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An industrial policy for climate change

By Jeffrey Sachs

23 February 2009

I believe that the biggest question on the planet today involves sustainable development: is there room enough on the planet for seven billion to ten billion human beings, tens of millions of other species, and economic convergence between rich and poor? As I argue in Common Wealth,¹ the answer is no with current technology, and yes if we focus on sustainable technology. The major challenge for our generation is to overhaul several key technology systems on a global scale, including: power production, food supplies, transport services, and infectious-disease control. These steps should be combined with a massive effort in family planning and voluntary fertility reduction, so that we aim for a peak population of eight billion people around 2050, rather than nine billion or ten billion people.

The global economy is literally unsustainable now and cannot absorb further economic and population growth without serious risks of global destabilization—even collapse. The unsustainability shows up in the following areas:

Carbon dioxide emissions, now running at around 36 billion tons per year, and growing by 1 to 2 percent per year during normal years
Nitrogen deposition from fertilizer use, creating more than 100 hypoxic zones in the world’s estuaries and wreaking even more extensive ecosystem damage
Water stress from ground-water depletion, glacier melt, reduced snowmelt, diversion of upstream waters through dams, increased evapotranspiration with higher temperatures
Greatly increased risk of new and reemerging zoonotic diseases
Greatly increased damage from invasive species
Greatly increased risk of extreme weather events, including droughts, floods, and tropical cyclones

Even if we did nothing more than continue at current levels of production and resource use, each of these problems would prove to be devastating within decades. Climate change would get completely out of control, reaching serious tipping points in food production, water availability, extreme events, and perhaps sea levels. Epidemic diseases could prove devastating. Food crises would multiply. Biodiversity would be shattered, with likely millions of species facing the threat of extinction.

The implications are rather clear. Either we cut back sharply in living standards in the rich countries, squelch development in the poor countries, or revamp our technological systems world-wide. The costs and benefits of these alternatives are a matter of empirical investigation. I believe the evidence is very strong that the best course of action is technological change, aiming to make possible the convergence of living standards of rich and poor, the continued high living standards of the rich countries, and environmental sustainability. In other words, technological advances, if properly promoted, can turn the answer from no to yes.

It’s even fairly clear what needs to be done, but of course less clear on how to do it. Just a few human activities contribute the bulk of the unsustainable resource use. The major areas to focus on are:

Electricity production, which must become low- or zero-carbon emitting

Automobile transport, which must multiply by four- or fivefold the miles vehicles can travel per gallon of gasoline or eliminate gasoline entirely by moving to electric batteries recharged on a clean grid

Food production, which must produce a healthier diet with much less destruction of habitats, biodiversity, and water resources; less use of pesticides and antibiotics; and reduced greenhouse gas emissions (methane, nitrous oxide, and CO2 through fossil-fuel use)

Green buildings that are much more energy efficient and more reliant on electricity than they are on on-site burning of fossil fuels

Reduced industrial pollution through systematic materials recycling and the redesign of production processes

Comprehensive introduction of infectious-disease control, including surveillance, monitoring, case management, and appropriate uses of antibiotics

Accomplishing these goals will require bold sector-wide strategies involving the public, private, and academic spheres. The biggest mistake is to believe that technology transformation can and should be left to the marketplace, perhaps after tweaking the markets with some corrective pricing (for example, tradable permits for greenhouse gas emissions). Large-scale technological change requires basic scientific research, extensive spending on product and process development, high-cost demonstration projects, public awareness and education campaigns, revamping of regulations (including environmental assessments, federal land use, liability law, taxation, and zoning), as well as help for the poor to adopt the new technologies. Major industrial sectors in the United States—such as airplanes, automobiles, Internet, public health and medical care, and power generation and the electricity grid—are all examples of extensive public–private partnerships. When the government retreats too much, as it has in the development of carbon capture and sequestration (CCS) technology, precious years are lost.

The Obama administration should revamp and dramatically upgrade the US federal laboratories system by boosting the amount spent on RDD&D (research, development, demonstration, and diffusion) of sustainable technologies from roughly $3 billion per year to $30 billion per year. Moreover, the new administration should rapidly engage with key international counterparts—Brazil, China, the European Union, India, Japan, and Mexico, among others—to cooperate on major new technology classes, such as large-scale solar power, long-mileage automobiles, and global disease control and surveillance. The China–US relationship will of course be especially pivotal. The two countries contribute more than 40 percent of the world’s greenhouse gases. Neither can solve the climate or food problems on its own, and both have a tremendous amount at stake. Technological cooperation rather than confrontation and finger-pointing will be essential.

Like McKinsey, I’ve tried to estimate the costs of these technological transformations. My impression is that they probably sum to 1 to 2 percent of GNP on an annual basis—or, very roughly, $500 billion to $1 trillion per year, a significant sum but modest compared to the incalculable costs and risks of wrecking the planet. Climate change, disease control, food production, and biodiversity are solvable problems, but only if we cooperatively choose to direct significant resources toward their solution, mobilize the needed scientific and engineering knowledge, and act quickly and consistently for years to come. All of this requires a significant, but manageable change in direction.

¹ Jeffrey D. Sachs, Common Wealth: Economics for a Crowded Planet, New York, NY: Penguin, 2008.

Comment [22]

Agree? Disagree? Let us know what you think. Please include your full name with your comment. Comments may be edited.

As a person growing up in a developing country like India in 1980s and 90s I was really petrified to know that most of the speicies of the world and the entire natural resources were at risk of being completely stripped to the bone leaving earth a skeletal emaciated remain of its original magnificient self. As I was fortunate enough to lay a hand on Time and Newsweek during those formative years I thought I know about the problem and I should go about educating my peers and the society in general. However, even today a lot of the earth is alive and kicking and the politicians, corporates, traders and power elites of all types doesn’t seem to understand what I am saying. The question that arises is neither the country from where the journal originated is interested in bringing down carbon footprint nor the one that is reading the material shows any sign of scaling down their ambitions. I don’t know whether we are beset with the problem of collective death wish?

Posted 7 August 2009, 05:43 by Keshav Chaturvedi/ India
Dr. Sachs is a professor of sustainable development at Columbia. He tells us that the “biggest question on the planet today” is whether there is “room enough … for seven billion to ten billion human beings, tens of millions of other species, and economic convergence between rich and poor?” He tells us that the solution so all our problems is “sustainable technology”?

I would ask the good professor if he is aware of any system which has ever existed at any place in the known universe — social, economic, technological, environmental, chemical, et al — which meets his definition of “sustainable”.

When I hear the word, I think of the perpetual motion machine. And when I hear proposals for managing population growth, I think of George Orwell’s dystopian predictions… or China’s one child experiment. The future is grim, therefore we should turn our lives over to beneficent professors and government planners.

Could it be that Nature doesn’t give a moment’s care as to whether the climate is cold or warm, or which species live or die? I’m told that 99.5% of all species of which we are aware are extinct, yet millions of species currently exist.

I am amused by those who say we should stop listening to scientists bicker and simply move forward, making sweeping changes while having no idea if they are actually needed or if they will be truly beneficial.

Posted 14 July 2009, 14:20 by Bill Bigman
This is my first reading of a McKinsey online article and I am impressed that they do back sustainable development. I generally agree with all statements inside Prof. Sachs paper but I would point that birth-control measures should be the most important and first to implement as currently the world economy is based on satisfying the needs of non-stop growing human population and thus inflicting further and further damage on the planet. Limiting the growth will have positive effect on all spheres as companies will strive to profit not by selling more and more units but to optimize their production in order to decrease the cost of goods sold. Efficiency and sustainable development will then proliferate.

Posted 1 April 2009, 10:13 by Nik Steff
A very insightful and well written piece by Prof. Sachs.

This article is a sobering read for Indians like myself. It suggests that we rethink our development paradigm. We have the opportunity not to make the same mistakes as the developed world and then figure out how to correct them. We should figure for ourselves a way to economic growth in a sustainable manner using appropriate technologies and policies and not blindly the economic growth and development model of the west.

Posted 27 March 2009, 05:02 by Karthik Mahadevan
Solutions to global issues are developed quite slowly, despite the clear indication that all will lose from lack of a deal.

US, EU, Brazil, China, India, Mexico, Japan are mentioned as the initial round of states – where a consencus must be established.

Unfortunately, it is precisely the presumed leader of this process – the US – who has turned down for decades the quest for global decision-making. The globe needs a stronger-then-any-individual-government institution to govern and enforce the change. The UN, international court of justice, Kyoto Protocol, WTO’s DOHA round are good examples of strong states not respecting the international decision-making, and their efforts have mostly gone nowhere.

Also note that if the decision-making body favors certain states, and results in a polarization because of lack of democratic process, that decision-making body will not be sustainable.

A new mechanism is needed for strong international collaboration. UN and the like are dysfunctional as it is. Could the internet help?

Erdem Ovacik

Posted 21 March 2009, 07:38 by Erdem Ovacik
The first step in this direction has to be taken by united states, as it is the source for most of the carbon emissions.As most of the chinese exports are also going to US, a sincere step by US would automatically reduce the carbon emissions in China.

Posted 18 March 2009, 00:46 by Ajitreddy Nandayal
Such recommendations often remind me of the fable about the grass hopper which went to the owl, the wise man of the forest, complaining about its extreme suffering from the cold in winter. The sage owl told it to turn itself into a cricket and hybernate in winter. Shorly after the grasshopper went back to the owl complaining that it could not turn itself into a cricket. Impatiently. the owl told the grasshopper that it had given it the general idea, and that it was up to it to work out the details!!

Posted 17 March 2009, 19:57 by ikram youssef sayed, cairo, egypt
I am always disappointed when I see no mention made of how we might actually need to look at and redesign how we live. In this essay and others I read, I don’t see anyone questioning or looking at how living seriously individualized lives contributes to our problems. We seem to assume that we really all must have our own cars, that we need the freedom to run around to do our own separate errands, that we need to have our housing set up in ways in relationship to the rest of our lives such that we need our own car to get around, etc. I see so little mention made about public transportation or redesigning how and where we live. I will admit that I am guilty of the above, but I am looking at ways to change that, e.g., living in community and using public transportation or sharing a car with others.

Posted 17 March 2009, 15:38 by Deborah
I agree with Jeffrey Sachs, but one point we need to emphasize way more strongly is population control.
We work on GDP per capita and technology, but do far too little on population reduction. Massive investments in birth control is needed.
Plus, we need to point to the hypocrisy of rich countries that scorn high birth rates in poor countries, but throw money to raise birth rates in their own countries. They should lead by example (especially in reducing unwanted and teenage pregnancies), and if they need people, they should push for more immigration.
Fortunately, there is a best practice. My country, Japan, is shrinking its population and disappearing from this planet for the good of the world.

Posted 15 March 2009, 11:11 by James Kondo
I realize this is jumping off topic a bit from the helpful summary by Jeff Sachs, and takes us back at least a few years in the dialog in general, but I’m compelled to respond to the first comment (from John Hansen).

While I agree in general with the comment from Pedro Mafeii that one cannot use a single variable or dataset to explain or deny “global warming” (or, more precisely, human-exacerbated climate variability and change), please consider the following global temperature data from NASA Goddard Institute for Space Studies, which show that the last 12 years (1997-2008) include the 10 warmest years on record for the period 1880-2008:

Rank (1 = warmest since 1880)
1: 2005
2: 1998/2007
3:
4: 2002
5: 2003/2006
6:
7: 2001/2004
8:
9: 2008
10: 1997

Source: http://data.giss.nasa.gov/gistemp/graphs/

Posted 12 March 2009, 16:19 by Joseph Herr

Commenting is closed for this article.

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