How markets are being used to save the planet

‘It’s now cheaper to save the world than destroy it,” is the poignant opening line of Akshat Rathi’s recently published book. This is the heart of the matter and Rathi, a Bloomberg journalist, concisely dissects how business, government and activists are coming together to confront the challenge of climate change through policy, innovation and market mechanisms. 

The book also begins with a hilarious anecdote about Donald Trump. 

“Donald Trump was campaigning to be the US president and, though he didn’t really care about fighting climate change, he was making pronouncements about ‘clean coal’ technology. I was a science journalist at the time, writing about everything from the birth of stars to the manipulation of atoms. My editor asked me to find out if clean coal was something worth writing about,” Rathi writes.

“What I learned was that Trump mistakenly thought the term referred to coal that could be somehow cleaned after it was mined. Instead, there was a technology called carbon capture and storage, which could trap and bury the CO2 produced when coal is burned...

“What started out as a single article about a flawed marketing slogan aimed at making a political point turned into a year-long investigation into breakthroughs in climate technology.”

It would also lead to this timely book about the race to “net-zero emissions”, an unintended consequence of Trump’s dim-witted grasp of science.

Net zero is a global policy goal aimed at getting the greenhouse gas emissions seen as most responsible for climate change down to zero, if possible, with those that linger reabsorbed by carbon sinks such as forests.    

What Rathi chronicles can perhaps be seen as a new phase of capitalism that, having played a very visible hand in the stoking of the climate crisis, is now in a position to undo the damage through innovation and markets – a drive that has growing public and investor support.

“It (climate change) cannot be addressed by the same form of uncontrolled capitalism that is partially responsible for the excess greenhouse gases stuck in the atmosphere. At the same time, reforming capitalism might be the only practical way to get to zero emissions so quickly. 

“This book shows why it’s possible to harness the forces of capitalism to tackle the climate problem – and how the work has already begun,” Rathi writes.

“Crucially, capitalism, from the United States to China, is now deeply entrenched. There’s not one ‘utopian’ country in the world where it has been successfully replaced by an economic system that solves climate change. 

“Even if you think the best option is to overthrow capitalism, there doesn’t seem to be any way that a new system could be put in place within the few decades left to avert catastrophic climate change.”

Rathi’s focus is on initiatives and individuals, some of whom have played an outsized if unsung role in the rise of climate capitalism. 

Wan Gang is a case in point. 

“Wan Gang’s story is mostly unknown,” Rathi notes. Yet he has been a driving force in the electric vehicle (EV) revolution, which is more commonly associated with the likes of the flamboyant Elon Musk.  

“While Musk fought Wall Street’s scepticism and benefited from waves of government subsidies to keep Tesla afloat through turbulent periods, Wan has shown how policy done right can drive technological disruption not just in China, but worldwide. 

“Both men are at the forefront of the global project to propel the world from the current economic age into the next – yet it is the lesser known of the two who has had the bigger impact,” Rathi asserts.

As China’s minister of science and technology, the car engineer who cut his teeth in Germany’s towering motoring industry forged policies that “incentivised the creation of hundreds of Chinese companies tied to making electric vehicles”.

“The country now sells more than six million EVs each year... Wan’s policies have also created some of the world’s largest and most valuable companies selling electric vehicles and lithium-ion batteries. And the choices he has influenced haven’t only affected already established Chinese car companies; all big car manufacturers in the world, for whom the largest market globally remains China, have been affected.” 

Then there is energy analyst, Fatih Birol, a Turkish national who steered the  International Energy Agency (IEA) from its focus on fossil fuels to its embrace of green energy.

Dramatic transition