The Experts is an exclusive group of industry and thought leaders brought together by the Wall Street Journal to comment on issues raised in Journal Reports. In September 2013, BCG’s Iván Martén weighed in on four questions prompted by the latest Energy report.
There’s a consensus among leading scientists that global warming is caused by human activity. What—if anything—should we do about it?
The volume of greenhouse gases emitted by humans keeps growing. The concentration of carbon dioxide in the atmosphere is already around 400 parts per million (ppm) and close to the critical zone of 500 ppm, the point at which the consequences for our planet are unknown and potentially irreversible, according to climate change experts.
Although international agreements aimed at tackling climate change are failing, the issue is still on the agenda of governments and companies because the risks of inaction are huge. As President Barack Obama said in January 2013, “We will respond to the threat of climate change, knowing that failure to do so would betray our children and future generations.”
Public and private stakeholders should develop strategies to mitigate greenhouse gas emissions for two main reasons. First, climate change is a serious risk for our planet. Second, on the positive side, such actions can help generate new businesses that may contribute to economic growth and create jobs.
Worldwide, the rise in greenhouse gas emissions has been driven by population growth and economic development, which, by necessity, increases the energy intensity (energy consumption/GDP) and the carbon intensity (CO2 emissions/energy consumption) of nations. Mitigation measures, therefore, should be focused on lowering the energy and carbon intensity of social and economic development, especially in developing economies.
National, regional, and local authorities as well as companies should face up to this challenge with a really structured approach. They should define roadmaps for mitigating greenhouse gas emissions that fit their needs and context without losing sight of their goals. Climate change policies should incorporate detailed inventories of greenhouse gas emissions and solid abatement strategies, as well as plans that help to adjust to the new energy context.
Such roadmaps should include abatement scenarios that prevent damage to economic and social development and that promote technological change. Abatement technologies must be prioritized according to both their potential and feasibility, and over both the long and short term. Authorities and companies should start considering renewable technologies like wind, solar, and bioenergy that have already proved to be technically and economically feasible, as well as energy efficiency measures in the power generation, residential, industrial, and transportation sectors. In the long term, greenhouse-gas-abatement technologies such as carbon capture and storage will become more feasible, both technically and economically.
This blog was originally published by the Wall Street Journal.