Going Big: Now Is the Time for a Bold, Durable Strategy for Climate Protection
Now is the time to do what is necessary.
As President Joe Biden took office yesterday, our nation faces critical and urgent issues: a global pandemic, extraordinary economic challenges and political unrest following the siege on the U.S. Capitol.
Yet, as one of his first acts in office, the President rejoined the Paris Agreement. While the U.S. has made substantial progress on CO2 emissions, this move signals to the rest of the world that the United States will once again engage and collaborate in reducing carbon emissions to stave off the worst impacts of climate change. Its message also should be a reminder that, while our nation faces the immediate task of recovery, we must work for transformative change. Now is the time to act – act boldly, to move our nation toward a net-zero economy.
Climate change is already causing more frequent and severe weather across the United States. Our communities and businesses face threats to infrastructure, ecosystems, health and the economy if global warming is allowed to continue, according to a comprehensive National Climate Assessment. There is a real and calculable cost to inaction, a cost that only worsens over time. However, our borders do not insulate us from the impacts of climate change; it is a global challenge. Partnering with our allies – across business, government and society – to level the global playing field and ensure alignment on credible, effective, and long-lasting solutions will be critical.
By seizing the moment and going big with durable policies and investments that are equal in their ambition to the climate challenges we face, we can help secure a more stable and prosperous future for the entire planet.
Fast-forward to decisive action
Decarbonization will require big changes in almost every sector of the economy – and breakthrough technology and levels of infrastructure investment not seen in the United States in decades. This is a big opportunity for the United States. Central to these efforts is the transition to all forms of clean energy. But the clean energy technologies that are required to get to a net-zero economy are at different stages of development and have not reached commercial scale. Government policies and incentives are needed to accelerate the development of the required clean energy that will support this transition.
In addition to supporting the aims of the Paris Agreement, the United States should lead by example, adopting a credible, durable, competitively sustainable and comprehensive climate strategy for the world to follow. The strategy must aim to reduce, avoid and mitigate emissions, while increasing resilience and adaptation to climate change.
Actions should include:
- Government policies that accelerate the development of all forms of clean energy. Incentivizing innovation can drive emissions reductions at low cost, while also helping find optimal pathways for transforming our power sector and overcoming infrastructural and technological challenges related to renewables. For example, renewables can work for electricity demand in homes and vehicles, but many manufacturers require constant, very high temperatures to make products, which today can only be provided by coal, gas, hydrogen or nuclear energy. We will need all forms of clean energy to transform across all sectors.
- A market-based, economy-wide price on carbon. This could be one of the most effective policies to address climate change. An emissions trading system (ETS) could provide a smart framework to reduce carbon emissions and has proven to be a cost-effective carbon reduction policy in nearly 40 countries.
- Strategic investments in infrastructure. Although a price on carbon is not a silver bullet, we need to direct those funds to invest in process and technology breakthroughs and make strategic infrastructure investments. The private sector alone cannot create a net-zero U.S. economy without the full advantage of public investment from funds collected via a price on carbon.
These actions not only will move us closer to achieving a net-zero economy, but also will create jobs and boost U.S. competitiveness.
The role of business
While government must lead the way in the transition, companies also have a meaningful role to play. Recognizing the risks and opportunities, many companies, including Dow, already have taken major steps to reduce their climate impact and help achieve the vision of net-zero. In June, we accelerated our commitment to climate protection by announcing new targets that will help us lead the industry toward carbon neutrality, in line with the Paris Agreement.
Our actions aren’t only aimed at reducing emissions, but investing and innovating technologies that contribute to a low-carbon society, such as materials for lightweight cars, building insulation and solar panels. In fact, many Dow products help lower our customers’ emissions by more than the carbon emissions used to produce them. Companies like Dow have a unique role because our products are an important part of the strategy to achieve a net-neutral global economy.
So, what is needed to meet the global challenge of climate?
We need national policies that harness market forces and mobilize investment and innovation. We also need partners – the world needs to come together.
Yes, this work and these investments will have real costs, but so do the runaway costs of inaction. One study has estimated that, if emissions remain unchecked, losses related to just four areas – hurricane damages, energy costs, water costs, and residential costs stemming from sea-level rise – could equal 1.4 percent of GDP by 2025. The benefits – on the other hand – are numerous: new jobs, stronger U.S. competitiveness, improved public health, enhanced national and global security, and the preservation of vital ecosystems.
Now is the time to do what is necessary. Now is the time to work together and make the smart choices.
Now is the time to be bold and go big in investing in global climate protection.
Jim Fitterling, Dow Chairman and CEO