Economic Growth

Is a low-carbon economy achievable?

Antoine Frérot
Chairman of the board, Veolia
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After having invented the high-carbon economy that alters the climate of our planet, will mankind be up to the task of “disinventing” it? And will we manage to stabilize the increase in temperature within 2°C? That is the major challenge of COP21, the United Nations Conference on Climate Change, which is being held in Paris this week.

If we are going to keep climate change under control, it is important to step back and examine its many origins. The phenomenon is the result of a development model based on fossil fuels, which leads to releasing vast quantities of greenhouse gas emissions: that much, we all know.

But above and beyond that, it is the result of a linear approach to the economy, of the “extract, manufacture, dispose” type, in which increasing quantities of resources are extracted from nature. The non-recovery of waste, the non-reuse of used products and non-recycling greatly increase the need for energy. But of that, we are far less aware. It requires the implementation of a different model for the use of natural resources, one that consumes less and more efficiently. This other model must be supplied by clean energy and based on the principles of the circular economy – turning waste into resources. Making new raw materials by recycling waste produces far fewer CO2 emissions than extracting virgin raw materials from the environment. In the area of plastics, for example, the use of recycled PET emits 70% less CO2 than the production of virgin PET. Too often, we do not realize that the circular economy is one of the main levers for reducing CO2 emissions. When temperatures are rising, when extreme events become the norm and the unusual becomes the usual – the economy has to become circular.

When we talk about greenhouse gases, we immediately think of carbon dioxide. However, we must not forget short-lived atmospheric pollutants, methane in particular. Calculated over a century, its contribution to greenhouse gases is 14%, but calculated over 20 years, it is as high as 40%. In other words, if we want to achieve rapid results in reducing greenhouse gas emissions – and we know we have to act fast – we also have to combat this gas that we hear little about but that makes such a significant contribution to climate change. Bringing down levels of methane emissions would have a significant impact in the short term and must be tackled with as many resources and as much ambition as the sensitive issue of CO2.

The world is caught in a dilemma between the need to satisfy growing demand for energy and protecting the climate. Whatever the uncertainties surrounding the agreement that will be reached at COP21, we do have the means to act. Yes, solutions to greenhouse gas emissions exist. We can mention waste recovery, whether in the form of energy or materials; capture of methane from organic waste and its transformation into heat, biofuel or electricity; energy savings and energy efficiency; and the use of non-intermittent renewable energy, such as biomass and the recovery of unavoidable energy.

However, no single solution will be enough; no company, no municipality, no nation alone will be able to deploy them on a sufficient scale. If we want the low-carbon economy to become a reality and put a ceiling on the amount of carbon accumulated in the atmosphere, we must intensify our efforts towards cooperation and innovation. Cooperation is needed so as to spread the use of these solutions that, for example, turn energy which is not used by some into basic energy for others, or that organize permanent resource recycling; both of these solutions in turn reduce energy needs. And innovation is required because a low-carbon economy will necessarily be an economy of innovation.

However, for these “anti-CO2” solutions to come into widespread use, it is vital to set a robust, predictable carbon price at a sufficient level, which means at least €30 to €40 per metric ton of CO2. And that means having to take into account the cost of all external factors relating to carbon dioxide – as is already the case for waste water and waste – by applying the two-fold principle that “the polluter pays” and “whoever cleans up receives help”. At the moment, as there is no carbon price that charges for the use of the atmosphere as a “greenhouse gas dump”, anyone and everyone is free to release as much CO2 as they like. It costs nothing to pollute, whereas it costs a great deal to treat the resulting pollution. An economic system that encourages the emission of greenhouse gases cannot hope to reduce them. It is simply not possible to conduct strong environmental policy with weak regulatory mechanisms. Without financial incentives and a far-reaching regulatory framework, winning the climate battle will remain a pipe dream. So to all the diplomats who will be negotiating the COP21 outcome, I say: give us a good agreement and we will give you a good low-carbon economy.

The author is one of 78 signatories to an open letter from CEOs to world leaders urging climate action.

Author: Antoine Frérot, Chairman and CEO, Veolia

Image: Trees and plants frame a building in the “eco-neighbourhood”, Clichy-Batignolles, one of several new ecological housing developments with low energy use and carbon emissions, in Paris, France, October 22, 2015. REUTERS/Benoit Tessier

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Related topics:
Economic GrowthClimate ActionCircular Economy
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