Addressing climate change is the most formidable challenge humanity has faced since World War II. Reaching net zero requires similar levels of mobilization, cooperation, and dedication from every part of society.
The challenge is huge. Over 80% of our energy still comes from fossil fuels. Transitioning to carbon neutrality will require a rewiring of the entire global economy.
Achieving a transformation this big will require action from all of us. We need broad systems change right across our economy and society. No one can afford to stand by.
It’s not enough to reduce emissions in some parts of the world. We are one deeply interconnected global ecosystem. The entire planet needs to take action.
Global unity also means achieving a just transition, both within and between countries. We must manage the transition with empathy for all people and nations, and ensure no one is left behind.
We must fight together on all fronts, sharply reducing our emissions while adapting to changes already happening. Humanity is capable of incredible bravery, resilience, and unity - and that’s just what we need right now.
If the public and private sectors across the world join forces, we believe we can achieve the depth and scale of change we need. The efforts of public and private will enable and amplify each other, accelerating our progress toward net zero. Here are four ways public and private efforts can fuel progress together.
Together, we can accelerate innovation. The International Energy Agency predicts that roughly half our carbon efficiency by 2050 will be powered by technologies that currently only exist as prototypes. What can public and private sectors do to help? Government can invest in early stage R&D to help make speculative technologies practical and affordable. Business can leverage its skills in product development, supply chain, manufacturing, distribution, marketing & sales, product support, and more to bring new technologies to market and spur their adoption.
Together, we can create functioning markets. At PwC, we believe in the creative power of markets to accelerate progress. But markets struggle to function if, for example, infrastructure is lacking, risk is too high, financing is unavailable, demand is too low, or supply chains are broken. Government can help to correct these issues through, for example, sharing risks, underwriting investments, building infrastructure, or educating the public. Business too helps to create markets by addressing market failures, creating new businesses, and transforming existing businesses to align with the net zero transition.
Together, we can create the right regulation and policy environment. Government can create regulations and policies that encourage and enable the net zero transition. For example, only government can price externalities like carbon emissions - for example, through carbon pricing. (At PwC, we see the value of carbon pricing as a market-based lever to increase incentives to reduce emissions.) Governments can set economy-wide rules like emissions standards, fossil fuel phase-outs, or green building standards. At PwC, we have called for governing bodies to institute global standards for non-financial reporting. For its part, business can align its strategy with policy signals and the evolving regulatory environment, and proactively report on climate performance.
Together, we can build public and political will. Both business and government can marshall, amplify, and demonstrate vocal support on net zero. Both can play a role in maintaining public support for the green transition, for example by supplying the affordable green products and stable green energy supplies to support a smooth transition.
Public and private efforts together fuel the ‘flywheel’ of progress. Efforts in one area enable progress in others, each positive step forward encouraging others and speeding the flywheel.
Here’s just one example of these positive interactions. Green policy encouraged wind turbine innovation, making turbines more cost-effective and growing the market for wind farms. More wind farms increased the supply of affordable green energy which helps to maintain public support for the net zero transition. Public support encourages further innovation and investment. And so on, accelerating our progress toward net zero. When we see successes like this, we know it is possible to reach net zero if we all play our part.
The flywheel reminds us it will take all parts of society working together to meet the biggest challenge facing living generations. The more hands we have pushing the flywheel, the faster our efforts can amplify each other and the faster we can accelerate toward a just transition to net zero. (See more about how the flywheel helps us unpack the change we need and the roles we all need to play.)
At PwC, we are striving to do our part. For example, we are contributing to policy development by advocating for global non-financial reporting standards and developing original research on the impacts of an international carbon price. We support innovation on climate change with our Global Innovation Challenge. We support our clients to transform their organizations to align with net zero. Our ESG Academies actively upskill all of our global staff on achieving net zero. And we are transforming our own business with science-based climate targets validated by the Science Based Targets initiative.
COP26 is a moment of hope. Now is our time to come together to create a world we are proud to leave to our children. Every one of us must do our part.