It is an understated truth that economics is about people. Economics is the tool of politics. And it is fundamental to our concepts of community, fairness, and justice.
It is a well-stated truth that modern economies are fossil fuel economies, i.e., greenhouse gas economies. Yet, if the net-zero pledges are to be believed, it will also be true that we are heading towards a low-carbon economy the world over. If this is to be true, then it is a truth that will be realised fast (it needs to be).
Transitioning to a low-carbon economy is a major shift in our economics. This will inflict major impacts on people. Especially in the timeframes committed to by national governments and major corporations.
Looking at the corporate world, we see one such example of this. Many companies are promising to cut emissions to keep the world from warming below 1.5°C (what is known as a Science-based target). On the way to achieving this there will be left-over emissions (known as ‘residual emissions’). Even once achieved, there will still be left-over emissions. In dealing with these left-over emissions companies are exploring ‘neutralisation’ and ‘compensation’ measures.
Neutralisation measures remove molecules of greenhouse gases from the atmosphere. Compensation measures reduce (offset) emissions elsewhere (i.e., outside the company’s value-chain).
Neutralisation includes things like reforestation and BECCs (Bioenergy with carbon capture and storage). In the future, they may also include technological solutions. Compensation includes things like renewable energy or energy efficiency & fuel switching projects.
Demand for both measures is at an unprecedented scale. Yet, demand would need to grow at least 15-fold between 2019 and 2030 to reach a 1.5oC limited, low-carbon world.
Neutralisation and compensation projects impact people. Neutralisation projects at a global scale will have implications for land-use. This will affect water and food availability, land rights, and self-determination. Compensation measures can have positive effects. They are often designed in alignment with Sustainable Development Goals (SDGs). For example, a project may fund biogas use for cooking by communities. This can improve air quality and social conditions.
A low-carbon economy is still about people. And so is the transition towards it. As we make this unprecedented transition it is vital to put people at its core. It is by doing so that we can also begin to transform our ideas of community, fairness, and justice.