What Climate Activists Don’t Understand
Money is what moves the world. Creating change is really hard without a business incentive. A good multiplier for impact is not just the amount of people that are decoupled from greenhouse gas emissions, but the number of dollars too. The article’s title is a little clickbait, but I do consider myself passionate about climate change and progressing towards a sustainable earth. I just find myself frustrated by many of the movements/protests that I have been to and seen on the news boasting a wide range of ideologies and misinformed political motives. My goal for this piece is to provide a data-based explanation of what solving the climate crisis looks like.
Money controlling the world is a harsh reality. A common statistic is that the top 1% of wealthy individuals control 30% of the total wealth. This is an important and true fact. The average household income in the United States is $67,521. If we imagine that family’s carbon emissions, now imagine what Elon Musk’s carbon emissions could be, with a net worth of $243,000,000,000, depending on where TSLA stock is today. Illiquid assets or not, he is able to control the carbon emissions of 3,598,880 families. With an average of 4 people per household, that is 14,395,520 people. That is 4.3% of the US population or as if 1 in 24 people were Elon Musk clones. This is why money matters and this is why it is what powers the world. We are multiplied not by our population but by our net worth and market capitalizations.
Business moving the world is one of the reasons why Tesla is great, because now there is a true business incentive in electric cars. Although where the energy comes from can be a problem, at least there is potential for it to be clean. With pure gas, there is no hope. Besides, clean energy is a solvable problem and has excellent case studies such as the Canadian province of Ontario. From history, we know that businesses will tend to do what they are incentivized to do. If that is to burn coal and waste resources then that is what they will do. This is because up until recently, there have not been serious economic repercussions for doing so.
So to solve the problem, we need to focus on the big pieces first. This is twofold: where are the emissions coming from and where are the financial incentives for it. Then, work towards bridging the gap between these two to see what capital is perpetuating climate change.
What is interesting is that you can see many countries moving the right way, towards lower emissions. However, China has a clearly widening share of the global emissions year over year. Also, a quick note on per capita data: although interesting, I deem it nearly irrelevant for this problem. Climate change doesn’t care how many people are on earth. It cares what the final sum is, and that is measured in annual emissions.
Looking at this chart here we can see that we only really need to focus on 4–6 countries to solve 67.62% of the problem. Observing the top countries sorted by GDP, we can see many of the same familiar faces. Who would have thought. GDP is essentially a measure of spending power per year and as I showed with the Elon Musk example, spending power is the power to reduce carbon emissions.
So out of these countries, how are we doing globally? As it turns out, this data is also publicly available:
The good news is, almost all the countries are on a steady downward trend in carbon emissions. The bad news is, it’s almost hard to see this downward trend when you have to plot China’s explosive growth on the same chart. With this knowledge, it can be tempting to think that China is the only problem and drastic action needs to be taken to intervene. After all, China has been known to not take self-regulating seriously. However, the carbon is on our hands too. A big part of this picture is the trade we do with countries like China. If we purchase products from them that were created using excessive carbon emissions, we are just making ourselves look better while continuing to support archaic carbon-emitting practices. As it turns out, measures are being taken to address this as well. Although the motives for the United States may be more economically motivated instead of climate focused, they achieve the same goal: pressure on China to co-operate with our plan forward. In the modern world, we don’t have boots on the ground wars. We use our trade and substantial portion of the world’s GDP to achieve our goals.
By keeping exports to China high and imports decreasing the United States is putting pressure on China to be a team player both economically and from a climate standpoint. This is a step in the right direction, but far from the solution. Products are far more expensive when manufactured outside of China, and with a rising inflation rate price increases are certainly not preferable for anyone. Remember this the next time you use your $400 iPhone (or alternative device) which was made an order of magnitude cheaper by manufacturing in China. Of course, there are still many things to be done inside the United States to reduce carbon emissions, but the point is we are on the right path.
So, for the next time you feel like yelling at your government to improve the climate crisis and take action, I hope you will recall the complicated big picture involved. This is not an easy problem. Limiting the products we use and consuming less energy are good starting points. We should work to incorporate nuclear power into our local grids. We should fight for legislation that creates incentives for sustainable business ventures. These are actions that have potential to save us from our self inflicted demise and they start with a more informed actor. I hope you are that actor.