A race to the top, the bottom – or back to the Dark Ages?

Review: Climate Race: Collected Essays (Bilingual English & German Edition) Gernot Wagner. Leykam Universitätsverlag. 2024, 188 pages 

Raging fires and floods are part and parcel of climate change narratives. They’re also part of mythology and even the original meaning of “race”, from Old Norse dating back over a thousand years. Race in terms of Vikings “running the course of life” along perilous rivers against dangerous rivals, culminating in the battles of “Ragnarok” between the gods and the giants – as flames and floods consume the land. The archetypal race to the bottom. 

Taking us in the other direction is climate economist Gernot Wagner, who in his latest book Climate Race says: “The climate race is on, and despite the best attempts by some, there’s no going back. Low-carbon, high-efficiency technologies will only get better and cheaper over time. Oil, coal, and gas, meanwhile are commodities, whose prices will always fluctuate due to geopolitical vagaries… The best medicine for addressing ‘fossilflation’? Getting off fossil fuels… The one clear winner: the planet.” 

Sound too good to be true? Despite the headwinds of the second Trump term, the energy transition is clearly in everyone’s best interest – existentially, environmentally, even economically – irrespective of identity politics. In this collection of essays Wagner points to the Texas Land and Liberty Coalition, a group of conservative farmers and ranchers who (having “struck wind”) are doing what was previously unthinkable: Lobbying hard for renewable-energy policies and investments. 

It’s not just grassroots groups that are running this race. This “revolutionary” climate optimism is echoed at the highest levels, including the International Monetary Fund and the International Energy Agency. Both institutions now state that “ambitious climate action leads to higher growth and more jobs even in the near term,” according to Wagner. 

Key to this new reality and “what really matters,” says the economist, “is the interplay between technology, policy, and behavioral change” – which is the driving force of this climate race. It is what we might call “comprehensive innovation” – a term used in UN circles, but not one that appears in the book. In other words, technology is the spearhead, but it needs the right (policy) ecosystem and (social) uptake to succeed. 

Focusing on issues including climate-tech solutions, climate-risk accounting and the green growth mindset, this collection of essays from June 2021 to September 2023 does get technical, but is surprisingly accessible thanks to Wagner’s clear and confident handling of the subject matter. Each of the 13 chapters is peppered with helpful data and pithy summaries. There are no footnotes or fancy infographics, just clear and compelling arguments – busting myths and challenging assumptions, while batting away doomsday pessimists. “Yes, we can [because we’d better]!” is the post- Obama tone at play. 

Most helpful is Wagner’s weighing up of the different kinds of “moral hazard” – when people take risks out of complacency or because they think others will bear the burden. Some critics have framed the debate between climate adaptation and mitigation in this way, saying the former is a diversion from “true” climate action. Wagner begs to differ, walking the tightrope of a balanced approach from chapter to chapter: 

• “It is moral hazard to think that technology will save us. However, it is equally hazardous to ignore innovations that could be game changers if they are accompanied by the right kinds of policies, investments, and political commitments.” 
• Meanwhile, “…those who merely argue for more research into solar geoengineering usually meet with strident ‘moral-hazard’ objections, as if simply studying the issue will distract from emissions cuts. We must move beyond that argument.” 
• Granted, “…there is also a danger of a green moral hazard, whereby the mere promise of a simple technofix weakens the incentive to pursue a more comprehensive and ultimately superior transformation.” 
• “The key question when considering climate moral hazard, then, is whether a technology moves a company, industry, or sector closer to implementing an 80-100% solution, as opposed to a 10% or 20% measure that merely kicks the can down the road.” 
• “In the end, there is a fine balance to strike between unleashing the entrepreneurial ‘can-do’ spirit and channeling it in the right direction; between Silicon Valley’s mantra of ‘move fast and break things’ and the physician’s oath of ‘first, do no harm.’” 

Also of note are the many international comparisons, particularly between China, the USA and EU – who is leading or lagging, who could leapfrog and so on? In a nutshell: 

• “China currently produces the vast majority of the world’s clean-energy technologies: including three-quarters of all solar panels and batteries sold globally, well over half of all wind turbines, and around half of all electric vehicles… According to Bloomberg, global investments in the energy transition topped US$750 billion last year [2021], with China alone spending US$266 billion…” 
• “Public funds are the lever for rechanneling private money at the necessary pace and scale. The Inflation Reduction Act, Bipartisan Infrastructure Law, and CHIPS and Science Act that the United States has recently enacted are good examples of this lever in action. The idea is that some US$500 billion in government investments will encourage many hundreds of billions more in private flows.” 
• “Europe’s goal is significantly more ambitious than America’s. The EU is pursuing carbon neutrality by mid-century and a 55% reduction in emissions from 1990 levels by the end of this decade… The EU, meanwhile, must take the arguably easier step of ramping up its own clean-energy subsidies. It can and must afford to do so. The result will be a race to the top, with the global economy and the planet as clear winners…” 

However, Wagner is quick to point out that the climate race is not only for the big players. Smaller countries must also pull together, as many are not only vulnerable but also ill-prepared for climate change. Meanwhile the combined CO2 emissions of these smaller countries make up around a quarter of the global total: 

• “Globally, most countries that are not among the largest dozen polluters can and often do hide behind the claim that they are ‘too small to matter’. But together these economies account for around 25% of annual CO2 emissions. Being small does not mean your actions are irrelevant.” 
   

It’s difficult to capture and do justice to all the information set out in this book, despite its compact format. My sole small criticism is that I would have preferred the chapters to be a little less bite-sized and a little more detailed with a stronger narrative thread. This is a book to dip into rather than dive into, which of course is the nature of the beast with a collection of essays. 

By chance I finished the English version while on a train passing through St. Pölten, an hour west of Vienna. A fitting place to end, given what happened in September 2024, when the Traisen River burst its banks, causing millions of euros in damage to homes, shops and transport infrastructure. Beyond Austria, the floods caused by Storm Boris led to dozens of fatalities across Central and Eastern Europe. All of which proves Wagner’s point: “Climate risk is financial risk, and climate action is an insurance policy – for the world as much as for individual companies and for us as individuals.” We therefore adapt or die. 

Gernot Wagner 

Gernot Wagner is a climate economist at Columbia Business School, New York, where he is Faculty Director of the Climate Knowledge Initiative. He holds degrees from Harvard and Stanford universities and has authored several books, including Climate Shock and Geoengineering: the Gamble. For more see: gwagner.com 

A mythical frame for our climate race 

According to legend, the Jade Emperor held a contest to decide which animals would be included in the Chinese calendar. The winner of the race – the Rat – received the first year of the 12-year cycle. 

Out of curiosity, we asked our Microsoft Copilot to reimagine the 2,000- year-old “Great Race” of China, recasting the mythical animals onto contemporary regions. Though far from scientific, it shows how friendly competition can be mapped to mythology – from pioneering Americans to persevering Europeans to the growing resilience of the Global South. 

It’s also a constructive counterpoint to Western sagas. The Vikings had their Ragnarok a thousand years ago. Now we have Mad Max, set in a not-too-distant future, where climate survivors fight it out in highoctane battles over fuel and water. All death, doom and dystopia. 

Crucially, our Copilot agrees with Wagner: “The actual outcome of global efforts to combat climate change depends on the collective actions of many countries. Ultimately, the ‘winner’ in the climate race will be determined by how effectively countries collaborate and implement sustainable practices to protect our planet. It’s a global effort where every nation’s contribution is vital.” 

China (Dragon): 

Despite its awesome appearance, the Dragon is portrayed as a helper and protector. According to the mythical story, it could have easily won the race, but instead stopped to help people and animals in need. Transposed to the present day, it represents a powerful influence and leadership in global climate initiatives. 

USA (Horse): 

The Horse’s story highlights how unexpected challenges can arise (in the form of the Snake), even for the strongest and fastest competitors. It embodies a pioneering and energetic spirit, leading in technological advancements and climate initiatives. 

European Union (Ox): 

The Ox’s story highlights its strength, reliability and willingness to help others, even if it means not coming in first. It embodies hard work and perseverance in pushing for environmental regulations. 

Global South (Rooster): 

Demonstrating initiative and inclusiveness, the Rooster found the raft and invited the Goat and Monkey to get on board. Countries across the Global South are sharing knowledge, pooling resources and investing billions of dollars into climate adaptation and mitigation measures.