ℹ️ You’re reading Quartz Essentials: quick, engaging outlines of the most important topics affecting the global economy.
The climate economy
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The most pressing question
How do we get to net zero emissions?
The question will define the global economy for the next century. The IPCC estimates (pdf) we need to invest at least $1.6 trillion per year through 2050 to put the planet on a safe climate trajectory. We’re spending about 20% of that figure today. And that’s just for the energy sector. The climate economy means almost every aspect of our global system—agriculture, transportation, energy, construction—will need to be rethought and redesigned to reduce and then remove greenhouse gases from the equation. It’s the greatest challenge, and opportunity, of our time.
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By the digits
350 parts per million: Safe atmospheric CO2 concentrations, last recorded in 1990
414 parts per million: Atmospheric CO2 concentrations in Nov. 2020
$68 billion: Global damage from natural disasters in the first half of 2020
1.7: Number of Earths it takes to sustain today’s global level of consumption of natural capital.
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One big number
$40: The current price of a barrel of West Texas Intermediate oil, the US benchmark. After starting the year around $60 and crashing below zero early in the pandemic, the price has been stuck around $40 for months. This number is the key to the global energy market: It determines which oil patches can be profitably drilled by which companies, and sets the tempo for the transition to cleaner fuels. Fossil fortunes are made or broken by the ability of CEOs to prognosticate this price and shuffle assets and investments accordingly—and its current level puts US producers at a serious disadvantage to their Middle East rivals.
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The world’s engine, as you can see in the chart below, runs on fossil fuels. All of it adds carbon to the atmosphere. To keep it all from overheating, we’ll have to rethink every aspect of the economy. That doesn’t mean eliminating fossil fuels altogether: it’s cheaper to keep some running and store those carbon emissions. But the next Industrial Revolution will be powered by very different fuels — sun, wind, water, hydrogen, nuclear, geothermal, and more — than the last one.
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“I’m convinced we will deal with the problem. [But] not before there is an amount of suffering that is unconscionable and should’ve been avoided.” —climate scientist Michael Oppenheimer, who testified at a seminal 1988 Congressional hearing about global warming
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Commonly held question
Does recycling work?
The short answer is no. Unfortunately, only 5-10% of what people throw in recycling bins globally actually gets recycled, and up to 40% winds up in the environment, mostly the ocean.
One reason is that China and several southeast Asian countries, which used to import large volumes of recycled stuff from the US and handle the actual processing of it, recently got fed up and shut their doors to it. Another is that a large volume of what people try to recycle can’t actually be recycled, either because it’s the wrong material or is contaminated (yes, you should rinse things before recycling them!). Finally, there’s just too much plastic, period, and the oil industry has spent years pushing recycling as an excuse to make more of it. The best solution is to use less plastic to begin with. Government and corporate procurement rules can also help boost the nascent domestic processing industry, especially for recycled paper, by requiring it in purchased products.
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Person of interest
Mary Nichols is the world’s most powerful environmental regulator you’ve never heard of. The Yale-trained lawyer serves as the chair of the California Air Resources Board. From her perch presiding over air quality regulations in the world’s fifth largest economy, she has influenced climate policy in more than a dozen US states that have adopted California’s strict vehicle emission standards, which go beyond federal requirements. China, too, has modeled its carbon-trading scheme on California’s.
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- How to call BS on corporate climate pledges, by Tim McDonnell. Credibility hinges on timeline, scope, and strategy.
- Welcome to Leeside, the US’s first climate haven, by Amanda Shendruk and Tim McDonnell. America is facing a tidal wave of climate-induced migration and urbanization. Here’s how cities should prepare.
- Climate tech’s second shot, by Michael Coren. Saving the world should have been a surefire bet for Silicon Valley investors. In the early 2000s, it wasn’t. But this time might be different.
- The Future We Choose: Surviving the Climate Crisis, by Christiana Figueres and Tom Rivett-Carnac. As the diplomat who spearheaded the Paris Climate Agreement, Figueres knows how to articulate practical solutions that go beyond simply cutting emissions, including “let go of the old world” and “build gender equality.”
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In the US, weed cultivation uses more electricity than all electric vehicles put together. And, according to Morningstar, will continue to do so until at least 2030, despite rapid growth in EV adoption. But the two sectors, along with data centers, are expected to be the largest drivers of electricity demand growth over the next decade.
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Even famed economist Adam Smith knew nature was the source of human prosperity. The services nature provides, from clean water to breathable air—what we now call “natural capital”—is valued at more than $160 trillion (pdf) every year. But we’ve overdrawn nature’s bank account. In 1970, human consumption surpassed Earth’s capacity to regenerate resources. We’ve depleted the principal and we’re running a deep deficit. Now, natural capital is at the center of a global movement to expand economics to include ecology. Our GDP will never be the same.
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Fighting climate change will require big, systematic changes in the energy system, as well as the housing and insurance markets and many other parts of the economy that are hard for any individual to influence. But it still doesn’t hurt to curb your personal carbon footprint by:
- Eating less meat
- Driving and flying less
- Using less plastic
If you want to try something more ambitious, consider divesting your retirement or mutual funds from fossil fuels using this tool from the corporate accountability nonprofit As You Sow.
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