The recent Garnaut report states that “the solutions to the climate change challenge must be found in removing the links between economic activity and greenhouse gas emissions.” In order to successfully mitigate climate change impacts on both the environment and the economy, we need to go a step further and replace those links with avenues for sustainable economic activity. This can effectively begin with innovative designs for improving efficiency in energy production and usage.
Rather than compensating mining companies that are vulnerable to the new emissions trading scheme, the pledged compensation should be used to train employees of these companies with skills that will help them develop innovative designs for efficient energy usage to the commercialisation level. These high emission companies should begin investing in new technologies which could eventually be traded instead of coal to countries like China, in order to spread the improvements in carbon emissions to a global scale. Of course, this is the ten billion ton gorilla in the room that no one quite wants to recognise (at least not publicly!)
Credits to trade-exposed companies and low income households should only be considered to the extent that benefits are not initially received for their investment. Once benefits are realised, this monetary gain must be re-invested into future innovative solutions, thereby replenishing the funding for green solutions. Essentially, we need to amp up the green investment cycle. For example, in the above situation a mining company burdens the cost of training some employees and using their work hours for sustainable development avenues.
Once the company receives return on their investment, re-investment into development of sustainable technologies should occur to the extent of the original “loan” or government credit. Similarly, households given credits, for example, to install solar panels should be encouraged to re-invest the savings on their electricity bills into new innovative technologies. The establishment of this positive feedback loop should be a condition of receiving the credits in order to prevent the misuse of the credits or the undermining of carbon trading.
The missing links in the solutions to climate change are the real ideas that will drive the economy towards sustainable development. Treading softly on this issue is not an option – time is of essence. Another weak link in this much needed cycle is the fact that economic gain is our society’s key motivation and the environment is severely undervalued. The Garnaut Review states that environmental and social costs “are not amenable to conventional measurement”.
In other words, any cost-benefit analysis will not be accurate. Society’s real motivation needs to come from desire to maintain and conserve the environment for future generations. There is no adequate or accurate way to quantify this desire. And there is no way to ensure that that this desire is a top priority of world citizens. It seems that the best way to achieve this goal is to steer people’s actions economically. However, it is unlikely that the outcome will exhibit the same strength when motivated by monetary value.