Danny ChenThe future is there but not equally distributed.
Several years ago, when AI Gore gave the speech at TED Conferences, he used the NASA - National Aeronautics and Space Administration “human to the moon’ as an example to explain every challenges are not too big to solve but the determination of the people will make the history. However, as he mentioned in the 2023 Ted Talk, the global temperature rise continues. The question that we now face is: Will we solve climate change in time?
Historically, in our human society, the global annual greenhouse gas(GHG) emissions drop in 2 times: the 2008-2009 financial crisis and the 2020-2022 COVID-19. The rest of the years, the GHG emissions increase with a average compound rate range of 1.1-1.3%/year(according to the The World Bank data).
In his speech, he pointed out that relentless opposition from the fossil fuel industries and outdated traditional capitalism are the major obstacles that we need to overcome. Fossil fuel companies and their representatives(e.g., Dr. AI Jaber) advocate that phasing out fossil fuels will not result in sustainable socioeconomic development. The problem is not about fossil fuels but the GHG emissions from fossil fuels. If we can reduce/remove the GHG emissions from fossil fuels, there is no problem.
The statement is true if most of the negative external impacts can be mitigated properly. However, the funding allocation to these actions from fossil fuel companies is limited, where spending too much focus on marketing rather than technology development. There is a direct conflict of interest when taking climate action when the business profits are affected.
And here comes the second problem: outdated traditional capitalism. The capitalism is an imperfect solution that allocates resources efficiently through voluntary trade and market competition. It works well for human society but not for the Earth's ecosystem. As our global population grows, the ignorance of the positive/negative externalities of human activities can not support sustainable socioeconomic development. Accordingly, the regenerative economy with a conditional impact business model receives more and more stakeholder attention.
AI Gore mentioned that the sustainability revolution was the single largest investment opportunity in history for a while ago, and I somewhat disagree.
All impact VC investors know that investment is not revenue. Without market demands from consumers, no climate startups will survive. On the other hand, without market demands from consumers, there are no fossil fuel companies, where pollution will never happen.
At Optivide, we acknowledge that our climate ecosystem is complex, with conflicts of interest among stakeholders and intergeneration. Even without a conflict of interests, each stakeholder's priorities are different. It makes the necessary impacts often hard to fulfill. Nevertheless, it does not mean fossil fuel companies or any businesses should be responsible for their Scope 3 emissions.
Scope 3 emissions mainly originated from stakeholders' Scope 1 and 2 emissions. When we ask businesses to take other stakeholders’ Scope 1 and Scope 2 emissions as their reduction responsibilities, we indirectly allow stakeholders to have free-riding problems.
In a global capital market where competition is encouraged for efficiency and effectiveness, stakeholders' free-riding problem harms voluntary climate action. It harms the market demand for the climate solutions proposed by startup founders and slows down our climate progress.
Different from the NASA - National Aeronautics and Space Administration Apollo mission, the climate problem cannot be solved by a small group of elites without market demands and cannot be solved by 1-time climate action.
Most of our human activities create greenhouse gas(GHG) emissions and before we can solve the problem, we need voluntary carbon credits to mitigate the problem and encourage climate innovations.
In spite of all the differences between climate action and the NSAS Apollo mission, 1 thing for sure is that every challenge is not too big to solve, but the determination of the people that prioritize and sacrifice.
When Apollo mission succeeds after 8 years of preparation, the average age in NASA control room for Apollo mission is 26 years old, when they first heard about the moon landing plan at age 18.
Future generation will be most affected by the climate problem when they are with least financial resources, global networks and domain knowledge to engage the climate movement.
However, they hold less conflict of interests when it comes to solving the climate problem.
The future is there but not equally distributed. With proper support from intergenerational cooperation without geographic boundaries, we may solve the climate problem in time.
