The 2 ℃ Dilemma
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The 2 ℃ Dilemma

  Jamal A. Said | Partner

  6th October, 2016

Jamal A. Said
Senior Consultant
Meirc Training & Consulting
September 2016

2016 is proving to be the hottest year on record. As a citizen of this wonderful planet, I take a keen interest in climate change. My concern is not personal, but more about the environmental inheritance we are leaving for future generations. While climate change is a priority topic for me, I fully understand why others may not consider it so. In light of this, I am very wary of the temptation to preach the ills of global warming and other related matters. As a matter of fact I am the first to acknowledge that my personal and business lifestyles are not well tuned with the environment.

However, if my personal and business lifestyles were actually environmentally friendly, how much of a difference would I be making toward reversing the process of global warming? The honest answer is very little if not negligible. Honesty hurts, but saying it as it is the fastest road to start fixing a problem. In the case of climate change we have a very awkward, extremely complicated, volatile, and unbelievably challenging situation, yet one that is not impossible to solve. So, if you happen to lead a healthy and environmentally friendly lifestyle, keep doing that. Don’t stop! First, it is a fantastic conscience-clearing effort. Second, a mind with a clear conscience is much more productive when thinking of solutions to problems or to the environmental dilemma we are facing. Third, your green and friendly lifestyle might be fertile ground for many creative, practical and well-tested ideas that you may want to share with others to help improve things within your direct circle of influence, and possibly on a wider scale. So, hang in there! We are not done yet.

On 7-8 December 2015 COP21 (Conference of Parties) took place in Paris, France. The conference is the United Nations Framework Convention on Climate Change (UNFCCC) where international environmental agreements on climate change are discussed and drawn. One of the key strategic goals of COP21 was to effectively set in motion the limitation of global warming to 2 ℃ (degrees centigrade) between NOW and 2100. Global warming of more than 2 ℃ would have serious and very possibly irreversible environmental consequences. According to the International Panel on Climate Change (IPCC) “Global Greenhouse Gas (GHG) emissions need to be reduced by 40-70% by 2050 and carbon neutrality (zero emissions) needs to be reached by the end of the century at the latest.”

On 4-5 September 2016 the United States of America and China formally joined the Paris Climate Change Agreement, when both ratified the outcomes of COP21 during the G20 summit in Hangzhou, China. They are the two largest economies in the world, and they represent 40% of global emissions of GHG.

Over the past two decades countries like Sweden, Costa Rica, and Germany have been leading the drive toward sustainable and green economies. They managed to achieve some impressive results toward reducing GHG emissions. Such efforts, unfortunately, will always have little impact, unless every country or nation, particularly the big economic players, get on board the environmentally friendly bullet train. With the United States and China on board, the business and economic scenarios are expected to drastically change. Adherence to environmental policies and targets will become more stringent, and penalties for non-conforming countries and their governments will become more austere.

Ratification of the COP21 agreement by more than 190 nations strengthens, in an unprecedented fashion, the environmental collaboration between the three main segments of an economy: The consumer (or the citizen), the government, and the business community (i.e. major corporations to medium and small size businesses across all industrial sectors). Whether we are talking local or global economies, what ideally should have happened at the dawn of the first industrial revolution is finally materializing, but with more urgency, haste, and pain.

Looking in the rearview mirror, environmental collaboration between consumers, business communities and governments regrettably rarely worked. Despite some brave attempts by all three, such collaborations have been fraught with failures, corruption, law suits, finger pointing, deception and intentional or unintentional naivety on everybody’s part. Now that we know our own precarious existence is at stake, collaborative efforts around environmental and sustainable initiatives are exhibiting some encouraging signs, but nothing close to tip the scale away from the 2 ℃ danger zone.

Since consumerism became main stream in the early 1920s, governments and their sub-entities (i.e. local provinces, states, cities, agencies, municipalities, etc.) have been on the front line when it came to dealing with the obvious and hidden environmental concerns resulting from the products and services we consume. In some cases, very courageous individuals, communities, and powerful investigative journalism and reporting took on the responsibility of bringing such issues to governments’ and public’s attention with varied degrees of success.

Be it electricity, cars, tooth paste, a smartphone app, a plastic bag or healthcare services, every product or service entering the market has its own environmental footprint. Generally speaking, governments, especially those of “advanced economies” try to regulate the environmental impact and public safety of such products and services. Certain regulations were enacted over a number of decades in the form of environmental and consumer protection laws in an attempt to control environmental degradation and public health safety concerns. Such laws are normally applauded by consumers residing within those advanced economies. However, as we clearly notice today, local or national laws have minimal influence on the rest of world, especially on emerging economies (e.g. BRICS: Brazil, Russia, India, China and South Africa). Over the past two decades emerging economies engaged in an unprecedented drive for economic growth with little “adherence” or “regard” to local or international environmental regulations or laws. For those economies the environmental footprint was of lesser concern as compared to the economic benefits and growth they voraciously pursued.

Three questions come to mind whenever the 2 ℃ Dilemma is discussed:

  • What can consumers do to contribute toward improving the environment?
  • What can governments do to promote sustainable and friendly environmental practices?
  • What can businesses do to ensure their products and services are environmentally friendly?

As a consumer, my impact on the environment is negligible compared to the size of planet Earth. When my consumption is multiplied by billions of other consumers, the story changes completely. Take Sodium Lauryl Sulfate (commonly known as SLS) for example; SLS is a widely used and inexpensive chemical found mostly in mainstream personal hygiene products such as shampoos, toothpastes, mouthwashes, soaps, detergents and body wash. Nature is quite efficient when it comes to breaking down SLS and other similar chemicals into more organic components that can be re-absorbed and naturally recycled back into the environment. When we, as consumers, inject, on a daily basis, billions of liters of SLS-based liquids, along with billions of plastic containers, into our landfills, rivers and oceans, nature stalls and the breaking down and recycling processes get choked. We are simply dumping into nature a lot more than nature can “handle”. The same applies to GHG, the main cause behind global warming, in addition to hundreds of thousands of harmful chemicals and gases that are more dangerous than SLS and yet end up polluting our environment.

The above reality merits a consumer pause, and some introspection into our consumption habits. We are definitely living in what I term the “Age of Plenty”. This does not and should not translate to taking nature and the environment for granted. If I, as a consumer, would like to continue relishing this Age of Plenty, I need to start changing some of my habits in order to help build a more sustainable and greener environment. Changing some of my habits may involve:

  • Becoming more conscientious and aware of my consumption habits or lifestyles
  • Leveraging my purchasing power to impact the environmental footprint of the products and services I buy
  • Harnessing the power of social media to increase the pressure on producers and manufacturers to rethink the entire lifecycle of the products and services they introduce into the market
  • Reaching out to government representatives on environmental issues, and pressuring them to do more at the local and international levels to improve environmental sustainability on all fronts
  • Participating in forums and conferences where one can exchange ideas on how to improve environmental footprint across different products, services, lifestyles, etc.

From a government perspective, there are many green initiatives capable of delivering impressive results over a relatively short period of time. Such initiatives include alternative transportation, more recycling, green buildings, landfills and mining pits rehabilitation, etc. The government can play many influential roles to accelerate the drive behind a sustainable and CO2 neutral environment, while driving a green agenda across all three segments of the economy. I summarize these government roles as follows: Expertise, Leadership, Enforcement, Facilitation, and Promotion.

  1. Expertise: Governments have to be the experts on the climate front. They should be the custodian of this environmental challenge, particularly when they are the ones participating in UN sponsored conferences on climate change. They need to build much needed expertise and awareness to be effective at engaging this environmental dilemma, and assuming the other key and complementary roles. Leading industrial nations have significant scientific and technological edge when it comes to working with the environment; they also have a head start of a number of decades when it comes to dealing with environmental crises, issues, laws and regulations. Such expertise is becoming vital for all nations to interact with environmental issues better, rebuff false claims, and to make sensible environmental and economic decisions in the short and long run.
  2. Leadership: Services like utilities, water treatment, desalination plants, waste management, land management, forestry, transportation infrastructure, public school and universities, building permits, city planning and management, etc. are considered part of the government or public sector domain. All of these services have a considerable impact on the environment and the amount of GHG they end up injecting into the atmosphere. So, to be in a position to ask the business communities and the consumers to become environmentally mindful, the government has to lead.
  3. Enforcement: With every COP (Conference of Parties) come new environmental policies and practices which will be enforced by the different bodies or organizations listed under the UN Charter. These organizations will work with the different governments represented in the United Nations. Local governments will try to enforce UN’s environmental agenda, which they themselves have ratified, by enacting their own environmental laws in line with those of the United Nations, and work with their business communities and citizens (consumers) to ensure they are meeting their national quotas or targets of GHG emissions. Yes, there will be resistance to such environmental laws, as well as non-conformance, and many attempts to cheat the system. With every passing year, the urgency will get higher, technology will get smarter, the enforcement will get stricter, and the penalties will get stiffer; the 2 ℃ Dilemma will not go away, unless everyone pulls together and collaborates to ensure enforcement pays off instead of leading to negative reactions or behaviors.
  4. Facilitation: As we push further toward reducing GHG, governments need to facilitate that push particularly when consumers and businesses show interest in participating to achieving that goal. This facilitation can take many forms such as: enacting new laws to allow the construction of charging stations for electric cars, giving businesses the right incentives to accelerate the introduction of products and services that are environmentally friendly, funding universities’ R&D activities that focus on renewable energy or innovations that help reduce GHG emissions. Many of these ideas are in place in some countries and have become mainstream, while they are non-existent in many other countries due to time-consuming bureaucracies and red tape.
  5. Promotion: Governments alone cannot solve the 2 ℃ dilemma. They need the cooperation of the business and consumer communities. As the presumed “custodians” of the climate challenge, governments need to continuously promote solutions for environmental challenges, report on the status of climate change and GHG emissions, announce and encourage the use of best practices to reduce the intensity of climate variations, work with the business community and consumers to ensure that climate change is on the agenda of every business, and every citizen, and so on. This role is the backbone of all other roles governments need to assume. It is all about communication. A proper comprehensive multi-channel strategy is indispensable to ensure the right message and level of urgency around climate change is received, understood and acted upon by all those concerned.

From a business community perspective, a lot can be done as well. As a matter of fact, this is the economic segment that, until very recently, had not embraced climate change as seriously as governments and consumers or, have approached the whole climate issue with skepticism or lack of interest. Still, I can think of a few reasons businesses distance themselves from an environmental agenda: 1. Profitability, 2. Cost, 3. Practicality, and 4. Uncertainty behind the story of climate change.

  1. Businesses need to be profitable. It is the premise upon which a business would grow, ensure investors are satisfied, and remain capable of securing capital to invest further and expand. Businesses cannot price themselves out of the market if conforming to environmental standards hurt their competitiveness while, foreign competition thrives in a lax environmental adherence setting. Many business firms have opted to shift their facilities to locations where environmental and labor regulations are less stringent in order to maintain a competitive edge, and to take advantage of incentives offered by the new host countries. Many of these decisions are taken for the sake of avoiding strict environmental and labor policies which can be quite costly to adhere to back home, and which could impact profitability. With regulations around global climate change coming into effect, we have a leveling of the playing field, and adopting an environmental agenda would form a solid business justification for profitability again. Does this mean that products and services will become more expensive? Probably, at the beginning, similar to the story of organic vs. non-organic food (or pesticide treated food); competition always finds a way to make processes more efficient and to make products and services more affordable, even at higher standards. At least traditional economics will still work in this particular case.
  2. The same logic can be applied to the cost of running a business enterprise. Every product or service has its own cost structure, which is closely tied to how a business is run. Once the cost of running an environmentally compliant business operation has been absorbed, the cost will go down due to more efficient operations and new technologies that are coming to the market on a daily basis. Such savings will impact the cost of a product or service and eventually the price. As a matter of fact, businesses should see a major influx of innovations on all fronts to facilitate the introduction of environmental practices back into the business enterprise. The good news is that there are many companies that have adopted such an attitude and have either established or re-engineered their operations with a view of what is best for the environment . Unfortunately, from a global perspective, such companies still form a very small percentage of the whole.
  3. One area where businesses resisted the idea of adopting a green agenda is the impracticality of some of the environmental requirements, innovations, ideas, etc. especially when you have a full-fledged business operation running, producing and making money. Take solar energy for example; besides being exorbitantly expensive when it was first introduced to the market, the amount of solar panels a business would need to have in order to produce what a diesel generator would is simply impractical. You can use solar panels to heat water, or even light a building, and that is great, but to run a production line, it might be a challenge for a business owner. Solar energy has been adopted by consumers and household owners, but for business owners with a lot of power requirements, that responsibility still falls on the shoulders of a utility company or government who can run things on a much bigger scale. It can also be taken up by energy entrepreneurs or consortiums of investors who are willing to consider large scale investments into solar or other renewable energy sources and make it economically feasible.
  4. Business people are generally practical people, and they are willing to adopt new ideas to help save the environment as long as they are realistically and reasonably priced. The good news is that we are getting there, and quite rapidly. Hence, business leaders and owners need to become more proactive toward the environment. Otherwise, their indifference or lack of interest would result in heavy penalties or fines. They could also face business closures due to non-compliance with environmental policies and regulations, and operating beyond stated and agreed GHG emissions. This time around, it would be very hard to ship their business operations overseas, since compliance with climate change regulations is a globally enforced agenda and no longer limited to a local or a national one.

Adopting a green agenda is not rocket science. Here are some pointers for the business community to consider as they start or re-evaluate their transition toward an environmentally, CO2 neutral business operation:

  • Ensure that sustainability and contribution to a climate friendly business environment is part of a company’s vision, or one of the strategic themes upon which the company is basing its long term future.
  • Make environmental compliance a daily or weekly discussion where initiatives to reduce carbon footprint are discussed, measured, amended and celebrated. Businesses need to also rethink their product and service lifecycle beyond passing the ownership to the consumer community.
  • Introduce environmental accountability in employees’ job objectives. This way, employees, who are also consumers, are rewarded and compensated for their contributions to a green environment inside and outside their workplace.
  • Encourage employees to participate in social activities geared toward improving the health of the environment .
  • Push companies that are not environmentally friendly, to accelerate their contributions on the social responsibility front, and allocate budgets where they balance their high GHG emissions by investing in initiatives that help neutralize their emissions. This could be similar to greenhouse gas credit exchanges or trading, where voluntary emission reductions are listed for non-compliant companies to purchase. The money is then used to fund emission reduction “projects implemented in accordance with rigorous protocols and guidance approved by the governments to ensure the credits are real, quantified, verified, permanent, fully enforceable, and are additional or surplus to any reductions that are required (or would otherwise occur)”.
  • Seek the right advice from reliable sources on how to become an environmentally friendly business. Many environmental initiatives, despite being advertised or positioned as environmentally compatible, result in outcomes that are harmful to nature instead.
  • Partner with the government and the consumer community to help close the gap between the three segments of the economy.

What concerns me as a global citizen is not the lack of interest or indifference toward environmental issues, but the skepticism about the validity of the challenges surrounding climate change. Even worse is the two-pronged approach toward the environment as a whole. In a recent report, some of the most admired and leading US corporations, with a market value that can easily outmatch the GDP of many sovereign nations, were touting climate policies, while at the same time funding climate skeptics with unbelievably huge sums of money . I am confident the leadership at those leading corporations has many questions to ask, and I have full faith that some serious actions will be taken to review the due diligence behind such activities.

Everything is out there, and sooner or later information about lack of compliance or questionable activities that harm the environment will eventually come out; just like the story of VW and their admittance to deliberately bypassing U.S. EPA’s (Environmental Protection Agency) pollution standards. (You can read more about this story by clicking on the link).

COP22 is coming up very soon, right at the heels of COP21. It will take place in Marrakech (November 17-18, 2016). One can’t help but feel the urgency created by the momentum resulting from US’s and China’s ratification of COP21. Thus, actions, directives, provisions, proposals, guidelines, targets, etc. will be issued and many of those will affect all three segments of the economy of every nation involved. From a consumer perspective, engagement is a must. From a government perspective, leadership is paramount. From the business community perspective, innovation, creativity and ownership are without a doubt the ingredients needed to accelerate our recipe of recovery toward a more sustainable and CO2 neutral global environment.

During my last visit to Lebanon, I went to a small village in the Beqaa Valley to visit a friend. The village sits on the banks of one of the tributaries of the Litani River. As we talked, my friend commented on the fact that many people in his village are dying of cancer. He attributed this fact to the high pollution level of the Litani River. Then he said that over a period of thirty to forty years a river where people used to spend their pastime, swim in, bathe in, even wash their clothes in have turned into a health and environmental hazard that is adversely affecting the lives of those living around it. It will take time to change things. We cannot expect overnight successes to climate change and reducing GHG emissions. The same story gets repeated everywhere across the world. What was done over a period of 30-40 years, will take time to be undone.

Nonetheless, only by working together would the 2 ℃ dilemma be turned around to become a wonder of human ingenuity and will power.