6. Solving the Climate Crisis: A Hidden Dialogue of Two Power Players
« 5. Climate Naivety: The $50 Trillion Mirage
In the heart of ancient Norse legends stands Yggdrasil, the World Tree, an evergreen ash tree whose sprawling branches and deep roots provided a place for Odin to spend nine days and nights to find wisdom. Yggdrasil is hard to find, but with me having trouble with the final part of the Climate Kraken series, I went to this tree to find help.
Kristjan: “Great Yggdrasil, the final chapter of my Climate Kraken series has been troubling me. Four drafts in, and still, the words fail to capture the urgency without plunging into total darkness. How to find a path to this story?”
Yggdrasil: “You have taken quite a quest. Think about it, has there been ever a bigger challenge for humankind than the current climate crisis? So the path to cure is complex. However, I offer you a unique aid: Close your eyes, and I'll summon any two individuals from your world. Infused with the truth-revealing waters of Urdarbrunnr, they'll answer three of your questions candidly. You can never reveal their identities. Who shall they be?"
Kristjan: "I seek the perspective of power and influence. One—a Prime Minister from the G7 nations, and the other—a CEO from an industry with a significant carbon footprint, but not from the tech world."
Yggdrasil: "Prepare yourself. Lean into my bark, close your eyes, and let the journey begin."
//
Two figures materialize before me.
Kristjan: "Given the brevity of our time, I must dive straight in. In the past three years, you've recognized the gravity of the climate crisis, yet your actions haven't mirrored that urgency. Why?"
The Prime Minister paused before beginning. "Consider my position. As both our party's leader and the prime minister, I grapple with a constrained budget. Requests pour in from every angle, and the climate is merely one aspect. My team consistently asks: Does this align with our polling?
This is the reality of politics. Polls, which reflect our voters' sentiments, take precedence. While I acknowledge the severity of the climate crisis and its impending intensification over the next decade, our electoral terms are just four years. Climate repercussions aren't immediate within this span.”
The eyes of the Prime Minister looked tired. Was this the price of constant maneuvering? He took out his phone. “Just this morning, a poll indicated that 53% of our voters oppose hiking car taxes. However, the youth are increasingly eco-conscious, and their electoral presence is growing. Hence, come 2030, our commitment will intensify. For now, we are applying only moderate measures and setting ambitious targets for 2040 and 2050, a strategy that resonates with our majority electorate."
CEO: “That honesty is refreshing, PM. My position is also not easy. As the CEO of a publicly listed company, I am responsible to my board and shareholders to deliver a high level of profitability every year.
Over the last 5 years, the importance of sustainability has increased a lot, so we have for sure to take this into account as well. We have a big sustainability team that is focussing on how to reduce our CO2e footprint and we are also offsetting our CO2e footprint. Honestly, not all of it, but Scope 1 and some Scope 2. More and more customers, supply partners, and banks are asking for this, so we need to do this. I am sure we could have done way more, to be honest, at least 10 times more. But the “more” would cut into our profits very strongly. Neither the shareholders nor board would approve that.”
//
Kristjan: "I have come to the conclusion that in the battle against climate change the idea that 'polluters should pay' should be central. Were this to be universally applied to governments, businesses, and individuals, we'd see a significant decline in CO2 emissions. Do you concur? And if so, what barriers exist?"
The CEO started quickly. He was witty and fast, but it was also clear that he had spent a lot of time thinking about this issue. "At its core, I believe in that principle. We anticipate that, in time, a global mandate where 'polluters pay' will be adopted. Charging for pollution would drive behavioral change, as both companies and individuals are inherently cost-conscious. For instance, the Voluntary Carbon Markets (VCM) exemplify this shift—allowing businesses like ours to offset emissions by partnering with enterprises that sequester carbon. If all companies offset their total emissions, the results would be transformative.”
The CEO pauses, clearly feeling uncomfortable: “However, and this is a significant point, I've never voiced these thoughts publicly. Instead, we've directed substantial funds toward lobbying efforts against it. If anyone believes that the surge in VCM criticism over the past year is due to journalists spontaneously digging deeper, I have a bridge to sell to you. Confusion around climate topics is advantageous for us, as it delays concrete solutions. Here is the toolbox we use for PR messaging:
Why are we doing this? I would have to close half of my global business if we would have to offset properly all the pollution we generate. It probably will need to happen in the end, but the later it happens the better for our company.
PM: This all makes sense. I do agree that the 'polluters should pay' is the right principle, but you also need to understand that the interests are very different. It is no secret that richer countries pollute more and with that, we have way less interest to make everybody pay for their CO2 footprint. Look what is happening at all the COP meetings - lots of important words, but realistically nothing that would enforce the governments act right now. I love this, it gives my government no external pressure, but it’s a sign of very different interests.
This chart reveals that UK and US voters are less concerned about climate issues than those in Mexico, India, or Brazil. Two points stand out: our government will prioritize climate funding when over 50% of our population is 'alarmed'—we're not there yet. Plus, while the Global South will face the worst of climate change impacts, the Global North, which contributes more to pollution, is less personally affected and thus less motivated to act.
CEO: “Adding to that, within the corporate realm, there's vast variability. Tech firms can comfortably proclaim they offset their carbon emissions—their primary products are digital, inherently producing a lesser footprint. But tangible goods, from our meals to apparel, carry a carbon cost. A UK-based 'carbon intensity' chart depicts this stark difference: sectors with low carbon-per-unit revenue are less inclined to adopt a 'polluter pays' system."
Kristjan: Lastly, if you would have unlimited budgets and just one job - to solve the climate crisis, how would you do it?
PM: "Let's face a hard truth: You cannot have economic growth, bring hundreds of millions of new people to the middle class every year, and get the CO2 levels down. It’s just physics, it’s not doable. I am a politician, so everything needs to start from the story. Let’s stop the growth story, I am sure that deep down most of the Western World understands that the climate issue is serious and they are willing to change as well. Let’s find a new story that is not growth anymore. We do not need to fall into poverty, but what about the new narrative that says “Let’s focus on having a livable planet for our kids”? And next, we say that this is a more important issue than growth. That would refocus the whole society. The total narrative change.”
CEO: “Very true. Presently, we risk ending up with neither growth nor a sustainable environment. There's a pervasive optimism that CO2 levels will spontaneously decrease, but how? People need to understand that solving climate change is going to cost and everybody needs to pay. Governments, companies, individuals. The budget of that war is 50 trillion euros. Has humankind ever faced a problem that costs this much? No. Therefore it’s crucial to also look at the costs. Start with solutions that cost less. This tool shows clearly that some of the solutions are cheaper - renewable energy, nature-based carbon solutions, electrification, etc. “
Why are the cheaper solutions important? If you have an honest view on government budgets, those are so much under water already, that governments will probably not be the ones who will pay for it. And private sector can only do this if the cost is tolerable.
PM: "I agree. The financial limitations of G7 nations mean governments can cover only a portion of these costs. But there's a way to accelerate change. As I've mentioned, our actions are driven by polls and voter demands. If G7 constituents insist that companies include their carbon pollution costs in product prices, we politicians would implement such policies.
What the voters outside of G7 are voting … I am sorry, it does not matter very much on this. The capital and pollution are coming from G7. So it’s up to all regular voters in the EU, US, and UK to decide what we will do on this. Therefore, ordinary citizens of these nations wield considerable power over our climate response.”
CEO: “Ugh, this would mean that the profit margins of most businesses would come down. And also it would mean higher prices for consumers. Not easy. But (oh, I hate this truth serum), this would be a very big step to bring pollution levels down. If there is a direct cost with carbon emissions, every business would very seriously refine their operations. We're are slowly moving on that path, but a universal approach would turbocharge corporate efforts."
The CEO and the PM have put away their phones, creating an eerie silence. They've often thought these thoughts, but they've never voiced them to outsiders before. This all seemed surprisingly doable.