Invoice for effects of Anthropocene era

Written on 26 July 2021.

In 2020, we felt like almost all economic activities worldwide had stopped. However, CO₂ emissions were reduced by only 5.8%, which means 2 billion tons, as estimated by the IEA. This was less than only 6% in spite of our hard efforts, wasn’t it? How much more do we need to sacrifice to achieve the goal of carbon neutrality by 2050?

At the Climate Change Summit in April, major countries announced their goals for CO₂ emission reduction. The leaders said that the goals would be achieved through innovative technologies. However, many people judged these goals to be wildly aggressive. Moreover, these innovations will need huge amounts of investment. Currently, one-third of world investments are going to the ESG (Environment, Society and Cooperate Governance) areas. How much more investment do we need for invisible CO₂?

In 2018, we emitted 33.5 billion tons of CO₂. Assuming that CO₂ is reduced by 33.5 billion tons each year until 2050 to achieve carbon neutrality, the total reduction would be 500 billion tons. And assuming the average price of carbon credits during this 30-year period is 100 Euros, the eliminated CO₂ would be valued at 50 trillion Euros. Therefore, investments totalling 25 to 30 trillion Euros might be necessary.

If we apply the same calculation to Japan, which emits 1.2 billion tons of CO₂ annually, an investment of 0.9 to 1.1 trillion Euros is probably necessary. However, the Japanese government has committed only 160 million Euros to related investments. If innovation by private companies is delayed, the only thing Japan can do is invest government money. As a result, a carbon tax and/or environmental tax may be imposed on Japanese people.

The modern era is called “Anthropocene” because human activities have begun to affect the environment. How much more economic growth can we achieve by paying the huge bill for modern industrial civilization?

We have begun to realize that we cannot continue with the conventional lifestyle. We will come one step closer to continuing to live on Earth by achieving CO₂ zero emissions. We have been focused on insatiable economic growth. The invoice for this has now come due, and the cost we face is very high.

Akio Kasuga, fib President 2021-2022 The original text is available online.