As the call to effectively respond to climate change grows louder, governments, think tanks, and companies across the globe are struggling to discover new ways to arrest, reverse, or ameliorate destructive patterns. But new solutions can only come from deliberate and unified action, according to author and energy expert NJ Ayuk.
Ayuk, who serves as executive chairman of the African Energy Chamber and speaks and writes extensively about the future of Africa’s fossil fuels and transition toward more sustainable energy sources, believes that the best way to create an effective plan against the worst consequences of climate change is to empower businesses across the globe.
“I think the first thing we have to look at is that we believe in a market-driven approach,” he said. “I’m a capitalist. I enjoy making money, and I believe that capitalism is the best way to respond to the issue of climate change. I like making money, and I think we need to engage in a more free-market discussion of how we approach problems like climate change.”
Capitalism can help, NJ Ayuk said, but it may take more than a simple laissez-faire approach. Because the need for effective road maps is so great, governments must play a role in spurring the markets to action.
“If a free and structured market has been important in creating wealth and solving problems, it can be leveraged to address our responses to climate change. That’s why we have to drive the conversation and government regulation toward a place where the market can really start addressing these issues,” NJ Ayuk said. “Now, those solutions will probably come from the private sector, but the public sphere has a very important role in guiding the conversation and leading businesses.
“One of the key things we look at, and that we’ve already accomplished with the African Energy Chamber, is to ask ourselves, ‘How do we encourage the right sort of policymaking? How do we encourage the right rules?’ We want to encourage market-driven solutions, but there is no simple boilerplate language that will create the perfect solution. It’s complicated. We want governments to help, but at the same time, we don’t necessarily want governments picking winners and losers.”
The right policy mix includes incentives for entrepreneurs to innovate new technology and discover new ways of responding to climate change, NJ Ayuk stated.
But creating “the right policies” is difficult, he added. Every country has a different sort of business culture, which forges a need for subtle nuances in incentives in every nation. At the same time, climate change is a worldwide concern that should be approached from every angle, which means that government rules and regulations should not only encourage local businesses to tackle the problem, but also make foreign investment attractive.
“On a bigger scale, you can look at the issues related to access to finance. This is something that I think about and talk about a lot,” NJ Ayuk said. “Less than 2% of global renewable investment has gone to Africa. That’s an issue we need to advocate [for] much more loudly. You can’t tell the entire continent of Africa to simply walk away from fossil fuels and then give them only 2% of your investments. That is not a recipe for addressing climate change or bettering the lives of Africans. You simply cannot create solutions that way.”
Ideally, any climate change response will not only help heal the damage done to the environment but will also allow people from poorer countries who have not been the beneficiaries of technologies that have spurred the current crisis to improve their stations, he said.
A full explanation of the policies advocated by NJ Ayuk is explained in his recent book, A Just Transition: Making Energy Poverty History With an Energy Mix. It details how oil and gas companies can help deliver economic prosperity to Africans using the continent’s fossil fuels while simultaneously taking steps toward a more sustainable future.
Already, some helpful methods of addressing climate change through capitalism have emerged. Ayuk pointed to international cap-and-trade policies as well as climate mitigations funds, which have both brought successful, if limited, solutions to the table.
“We have seen the effectiveness of climate mitigation funds and other policies that have helped businesses get a better grasp of the toll they take on the environment while increasing investment in more diverse areas across the globe,” he stated. “I think more adaptation of them should come. But they have not been completely accountable. Wealthy countries promised to invest $100 billion in less-developed nations, but it has not come. It has not come for 13 years. That’s a balance sheet. And it needs to change.”