Certificate for climate-related restructuring of industrial companies

About 70 of the worlds greenhouse gas emission is produced by 100 companies! Impacting those therefore has a global-scale effect!
To motivate companies to reduce their climate impact, policy-makers should set up international standards for green certificates for businesses in relation to produced goods. The certificate requirements would feature greenhouse gas emissions (especially CO2), air pollution, and sustainable sourcing and usage of resources. To reduce the environmental footprint of companies most efficiently and to take into account different industries, reduction aspects are weighted differently by cluster. If companies fulfil those specific reduction goals, they will be rewarded with green certificates linked to a reduction of their tax rates.

Thus, enterprises would have several benefits. Firstly, they could make more profit due to reduced taxes. Secondly, it would be possible to advertise their products as environmentally friendly attracting a wider range of consumers and therefore leading to higher sales. Thirdly, more investors would be interested in supporting those businesses due to their green image and higher market value. Motivated by those advantages, other companies would be interested in transitioning to greener standards by decreasing their carbon footprint etc.
Furthermore, pressure would be exerted indirectly on non-green companies by companies with green certificates as their higher financial strength will eventually enable them to take over other less sustainable companies.

Therefore, this small change of introducing green certificates would lead to self-reinforcing feedback with an enormous impact on reduction of carbon emission and an increase in more sustainable behaviour of companies. The competition between companies to fulfil certificate requirements, in order to increase profitability, is the feedback mechanism.
Attempts to trigger this feedback loop can start soon after the conditions for certificates are defined and a control system is developed which would evaluate the eligibility of companies for the certificate.

 

Actor(s)

Government

 

Trigger (intervention)

 

Criticality

 

Feedback Dynamics

 

Timescale and scaleability

 

Resistance

 

Author

Nora Fahrenbach

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