Climate Change
Green Premium and Climate Change
Bill Gates recently wrote a book called How to Avoid a Climate Disaster.
We must reduce the world’s annual greenhouse gas (GHG) emissions from 51 billion tons to net zero by 2050.
He offered his mental framework and actionable steps required with breakthroughs and innovations. This blog intends to explain the climate crisis, the green premium and some solutions to avoid a climate disaster.
Human beings emit roughly 51 billion tons of greenhouse gases per year. These gases stay in the atmosphere for thousands of years. These emissions raise the temperature, which causes disastrous effects on the human species.
As long as humans keep emitting them, temperatures will increase. This will lead to catastrophic climate changes.
Sources of these Emissions
To reduce emissions to zero, we need to understand the sources of these emissions. Almost all human activities emit greenhouse gases into the atmosphere.
The five primary sources of the current global GHG emissions are
- manufacturing (31%)
- electricity (27%)
- agriculture (19%)
- transportation (16%)
- buildings (7%).
The Green Premium
The green premium is the additional cost of buying a product or a service with no emissions compared to the price of that product with emissions. Currently, green alternatives are more expensive than existing products.
For example, the difference in cost between an electric car and a gas car in the passenger car industry. The electric car is more expensive, with less mileage and longer charging time than gas cars.
As electric cars become more affordable and as good as gas cars, the electric vehicle would be preferable. Similarly, green alternatives will be preferable for other industries over the current products once the green premium comes to zero.
Here are Some Actionable Steps to Avoid a Climate Disaster
- Reducing emissions is not about stopping essential activities like manufacturing, agriculture or electricity. These activities are precious for humans. The goal is to continue to do these necessary activities but without emissions.
- An essential method is to innovate to create more affordable and better green solutions and products to replace the current products.
- Governments around the world must increase their Research and Development budgets. — They should have economic policies like tax credits or subsidies, such as making the carbon version more expensive or subsidising the green version.
- We need people and organisations who make it their moral duty to solve climate-related problems instead of working on other issues. Providing funding and capital for these people and organisations is integral to the solution.
- The most challenging part is to create markets for these green alternatives. The combination of supply of innovation and demand for green products helps in making this change to the physical economy.
Climate change is real. Human beings need to come together and take steps. They must collaborate and, through innovation, create green alternatives to bring the total greenhouse emissions to net zero by 2050.
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