• Lussot Team

Climate Agreements (or lack thereof) don't have to stop our commitment to Net-Zero Emissions

As the annual UN Climate meetings kick off in Madrid this week, net-zero emissions is the cause célèbre that will garner much of the attention. Scientists who research the matter say that achieving net-zero is a key milestone in reducing the continual heating of the atmosphere. Joeri Rogelj, a Climate lecturer at the Imperial College of London told the Financial Times that “The physics of the problem tells us that achieving net zero is essential in stopping global warming”

To achieve net-zero, we need help from all angles: Public Policy, Legislation, Corporate Governance, Carbon Offsets, and more. But whatever tactics we ultimately choose, one thing is certain: organizations in every sector can contribute to net-zero emissions regardless if our governments subscribe to Climate Agreements.

Public Policy will be imperative in forging new rules and incentives to favor winners in the market that also achieve carbon reductions. One way to do this is by creating a global market for carbon offsets. For those that don’t know, a carbon offset is a [reduction] in emissions of carbon dioxide made by companies or governments in order to compensate for emissions made elsewhere.

For example, Company A might need to offset a certain amount of carbon coming from a plant that they own. Because of this they might invest in a Renewable Energy project like wind turbines. They would then receive carbon credits for that investment and still be allowed to operate their emitting plant.

Environmentalists might take the stance against offsetting – saying that these programs don’t limit emissions, but just promote investment in new and other areas. Although that’s true if the only metric is emissions, we also need to find an economic balance. For example, if we took 50% less airline trips in 2020, emissions would surely decrease. But what would happen to global productivity?

Because there is both a compliance market and a voluntary market for emissions, legislation from inter-governmental organizations play a pivotal role in how we create effective global markets for these offsets.

In addition to legislation, corporations need to actually shift from a shareholder model to a stakeholder model. A topic that has caught fire recently, and rightfully so, is shareholder capitalism vs. stakeholder capitalism.

Shareholder capitalism is something we’re all used to in the US. It’s embraced by Western culture as the dominant corporate model since the 70’s and has been widely successful depending on which metrics we use to measure performance.

Proponents of Shareholder Capitalism may argue that the act of maximizing the share price of a company will inevitably lead to superior [behavior] in the marketplace.

Diesel Gate hitting the press

But this image shows the stock price of VW as Diesel Gate unfolded. Trading at roughly $170 dollars per share, it’s possible to assume that if shareholder value is the paramount concern, then there’s an incentive in the market for corruption. In VW’s case, the development of software to unlawfully disguise the actual amount of emissions coming from the vehicles they manufactured.

One might say, this is Shareholder Capitalism working, “Look what happens to the share price once the emissions scandal breaks out.”

Precisely. Until they were caught, the share price was high! Not exactly what we’re shooting for.

Stakeholder capitalism, by contrast, attempts to add the other necessary components of corporate externalities. For example, if we revisit Company A in our previous carbon offset example, the pollution coming from their plant (and the offset value they invest in) is not just a dollar figure on their balance sheet. It also affects the health and wellbeing of people, forests, rivers, and every other participant in our society at large. And many of these [negative] values cannot be measured in corporate metrics; because no corporation owns the environment.

Thus, the stakeholder view might take more consideration in the negative externalities that are imposed on surrounding ecosystems.

So, it’s no secret why it’s the perfect time to shift towards Stakeholder Capitalism. Just this year, Greta Thunberg made a big splash at the UN meetings in New York that crystallized an image for many of us: There is no Plan(et) B – we need to act now. All of us have a part to play.

With that thought, here is a transit specific example of what we can do to help pull on the net-zero rope. If we can agree that everyone can do something to help us reach certain targets, let us examine some simple steps to improve ridership and thus and reduce congestion and pollution.

There are several factors why public transportation isn’t used more often than it should be in some metropolitan cities. These factors include land use, sprawling cities built after the invention of the automobile, no or low cachet for ‘riding public transit’ in certain cities, and lack of innovation.

At Lussot, we’re focused on the last problem: lack of innovation.

We’re sure of a couple things that will happen in the next decade. Cities will get bigger. Transit users will shift younger. And young people love phones.

With these observations, we are laser focused on increasing the mobile experience for passengers while simultaneously automating transit agency functions like ticketing, ridership reporting, passenger counting, data collection, on-time performance, asset management, safety management, and more.

If we think that young people will ride more public transit without a shift in culture or digitization, we’re fooling ourselves. Go anywhere these days and you’ll find young people holding phones and staring down. Literally anywhere.

This is the next generation of transit users

The other elephant in the room is culture. If you go to New York or Tokyo, taking mass transit isn’t low brow – it’s just how you get around. But that’s not the case in many suburban neighborhoods.

Jacqueline Carr, writer of the blog Snob On A Bus, told the LA Times, "I felt like I was too good for the bus, I think there’s a social understanding and a construction around that if you take the bus, you take it because you don’t have money. There’s a social standard. Obviously, I had bought into that."

Multiply that times no digital experience and you’ve got kids completely at odds with transit. In other words, the only two things that matter to young people are being cool and their phone. Not a great matchup.

Unfortunately, at this point Lussot as a company can only tackle the digital problems facing mass transit agencies. But we eventually hope to catalyze a shift in culture. As JFK once said, “Change is the law of life and those who look only to the past or present are certain to miss the future.”

If you agree with him, and us, that we can all do our part in creating a more sustainable world, then help us catalyze this change. Here in transit, and everywhere, there’s a difference to be made. And we’re optimistic that while cities keep growing, transit will eventually be the coolest thing around.


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