COMPRESSED MATTER #5 WHY YOU’RE MAKING INTERVENTION INEVITABLE

Published on 07-05-2021 10:52:54

Left to free markets, consumer tech for decarbonisation will be adopted far more slowly than carbon-hungry innovations like smart phones and streaming services.




Heat pump adoption in the developed world versus global smart phone penetration. Sources: IEA.org and Statista



Why? Gadgets and apps solve problems and create novel experiences. Meanwhile, heat pumps replace boilers. While addressing market externalities, heat pumps ostensibly do the same job as boilers with little extra personally-felt value.

The only way to accelerate this curve is for governments to strongly incentivise, mandate and enforce the necessary changes in consumer (and corporate) behaviours.

Is this inevitable market intervention a bad thing? Only if we believe free markets and consumer choice are more important than an unchecked global warming catastrophe which, given EV valuations, is not the way most investors expect humanity to jump.

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