Prime Minister Naftali Bennett is expected to lead Israel’s delegation to the UN’s 26th Climate Change Conference of the Parties, known as the COP26, at the end of October. The prime minister can leverage his background and Israel’s unique position. Here is the speech I would recommend he give.
Dear esteemed delegates and world leaders, I stand before you here today both as the prime minister of my country as well as a father deeply concerned about the future.
Before I speak to the reason we are all here, I would like to directly address the elephant in the room: I know many of you have disagreements with my country and with the particular circumstances we are in with our neighbors. I recognize we have a lot to work on. There are injustices we have yet to remedy. Our nation is devoted to reducing human suffering, and I commit to you we will do our best to address the very real political challenges we face.
I ask your patience for the moment to put that aside. Because without reducing the complexities of our current political situation, things are going to get a whole lot worse for all of us if we do not use this opportunity to think of the future. If we do not work together to overcome gathering storms brewing that will change life as we know it.
I am here as the prime minister of a country that has seen remarkable growth in its technology and services infrastructure over the past 30 years. Even before we were known as Startup Nation, we were known for leveraging cutting edge breakthroughs in the sciences to make the desert bloom. For the past century, we have built a national home under the often harsh environmental conditions of our region, and went from being a parched nation to a nation proud to export water to our neighbors in need. Because of our history and our geography we have become a nation engaged on a daily basis with the question of how to improve human life in ever hotter climates.
Even before we were known as Startup Nation, my nation was known for leveraging cutting edge breakthroughs in the sciences to make the desert bloom
I am here to extend our hand in partnership to anyone and everyone who would like to work with us towards solving the challenges that will face us all in an ever hotter climate.
I am also here as a veteran of the Israeli startup ecosystem, as a person who has built companies that have transformed industries. With my own eyes I have seen what entrepreneurial individuals can do when the right incentives are aligned, taking scientific and engineering breakthroughs and applying them in novel ways to meet the needs of the market.
With my own eyes I have seen what entrepreneurial individuals can do when the right incentives are aligned
Markets, however, do not work unless goods are properly priced. When participants in markets take into account the true cost of supplying products to meet demand, amazing things happen: salaries rise, products improve, and customers are happy. Incentives align for entrepreneurs, customers, and investors, and everyone benefits from the new value that is created.
When markets do not take into account the true costs of producing something, the incentives become misaligned. In the short term everything looks great: companies produce products priced below their actual cost, customers are initially ecstatic because they are able to buy more for less, and investors reap the benefits of a lower cost base and higher revenues. But when the bill comes due everyone suffers from the long-term costs of the negative externalities. Companies fail, products break down, the stock crashes.
Which is of course what has happened today. All of us have benefited tremendously by the abundance of energy made available by how we account for the cost of carbon. Until today, the price of oil, for example, was calculated based on the direct costs of extracting, packaging, and shipping that oil to the end customer. The companies able to extract oil have profited tremendously, and our economies have been turbo-charged by having access to cheap energy for industrialization.
We now know, however, that the same public that bought the oil at that immediate, lower price also accrued a debt reflecting the long-term costs of using that oil: by burning so much oil so quickly, we have altered the climate and led to a rapid warming of our planet. We are already seeing the economic impact: increasing healthcare costs, defense budgets, infrastructure expenditures, and more.
Or take something as mundane as non-compostable packaging, for example: we have agreed to allow plastic plates and cutlery and bags to be sold for pennies on the dollar, while ignoring the public costs of waste management, land appropriation for landfills, and the health effects of plastic contamination of our water. Whether it is oil or plastic plates or one of many other goods and services, by allowing our companies to sell products at a price that does not take into account the true cost to our countries and our tax-paying citizens, we have allowed a market inefficiency to pervert our incentives. We have constrained the power of free markets, stopping them from helping us solve the climate crisis.
The most fundamental thing we can do today is to create a properly priced market for carbon that takes into account the true price of the goods we rely upon
I believe the most fundamental thing we can do today is to create a properly priced market for carbon that takes into account the true price of the goods we rely upon. I believe that if we build such a market, through the judicious use of taxation, innovators and inventors and entrepreneurs will have properly aligned incentives to launch new startups that can help us transform our world.
It is time for us as world leaders and committed members of humanity to recognize that for private initiative to succeed, public initiative must come first. It is time for us to work together to internalize the costs that until now have been externalized by private players. It is time for us to create the conditions for free enterprise to unleash the creativity of our best and brightest to tackle the clear and present dangers before us.
This is the 26th Climate Change Conference of the Parties. Over the past quarter-century, we have hoped that corporations and private citizens would get in touch with their better angels and reduce their contribution to the warming planet. We expected philanthropy and good-will to save us. It did not. It is time for us to unleash the power of the markets by properly structuring them to take into account negative externalities in pricing. It is time to use true cost accounting to properly price goods and services.
It is time for us to unleash the power of the markets by properly structuring them to take into account negative externalities in pricing. It is time to use true cost accounting to properly price goods and services
My small nation is unable to do this by ourselves. We will do our best to share our hard-earned lessons with the world on how to survive a warming planet and feed a growing population. But I recognize that it will be no more than a Band-Aid for a wound that needs surgery. Which is why I am standing before you here today calling for a global alliance to mandate true cost accounting to harness the power of free enterprise to help us fix the planet.