The kids are [going to make it] alright

Last year, the Lancet published a survey of 10,000 young people from around the world finding that over 80% of people between 16-25 were at least moderately worried about climate change with over 50% being extremely worried. The study also found that feelings of anxiety, anger, guilt, and helplessness are translating into practical and life-defining decision making: where to live, whether to have children, what jobs to take, who to support as a voter and as a consumer, etc. To young people around the world, climate isn’t an issue to care about; it’s theissue that will determine their future.

One of the biggest findings of the study is the overwhelming feelings of those surveyed that government has let them down. That the world’s older generation aren’t taking the threats seriously.

I don’t think we’ve thought enough about the practical implications of the generational resonance of this issue for investors, policy makers, and consumers.

And that’s where the optimism comes in.

As these young people become less young, we are in for a dramatic shift in the way decision makers view the climate challenges and, therefore, a dramatic repositioning of how decisions that have an impact on emissions reductions have are made. Unlike the current crop of policy makers who see climate as one of many issues (if they “see” it at all), the next generation of leaders will come into power having internalized climate into every decision they make.

Practically, I think that means a very specific shift. Today, policy makers look at climate through the lens of economic productivity. Tomorrow, they will look at economic productivity through the lens of climate.

That shift will mean profound differences in the way markets take shape. Government policy, investor expectations, customer demands, and employee satisfaction will all be defined by climate. As climate anxiety begins to define our reality, the things that we think of as the “unlikely to happens” or “always fails” will become the rule – like durable, boarder adjusted carbon prices and meaningful mandates, clean product standards, and other market controls that will make green technologies not only economically competitive, but possibly the only answer. Customers and employees might start to demand real action and begin to see through greenwashing and hollow attempts to slap a climate logo on some trees. Assuredly, when it comes to adopting new products and services, people will start to prefer “greener” even if the green alternative is not empirically better at doing its underlying job (like delivering electrons) or cheaper than the current standard.

Over the last three years we have seen incredible progress toward productive climate policy making. You have more globally leading firms saying they will meet the customer, employee, and shareholder demands to decarbonize, you have COVID era funding packages from governments prioritizing a “green recovery” with real resources for building out the infrastructure for the transition, and you have real policy levers like the recently passed Inflation Reduction Act in the US that begin a process of market creation for the technologies we need.

The generation surveyed, however, does not see that as enough – not nearly so. That is a bit disheartening for the people who have worked so hard to made that a reality, but we should be heartened by the constant pressure to do more.

That pressure should lead to new ways to think about how we invest in a green future. The winners, as with any investment case, are those who spot the trends early and invest creatively. I think there are some ways to start doing that now, but that’s a subject for another post . . . .