The IPCC (Intergovernmental Panel on Climate Change) is a body run by the United Nations that has published data looking at man made emissions. As you can see, since the industrial evolution man made CO2 emission have rapidly increased.
The U.S. scientific agency NOAA (National Oceanic and Atmospheric Administration) have published data showing atmospheric CO2 levels for the past 800,000 years based on ice core data. For reference modern humans (homo sapiens) evolved ~300,000 years ago. As you can see in recent years the concentration of CO2 in the atmosphere has increased far above historic levels.
Looking at more recent history, a report from the World Meteorological Organisation (WMO) shows that we have over 400 parts per million of Carbon Dioxide in the atmosphere and we are on track to reach or exceed 415ppm by the end of 2019. The report is a little clunky, so check out this article if you want to get an overview. The 'safe limit' for CO2 is generally considered to be 350ppm which accepts a 1 degree rise in global temperatures. For reference, 280ppm is what's considered pre-industrial levels. What this tells us is even if we had net zero emissions tomorrow, we would still need to remove excess CO2 from the atmosphere to get it down to 'safe' levels. The 2015 Paris agreement adopted a 2 degree rise as an upper limit which translates roughly to 450ppm CO2.
The World Meteorological Organisation (WMO) has also published data showing how global mean temperatures have risen compared to the pre-industrial average. As you can see the global temperature has been rising since the industrial revolution, as humans put more CO2 into the atmosphere and CO2 concentration in the atmosphere increased. To stop climate change, we need to stop increasing the amount of CO2 (and other green house gasses) in the atmosphere.
So what are the biggest things you can do as an individual to reduce your emissions and combat climate change? According to this paper, (and shown on the corresponding graph) it depends on where you live. This is because different countries get their electricity in different ways and have different driving habits etc. Easy Carbon Solutions started in Australia so our recommendations focus on the most effective things Australians can do, but they are broadly applicable. From the graph, you can see that for an Australian, the most effective actions you can take are: have one fewer child, live car free and buy green energy. Buying green energy rates higher than avoiding a long distance flight because the energy grid in Australia is so fossil fuel intensive.
As mentioned above the most effective action you can take to reduce emissions is to have one fewer child. This is because you are avoiding a lifetimes worth of emissions. This is a difficult topic. In general, richer/more developed countries tend to have higher emissions per capita and people from poorer/less developed countries tend to have lower emissions per capita. You can see these trends by comparing the two graphs that show the top 20 and bottom 20 nations emissions data (data is from Global Carbon Atlas 2018, global average is ~4.8 tCO2/person). This means the impact of having one less child is bigger in developed countries, but the birth rate in these countries tends to be below replacement rate (~2.1 births/woman). Countries with a higher birth rate tend to be less developed and with lower per capita emissions. The number of children a couple has is a very personal, emotional decision, with a big impact on their lives, so it doesn't really fit with the 'easy' high impact, low effort solutions that Easy Carbon Solutions is targeting.
Campaigning for people in poorer, developing countries to have fewer children is an ethically fraught issue. There are examples of human rights abuses in developing countries of forced or coercive sterilization. A better alternative would be to champion the education of girls and the economic empowerment of women. Project Drawdown lists "Educating Girls" and "Family Planning" as high impact opportunities (ranked 6 and 7 on their list) and describes how girls who finish high school and women who have access to family planning services are more likely to choose to have a smaller family. However even this approach is more fraught and complex than the the straight forward, easy solutions that we are encouraging people to implement.
Looking back at the graph, the next largest impact option is living car free. Living completely car free isn't practical for many people. If you live in an urban city center, near your place of work, with easy access to amenities and public transport it may be feasible. But if you live in the more affordable outer suburbs with longer commutes (and worse public transport), or further out in rural areas, a car may be your only option. The advice to drive less and walk, cycle or catch public transport as much as possible is already well covered and there is a good level of public awareness. Asking people to live completely car free would require a significant change in lifestyle and that isn't the kind of quick, easy and accessible solutions we are recommending.
What's really interesting is looking at the 6th option - switching from an electric car to car free. You can see that for this data set, in Australia, the difference between giving up a regular car and an electric car is fairly small. This would be because of our carbon intensive electricity grid. We have covered this topic in greater detail in this story and found that switching from a conventional car to an electric car is a high impact action - if it is charged using renewable energy and has a low emission intensity battery.
Buying Green Energy or choosing to 'Green your Power' is the highest impact action you can take without significantly changing your life style. It is about exercising your choice as a consumer to affect industry. Many people choose to pay a little extra for products that are more ethical or better for the environment e.g. people who choose free range eggs over cage eggs. When enough people make this choice, it ends up affecting the industry as a whole. Electricity is a product that you pay for and in Australia for approximately 5-8c extra per unit of energy, your proportion of electricity consumption can be sourced from renewables. The Department of Energy and Environment March 2019 report on Australia's National Greenhouse Gas Inventory shows that electricity generation accounts for nearly 1/3 of Australia's total emissions. By switching to GreenPower, you are sending a strong signal to the market (and politicians) that there is a demand for clean energy and helping to lower the carbon intensity of the grid. Not everyone will be able to afford 100% GreenPower, but most retailers offer a 10%, 25% or 50% option, and every little bit helps. This is why it is our first recommendation.
In terms of 'bang for buck', carbon offsetting is the most effective action you can take. The graph attached takes the Australian data from this paper and assumed a $5USD per month/$60USD per year donation (~ $7AUD/m or $84AUD/y) to three different carbon offset charities specifically:
As you can see, donating to effective carbon offset charities dwarfs the impact of other actions.
However, we need to reduce emissions. Carbon offsetting is a wonderful thing and an important enabling tool to get us to net zero emissions... but it doesn't reduce emissions, it only mitigates what we have already emitted. Scientists have identified what land is available for planting offsets so that it can be done without impacting food production or housing - and there's enough room to plant trees that can absorb roughly two thirds of the CO2 emitted since the industrial revolution. These areas are identified on the map and in this tool indicating reforestation potential - but the space is finite so relying overly on carbon offsetting is not a long-term solution. This is why, although it is very cost effective, we list carbon offsetting as the last of our three solutions.
Going back to the graph, switching to a plant based diet is another high impact way to reduce your carbon footprint.
Based on this data from Poore and Nemecek (2018), Science about a quarter of greenhouse gas emission come from food and 58% of these emission are from animal products. This means that ~15% of global emission come from the production of animal products and ~11% of emission come from the production of plant based products.
This graph from this study (B. Kim, et al. 2019, Science Direct) shows the CO2 emissions from different crop types including the CO2 release from land use conversion (LUC) i.e. clearing vegetation. You can see that the footprint for plants is much lower than meat, dairy and eggs. Although this is useful to know, looking at diet rather than individual food types gives a better overview of the footprint of how we eat.
This same study (B. Kim, et al. 2019, Science Direct) looked at 140 countries and measured the impact of 9 different diet options with varying levels of animal consumption.
The 9 diets modeled were:
1. Meatless day
2. Low red meat (maximum of 350 g cooked weight per week)
3. No dairy
4. No red meat (no cow, sheep, goat or pig meat)
5. Pescetarian (no red meat or chicken)
6. Lacto-ovo vegetarian (can eat dairy and eggs)
7. 2/3 vegan (i.e. 2 out of 3 meals a day were vegan)
8. Low food chain (protein from insects, forage fish and molluscs)
9. Vegan (plant based diet)
These option were compared to the country’s baseline diet and the base line diet adjusted to scale food consumption to 2300kcal to account for over or under consumption of food in different countries. The results for the countries with the 4 largest whole-of-country food related GHG footprints are shown below. In terms of whole-of-country footprint size the rankings were (1 st) mainland China, (2nd) India, (3rd) Brazil and (4th) the United States). The base line diet related footprint varies widely depending on local eating habits but it’s clear from the graph that an exclusively plant based diet results in the smallest footprint in every country.
This may make veganism seem like an easy win, however changing diet is a big lifestyle change and veganism is not seen as easy or considered desirable by many. In fact in this study (C. Bryant, We Can’t Keep Meating Like This: Attitudes towards Vegetarian and Vegan Diets in the United Kingdom. Sustainability 2019, 11, 6844) only ~9 percent of people viewed veganism as an easy choice. Overall ~77% of people viewed it as inconvenient and ~61% viewed it as unenjoyable. It is interesting to note that most peoples opposition was largely around the practicality of implementing the diet, not the ethics, environmental or health aspects.
Even if a person does want to make the change it can be difficult to make it stick. Changing your diet requires people to giving up long established patters of eating behaviour and acquire new habits. Public health officials have been trying to convince people to change their diets for years through healthy eating campaigns with limited success. This study (Kapur, et al. 2008, Barriers to changing dietary behaviour. The Journal of the Association of Physicians of India. 56. 27-32.) looked at barriers to changing dietary behaviour in the context of managing diabetes and found that only 28% followed the dietary advice for the full duration of treatment. If people have trouble making the change for their own near term health benefit, making the change for the long term health benefit of the planet will be even more difficult. The study also showed that the likelihood of successfully changing diets is much higher when there is family support (everyone eats the same food) which isn’t a choice that the individual can make. In this context, calling on people to choose a vegan/plant based diet may not be effective.
Based on the B. Kim, et al. 2019, Science Direct data, a couple both switching to a 2/3 vegan diet can exceed the gains of an individual changing their diet and the other person making no change. The effect would be even more pronounced in a family of 4 - in fact the family all switching to just a low red meat diet can exceed the impact of an individual being vegan. For a large enough group, all people committing to be meatless 1 day a week (e.g. participating in #MeatlessMonday) can have a bigger impact than an individual vegan. It could therefore be more achievable, practical, sustainable and have a greater impact, if people committed to moving towards a "meat reduced" / "as plant based as we can manage" diet and taking the household along for the journey.
Changing diet is a big lifestyle choice that requires ongoing commitment at every meal, so the plant based diet recommendation doesn’t make it to the top 3 ‘easy solutions’ which are all one-off actions that can be completed in 10 minutes in a set-and-forget fashion. That said, in terms of an easy to adopt, reasonably high impact action we would endorse a move to “eat plant based as much as possible”.
We believe that there is enough evidence to conclude that being selective in your superannuation investments is a potentially high impact action. This is because it comes at no cost to you (and requires no change in lifestyle) but may have a high impact. We will address this claim in two parts, that it is 1). no cost and 2). potentially high impact (considering direct and indirect impacts).
We say that the action comes at 'no cost to you' on the basis that in Australia there are funds which exclude fossil fuels which deliver returns in or above the range of top performing funds. In 2018 the Institute of Energy Economics and Financial Analysis (IEEFA) release a report on the Financial Case for Fossil Fuel Divestment which argued that “Over the past three and five years, respectively, global stock indexes without fossil fuel holdings have outperformed otherwise identical indexes that include fossil fuel companies”. The graph compares the returns of two index funds over the period between 2010 and 2018 and it shows that the index fund with fossil fuel exclusions delivered a higher return.
There is some speculation about the reason for the reduced performance of the fossil fuel sector. One explanation put forward is that there is growing recognition that if the world is to meet the targets set out in the Paris Agreement ~80% of known reserves will need to remain in the ground or we will risk exceeding out ‘carbon budget’. As more governments put in place legislation designed to meet Paris Agreement targets there is a risk that undeveloped reserves will become ‘stranded assets’ and will lead to a devaluation of the company. You can read more about the risk of stranded assets here.
To date, we have not been able to find a study that has attributed a reduction in GHG emissions to fossil fuel divestment. Nor have we been able to find any modelling that has been able to link the two. However, there is some emerging evidence that divestment does affect share price as reference by this study from 2019 that concluded “divestment announcements decrease the share price of the fossil fuel companies, and thus, we conclude that ‘divestors’ can inﬂuence the share price of their target companies.” This study from 2008 looked at divestment more broadly (not specifically at the fossil fuel industry) and concluded “that there is a significant price effect on the order of 15–20% from large institutional investors shunning sin stocks.” The campaign for fossil fuel divestment started in 2011 and has been growing as demonstrated in the accompanying graph. 2019 saw a big increase in fossil-fuel divestment and large institutional investors such as BlackRock and Allianz, banks such as the World Bank and ING and insurance groups such as AXA began to join the movement. When these large institutions get involved it means that:
There is anecdotal evidence that divestment is concerning fossil fuel companies with Mohammed Barkindo, the secretary general of OPEC stating that “Climate activists and their ‘unscientific’ claims are perhaps the greatest threat to our industry going forward.” A 2017 Shell annual report also addressed divestment stating “Additionally, some groups are pressuring certain investors to divest their investments in fossil fuel companies. If this were to continue, it could have a material adverse effect on the price of our securities and our ability to access equity capital markets.”
The affect appears to be largest on coal. A 2018 Goldman Sachs report noted that the “60% de-rating for coal produces since 2013 as the number of divesting institutions increased to 1,000.” In 2016, Peabody, the world’s biggest coal company, announced it was going bankrupt. In a 2014 SEC filing the company had noted that “Concerns about the environmental impacts of coal combustion, including perceived impacts on global climate issues, are resulting in increased regulation of coal combustion in many jurisdictions, unfavorable lending policies by government-backed lending institutions and development banks toward the financing of new overseas coal-fueled power plants and divestment efforts affecting the investment community, which could significantly affect demand for our products or our securities.“
“There have also been efforts in recent years affecting the investment community, including investment advisors, sovereign wealth funds, public pension funds, universities and other groups, promoting the divestment of fossil fuel equities and also pressuring lenders to limit funding to companies engaged in the extraction of fossil fuel reserves. The impact of such efforts may adversely affect the demand for and price of securities issued by us, and impact our access to the capital and financial markets.”
The indirect impact of divestment is better documented with the effect on culture, politics and finance considered larger than the direct effect on share price. This 2018 study suggests that the expansion of the climate change debate, the effect on political agendas, the creation of fossil free funds and the uncertainty that divestment creates all have a bigger impact on the cultural, political and financial landscape in which fossil fuels operate than a direct effect on share price. This 2013 Oxford study took a more pessimistic view on the direct financial impacts but argued that the stigmatisation resulting from divestment campaigns “poses the most far-reaching threat to fossil fuel companies and the vast energy value chain. Any direct impacts pale in comparison.” And that “bad image that scares away suppliers, subcontractors, potential employees, and customers.” This in turn could lead to restrictive legislation.
Socially responsible investment is the least intuitive of our recommendations and a direct link to GHG reduction is yet to be proven. However we believe that the evidence conclusively shows that the action comes at no cost and has a potentially high impact, so we list it as our second recommendation.
If you want to learn more about how to start investing in a socially responsible way visit our Social you Super FAQ.
Carbon Offset options
(tax deductible for Canadians through this link)
(tax deductible for Canadians through this link)