Handshakes, diplomatic formalities and zero progress. The UN’s historic Paris Agreement may look good on paper, but it takes more to stop global warming. Just ask Bill Gates.
On December 12th 2015, history was made in Paris. Government leaders from around the world vowed to do their very best to ensure that future generations have a planet to live on. The UN’s Climate Conference managed to reach its objective to make a legally binding universal agreement on methods to reduce climate change. In the wake of this historic agreement, the U.S. Secretary of State at the time, John Kerry, announced that the United States would double its spending on helping developed countries decrease carbon emissions and adapt to climate change impacts. Alongside China and India, the U.S. is considered one of the key players in solving the environmental issues the world undeniably will face in the 21st Century.
The world is undoubtedly in another state than it was only a year ago. The Obama Administration is replaced with a president that does not believe in climate change and even managed to remove the White House’s website on climate just minutes after the inauguration. The world is waiting nervously on what President Trump will do with the Paris Agreement. The sudden change of political climate in the U.S. reveals the vulnerability of multilateral agreements. Considering that we have no “world government”, the sovereign states are the highest level of authority. Apart from the regulations by a few global institutions, this pretty much means that the supranational level is an anarchy. Multilateral agreements alone will not be sufficient to solve the climate problem, due to the possibility that one of the parties could pull out of the pact.
Trendsetters of Silicon Valley
Present among world leaders at the 2015 Paris Conference was Microsoft-founder and philanthropist Bill Gates, reputed for his engagement and generous contributions to secure an ecologically sustainable development. In the November 2015 issue of The Atlantic he emphasized the necessity to fund energy technology research and development through an increased government spending. Specifically, he argues that the U.S. government should triple today’s annual spending from $6 billion to $18 billion. From whatever spin-offs that will come out of this government-funded activity, Gates argues private investors like himself should support these high-risk start-up companies.
Bill Gates wants mankind to invent its way out of the climate crisis. And things are happening. Silicon Valley’s biggest rock star these days, Mr. Elon Musk (the man behind Tesla, SpaceX, PayPal, SolarCity… you get the idea) paves the way for this development and is presumably held in high esteem by Gates. Perhaps more surprisingly, he is also highly regarded by reality star-gone-President Donald Trump. This is in no way due to Musk’s efforts regarding sustainable technology, but due to his great and fantastic contributions to the domestic workforce. Trump even appointed Musk his political advisor, a role the climate-hero accepted in order to bring some moderate perspective into the White House (keep your friends close and your enemies closer, right?)
The real-life Iron Man (Musk, that is) is dramatically changing the automotive industry as we speak. Tesla has been the first-mover, and other car companies are now realizing that electric vehicles are the way forward. Even Tesla’s battery production will be sustainable, thanks to the newly opened Gigafactory in Nevada where solar panels, windmills and geothermal energy provides life to everything. (Seriously. Google it). It’s pretty cool that the world’s largest factory will produce as much energy as it uses.
Let’s Talk Justice (‘Cause We Like It Complicated)
The media has accused parts of the participating nations of slowing down the progress when trying to reach climate agreements. The lack of political engagement may stem from the common perception that ecological sustainable development will happen at the expense of business profits and the nations’ economic growth. Indeed, this was among the most difficult topics for the Paris-negotiations. The President of the world’s largest emission-nation, China’s Xi Jinping, emphasized this issue in his opening ceremony speech with the following statement: “It is imperative to respect differences among countries, especially developing countries, in domestic policies, capacity building and economic structure. A one-size-fits-all approach must be avoided. Addressing climate change should not deny the legitimate needs of developing countries to reduce poverty and improve their people’s living standards.”
The Unsustainable Growth of China
As a result of its political reform era in the late 1970’s, China has seen rapid economic growth and what the World Bank describes as 200 million Chinese citizens raising from absolute poverty. However, as President Jinping acknowledges in his speech, this growth has not been sustainable, leaving the Middle Kingdom with serious pollution issues yet to resolve. The main responsibility however, should according to President Jinping lie on the developed nations which ever since the industrial revolution have pumped substantial emissions of carbon dioxide out in the air.
Agreeing with President Jinping, is Indian Prime Minister Narendra Modi, who commented in Financial Times in 2015 that the wealthy countries had “powered their way to prosperity on fossil fuel” and thus have a moral duty to lead the fight against climate change. On the other hand, representatives from the developed countries argue that the availability of new technology and energy sources makes the responsibility universal.
India, with its 1.2 billion inhabitants, is currently the fastest growing economy in the world. Unfortunately, the “world’s largest democracy” has major issues regarding natural resource management. The author of Imagining India, Nandan Nilekani, describes it as a nation stuck in old nonrenewable energy patterns, missing out on the opportunities innovation and new technology presents. However, if shifting towards a low-carbon energy strategy, India is blessed with an abundance of land, wind, sun and natural gas resources. Indian policy-makers have thus far not prioritized environmental concerns, and have instead focused on a rapid economic growth. It is presumable that Indian authorities will be forced to address these issues as the population continues to grow and the ever-increasing energy demand causes problems.
The Role of Multinationals
Yes – we need clean technology inventions, but it is no secret that large multinationals will play a crucial part of the ecological future ahead of us. Many have pointed at globalization forces, especially in terms of multinationals, as the big bad wolf when it comes to climate change. In hunting for lower costs, many multinationals have moved their production to low-cost markets such as China.
From a moral standpoint, developed countries cannot deny the developing countries the same opportunities that they had as they rose from poverty. But at the same time, we can’t run the experiment of doing nothing.
According to the author of China 2020, Michael Santoro, the nature of China’s economic and ecological future is going to be greatly influenced by the role of Western businesses. Santoro describes two possible scenarios that he names “Pax China” and “Nox China”. The former is an optimistic projection with improved rule of law, human rights and a healthy economic growth whilst the latter represents a pessimistic narrative where China remains in the shadows of Tiananmen Square, regressing to a tighter authoritarian rule. In fulfilling “Pax China” corporations have taken an active and engaged role as opposed to “Nox China” where they have functioned as passive bystanders. Additionally, a third scenario referred to as “muddling through” is discussed, reflecting a state of stasis where the future China is more or less equal to today’s reality.
Triple Bottom Line
As for the role Western businesses should undertake, Santoro is not in doubt: by committing to its “moral duty to do its fair share to promote worker rights, product safety, Internet freedom and rule of law”, Western businesses are setting the path to “Pax China” and will ultimately benefit from a sustainable political and economic Chinese future. Fortunately, an increasing number of corporations are now paying attention to the so-called “Triple Bottom Line”, which regards social, environmental and economic issues as interconnected.
Bill Gates wants mankind to invent its way out of the climate crisis.
More Effective Than Sovereign States
An example of a Western business that is currently changing China for the better is the American multinational Walmart, which may come as a surprise to many considering its low-cost strategy. However, the corporation has had a “reincarnation as a company devoted to sustainability”. As the world’s largest corporation, Walmart can be even more effective than a sovereign state in changing social and environmental matters. Every move they make is going to have a profound impact on their stakeholders. As a result of this, Walmart’s eco-friendly efforts are contributing to a shift on a global scale.
What’s In It For Me: How Corporations Can Benefit
Turning greener can actually be beneficial for companies in several ways. Dr. Paul Shrivastava’s article “The Role of Corporations in Achieving Ecological Sustainability” from 1995 captures the mindset behind Walmart’s and other businesses’ environmental strategy in the following excerpt: “Corporations too stand to benefit by moving toward ecological sustainability. They could benefit by reducing costs through ecological efficiencies, capturing emerging “green” markets, gaining first-mover advantage in their industries, ensuring long-term profitability, establishing better community relations, and improving their image.”
Join Me On The Green Side
By 2030, two million people are going to be brought into the global middle class. Combined with the expected population growth this will represent a huge threat to mankind if world leaders and businesses simply maintain the laissez-faire attitude towards these issues. From a moral standpoint, developed countries cannot deny the developing countries the same opportunities that they had as they rose from poverty. But at the same time, we can’t run the experiment of doing nothing. Accordingly, the solution would have to be innovation. However, if we run the current business-as-usual course, the technology might be invented too late. For this reason, Gates would like to “tilt the odds in our favor by driving innovation at an unnaturally high pace”. We may have the key to what is going to be the 21st Century’s greatest battle if we invest in energy technology research and development as well as pushing multinationals to pay attention to their triple bottom line. As a matter of fact, there will be no economic future if we do not preserve the environment.