Climate in a Bullshit World

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Climate in a Bullshit World

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• 'On Bullshit': The 1986 essay by Harry Frankfurt defined bullshit as "the presence of insincerity, laziness towards details, and half-heartedness, an indifference to truth". Today, when we look at the ESG commitments of corporates, we find claims that those following ESG are doing better than those who are not. Even investors are asking for ESG commitments before investing. [ESG - Environmental, Social and Governance benefits]
• The Paris Climate deal 2015: When 195 countries came together in 2015, the need for national climate related targets was made clear, and voluntary reductions of GHG emissions to keep global temperatures down was agreed upon. But what is the ground reality, really?  [GHG - GreenHouse Gases]
• Large claims, poor delivery: Everyone seems to be enamoured with the ESG idea. The ADB (Asian Development Bank) says ESG market is worth $23 trillion, and when one digs deeper into what companies are actually investing in, two "bullshit" elements can be found -

1. There is indifference to the truth. Most ESG firms verify their own investments, so there's a conflict of interest. The dollar investments being made are counted (e.g. in solar panels, or energy efficient cookstoves) but the net GHG emission reduction is not. The gap between commitment and action is huge. Many ESG firms routinely violate environmental laws too!
2. There is insincerity and self-delusion. Sometime the governments perpetrate the delusion. If it is believed that the emission cuts by all 195 countries as promised will actually meet the world's climate goals, it is overlooked that those who made the commitments are also heavily subsidising fossil fuels.

• The measure of GDP: Some countries like Finland, Iceland and N Zealand have dismissed GDP as a measure of well-being. Actually, GDP is unable to measure things that matter the most to humans - so pricing for environment, clean air and clean water needs to be done. But that doesn't mean they are substitutable ($1 of water cannot be traded for $1 of fuel).
• Good data for independent verification: It is important to have good quality data so that third-party verifiers can look into the real achievements made when commitments are made by companies and countries. Credible ESG reporting will happen only when external standards are set - emissions over entire life cycle of technology.
• Regulation: It is important to have an independent regulatory authority to whom the independent verifiers will report. Other than good intentions, the right incentives, taxes and social norms are now needed. India (and the world) needs thoughtful people who can call out the bullshit.

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