A few years ago, I was working at an NGO in Rajasthan where I was researching the incentive structures promoting human trafficking in the local villages. While I was working at the NGO, there was a group of students from the US who were developing a curriculum for school students in the villages on how to reduce their carbon footprint. One day, I simply posed the question: “Do you guys realize that the flight that you took over here probably created a higher carbon footprint than most anyone in this village would ever have throughout their entire life?”
That hit a nerve–and for good reason. The biggest problem that we face in confronting climate change is confronting our own unsustainable consumption.
Fun fact: The wealthiest 10% of society contributes over 50% of the world’s carbon emissions. The world’s poorest 3.5 billion contribute just a tenth of all carbon emissions.
There are many people that point their fingers at capitalism as the greatest evil in the fight against climate change. While I agree to some degree, I think we need to come to terms with the fact that our own consumption, our desires, our greediness is the fuel to the fire for the capitalist system that is exacerbating our climate crisis today. The system would not exist without us because it was built by us. This also means that we can redefine the system as well.
I may be crazy, but I’m not alone. Generation Investment Management is on a mission to shift the world towards “sustainable capitalism” (I’ll dig into this one later). The $18 billion dollar (AUM) fund, founded by the one and only Al Gore and David Blood, has been pushing this agenda for years. While their portfolio has seen above market-rate returns, they have been falling short on one of their most important goals: getting others to take up their mission and get their skin in the game. While Generation is ahead of the curve, it is imperative that the rest of us get on board, and quickly too.
I like to joke that the best way to confront climate change is for everyone to become buddhist monks, or for us to dramatically change the way we engage with capitalism.
Here are some starting points that I’m exploring:
- Public interventions to improve regulatory practices that promote–not inhibit–technological innovation and appropriately incentivize smart environmentally sustainable decisions for businesses and consumers.
- Greater cleantech penetration in high-carbon emitting businesses. This spans everything from shifting towards alternative energy, utilizing more sustainable construction materials, reducing inefficiencies in production processes in nearly every industry from agriculture and textiles to heavy metal mining. Cleantech innovation should become the most cost-efficient choice for any business. Mass disruption is on the horizon, but there is definitely an overwhelming degree of affordability and scalability obstacles in our path
- More efficient, streamlined supply-chain systems. Not only are the resources we consume unsustainable in process and quantity, there are massive gaps that must be filled in our global supply chains in order to improve sustainability. Some key sectors are agriculture, textiles, energy. Consumer-driven companies are the key drivers in supply-chain inefficiencies (McKinsey & Co).
- Sustainability integrated into urban design and mobility. 75% of carbon emissions can be traced back to our urban centers, and the “ecological footprint of the cities is tens to hundreds of times larger than the actual urban area occupied”
- Savvier consumer decisions. The most well-off in the world are the most wasteful because they can afford to be so. It is easy to ignore wasteful consumer decisions, especially when we hide our waste from ourselves. Consuming responsibly, reducing waste, improving capabilities for better recycling and being discriminating in the sustainability of consumer goods must become mainstream.
- A “come to Jesus” moment for the wealthiest 10% of society. The consumption patterns of the wealthiest people in society have spillover effects in terms of environmental impact, but also in influencing the consumption of the rest of society. Consumption is aspirational, so anyone coming into wealth naturally wants to consume in the same was as the wealthy do. This problem is exacerbated as wealth grows throughout the world.
- Making sustainable consumption desirable. This involves redefining what “success” looks like in society–which is happening, slowly but surely. Public policy can only go so far; people have to want to change and it has to be exciting and attractive for them to do so. Personally, I find this part of the problem the most important, and most interesting to solve.
Ultimately, in order to counter climate change, we need to confront the climate of our consumption. We need to make sustainable consumption desirable and wanted, versus looking at it like a burden and a restriction on people’s lives, desires and goals.
Personally, I think that #6 and #7 hold the key to unlocking big opportunities. There are some companies out there that are getting this done–and I’ll be exploring them in later posts.
If we can do this, the opportunities are boundless. We just need to focus on building our system correctly this time around.