Now it is clear: Bill Gates is a wise man. Recently, he published a book entitled ”How to avoid a climate disaster: The solutions we have and the breakthroughs we need”. He doesn’t complain or brag. He doesn’t blame others or criticise. He analyses the current state of the climate crisis, addresses the changes needed and offers a recipe towards a carbon-neutral economy. He discusses what is known at the moment and identifies areas in which action is called for. Admirable wisdom.
51 billion
Expressed as standardised CO2 emissions, global climate emissions amount to 51 billion tonnes. From these figures it is a long journey to a carbon-neutral world. The biggest single source of emissions is the manufacture of goods (31%), followed by electricity generation (27%). Of these, the latter is also part of the solution as electrification continues and is being increasingly implemented using renewable energy.
Simple recipe
The recipe offered by Bill Gates appears simple and comprehensible. The first part of the solution consists of three observations. The world must proceed towards carbon neutrality; the existing technologies must be used faster and more rationally; and new revolutionary technologies must be developed. The second part is to electrify the world as much as possible and generate electricity without carbon. Finally, remaining emissions must be recovered and materials used more efficiently. The last piece of advice means the circular economy. This is nothing new, but when a wise man puts it in a nutshell, people listen.
The importance of the timetable
Many countries aim for carbon-neutrality by 2035–2060. Bill Gates highlights the problems associated with interim milestones. If such milestones are set, the measures needed to meet them may be different from the measures aiming for carbon neutrality. This is a real dilemma. We would like to monitor the progress being made in some way. Interim goals would facilitate monitoring. Do we trust decisions that cannot be followed up?
Carbon tax and carbon border tax
Bill Gates welcomes a carbon tax – something self-evident to economists – and border taxes on carbon. As we know, many countries have already taken steps in this direction. In Europe, they are already part of the EU recovery fund and related measures. Progress will be made in carbon border taxes. It is only a question of time when and how tangible action will materialise. While Europe is deeply committed to this mission, the consent or engagement of the United States and China are also needed. This will help avoid a trade war around measures that will prove absolutely necessary in retrospect.
An engineer’s dream
Engineers tend to dream about technological solutions. If this is the case, Bill Gates offers an excellent roadmap for realising such dreams. The roadmap is available for every investor, shareholder, company, employee and government to read. It is important to note that all of us are facing choices. These choices are mutually supportive. For investors, it is important to recognise the direction and speed of change. Investors are automatically involved in the the process of change because it will be dictated by the market forces when the pressures to change direction are strong enough. Now they are.
The missing piece
First-rate knowledge and sharp analysis do not guarantee successful implementation. The data we have on climate change is of the highest standard. However, the real challenge that the book fails to respond to is the complexity of implementation. People and decision-makers are not ready or fail to take the measures that would be needed. Investors, too, are interested in the timetable for implementation and compliance with it. Mistaken implementation or delays may carry a high price to pay.
Future steps
Climate change is the gravest problem of our times and its solution the biggest challenge we are facing. The engineer-like roadmap of the wise Bill Gates gives us pointers as to how to allocate resources in the efforts to mitigate climate change. Amidst climate change and our response to it, we are all in the same boat globally. Skilful implementation of the correct measures lies at the heart of the matter.
The writer is VER's CEO Timo Löyttyniemi.
