Yuval Noah Harari: The 2% solution to curb the climate crisis | Ideas

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Yuval Noah Harari: The 2% solution to curb the climate crisis | Ideas
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As the climate crisis deepens, too many people are moving from evidence denial to despair. A few years ago it was common to hear people denying climate change, downplaying the threat, or claiming it was too early to worry about it. Now there are many who say that it is too late. The apocalypse is coming and we can’t do anything to avoid it.

Hopelessness is just as dangerous as denial. And it’s just as misleading. Humanity has immense resources and, if used wisely, it can still avoid environmental cataclysm. How much exactly would it cost to stop the apocalypse? If humanity wants to prevent catastrophic climate change, how much money would we have to pay?

Naturally, no one knows for sure. My team and I have spent weeks poring over academic papers and reports, immersed in a cloud of numbers. The models on which the calculations are based are dauntingly complex, but the result is encouraging. According to the International Energy Agency, to achieve an economy with net zero carbon emissions, it would be enough to invest 2% of the world’s GDP per year more than what we already spend in our energy system. In a recent Reuters poll of climate economists, most agreed that achieving carbon neutrality would cost no more than 2% to 3% of annual global GDP. Other estimates calculate a slightly lower or slightly higher cost to decarbonize the economy, but all calculations indicate very low percentages of annual global GDP.

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These figures are in line with assessments by the Intergovernmental Panel on Climate Change, which in its landmark 2018 report stated that to limit warming to 1.5 degrees Celsius, annual investments in clean energy needed to increase to about 3% of world GDP. Given that humanity already invests about 1% of the world’s GDP per year in clean energy, we do not need more than an additional 2%.

The above calculations focus on the cost of transforming the energy and transport sectors, which are by far the largest. However, there are also other sources of emissions, such as land use, forestry, and agriculture. You know, the famous cow farts. The good news is that many of these emissions can be reduced cheaply with behavioral changes alone: ​​for example, by cutting back on meat and dairy and introducing more vegetables into our diets. Eating more vegetables costs nothing and can help us (and the rainforests) live longer.

We can argue endlessly about the numbers and adjust the models one way or another. But we must not stop at mathematics, but have an overview. The bottom line is that the price of preventing the apocalypse amounts to a tiny percentage of annual global GDP. Not 50% or 15%. It is less than 5%, maybe even as little as 2% more of world GDP invested in the right items.

And I highlight the word invest. We are not talking about burning piles of banknotes as a great sacrifice to the spirits of the earth. We are talking about investing in new technologies and infrastructures; for example, advanced batteries to store solar energy and upgraded power grids to distribute it. These investments will create many jobs and new economic opportunities and are likely to be financially profitable in the long run, in part by reducing health costs and preventing millions of people from falling ill due to air pollution. We can protect the most vulnerable populations from climate-related catastrophes, leave a better future for generations to come, and create a more prosperous economy in the process.

Cloud Forest scenic in Amazonas region of Ecuador.
Cloud Forest scenic in Amazonas region of Ecuador.Mark Newman (Getty Images)

This great news has been somewhat marginalized in the heated debate on climate change. We must highlight it, not only to give people hope, but above all because it can be translated into a concrete plan of political action. In recent years we have learned to define our goal with a numerical value: 1.5 degrees. And we can define the means to achieve it with another number: 2%. Increase investment in green technologies and infrastructure by two percentage points above 2020 levels.

Of course, unlike the 1.5 degree figure, which is a solid, science-based threshold, the 2% figure is no more than a rough estimate. It should be understood as a possible figure, useful to frame the type of political project that humanity needs. It tells us that avoiding catastrophic climate change is a totally feasible project, although it would obviously cost a lot of money. If, at present, the world’s GDP amounts to about 85 billion dollars (about 75 billion euros), the 2% adds up to around 1.7 billion dollars (1.5 billion euros). That means that in order to save the environment, it is not necessary to completely ruin the economy or give up the achievements of modern civilization. We just have to set our priorities properly.

Let’s not think that signing a check for 2% of the annual world GDP is a panacea, far from it. That will not solve all our environmental problems, such as plastic invading the oceans or the continued loss of biodiversity. Even to avoid catastrophic climate change, we will have to make sure that the funds are invested in the right places and that the investments do not cause new environmental or social damage. If we destroy a number of ecosystems by extracting rare metals needed by the renewable energy industry, we arguably lose as much as we gain. In addition, we will have to change some behaviors and ways of thinking, from what we eat to the way we travel. It will not be easy. But that’s exactly what we have politicians for: their job is to tackle the tough stuff.

In fact, politicians have a great ability to transfer 2% of resources from one side to another. They do it all the time. When push comes to shove, the difference between the policies of right-wing and left-wing parties is often only a few percentage points of GDP. When a truly major crisis arises, politicians are quick to allocate far more resources to combat it. For example, in 1945, the United States spent almost 36% of GDP to win World War II.

During the 2008-2009 financial crisis, the US government spent about 3.5% of GDP bailing out financial institutions deemed “too big to fail.” Perhaps humanity should also treat the Amazon rainforest as a “too big to fail” entity? Taking into account the current price of tropical forest land in South America and the size of the Amazon rainforest, buying it in its entirety to protect local forests, biodiversity and human communities from destructive corporate interests would cost an estimated $800 billion, that is, an amount less than 1% of world GDP.

In the first nine months of 2020 alone, governments around the world announced stimulus measures worth nearly 14% of global GDP to tackle the covid-19 pandemic. With enough citizen pressure, politicians can do the same to deal with the environmental crisis, as can investment banks and pension funds. The latter have a capital of about 56 billion dollars. What is the use of having a pension if there is no future?

Currently, neither companies nor governments are willing to make the additional 2% investment needed to avoid catastrophic climate change. Where do they invest the money?

In 2020, governments invested $2 trillion in their militaries, representing 2.4% of global GDP. Another 2.4% of global GDP is spent every two years on food that goes to waste. Governments also spend an incredible $500 billion a year in direct subsidies to fossil fuels. That is, every 3.5 years, governments give away an amount equivalent to 2% of the annual world GDP to the fossil fuel sector. And that’s not all. Taking into account the social and environmental damage caused by the fossil fuel industry (and given that it is not asked to pay for it), the value of these subsidies is actually as much as 7% of global GDP annual.

Yuval Noah Hararien in an image from 2016.
Yuval Noah Hararien in an image from 2016.Jonathan Nicholson (NurPhoto/Getty Images)

Let us now turn to tax evasion. The EU estimates that the money hidden by the rich in tax havens represents around 10% of global GDP. Every year, companies hide another $1.4 trillion of profits in tax havens, equivalent to 1.6% of global GDP. To avoid the apocalypse, we will probably have to create several new taxes. But why don’t we start by collecting the old ones?

The money exists. Of course, it’s one thing to talk about raising taxes, cutting military budgets, ending food waste and cutting subsidies, and quite another to do it, especially when you’re up against some of the world’s most powerful lobbyists. But no miracle is needed. Only organization and decision.

So we must not succumb to defeatism. Whenever someone says, “It’s too late! The apocalypse is coming!”, we must answer: “No, we can prevent it with only 2%”. And when COP27 convenes in November 2022 in Egypt, we must tell the assembled leaders not to just make vague promises about 1.5 degrees. We want you to get out your pen and write a check for 2% of the world’s annual GDP.

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