If the world heats up more than 2 degrees Celsius, and we have a risk that we are moving in that direction, most scientists say we don’t know any more how that future will look. Not only that the water will be higher, and some countries like the Netherlands maybe are in danger, but also biodiversity will go down, all kinds of droughts will be there, rainfall will be there, so mankind will suffer a lot from this.
So that is the reason, because of the devastating costs of greenhouse gas emissions, why we need to reduce the exposure or we need to reduce the emissions of carbon dioxide into the air, because we need to address climate change.
Via carbon pricing, you build in an economic incentive for companies to move to the use of alternative energy and to reduce their own greenhouse gas emissions.
I think today it is an excellent moment to do that. Oil prices are relatively low, and it is easier at a relatively low oil price to add that carbon pricing than when oil prices would already be very high.
The moment you have a good carbon pricing and/or the oil price will be higher, basically you increase the fossil cost by adding a price on carbon, then you make it easier for alternative and hopefully competing technologies to reach our economic system, like solar, like wind, like biomass, etcetera.
And I think we should stimulate that. And of course people are working on those technologies. And of course governments are simulating those. But I think there should be a baked-in economic incentive to develop those new technologies and not only dependent on good will or responsibility.
I think if we would introduce a price on carbon, we would create that.
One day, let’s realize that we will move away from the fossil age we live in today to a bio renewable age.
It is unbelievable what we did in the last 150 year in making the world totally addicted, dependent on those three raw materials. And due to the industrial revolution based on those three raw materials – coal, oil and gas – we built a lot of prosperity. But will that be continuing forever? No way.
Will we anyway at a certain moment run out of those materials? Yes.
Before we run out of those materials, will they become very expensive? Yes.
Next to becoming more expensive, will they be very polluting, and therefore if we want to get the middle class in India and China also to provide them energy, we need to change? Yes.
One day, we will switch from the fossil age we live in now and people will realize we will live in a bio renewable age. Just because new alternative are there, just because new alternatives need to be developed.
We didn’t leave the Stone Age because we were totally short of stones. We left the Stone Age because we had better alternatives available. And that will happen again.
This article is published in collaboration with The World Bank’s Development in a Changing Climate Blog. Publication does not imply endorsement of views by the World Economic Forum.
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Author: Feike Sijbesma is CEO of Royal DSM, a health, nutrition, and materials company.
Image: The sun is seen behind smoke billowing from a chimney of a heating plant. REUTERS/Stringer.