Design in a Time of Uncertainty
By Rives Taylor, Principal, Global Resilience Research Lead
This past fall Dr. Gavin Dillingham, HARC’s Clean Energy Policy Program Director, was selected to attend the second-annual Yale Sustainability Leadership Forum. During the 3-day Forum, he attended presentations from leaders on emerging trends and worked with his cohort in an in-depth and integrated topical study.
In partnership with the Yale Center for Environmental Law & Policy and the Yale Office of International Affairs, the Forum explores sustainability as an overarching framework for life in the 21st century. An integrated policy concept, sustainability diverges from approaches to environmental protection and economic development that were pursued in the 20th century. The program focuses specifically on the megatrends distinguishing sustainability from its 20th century precursors.
Here's an informative Q&A with Dr. Dillingham on his experience.
What are the three take-aways we should note?
- There is growing effort to mainstream environmental concerns in corporate decision making. Integrate environmental considerations into financial decisions, rather than just have it play as a side issue. There is also growing leverage by non-governmental organizations and citizens to shift the way company’s build their products and the material they use. That includes pushes to change labor practices and reduce toxic material from products such as game consoles.
- A carbon tax is likely to be more palatable for companies than we led to believe. There is major, largely partisan battle about carbon regulations. However, we find that a significant number of large companies have planned for a carbon tax or some type of carbon regulation and it is reflected in their internal project development and investment models. That would suggest that a carbon tax is likely to not have a significant negative impact on a company’s operations.
- There are five key ideas on climate change communication: Scientists agree, it’s real, it’s us, it’s bad, but there’s hope.
What are some emerging trends in sustainability?
- There is significant focus on figuring out the optimal carbon price and how to implement an effective carbon regulation whether it is cap and trade or a carbon tax/fee.
- There is also a lot of focus on how to get the financial markets invested in green infrastructure and carbon neutral investments; there looks to be approximately $3.5 trillion in carbon investments globally; green bonds are growing significantly but still some uncertainty on financial markets on how to design some of these green funding instruments.
- Sub-state actors, primarily cities, will have to be the leaders in reducing greenhouse gases. They are at the level where climate impacts are felt most acutely, and climate change is more real. This realism has been and will continue to be a significant motivator for cities to take action to mitigate GHG and adapt its infrastructure.
What do other organizations see as the biggest climate challenge?
- Regulatory risk from a carbon tax so they are starting to calculate carbon pricing into every investment.
- Significant uncertainty on how future climate risk will impact return on capital investments.
- There is a realization of climate risk among most of the world but there is concern that the appropriate governance structure and leadership is not in place to identify and invest in the optimal solutions.