Ian Adlington, a leading Venture Capitalist and CEO, New Carbon Economics shares a view for a more Relevant and Robust Global Carbon Economy
Nations of the Earth are doing very little to avert an impending foreseeable catastrophe. Yet the solutions to rectify this are very simple. Imagine a future where we can create and monetize short lived climate forcers (SLCFs), such as black carbon (soot) for others to use.
If climate change continues without any attempts to moderate it, we will experience significant increases to the cost of our economies,. In fact, modern businesses, institutions, investors and governments worldwide continue to view climate change as a material risk. For instance, there are an increasing number of multi-billion dollar severe weather events, such as the US East Coast storm, Sandy, caused more than $60 billion in damages.
Government policies are inconsistent and are impeding capital flows towards carbon-intensive technologies. The solution will require bold actions and greater collaboration driven by investors, companies, policymakers and other stakeholders.
The solution includes shifting away from the use of fossil fuels towards renewable energy sources, which will involve significant investment. Further, there will be a need to reduce energy burdens with more efficient solutions, and above all, monetize carbon and those SLCFs. Such mechanisms have economic consequences.
It is often suggested that to reduce demand for fossil fuels is to raise the cost of carbon through tax initiatives. However, such increased costs give rise to concerns that change underwritten by taxes or levies will damage economic prospects, particularly in developing countries.
There are a number of schemes under consideration, and a number already implemented. It’s too premature to evaluate the long-term economic performance of the first adopters, but Canada’s province of British Columbia serves as a good example of how carbon pricing can shrink fuel use – in their case through a revenue-neutral scheme.
Since a number of economic incentives are being tried, it seems too soon to declare them failures. It is interesting to note that while governments are having difficulty negotiating agreements on the global scale, regional schemes are already proving effective, flexible and popular. An important ingredient seems to be an accompanying tax reduction that makes the carbon tax revenue-neutral.
We must reduce our carbon emissions. If we are to avoid inconsistent government intervention, carbon pricing schemes may well be one of a number of suitable short-term methods of encouraging us to reduce our use of fossil fuels. And it must be set in context of bolder actions needed to monetize carbon and SLCFs.
The New Carbon Economy needs these efforts. In our view, successfully enabled carbon pricing mechanisms and markets will lead us into that relevant economy that balances our planetary needs with our economies.
- Carbon Economics and the Cost of Inaction (skepticalscience.com)
- Climate change looms as challenge for all parties (abc.net.au)
- Kevin Rudd: Labor had no mandate for the carbon tax (theguardian.com)
- FactCheck: the Liberal Party’s ‘Rudd’s record’ ad (sbs.com.au)
- Leading Venture Capitalist Ian Adlington encourages entrepreneurs, start-ups and growth companies finance and monetize Black Carbon Projects in Los Angeles, USA (newcarboneconomicsblog.wordpress.com)
- Government records show Canada supports global carbon pricing (calgaryherald.com)
- Business say they prefer carbon price over Direct Action (reneweconomy.com.au)