphasis by investors on environmental, social and governance (ESG) factors and reporting metrics. Investors sense tremendous opportunities in the shift to a clean energy economy, and they’re right. If you’re not on board yet, it’s time to get to work.