Jon Coifman's Blog
By the Numbers: McKinsey Tallys Up Climate Solutions
November 29, 2007
Posted by Jon Coifman in The Media and the Environment
Today McKinsey & Company, one of the world's leading management consulting firms released a sweeping new assessment of the more than 250 measures that together would get us into the ballpark of the global warming emission cuts now on the table in Congress.
The analysis is deep, detailed and dense.
The bottom line, as we have detailed elsewhere, is that we can still achieve the results we need in the necessary time frame at something close to zero net cost to the US economy -- but only if lawmakers get it in gear soon.
Several reporters asked us today why this study matters.
The answer lies much more in the context than actual pages of the report.
This year is a major turning point in the global warming debate. The logjam is cracking. It’s clear to anyone paying attention that some sort of global warming solution is coming soon to the US.
That means that business and political leaders are suddenly rushing back to the table, and taking a whole new look at their strategy. The horses are back at the starting gate, and there is jockeying afoot.
At that happens, a new dividing line is emerging that will shape the entire conversation for the next year or two at least.
On one side is a group that acknowledges - if grudgingly - that global warming might indeed be a real problem, but says we should bank on a technological miracle but oppose policies that would actually drive that market.
That’s effectively the Administration line today. That’s Newt Gingrich in his new book. That's where the "Skeptic Environmentalist" Bjorn Lomborg comes down. That’s talk-jock Glenn Beck, too. And that’s where we find many of the Republican political candidates.
(Whether any of them really believe it or it’s just pollster-driven cover for inaction, who knows.)
Then you have folks like NRDC, US CAP and a growing list of leaders in both parties who recognize deliberate steps are needed to get the solutions we HAVE NOW off the shelf, out of the lab, and into the economy.
THAT is what the whole battle is going to be about next year. THAT is why this report is so important.
Wishes alone won’t make it come true. A whole lot of furniture needs to be rearranged.
Companies making hundreds of billions of dollars in capital investment in the next few years need a clear, concrete signal about where the market for energy and emissions is heading.
According to McKinsey (and NRDC), the key variable in determining whether or not we beat the global warming challenge is not some far-fetched miracle technology, but rather whether there is a clear policy signal to business that the marketplace is ready to start deploying solutions already at hand.
That’s why we need policy, and that's why this is all very relevant to the very core of the climate story for the next year or so.
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Comments
A Siegel — Nov 30 2007 10:52 AM
Very nice post / discussion.
My question / challenge re McKinsey is how conservative it is.
From within the report: "The project ... did not examine economy-wide effects ... Did not attempt to address other societal benefits from abatement efforts, such as improved public health from reducing atmospheric pollution or improving national security."
Thus, without a doubt, the report is overstating the costs to deal with Global Warming and understating its benefits.
Now, I wonder how NRDC views this. Where is the analysis and discussion of the level of magnitude of the types of benefits associated with addressing Global Warming? Just how big, potentially, are those benefits? Could they reduce or even eliminate that $50 ton CO2 cost for achieving higher end impacts?