Editor’s note: Decision Makers is a global platform for decision makers to share their insights into the events shaping the world today. Erik Solheim is a former United Nations Under-Secretary-General and Executive Director of UNEP and Senior Advisor to the World Resources Institute. The article reflects the opinions of the author and not necessarily the views of CGTN.
To build an ecological civilization, three forces must unite. Citizens must demand action; political leaders must define the vision and regulate the markets; companies must be innovative and deploy new solutions at scale.
Last year, 80% of all vehicles sold in my home country of Norway were electric. And we are on a trajectory towards 100%, because when you drive an electric car, you don’t want to go back. It’s magic.
A few years ago, hardly anyone in Norway drove an electric car. Change happened extremely quickly because citizens, politics and business came together.
My family recently purchased a Hyundai Kona. It can travel 500 kilometers per charge, that is from Oslo to our second city, Bergen. Tesla has pledged to increase that number to 1,000 soon. We’d better buckle up and sit comfortably, because 1,000 kilometers is going to be a long time! Business delivers.
The good news for China is that when it comes to making batteries for electric cars, China beats all the rest of the world together. Take for example the Chinese company Contemporary Amperex Technology Co., Ltd. (CATL), a world leader in the development and manufacture of lithium-ion batteries. It remains the largest supplier of automotive lithium-ion batteries, with a global market share of 32.6% last year, up eight percentage points from a year earlier. And the company is currently scouting locations for a new $5 billion battery factory in the United States. BYD, a Chinese green legend, is China’s second-largest supplier and the world’s fourth-largest, with a global market share of 8.8%.
How did all this success come about? As early as 2000, the Chinese government decided to go with the risky and unproven technology of electric cars, using an array of policy tools, including subsidies, to help create an industry that could leapfrog Western competitors. It took courage as much as a green vision. China has become the world leader in volume. Half of all electric cars sold last year are on Chinese roads. Batteries for global industry are produced in China.
In Norway, we have become the world leader in terms of percentage. This happened because the government set the right policies, driven by citizen demands. The tax system has been changed in favor of electric cars. Electric vehicles have been allowed to circulate in the bus lanes. If your car runs on gasoline, you will have to pay higher fees at tolls and parking lots. In short, the government set up an introductory offer for people who wanted to buy electricity.
In the beginning, the charging stations were provided by the municipalities. But with the basics laid, the market takes care of the rest. Every gas station owner has set up charging facilities, and the same is true in parking lots. If you want to attract customers to your business, you simply have to change.
The government needs to lead the way from day one because few people have the vision and resources to bet on risky and unproven things for the public good. The Norwegian government has provided tax incentives and financial support to companies that want to switch to electric and low-emission ferries. At the same time, we imposed an emissions tax. It worked wonders – those who led the change paid less taxes and got more support for new technologies. Latecomers were doubly punished. Today, Norway is the world leader in electric ferries. Carrot and stick work.
Gone are the days when people thought we could leave everything in the invisible hands of the market. Look at the amazing success stories from Singapore, South Korea and China. It is not a binary choice. We need a mix of strong state, market economy and citizen action. When the chief architect of China’s reform and opening-up policy, Deng Xiaoping, launched reform and opening-up in China in the late 1970s, he visited Singapore. He wanted to be inspired and learn from the miracles created by his founding father Lee Kuan Yew. Asia’s rise depends on strong states and market economies.
The need for both the state and the market is even more evident as we enter the century of ecological civilization. The market alone or the state alone cannot get us there. Combined, they are dynamite.
BYD New Energy Vehicles, Shanghai, February 25, 2022. /CFP
BYD New Energy Vehicles, Shanghai, February 25, 2022. /CFP
One of the most important roles government should play is to ensure a just transition to a green economy. If you’re a coal worker from Shanxi Province in China or Kentucky in the United States, chances are you think you’re bearing the brunt of a transition from coal to renewables. You may not be happy to learn that there will be a lot more jobs in the new economy, even if that’s true. Solar and wind jobs can come from California or Arizona, Jiangsu or Guangdong province, not your hometown?
The government must find new and innovative ways to ensure a just transition. Workers should be offered training programs. Regions should get regional programs to help start new businesses. Public funds will be needed to support a just transition.
Companies are now leading the change towards a green future in most parts of the world. In China, Chinese President Xi Jinping is absolutely right when he said that clear waters and lush mountains are invaluable assets.
In a collaborative project, the World Resources Institute and its many partners have helped set science-based targets to show companies how much and how quickly companies need to reduce their greenhouse gas emissions.
This will prevent the worst impacts of climate change, leading them on a clear path to decarbonization. By guiding companies in setting science-based targets, companies are able to tackle climate change while capturing the benefits for more jobs and profitable investments. It strengthens their competitiveness in the transition to a net zero economy.
More than 1,200 companies worldwide are leading the transition to a net zero economy by setting emissions reduction targets based on climate science. Given the scale of their emissions and their capital, reducing emissions and climate action in these companies can lead to significant changes in global emissions. Many companies are much larger than states in this regard.
The 21st century is all about this inclusive approach that will help us take the big steps needed for a green economy. When citizens demand change, political leaders are visionary, and business drivers change at scale, we will eventually get there.