November 30, 2022

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Cloudy skies early, then partly cloudy in the afternoon. High 77F. Winds SSW at 5 to 10 mph..
Clear skies with a few passing clouds. Low 48F. WSW winds shifting to N at 10 to 15 mph.
Updated: October 6, 2022 @ 1:22 am

If we are to solve the climate change crisis, we need to get politics and government out of the way.
The failure of UN conferences on climate change, especially the unmitigated failure of COP26 (Conference of the Parties) at Glasgow, illustrated that world leaders could not agree on a unified strategy or tactics to mitigate the impacts of climate change.
We also need to decouple climate change solutions from ESG (environmental, social, and governance). ESG is a set of standards for a company’s behavior, used by socially-conscious investors to screen potential investments. The concept of ESG is far too complicated to be understood. There is no standardized measurement for ESG. We cannot paint all corporations with the same broad brush. With a corporation’s measurement of how it is perceived to be performing on a wide range of environmental, social and governance topics, many times there is a gap between perception and reality.
We even need to decouple climate change issues from other environmental issues measured by ESG. Climate change is a huge issue, rarely understood by most people, whereas ESG further complicates and creates a much larger issue rarely understood by anyone.
But if we were to allow capitalism to solve climate change, we would develop a market-based solution to climate change such as ICEMAN (International Carbon Equivalent Mechanism Attributed to Neutrality). This is a methodology I developed to solve climate change using a globally standardized measurement system known as the Greenhouse Gas Protocol, which was developed by the World Resources Institute (WRI).
Through ICEMAN, companies can get an accurate snapshot of their product’s carbon emissions on a standardized scale. ICEMAN applies established sciences and protocols to calculate the sum of greenhouse gasses emitted throughout every part of the supply chain – for the product itself and for all the materials and components it contains. The result is a carbon neutrality percentage applied to every product so that consumers can make the most informed – and climate-friendly – decision possible.
For decades, governments around the world – including the United States – have endeavored to pass legislation to combat climate change. World leaders have gathered at international summits and conventions, negotiating treaties and protocols. But when it comes to actually implementing measures to achieve greenhouse gas reduction goals, many countries – including the U.S. – have fallen woefully short.
History has proven that government climate change efforts simply don’t – and won’t – work. Why?
To begin with, every solution presented so far includes some kind of government-mandated tax, fee, or redistribution of wealth. Take the solution included in the Kyoto Protocol: Cap and trade. In this system, the government sets a cap on the amount of greenhouse gas emissions permitted across an entire industry. Then, companies within that industry trade in a market, buying and selling carbon offsets that permit them to emit a certain amount of greenhouse gasses. Because they need to pay for the carbon offsets, and because they can sell whatever offsets they don’t use, companies have a strong incentive to reduce their emissions.
Meanwhile, the government reduces the cap over time, encouraging companies to cut their emissions further. The government also sets the penalties for cap violations. It is a carrot-and-stick approach: The costs of purchasing carbon offsets and penalties for cap violations are passed onto the consumer, creating a carbon tax that increases the cost of products.
Cap and trade is not the only government-mandated system out there. Another is Carbon Fee and Dividend, in which the government places a fee on fossil fuel emissions. That fee steadily rises over time. This will increase the cost of products for companies, which will then increase the cost of those products for consumers. The fees collected are placed in a trust fund, and the dividends for that trust fund are returned directly to consumer households every month. The argument goes that a majority of consumers would receive more in dividends than they would pay in higher prices.
Carbon Fee and Dividend is essentially a wealth distribution system. The Kyoto Protocol also included an explicit wealth distribution system aimed at poverty eradication, in which wealthy countries with high per capita carbon footprints – such as the United States – would pay fines, which would go to developing nations so they could start implementing renewable energy infrastructure.
Now, in many countries, especially in Europe, systems like these have already been implemented. This is because those countries – including my birth country of Norway – are social democracies, meaning they are governed from the top down. And for the most part, the citizens of these countries trust that government officials, with their experience and expertise, know what is best for the country. So, when a government passes a mandate, people are generally willing to accept it.
But countries like the United States are different. In the U.S., power comes from the bottom up: From we, the people. It’s how all of our founding documents were written, from the Declaration of Independence onward. The power has always been with the people. So top-down government mandates rub us the wrong way – especially when they impact our capitalist, free-market way of thinking and operating our economy.
Government-mandated climate change efforts can work in a limited capacity within a top-down social democracy because there is a limit to the mandates elected officials can implement. However, it simply will not effect the kind of real, rapid change we need to avert a climate crisis.
But in a bottom-up free market economy, we understand market forces can be brutal and have an unlimited capacity to cause meaningful change to happen in a real way. We saw the negative effects of market forces in the 2008 economic collapse when the “too big to fail” corporations teetered on bankruptcy until the government bailed them out by infusing them with capital. Imagine a system that can harness market forces in a powerful, positive way and will work in every country to ultimately solve the climate crisis.
Frank Dalene, the author of Decarbonize the World: Solving the Climate Crisis While Increasing Profits in Your Business (www.frankdalene.com), is president and CEO of Telemark Inc., a construction services business he co-founded with his brother Roy in 1978.
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As attested by Vladimir Putin’s carefully calibrated photo ops such as the infamous image of the Russian leader shirtless atop a horse, he knows the value of spectacle.
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If we are to solve the climate change crisis, we need to get politics and government out of the way.
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