Every crisis has its winners and losers. During this crisis, the winner was the environment. Carbon emissions were significantly lower when a large part of the western world was in partial or total lockdown. At the peak of the corona lockdown, average carbon emissions across countries decreased up to 26% and while we reached the Paris Agreement target (-20% emissions), the National Climate Agreement targets (-49% emissions compared to 1990) were still far beyond our reach.
Under the assumption that some corona-related restrictions will remain in place until the end of the year, global carbon emission reductions compared to 2019 are estimated at only 7% (Nature, 2020 ).
So, essentially, we’ve shut down businesses, ceased travelling by plane, stopped commuting, and changed our consumption patterns in a way that we will not forget in our lifetime. But the results? Only one glorious moment of achieving the Paris Agreement target, and by the end of the year we will still be well away from our goal. “Fun” fact: China is currently emitting more than it did last year.
And then there is our Rebel Bouncing Back series… Stories of hope, change, and inspiration about how things can be changed for the better. A bright and positive outlook, often slightly rebellious. Blue skies indeed. But a bright and positive outlook alone does not do justice to the carbon crisis we are facing. Rather than bouncing back, it is time to accept we should change for good and consume much less. We believe that bouncing back is the wrong ambition.
Consider this piece a Rebel campaign #letsdoitforgood 2.0: taken to an extreme in order to create rapid, radical and global change. This, too, is a story of hope in the end, since we explore what we can do to arrive at a truly sustainable way of living on this planet. However, the process of change will be painful, and it will cost us.
What on earth do we have to do to actually curve the ever-increasing global carbon emissions? What are we willing to do, as a society, to fight this carbon crisis? A crisis that does not appear to be as urgent as the outbreak of a deadly virus, but which may in time prove to cost more lives than COVID-19 ever did, and cause a bigger economic mayhem than any corona crisis could ever have caused.
Policies and promises will not be enough. Our carbon debt to the planet is extremely high. If this carbon debt were a national financial debt, it would represent junk bonds. It is time to start paying back and pay the true price for our excessive, unsustainable consumption levels. Paying back includes pricing of and payment for all carbon emissions across our entire economy. This will be a painful transition. People will lose their jobs; others will gain one. Income differences may increase. We will have to address that and redistribute incomes. We do not know what to expect exactly, but we have addressed immense crises before – not even that long ago.
At Rebel we often say that good ideas do not only have supporters, so here we go: We must address the carbon crisis. Let’s price the hell out of this carbon mess we made. True pricing for each and every product we make, buy and consume. We should no longer allow the fear of short-term consequences to stand in the way of courageous solutions for the long run.
The measures we must put in place to apply true pricing to the entire global economy are probably in line with the size of the problem we are facing. We have shown we can do it: we hit the reset button during the COVID-19 crisis. Let’s do it again. We have been ringing the alarm for too long. Now is the time to act.
This time we will hit a different reset button: we have to start applying the concept of true pricing. We must ensure that the prices of our products and services reflect not only the added value of the supply chain up to consumption, but also all negative externalities that we have been ignoring for so long, caused by the very same supply chain. The best-known example is carbon emissions, strengthening the greenhouse effect in the atmosphere, warming our planet and severely effecting our climate. We all noticed the extent of the hurricane alphabet this year, we’ve seen the persisting bush fires due to drought and we heard about the hot weather in Siberia, where temperatures reached an insane 38°C around the Arctic Circle. Admittedly, we should not confuse weather and climate, but the global development of temperatures pretty much tells the same story.
Global warming “climate stripes” 1850 – 2019, courtesy of Ed Hawkins, University of Reading
After hitting this reset button, you will ask yourself two questions the next time you go to the supermarket:
1) This product seems expensive, do I really need it? And 2) Does it really have to be this expensive? The short answers: 1) No. 2) Yes. If you’re asking yourself the first question you will probably decide that you can fix your phone or repair your jeans. And for the second question: it has to be this expensive because now it has a true and fair price. This includes the cost of the damage this product and its supply chain brings to the planet (and to us).
To us it feels quite fair to give a product its real price. Luckily, there’s some great examples of putting some good old Pigouvian economic incentives in place to steer consumption within the borders of what is considered sustainable (i.e. what our planet ecosystems can provide). For example, in New Zealand the highly debated meat tax aims to lower consumption of a carbon-heavy industry, but also mitigate healthcare costs related to – amongst others – obesity. Most countries have excise duties on, for example, tobacco and gasoline, because they want to discourage the consumption of those products. These kinds of taxes are put in place to limit consumption with different sorts of negative externalities. And while it does work, it has never been done in an integrated way. Considering our consumption, we should all hit the reset button at once and give each and every product it’s true price.
The radical application of true pricing may lead to shocks in the economic system, due to a sanity check on our consumption. Do we really need fresh-cut roses that either come from fossil-heated greenhouses or that are flown in from Kenya to Europe by plane? Do we still accept that we have to replace an iPhone, or Android phone, because we’re forced to a new phone due to software-updates? And do we really need to be able to eat a mango or a kiwi in Europe all year round? You can and you may, but it will cost you.
This is not easy, to say the least. As shown by research we are currently doing on carbon tracking for products, measuring negative externalities is complicated. Getting the price right is probably even more challenging, at least politically. Let’s start simple, but firm. We can measure emissions and price every emission the same for each and every product or service.
Ideally, we should implement this worldwide. It would definitely be the fastest, and within the bigger picture, the least painful flight for spaceship earth and its passengers. But this may be too big a step for leaders around the world. Given the speed at which our carbon debt is increasing, a suboptimal solution is the least we can do. Let this, then, be a call for all ambitious leaders in business and governments to step up their game and start acting on implementing this, at least at a local, regional or sector level. Do something! Because to sit back and close our eyes for the impending crash cannot be the answer.
Implementing true pricing applies tremendous pressure on working towards a sustainable economy – which is exactly the point: to drive innovation, experiments and to gain experience. And in most fields, technology is not the bottleneck, which leads us to the somewhat embarrassing insight that it mostly comes down to human choice and individualism. Do you lose polluting businesses and the jobs that go with it? In the long run definitely… but once again, that’s the whole point.
In the short run the excise income on negative externalities should be made directly available for two main uses: 1) Cleaning-up and innovation, and 2) Redistribution of wealth. Let’s zoom in a (tiny) bit on those two:
While this article is not able to describe and grasp the impact and needs of implementing true pricing, it will definitely mean, a drastic decline in purchasing power in the short run. And if no measures for redistribution are taken, this will probably result in an unfair distribution of wealth across the globe.
So why won’t we just push that reset button? The answer is unsurprisingly simple: we are scared. Scared of losing what we’ve got and scared of losing the lifestyle we have grown accustomed to.
But will we lose all that much? Remember, on an individual level we constantly take risks for change: without change you would not have gotten where you are now. You went to school for the first time, didn’t you? (scary!). You have probably changed – or quit – jobs more than once. You might remember your first kiss, proposing to the love of your life, or deciding to end your marriage. These were all moments where you had a lot to lose, but more to gain. Freedom, love or self-respect. And these courageous moments made you the person you are now.
These very personal and individual life experiences might seem far removed from seemingly small decisions we make every day in terms of consuming, buying, and moving around. But together, the everyday decisions of 7.8 billion people are depleting the earth’s resources.
If you must reset and risk it all: you can do it. The response to the corona crisis has shown us two things, which makes us believe we can do it together, too:
We’re facing a crisis that is considerably larger that the COVID-19 crisis. Let us act upon it – drastically. Don’t let the short-term fear of change be the reason for not pursuing the long-term goal of a sustainable life for generations to come.