Charting a new course: Capitalism with less carbon

By Ali Agha

President of US baaed Thinkcycle Consulting
[email protected]

Kuwait is a wealthy country, one of the world’s largest producers of oil. Carbon is the stuff of diamonds and fossil fuels (including oil and gas), the primary energy source powering our technological civilization. Prosperity demands lots of energy and we harvest that energy from the environment. But the basic physics of energy, heat and work known as thermodynamics tell us that harvesting energy from the environment must produce waste that gets dumped back into the environment in the process. Kuwait has one of the world’s highest carbon-dioxide (CO2) emissions per capita.
Carbon dioxide and other greenhouse gases act like an insulating blanket, trapping some of the heat that Earth might have otherwise radiated out into space. As CO2 molecules soak up this energy, they vibrate and re-emit the energy back in all directions. About half of that energy goes out into space, and the rest returns to Earth as heat, contributing to the ‘greenhouse effect’.

Last year, Kuwait had 19 days where temperatures soared to 50 degrees Celsius or higher. For every ton of carbon that gets used up in a combustion reaction, a maximum of 3.67 tons of CO2 can be produced. That’s billions of tons of CO2 every year worldwide. There is little doubt that carbon is the currency of climate change, creating a global consensus on the need to act now, to start decarbonizing. We cannot eliminate carbon emissions, though we hope to reach carbon neutrality or net zero at some point, to remove as much CO2 from the atmosphere as we release into it by 2050. Capitalism has thriven on carbon since the start of the industrial revolution. The challenge now is to chart a new course: Capitalism with less carbon.
More than 100 countries have already pledged net-zero emissions in the coming decades. The UK and the EU are both committed to net zero by 2050. Saudi Arabia has committed to reaching net zero by 2060. Kuwait’s promise at the COP26 summit in Glasgow last year was a pledge to cut 7.4 percent of greenhouse emissions by 2035. This commitment is perhaps indicative of a number of issues that impede the transition to a sustainable energy system in Kuwait. You can read Dr Osama Al-Sayegh’s cogent analysis of those issues in his paper, “Barriers facing the transition toward sustainable energy system in Kuwait.”

A modest target is better than no target and it need not be the end of the road. In fact, given the conflict in Europe and the uncertainty gripping global supply chains and energy markets, now might be the time to start taking small steps toward curbing domestic energy demand, a key driver of carbon emissions in Kuwait. Change is hard but during a crisis, the door to change opens just a crack.

The country needs a credible plan to hit the 2035 emission reduction target. Credible plans establish priorities and force transparency into the debate, allowing everyone to see the costs, the trade-offs and the values such plans embody. Credible plans run on credible numbers. To start, every government and major private sector organization should build its own comprehensive carbon accounting and control system that runs alongside its financial equivalent. The carbon accounting system must track Scope 1 and Scope 2 emissions as defined by the Greenhouse Gas Protocol Corporate Accounting Standard. Scope 1 covers emissions from operations under the organization’s control, including onsite fuel combustion, direct emissions from its own activities.

Scope 2 covers emissions from usage of electricity, steam, heat and/or cooling purchased from power generators, indirect emissions attributable to the organization’s energy use. With a carbon accounting system, organizations can effectively manage their carbon inventories: Measure it, own it and control it.

A carbon accounting system could also be an important productivity lever. When looking at carbon inventory data in the proper context, decision makers might spot opportunities for raw material cost savings by controlling fugitive emissions for example. They might also identify low-cost opportunities for abating emissions through circularity and renewables, to lower their cost per ton of abated carbon.
Capitalism with less carbon requires investing in trees and green technologies. But to make it a success, we must recalibrate our consumption habits and balance them with a serious drive to conserve resources, to produce less waste. We can start today. Start small, think big and scale fast.

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