Human Prosperity and Planet Earth

If the history of the Earth were condensed into one day, the story of human civilisation would start just 0.2 seconds before midnight, or 12,000 years ago, as the planet emerged from the last ice age. At this moment in time, concentrations of CO2 in the atmosphere stabilised at just below 300 parts per million (ppm)[1] and average temperatures on Earth settled at a comfortable 14⁰C. Humans advanced from nomadic hunter gatherers to build permanent settlements supported by a newly dependable agricultural yield. We domesticated animals, repurposed land for growing crops, and transformed the Earth’s natural resources to support an ever-expanding human empire.

Populations grew, but prosperity did not. Agricultural production slowly increased but any gains were met with more mouths to feed. So, for most of human history, most humans have experienced the same levels of disease, hunger, and violence as all generations before them. Humanity was stuck in what would become known as the Malthusian Trap.

Thomas Robert Malthus, an eighteenth century scholar, asserted how any improvements to human existence would prove short lived because linear resource increases would always be met with exponential[2] population growth. He believed humanity would remain forever imprisoned by the shackles of poverty unless action was taken to limit reproduction. And he was right for most of human history, all the way up until he actually published his theory when, two centuries ago, at 0.004 seconds before midnight, along came the industrial revolution.[i]

This was the moment modern humans mastered combustion, just as Homo erectus had mastered fire. We unlocked millions of years of the sun’s energy stored in fossil fuels[3] and used it to power the machinery of the modern world: transport, industry, agriculture, and convenience living. Both population and prosperity not only expanded for the first time in human history; they exploded. And so did carbon dioxide.

The industrial revolution has created unprecedented population growth and prosperity. Average incomes have increased from less than $1,000 to $18,000 per person per year (in the equivalent of today’s money).[ii] Life expectancy has doubled, child mortality and extreme poverty are ten times lower, and deaths on the battlefield have declined twenty-fold.[iii]

We are living through a period of unprecedented wealth, quality of life, and relative peace. Yet not everybody is on board. Half the population still has no basic sanitation, clean cooking, or electricity. Nearly one billion people have no access to safe water or sufficient food.[iv] Population and consumption will continue to grow as developing countries rightfully strive for modern standards of living. So, unless we fundamentally change how our system is powered, CO2 emissions will also continue to climb, and ever higher concentrations will accumulate in the atmosphere.

Over the last 150 years, modern science has unravelled the complex relationship between CO2 and temperature. A relationship that dates back hundreds of millions of years into the deep geological record, through the last million years of ice ages, and into the modern archives of the twentieth century. This is a relationship that has held constant, unwavering through time. The data is clear, the scientific basis sound, and the predictive models have proven accurate so far. Change either CO2 or temperature and the other will mutually follow; and we now understand how humans are changing CO2 concentrations in the atmosphere faster than any other planetary event in at least 66 million years.[v]

Where eighteenth century scholars debated the perils of an expanding population and the future of the human race, now carbon dioxide, rising temperatures, and climate change have reignited the argument for the twenty-first century. On one side of the dispute sit the neo-Malthusians who foresee a dystopian vision for the future should we not limit population, consumption, and emissions. On the other side of the quarrel are those we might call the cornucopians, drinking from the horn of plenty, convinced that human innovation, technology, and free markets can weather the coming storm. So, who is right? Where should we set our dials of doom and boom as we forecast the future? Are we stumbling into disaster or striding towards ever greater prosperity?

Understanding our Climate Futures to Empower Action

Temperatures are already over 1⁰C higher than in pre-industrial times. Make no change to our existing systems and most likely we will warm the planet by at least 3⁰C by the end of this century and by 4.5⁰C by the middle of the next. Sea levels will rise, and the ocean will become increasingly acidic. Amplifying feedback mechanisms not yet captured in climate models – such as melting tundra, burning forests, or weaker than expected carbon dioxide uptake by land and ocean – may accelerate change even faster.

We are already experiencing three times the number of climate related and (not so) natural catastrophes compared to 40 years ago. The last 20 years have recorded 19 of the hottest in the last two millennia, and with half of the strongest hurricanes on record.[vi] If we don’t change the way we fuel the economy, over the next 80 years 40 million people may die from hunger and natural catastrophes, and 500 million more could be forced to migrate due to extreme heat and rising seas. That would cost the economy $5 trillion per year.

But the biggest impact won’t be from headline grabbing destruction, but from hidden death, suffering, and economic toll. With rising heat, melting ice, and changing weather, more than one third of the global population will lack sufficient clean water and nutrition. The air pollution from burning fossil fuels already kills at least eight million people every year.[vii] By 2100, one billion lives will have been cut short from respiratory disease and heart failure. The hunger, water shortages, poor health, and heat, will force labour productivity declines across the economy, bringing total damages to more than $40 trillion every year or 5% of GDP by 2100.

Compare the death, suffering, and economic toll of climate change and air pollution to other global issues and they already rank in the top three of major world problems, alongside poverty in the developing world and the prevalence of heart disease in rich nations. Continue burning fossil fuels and climate change quickly takes the top spot, before spilling over into nearly every other human problem.

But for our cornucopians the forecast needn’t look so bleak. The future isn’t simply a bigger, warmer version of the past, and humanity won’t just sit back and let rising temperatures and rising seas destroy their food supply, homes, work, and health. If GDP[4] grows at just half the rate of the last 40 years, average annual income per person will still rise to over $70,000 by the end of this century. Suddenly, losing 5% of future income becomes a much smaller concern. Why can’t future generations simply spend their way out of the problem? Humanity can adapt to a changing climate using an increasingly large pot of wealth to not only minimise associated death and suffering, but also to lessen its economic burden. With the benefit of advanced technologies, more information, and greater wealth, surely future generations are better placed than we are to solve the problem. If done well, climate change could cost the world less than 0.5% of GDP by 2100.

This is where the plot takes another twist. Thus far our story has assumed that climate change follows a manageable or predictable pathway. However, we know that not all change is linear. We know that dangerous tipping points exist where risks grow exponentially and sub-systems may collapse, quickly leading to complete systemic breakdown, whether of the environment, society, or the economy: or all three. The acceleration of melting ice, biosphere feedback, global pandemics, a financial Carbon Crunch, or conflict could trigger a tipping point moment where change is unpredictable and sudden. Damages grow exponentially. The problem may become unmanageable no matter how much money is thrown at it. Tipping points represent a known-unknown event that risks throwing humanity back into the Malthusian Trap unless we take action.

The Earth’s systems are currently playing catch up with the rapid increase to the concentration of CO2 and that means nearly 1.5⁰C warming is already locked in. Further change is inevitable but should prove manageable. Adaptation will be necessary, but other tactics must be deployed if we are to avoid higher temperatures and unmanageable tipping points.

At first glance, a technical fix like climate engineering seems the easy, cheap option. But as with most quick fixes, it only solves part of the problem. Limiting solar radiation using space mirrors, aerosols, or cloud whitening, might keep temperatures at bay, but such measures don’t solve air pollution or ocean acidification and they run a seriously high risk of going wrong. Negative emissions technologies to remove CO2 from the atmosphere are lower risk, but more expensive, or can only cover a fraction of emissions. Mitigation of carbon dioxide and the transition to a net-zero carbon economy offers the only complete and low risk path.

Mitigation assumes prevention is better than cure, and yet we are still presented with a range of neo-Malthusian and cornucopian ideals. Greenhouse gases[5] are the product of population, consumption, energy efficiency, and emissions intensity; so which factor should we target to produce the best outcome? The answer, of course, is all four, but not in equal measure. Attempting to control human reproduction is slow, morally difficult, and practically challenging and the global population should self-limit with growing wealth. Consumption limits are effective but demand a complete re-wiring of socio-economic behaviours and are perhaps best left to activities with little other option. Energy efficiency buys time but never offers a complete solution. The bulk of the change must come from slashing emissions intensity and reaching net-zero.

Systems Thinking to Build Net-Zero

A net-zero transition requires fundamental changes to both our energy supply and our energy demand. Wind and solar electricity coupled with pumped hydro and battery storage can form the backbone of a net-zero economy providing cost competitive, safe, reliable, distributed energy, with no carbon emissions or air pollution. We must electrify everything where possible and where not, switch to hydrogen, biofuels, or carbon capture. Electrification will replace oil-powered transport, gas-powered heating, and coal-powered industry. Global agriculture will need to be modernised to cut waste and lower carbon intensity. Global eating habits will require cutting back on meat consumption to free up enough agricultural land to regrow forests and offset stubborn residual emissions.

Change will be all-encompassing but requires no compromise on quality of life: simply the breaking of old habits. Done well, the transition will barely register for the top 10% of the global population already accustomed to the highest quality of life in developed countries. The remainder of the world will quickly be enabled to raise living standards towards those in the top bracket. The poorest 10% will for the first time connect to the modern world with electricity access, clean cooking, and basic amenities. A just and equitable transition for all.

Electricity prices will decline, but as electricity must replace cheap coal and gas heating, so the overall blended price of energy may rise by one third. However, electrification brings large efficiency gains – heat pumps use four times less energy than gas boilers, electric cars three times less energy than combustion engines, and electrified industrial manufacturing can halve energy consumption. A net-zero economy will demand less than half the energy of the equivalent fossil fuel system with no compromise on travel, goods, food, or amenities. Spending on the energy supply declines by one third, despite higher blended prices. The whole system, including the higher upfront cost of equipment, will end up 25% cheaper than the fossil fuel alternative.

Wind, solar, and battery costs are already shrinking by 10-35% every time the number of installations doubles. Hydrogen and biofuels will soon join this commercial experience curve. It’s not the passing of time that lowers costs, but the scale of production. Sitting on our hands and waiting for a breakthrough is not the way forward. We have already commercialised 80% of the technology we need so the faster we push, the cheaper it gets. The other 20% merely requires incremental development. The faster we reach net-zero, the sooner we save over $5.5 trillion per year on our energy system and we avoid worst case climate impacts: we get paid to breathe cleaner air, save lives, avoid climate change damages, and create a sustainable world for future generations.

If that isn’t enough, net-zero also cuts air pollution which could save nearly eight million premature deaths per year and create more jobs by directing our energy spending into labour rather than exorbitant profits for petro-states. Net-zero side-steps conflict over dwindling resources and avoids the worst impacts of climate change. A net-zero world will be cheaper to run, cleaner, safer, more reliable, more sustainable, and create more employment than a world bound to fossil fuels.

But let’s pause for a moment. Let’s sit back, take stock and remember the words of British statistician George Box, that “essentially, all models are wrong, but some are useful”.[viii] The model we will build through the pages of this book is no exception. We can’t predict the exact values for our dials of doom and boom: the response of the Earth, the desires of future generations, and the rate of technological progress are inherently uncertain sensitivities. But, I believe that we now have enough information to sufficiently narrow their possible values so that regardless of whether we turn our dials up high or down low, a rapid transition to net-zero will create the best possible outcome for the environment and for the economy. We can avert disaster and drive greater human prosperity.

Net-zero is inevitable. But that doesn’t mean the speed of the transition can’t be optimised. Continuing to run a fossil fuel economy is inefficient and, just like any other market inefficiency, it can be corrected to drive greater prosperity. Think about the value investor Warren Buffet who buys companies trading below their intrinsic value and profits as they rise, or Silicon Valley venture capital firms who recognise the potential of tech enthusiasts running makeshift operations from their parents’ garages. These market players profit from inefficiencies and in doing so they also correct them. Warren Buffet’s undervalued investment portfolio appreciates, and Apple, Google and Amazon are born. In the same way, markets will undoubtedly move towards net-zero as the best solution; however, by providing an early helping hand to overcome market inefficiencies, the speed of the transition can be optimised, generating greater wealth, improving health, and accelerating prosperity.

Getting to net-zero will require $70 trillion of upfront investment, $46 trillion more than sticking with fossil fuels, but it will create an energy system more than $5.5 trillion cheaper to run each year. A twenty-year transition provides the best balance with enough time for governments, businesses, and individuals to adjust whilst bringing the system cost savings forward and more than offsetting any losses from fossil fuel assets left stranded or from crowding out other investments. The headline numbers sound daunting but break the transition down over the global population and it seems far more manageable. Over the next two decades, we install just four solar panels, plant 27 trees and develop 16 square metres of biofuel cultivation for each person on the planet. We add the equivalent of one (radiator sized) battery in every house and one wind turbine between every 7,000 people. One quarter of car owners shift to ride sharing and the remaining three quarters replace their old vehicles with electric. Half of broken boilers are replaced with heat pumps. It starts to feel far more achievable. Part way through the transition, we decide whether renewables can cost-competitively carry us all the way to net-zero, or whether support from next generation nuclear or fossil fuels with carbon capture is needed. Either way, the best course of action for the next decade is abundantly clear.

Finding $3.5 trillion of annual investment also sounds like a daunting task. But the world already invests $1.75 trillion in mostly fossil fuel energy each year and wastes another $0.5 trillion on fossil fuel subsidies. We need to redirect this money and find another $1.25 trillion per year (1.5% of GDP) to deploy in net-zero solutions at a competitive market rate of return. The money is ready and waiting to go. It just needs clear direction from governments and private savers. Net-zero financing will create new and productive investment opportunities, boost jobs, and stimulate the economy whilst creating a cheaper energy system with a ten-year payback.

Bridging the Climate Divide to Accelerate Change

Despite the abundant benefits, progress towards net-zero has so far been slow. Since the International Panel on Climate Change formed in 1990, we have emitted as much CO2 into the atmosphere as all human history before and in 30 years net-zero energy supply has grown from 12% to just 15% of total energy.[ix] The hurdles to action range from apathy, misaligned economic interests, inequality, freeriding, and political wrangling to deliberate sabotage: each and all has slowed progress. But ultimately the balance of fear has stopped humanity transitioning away from fossil fuels. The perceived threat of climate change hasn’t been great enough to overcome the political, social, and economic risk of transitioning the energy system. But the longer we wait, the bigger and more immediate the threat becomes, the more people die from air pollution and, although the cost benefits of a zero-carbon system will become increasingly clear, our window of opportunity for the best possible outcome will inevitably narrow.

The time has come for governments around the globe, corporates, and individuals to stop stalling and to push towards a better system. We are now lining up, ready to clear the bar, and if we can only recognise the benefits of a net-zero system and act on that recognition, we will leapfrog most of the remaining hurdles. Are you a sceptic who doesn’t believe in climate change? Or perhaps you don’t care about other countries? Well, net-zero will be cheaper, and it will reduce air pollution in your own country. Do you think net-zero technology is too expensive? Well, total buying and running costs will become cheaper once we are just one quarter of the way through the transition and will end up 25% cheaper than fossil fuels once fully scaled. Don’t want to risk change? Once the transition is underway, to remain bound to fossil fuels will become uneconomic, unethical, and unimaginable.

Awareness and willingness to act are certainly on the rise. The unified scientific voice grows louder. 26 countries have declared a climate crisis and protests across the globe are mobilising young and old alike.[x] Investors are beginning to push companies for change and media outlets are spreading an ever-greater message of urgency. Over one hundred countries around the world, covering well over half of all emissions, have made net-zero pledges for the middle of this century. However, today’s average world leader will be nearly 100 years old when those targets come due.[xi] Clearly translating the long-term pledges, promises, and good-will into short and mid-term action is crucial. We must create change, not just talk about it. Science will continue to be constrained by burden of proof, business limited by burden of profits, and politics limited by popular votes, but recognise the benefits of net-zero and all become aligned. We already have the tools to expedite change; from left leaning command and control regulation to right leaning market economics and consumer choice.

Individuals can electrify end uses and source zero carbon electricity, forcing demand away from fossil fuels. Vote with your ballot paper and your wallet, choose credible policy and low carbon products. Politicians will soon respond to the changing polls and companies will soon react to falling revenues. Cut back on meat, the one area of consumption where there is no easy substitute solution (the average diet requires one football pitch of agricultural land, whereas the vegan equivalent requires just the penalty box). Reduce consumption where you can, but this should remain a personal choice. Do we need cars, planes, or washing machines to survive and reproduce? No. But they are culturally and economically embedded in our social systems – giving them up is a perceived hardship and we need to avoid the idea that solving climate change requires hardship or a trade-off between our current and future needs.[xii] The clear message is that net-zero is not a zero-sum-game, but a win-win, and we have everything needed to transition without compromise. As ecological economist C.S. Holling states, sustainable development is “not an oxymoron but a term that describes a logical partnership”.[xiii]

Individuals must recognise their role in changing energy demand; not just blaming government inaction or big business profiteering. Corporates should strive for net-zero as the best sustainable economic outcome; greenwashing[6] should not be used as a marketing tool. Politics should be used to transition the energy system; climate change should not be used as an excuse to change politics. Yes, there may be significant shortcomings with traditional economics, GDP as a measure of progress[xiv],[xv], and globalised capital markets, but once we understand that a net-zero system will create a more favourable outcome for both right and left politics, big and small business, the individual, and society, then we can accelerate change for the better.

The last decade of stimulus following the Credit Crunch transformed the economics of wind and solar technology which are now competing with fossil fuel power. No analyst, energy agency, or government predicted just how quickly renewables prices would decline compared to their fossil fuel predecessors. Everyone underestimated how much faster technology moves compared to geology. With the unprecedented stimulus being deployed following COVID-19, we now have the opportunity to transform the economics of supporting technologies such as hydrogen and batteries and to begin the full-scale transition to net-zero. Supply must be deployed five times faster and demand switched nearly ten times quicker to reach an optimal outcome. The solutions are ready: we just need to push.

Our story began with CO2 as the protagonist and air pollution quickly emerged as an equally dangerous accomplice. But the real twist in the tale is that net-zero can solve both problems whilst accelerating underlying wealth, health, and human progress. Net-zero will be cheaper, cleaner, safer, more reliable, more sustainable, and will create more employment than if we remain bound to fossil fuels. By understanding and acting on this statement we can redefine the argument and create a better future for all on planet Earth.

[1] 300 parts per million means there are 300 particles of CO2 for every million particles of all the gases making up the atmosphere or 0.03% concentration.

[2] A linear relationship means that if you double one variable the other variable will also double. Straight line change. Exponential growth is where the rate of increase in one variable increases with the other. Creating ever larger change. A line curving ever steeper.

[3] Fossil fuels are formed from dead plant and animal matter compressed and heated in the Earth’s crust over millions of years.

[4] Gross Domestic Product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period (usually one year). Divide global GDP by the global population and you get average GDP per capita which is very close to average income per person (ignoring a few adjustments).

[5] Greenhouse gases or GHGs cover all gases that act to warm the atmosphere with the same mechanism as CO2.

[6] Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company’s products or services are environmentally friendly.

[i] Thomas Robert Malthus, An Essay on the Principle of Population, J. Johnson (London), 1798.

[ii] Angus Maddisson, Contours of the World Economy 1-2030AD, Oxford University Press, 2007. ($1000 = $500 in 1990 international USD).

[iii] Max Roser, Hannah Ritchie and Esteban Ortiz-Ospina, Our World in Data, [online], accessed 2020.

[iv] United Nations, [online], un.org, accessed 2020.

[v] Richard E. Zeebe et al. "Anthropogenic carbon release rate unprecedented during the past 66 million years", Nature Geoscience, 9, 2016, 325-329.

[vi] Munich Re NatCatSERVICE, "Data on natural disasters since 1980", [online], munichre.com, 2020, accessed 2020.

[vii] WHO, "Air Pollution", World Health Organisation, [online], who.int, 2020, accessed 2020.

[viii] The Royal Statistical Society, “George Box: a model statistician”, Sept 2010.

[ix] BP, Statistical Review of World Energy 68th edition, 2019.

[x] Climate Emergency Declaration, [online], climateemergencydeclaration.org, 7 Feb 2021, accessed 2021.

[xi] Shuja Asrar, ‘Can you guess the age of a leader based on average age of country’s population’, The Times of India, Mar 5, 2021.

[xii] Nick Winder, “Integrative Research as Appreciative System”, Systems Research and Behavioural Science, 22, 2005, 299-309.

[xiii] C. S. Holling, “Understanding the Complexity of Economic, Ecological, and Social Systems”, Ecosystems, 4, 2001, 390-405.

[xiv] Kate Raworth, Doughnut Economics, Random House Business, 2017.

[xv] Mariana Mazzucato, The Value of Everything, Penguin, 2018, p76.