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Towards a New Carbon Economy Driven by a mix of rapid technological change, population growth and ever more obvious environmental limits, global capitalism is headed into a period of profound transformation. The World Economic Forum talks in terms of a ‘Fourth Industrial Revolution’.7 The Generation Foundation labels it the ‘Sustainability Revolution’, which, they argue, “appears to have the scale of the Industrial Revolution and the Agricultural Revolution — and the speed of the Information Revolution. Compared to these three previous revolutions, the Sustainability Revolution is likely to be the most significant event in economic history.”8 Such statements may sound hyperbolic to some, but we find the underlying analysis credible and in line with our own research. The shift to an economy that sequesters more carbon than it emits — i.e. a New Carbon Economy — will happen as part of the broader Sustainability Revolution that is re-shaping the economic landscape. Predicting precisely how, and over what timescales, this revolution will play out is a fool’s errand. Nonetheless, it helps to have a framework for conceptualising what lies ahead. We find the ‘Three Horizons’ framework developed by Bill Sharpe of the International Futures Forum (see diagram below) a useful model.9 Figure 1: Three Horizons map of the journey to a New Carbon Economy Prevalence Business as usual H1 H2 H3 Source: Volans, adapted from Bill Sharpe Third horizon: First horizon: Disruptive innovation Second horizon: Transformative innovation H1 / Business as usual: economy is largely fossil fuel powered; efficiency measures make some emission reductions possible, but the process of decoupling emissions from growth is too slow to align with a below 2°C pathway. H2 / Disruptive innovation: experimentation with solutions that deliver radical emissions reduction and increased carbon sequestration goes off the scale; Carbon Productivity — the value created per unit of CO2 emitted — begins to climb sharply. H3 / Transformative innovation: economy is regenerative and circular by design; value is now created by restoring — rather than disrupting — the natural carbon cycle. 7 World Economic Forum, ‘The Fourth Industrial Revolution: what it means, how to respond’, https://bit.ly/1pBfye4 8 Generation Foundation, The Transformation of Growth: How Sustainable Capitalism Can Drive a New Economic Order, 9 Bill Sharpe, Three Horizons: The Patterning of Hope (2013). Time https://bit.ly/2yR6yKM 4PDF Image | Our Carbon Future White Paper
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