Council Post: How We Must Fix The Market To Save Our Planet

What can we do about the climate crisis? It’s probably much more straightforward than you think. In truth, there are only two things we can do.

The first is we can make and consume less stuff. This one’s mostly on you. It’s a matter of habit, mindset and self-control. Do you really need that sweater you will only wear once? How much food do you throw out every week? Do you need to take that business trip?

The second thing we can do is change the way we make and consume the stuff we do need and the stuff we enjoy. I, for one, don’t need queso and tequila, but without it, what’s the point? This one’s on us: the CEOs. And right now, we’re failing.

Because while the question of what we can do to combat climate change may be straightforward, the question of how to do it is anything but. And currently, we’re not putting nearly enough energy into figuring it out.

There is no silver bullet when it comes to changing the way we make and consume goods. Instead, to respond, we require a million innovations extracted from a million minds and made real by the resources of the world’s nations and companies. These minds are out there right now, but many of them aren’t trained on the climate crisis.

If the future we want is to remain in our grasp, this must change. Fast. We must refocus the world’s attention on the climate crisis, and we must ensure that the resources are available to bring our innovations to life.

If we can figure out how to do that, all the other “hows” — how to move goods and people, how to provide electricity, how to manufacture without carbon — will rapidly fall into place, and we will find ourselves on course for a future that is as remarkable as it is sustainable.

Luckily, we don’t have to figure it out. We already know how to do it.

A new group of voices has joined the ranks of those who, for decades, have been calling on governments to confront the climate crisis. These voices don’t belong to the people you might suspect, and what they want might surprise you. They hail from the C-suites of the world’s largest companies, like Shell, Nike, BP, Nestle and Microsoft, and they’re taking to Capitol Hill to demand something that would’ve seemed unheard of from corporate executives just a decade ago: a price on the carbon dioxide they emit.

Those at the helm of corporate America are increasingly aware that neither our businesses nor our species can thrive in a world in which global warming exceeds 2 or 3 degrees Celsius. They know that to address the climate crisis we must first address a flaw in the market that caused the crisis to begin with. This means we must put a price on carbon.

Carbon is a resource in high demand and short supply. We need it to make and move almost everything in our world, but at our current burn rate, we have only about 10 year’s worth of carbon in the bank before the planetary systems that we rely on for survival and prosperity are irreparably broken.

It doesn’t take a brilliant CEO to know that, in a situation like this, where supply is low and demand is high, that the price of carbon should be extremely high. But in the case of carbon, this most basic of market mechanisms has collapsed. Not only is carbon cheaper than it should be; in most places on earth, it’s free. This has led to an unsustainable use of one of the world’s most dangerous resources.

We need to start conserving carbon, right now, and aggressively as possible. The only way to make that happen fast enough is to make the market treat carbon dioxide like any other commodity: to make the market accurately reflect its scarcity and value and to make carbon, like all other resources, something that is reflected in the cost of doing business. Then we will start to see the natural conservation of resources and the speed of green innovation catch up to the speed of the climate crisis. And only then will we see an alignment of the interests of shareholders with the interests of society.

But carbon is a strange commodity. The market can’t put a price on it by itself. Only one entity can do that: the government.

The transition will be costly, and there will be some who lose out. But the price of carbon, no matter what it is, pales in comparison to the cost of inaction. We simply can’t afford to not pay for it. And what we’ll get for the price is more than survival. It is a society and an economy that is more equitable, more advanced, more connected and safer than most of us can even imagine.

We must fix the market to save our planet. To help fix this, small businesses and all businesses can do two simple things: Vote for officials who support putting a price on carbon and advocate within your communities for the same. CEOs know it, and it is time for the government and the rest of us to catch up.