BCG Henderson Institute

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“COVID-19 is climate on warp speed,” said Gernot Wagner, a climate economist at NYU. Indeed, both trends show exponential growth—in infected people and CO2 emissions, respectively—while the capacity to fight them remains limited. The consequence is simple: a significant risk of sudden overwhelming, be it of the health care system or of our collective ability to manage consequences for the environment.

In both cases, we are aware of mechanisms to prevent or at least ease adverse effects. Bill Gates, among others, highlighted back in 2015 the necessary elements of preparedness to avert a global pandemic. And humanity is aware of the need to reduce CO2 emissions and remove excess CO2 from the atmosphere. But while governments enforce emergency measures around the globe in response to the pandemic, little action on climate has been taken. Therefore, the question is not “What can we do?” but “Why not now?”

As happened with the ozone depletion crisis, a top-down approach with supranational coordination might have addressed climate inaction. But the latest UN Conference (COP 25) resulted in few action-oriented outcomes. And the current lack of alignment among countries in the fight against COVID-19 shows the unlikelihood of a globally coordinated government response to climate change. A bottom-up approach—through financial incentives to adjust behaviors, like carbon pricing—has not been fruitful to date, either. We need an alternative, rigorously structured approach to finding practical and truly effective solutions. We used the concept of Smart Simplicity, successfully applied to solving complex problems in business and beyond, to explore a new approach to climate change inaction.

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