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Hacking the Tragedy of the Commons

Success in achieving net-zero emissions requires broad buy-in from the entire private sector, not just publicly listed companies. Fortunately, the rapid rollout of COVID-19 vaccines shows what can be accomplished when traditional organizational and sectoral silos are ignored in the interest of a common cause.

NEW YORK – The word of the week, unfortunately, is Omicron. With yet another new COVID-19 variant dominating the headlines, the global spotlight on climate issues following last month’s COP26 conference is quickly fading. Humanity, after all, tends to focus on the most immediate threat.

Still, our response to the pandemic could offer a roadmap for confronting climate change. Both crises involve a classic tragedy of the commons, which occurs when individuals disregard the well-being of society in the interest of personal gain. Yet the global reaction to COVID-19 demonstrated that some unlikely parties could come together, at risk to their individual interests, to accelerate the development, testing, and distribution (at least in the rich world) of successful vaccines. The climate crisis demands a similar approach. Deploying capital to mitigate global warming will require an alignment of unusual bedfellows in finance, technology, social-justice activism, and beyond.

Capital, along with government and religion, has been one of the three great levers of change in history. It has the power to alter the trajectory of entire civilizations. For many decades, capital flows have followed a simple rule defined by the Nobel laureate economist Milton Friedman: all that matters is shareholder returns. But the continuing viability of this maxim has been called into question by unprecedented wildfires, more frequent and severe flooding, increasingly visible social inequities, and other worrying problems.

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