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Driving True Sustainability

Avoiding “Carbon Traps” and Other Misbranded Environmental Efforts

An Executive Summary by Benjamin Liker and Thomas R. Ward

Climate change and environmental degradation are the existential threats of our time— perhaps of all time. In all our history as humans on this earth, never has there been such a need for urgent action by all of us, for all of us. Environmental activists have been shouting from the treetops for over a century, governments have slowly begun to shift toward “green” thinking in the past decade, and finally, the private sector has been catching on in recent years as well. Terms like “ESG” and “sustainability” have become buzzwords in the media, government, and corporate landscapes in an attempt to center planet-conscious actions in a world where market forces and social movements dominate headlines and executive decision-making. 

 

Conferences such as COP26, the latest annual United Nations Climate Change Conference, are critical meeting places for world leaders in both the public and private sectors to meet and exchange ideas and analyses for key decisions they will later make that will fight back against climate change. At COP26 and preceding events such as the 2015 Paris Climate Accords, a common headliner was that corporations and governments are aiming to fight climate change by reducing Carbon Dioxide emissions. 

This said, such government-led proclamations are not game-changers nor sustainable in their ultimate results. While a worthwhile pursuit by itself, focusing environmental action on just carbon emissions, while steamrolling other environmental actions into and under it, may end up causing more harm to the world than current leaders anticipate. Over the past 5 years, reducing CO2 emissions has become nearly synonymous with that term mentioned earlier: “sustainability.” We must not lose sight that denotatively, to be sustainable is to be “able to be maintained, kept going or upheld”- in essence, a quality of endurance, in perpetuity. Truly sustainable systems can go on forever, and sustainable solutions are ones that don’t merely address single-generational struggles, but ones that last centuries. Such solutions are time- and system-agnostic, applicable now and a hundred years from now, in our current society and in ones not even imaginable yet.

A key part of emphasizing these true sustainability is integrating them into the financial system through truly sustainable tools and methods. Efforts to mitigate carbon emissions through Cap-and-Trade policies doesn’t strike at the root of the problem, merely shifting burdens between one financial vehicle to another. Government subsidies, especially in the U.S., are likewise non-sustainable because centralized public spending can change between different presidential and gubernatorial administrations. Relying on financial climate solutions like these merely puts a band-aid on the larger problems the planet faces, attempting to buy time from a bank that’s nearly empty. More resilient and innovative solutions are necessary to provide financial incentivization of responsible climate action; a good place to start is the humble Private-Public Partnerships (PPP). PPPs have existed as long as modern society has, and using international and domestic networks and innovation of public and private sector cooperatives will allow sustainable systems to endure long past our lifetimes. Generally speaking, the more complex and interconnected systems and institutions are, the more resilient they become over time to disruptions and shocks. Market-based, incentive approaches are central to sustainable solutions, as opposed to transitory policies and proclamations.  It is a lot easier to design planet-conscious systems that have endurance baked-in when multiple stakeholders rely on them. In many cases, more moving parts introduces complexity that hinders progress and efficiency, but in the case of PPPs, more groups involved in various domains adds to the strength of the endeavors. 

Aside from PPPs, financial instruments like green bonds, asset-backed cryptocurrencies, and environmental ratings and audits maybe be tools to help transition to sustainable solutions from the financial, to corporate, to public services, (from merely caring about money for wealth’s sake to using money as a tool to affect positive change for people via its elastic properties as a currency). In the modern capitalist world economy, money is the main currency that communicates information about the value of things: The value of different types of labor, intrinsic usefulness of products, supply and demand of commodities, etc. It is imperative that financial institutions, corporations, and governments accurately assess and add the short and long term environmental impact of actions to that list of communicable information through innovative financing. Many entities may resist such a paradigm shift.  After all, it bucks against the trend of short-term profit-seeking behavior by many firms; but in the long run implementing these sustainable systems into the financial sector will benefit us all.

Outside the financial sector, there are other parts of our society that need further scrutiny to make sure our current solutions don’t end up doing more damage down the line. One such “solution” is the transition from internal combustion engine (“ICE”) vehicles to electric vehicles (“EVs”). EVs are being pushed as a decentralized way to reduce carbon emissions from vehicular pollution by using demand-side pressures. And for that purpose—reducing CO2 emissions and other air pollutants—transitioning to EVs is a worthy pursuit, as offloading energy conversion requirements from individual cars (chemical potential to kinetic energy) to energy grids allows for the energy to be sourced from renewables. However, there are glaring problems that affect the Earth and its people that cannot simply be dismissed. EV battery technology is a giant problem for the planet: mining Lithium and Cobalt for EV batteries causes significant environmental damage that is simply hidden from consumers and exported to other nations. Instead of the environmental damage being done at the point of consumption (where the cars emit CO2 and other pollutants), it is outsourced to the point of production (mines, refineries, and factories). A car driver in Los Angeles may be thrilled about her Tesla, but just ask a Cobalt miner in the Democratic Republic of the Congo what he thinks about higher EV demand. Suddenly that EV future doesn’t seem as rosy.

Unfortunately, most solutions to problems with transportation electrification are not any more elegant than the problems electrification seeks to solve to begin with. Hydrogen fuel cell vehicles are one solution, but their energy efficiency is significantly lower, not all hydrogen produced is “green hydrogen” (made with renewable power), and electrolyzers require rare-earth metal catalysts to operate that bring similar environmental concerns as batteries (albeit at smaller scales). A truly sustainable solution involves striking at the root of the problem while building bridges that make the solution stronger over time; for transportation, that solution is reducing the demand for reliance on personal vehicles. Moving growth of crops closer to population centers through initiatives like urban farms and hydroponics reduces the need for transportation of goods between rural and urban areas. Implementing mixed-use housing in urban centers allows for walkable communities where residents simply don’t need a car—a bike can do the job just fine. Smarter suburban and urban public transportation reduces the need for personal vehicles to get between home and work. Constructing urban parkways can reverse some of the community degradation that has occurred as a result of building massive freeways through the middle of  low-income areas. Building suburban communities around people, not cars, allows for better quality of life, community-building, and ecological restoration as urban sprawl threatens both the environment and people’s lives. Aided by technological improvements such as Web 3.0 and collective energy on sustainable solutions, master-planned “Neo-cities” are an increasingly popular form of PPPs that combine different sustainable systems (such as those mentioned above) to solve current problems and prevent future ones. Building a Neo-city movement allows for the intertwinement of culture and society into collaborative efforts of municipalities, states, countries, land developers, renewable energy providers, agricultural producers, tech firms, small businesses, and other stakeholders who want to make the world a better place while bettering the standard of living of individuals, families, and communities. 

PPPs also provide a framework for needed investments, innovation and risk means and can be large-scale sustainable projects and “green” financing vehicles that avoid government interference. Many active government regulatory agencies were originally created in the early 20th century to protect consumers from monopolistic business practices and unethical corporate behavior, but over time, driving factors and incentives have changed, and with such, these once-bastions of freedoms have become hindrances to technological progress and block environmentally- beneficial projects from getting off the ground. Take California for example: Due to a few bad/outdated environmental regulations, in many urban and suburban communities, lawsuits and environmental reviews are used by wealthy landowners to slow and stop projects that would benefit the public. Environmentally-beneficial endeavours such as high-speed rail, metro lines (with potential post-911 issues), and urban parkways often never get off the ground and cost much more than projected due to environmental regulations being weaponized by a mere handful of people. Of course, necessary regulations must be put in place to ensure consumer protections, and prevent clear environmentally-threatening actions such as clear-cutting of forests and mountaintop strip mining, but otherwise regulations deserve greater scrutiny per the progress they prevent. If the opportunity-cost of regulations outweigh the risks they seek to mitigate, governments should at a minimum reconsider their positions and role as decision-making bodies. As the “rulemakers” of the modern world, governments have a unique obligation to use policy to shape behaviors of individual actors to the benefit of all. By setting environmentally-forward and sustainable agenas, governments can set guidelines and provide structures that incentivize long-term benefit over short-term profit without the need for costly and unsustainable subsidies and tax asymmetries. Using their positions as publicly-entrusted bodies with access to more financial resources and power than most other institutions, they can clear risks for private entities to work more efficiently and utilize free-market principles to promote equitable, sustainable, and environmentally-friendly growth. 

Another carbon “trap” that we must be wary of is a rushed transition to renewable energy. Several governments and NGOs have floated a switch from an oil-based energy grid system to liquid natural gas as a way to transition away from fossil fuels to renewables as infrastructure and technology catches up. Natural gas is indeed a cleaner-burning fuel than oil and coal, releasing far fewer toxic hydrocarbons, heavy metals, sulfur oxides and nitrogen oxides into the air when burned. However, it still releases carbon dioxide when burned, as is the case with all hydrocarbon fuels, including various biofuels and ethanol. And just like oil and coal, LNG is nonrenewable and extracting it from the earth degrades the environment; while cleaner it still isn’t necessarily clean. Global supply chains must also be taken into account when considering what energy sources we use. Europe risks increasing energy dependence on Russia as it teeters towards using more natural gas (such as Germany). China is the global source for 85% of the world’s rare-earth metals, which are necessary for the production of water electrolyzers for Hydrogen gas production, as well as for photovoltaic cells in solar panels. For solar power, panels also require vast amounts of silica (sand), which causes significant environmental degradation when mined (and the sun doesn’t shine 24/7). Wind energy is a solution that is renewable, environmentally non-damaging, and doesn’t require rare or complex materials, but unfortunately technical limitations and practical properties (not everywhere is windy) limits its use. 

Of grid-scale energy sources, geothermal and hydroelectric power generation are fairly low-cost (both financially and to the environment) to set up and operate, but unfortunately there are limited locations globally where they are practical—either geography or ecological impact diminishes the number of suitable locations. Nuclear power is another renewable alternative that has been gaining in popularity among many energy experts recently. Nuclear fusion, which promises infinite clean power through creating a “star on Earth,” is jokingly referred to by scientists as “always being 30 years away,” and the technology likely won’t be ready for decades, if not centuries—far too late. Nuclear fission on the other hand, is a tried-and-true energy production method that has come a long way since its early use (and accidents). Public opinion seems to be the biggest problem for the widespread adoption of nuclear fission energy, as incidents such as Chernobyl still loom large in many minds. However, new technologies allowing for safe, decentralized fission reactors with waste recapture methods provide potential sustainable solutions to the hindrances to nuclear adoption across the globe. Per kilowatt-hour, nuclear fission produces very little waste, causes nearly no direct environmental damage, requires little in construction materials, sources fuel from an internationally-cooperative nation in Australia, and provides competitive costs at both the points of construction and production. However, there is still a long way to go in terms of adoption (outside France), as stigmatization of Nuclear, short lifespans, drawn-out semantic battles over where to put nuclear waste and the influence of the fossil fuel lobby stand in the way. Although tiered rankings of both adoptability and impact emerge, no energy source is without both benefits and drawbacks, so the question is: Which ones will we prioritize?

It is unavoidable that humanity will continue to grow- for the past twelve thousand years, it has steadily moved onwards, as societies have risen and fallen, languages have formed and faded away, billions of people have been born and died. The struggle for our Earth, our home, is ubiquitous and will last far beyond our short lifetimes. Over the past few centuries, making short-term decisions to benefit the few have resulted in catastrophe for the planet, and it is now up to everyone—of all ages, ethnicities, religions, and creeds—to work together and set up societal infrastructure for sustainable coexistence. The solutions we create today will likely need to go beyond just solving the problems of today: Reducing CO2 emissions, stopping environmental degradation, fighting poverty and disease; they must be so interwoven into our culture and values that they are able to be utilized by our great-great-great-great-grandchildren for problems of the future, problems we can’t even imagine! Together it is up to us, the citizens of this small blue dot in the sky, to work together to build that bright future for the people we will never get to meet.

Stay tuned for follow-up posts on our LinkedIn pages:

https://www.linkedin.com/in/benjamin-liker/

https://www.linkedin.com/in/trward/

Article 1: Post-COP26

Article 2: Nuclear

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