Zeroing out greenhouse-gas emissions by 2050 is crucial to avoid the worst impacts of climate change, but getting there will require dramatic action and significant investment—and within the next decade. In episode six of the Future of America podcast, McKinsey’s Rory Clune, André Dua, and Kimberly Henderson discuss findings from a recently published article, “Navigating America’s net-zero frontier: A guide for business leaders,” including the US path to net zero, opportunities for the private sector to drive the transformation of major industries, and the unique challenges of the current macroeconomic environment. An edited version of the conversation follows.
André Dua: Welcome to the sixth episode of McKinsey’s Future of America podcast, where we explore how we can build a future that drives sustainable and inclusive growth. Join us in conversation with leaders who are accelerating progress to grow, broaden, and sustain prosperity for more Americans.
I’m your host for today, André Dua. I’m a senior partner with McKinsey and the managing partner of our Miami office. Today, I’m joined by my colleagues Rory Clune and Kimberly Henderson.
Rory is a partner in our Boston office and one of our leaders in the sustainability and decarbonization work we’re doing. He is a driving force behind McKinsey’s research on the power industry and on clean energy.
Kimberly is a partner in our Washington, DC, office, where she focuses on supporting institutions as they navigate the transition to a zero-carbon economy. She also publishes research on lowering carbon emissions. And she leads McKinsey’s social responsibility efforts related to climate action.
Welcome and thanks for being here today. Can you tell us a little about your backgrounds and what motivates you to do your work around sustainability topics? Kimberly, perhaps we can start with you.
Kimberly Henderson: Thanks, André. I’ve been working on the climate topic my whole career. I started getting interested in this when I was a student. I was doing economics courses and policy courses and started to look at environmental topics that we were facing and thought, “Oh gosh, this is bad, we need people working on this.” And I wanted to be one of those people. I’ve been working on climate change and decarbonization for my whole career. I work with companies across sectors on it, and I’ve led a fair bit of our research around how to decarbonize.
André Dua: Great. Rory?
Rory Clune: Not too dissimilar of a background, André. Thanks for having us on. I have a background in engineering. I’m a trained and previously practicing engineer prior to coming to McKinsey. I’m a partner in our energy and sustainability practices. I’ve had a longstanding belief that this whole transition that’s under way and the move to decarbonization can be going a heck of a lot faster. And I really enjoy this intersection with the technical engineering side of things. Like, if we really get down to brass tacks, how do we make this happen?
That’s kind of where I spend my time. And the clients I work with reflect that mix. And much like Kimberly, I’ve done a lot of research and thinking about how to make this happen at the system level and at the really, really microfacility machine level. That’s a lot of what we’ve tried to bring to the work here, that combination.
Growing momentum behind ‘net zero’
André Dua: Well, that’s a good jumping-off point to begin our discussion, and maybe let’s start big picture. Addressing climate change and facilitating the energy transition that you are talking about is top of mind for leaders and the public across the world right now. And it seems that the urgency to act is getting significantly more acute over the last couple of years. The concept of net zero in particular has caught on across the public and private sectors. Can you tell us what people mean when they talk about the path to net zero?
Kimberly Henderson: What people mean by net zero is stabilizing the climate. It’s all the actions we need to take to get to net-zero CO₂, with a goal of avoiding runaway climate change. Scientists used to talk about temperature targets, a 2°C target, more recently a 1.5°C target. And I think for a lot of people, it was very abstract. What does that actually mean? What do we have to do? And the nice thing about net zero is it’s very clear. Anybody that emits CO₂ has to get to zero, and that’s in line with the 1.5°C pathway if it’s by 2050.
The one piece, André, that people often don’t realize is the near-term challenge. Because a lot of people are stuck on the net-zero-by-2050 goal, which is important. But to really stabilize the climate, we need a 50 percent reduction in emissions by 2030, according to scientists. And that’s the real challenge—the very near-term emissions reductions.
A lot of people are stuck on the net-zero-by-2050 goal, which is important. But to really stabilize the climate, we need a 50 percent reduction in emissions by 2030.
André Dua: One of the things that seems significant about the moment is that there does seem to be some real shift in attention and action on this issue. What has changed in the past 18 months or so to have really brought this issue to the fore?
Kimberly Henderson: There are a lot of things that are changing, so I’ll pick off a few. Rory, feel free to add. The financial sector is moving on climate change and setting requirements for companies they invest in. And that’s made a big difference—in terms of momentum in executive teams and boardrooms on this topic.
Financial-sector action is one piece. Another piece is a shift in regulation that we’re seeing, and this is happening now. Just a few weeks ago, the SEC [US Securities and Exchange Commission] came out with a proposed rule on climate-related disclosures. And we’ve seen a similar set of guidelines out of Europe and out of the IFRS [International Financial Reporting Standards] with the new International Sustainability Standards Board.
This wave of regulatory requirements that we’re starting to see is also a big catalyst. And then the last one on my mind is customer demands, and particularly B2B customers, where many companies are now trying to decarbonize their supply chains.
If you’re a company decarbonizing your own operations, that’s relatively straightforward, and that’s just your company. But when you talk about your supply chain, it can be thousands of companies. So that creates a domino effect across the corporate world.
Rory Clune: Those are all great points. In the last 18 months in particular, we’re starting to see some of the outcomes actually happen. And the US, which we’ve written about in our report, installed, give or take, 30 gigawatts of utility scale solar and wind last year. That is a really big number, by the way, in a really challenging year for the industry. So that’s one thing.
The one other thing worth calling out in the last 18 months as well, now that we’re in it and we’re actually starting to move, is that we’re seeing the bumpiness. The whole notion that we would have an orderly transition that plays out exactly as the piece of paper says it would is quickly becoming disproven from any number of disruptions. Whether it’s what we’re seeing with global commodity and fuel prices, the availability of solar modules in the US, with the challenge of everything happening, the antidumping proceedings that are going on—it’s becoming clear that this will be disorderly, will be bumpy, and we’re going to need to come to terms with that and keep going.
André Dua: Kimberly, one of the things that’s being talked about a lot is the new SEC-proposed rule on climate disclosures. How important a driver do you think that is in terms of the transition to net zero?
Kimberly Henderson: The SEC-proposed rule could be a major catalyst for decarbonization. First of all, it forces good measurement of carbon emissions—certainly in your own operations, but for many companies, if not most companies, there’s also scope 3 [emissions]. And what gets measured gets managed. So that’s the first way it will have influence.
Another is that it creates transparency, so it becomes much easier for investors and customers to demand that companies lower their emissions, because they can see it and they get updates every year on progress.
Lastly, it could really change the ways of working within companies and how companies manage climate risks and decarbonization. Because as written, the proposed rule would call for disclosures about your internal processes and the expertise you have in your executive team and your board related to climate change, and how they’re making decisions related to climate change day to day.
That could catalyze companies to actually change how they operate and make sure they have systems in place to better monitor and manage climate-related risks. So this could be a significant driver for climate action in the next couple of years.
André Dua: Rory, let’s come to some of the new research you talked about, which is this research about the US path to net zero, which really does lay out for US business leaders a road map on how they can engage in this transition. I want to dig into these findings a little bit.
One of the central takeaways of the report is that getting to net zero by 2050 is going to require profound changes to the US economy and to industrial systems. Can you talk a little bit about what are some of the biggest transformations that are going to need to take place to accomplish that?
Rory Clune: Let me give you a few of the really big ones, André. I’ll draw on a point Kimberly made earlier, which is that it’s the near term and the pace, honestly, in the next few years, that we’ve really focused on. That’s an important part of the whole pathway here.
In the report, we synthesize our five really big moves in markets that would need to happen in the near term. If you think about what we put out there, by 2030, even by 2025, 40 gigawatts of renewable power would need to be installed in a given year.
By 2025, 40 gigawatts of renewable power would need to be installed in a given year. We’re well on our way to doing that, but we have disruptions, and we would need to navigate those.
We’re well on our way to doing that, but we have disruptions, and we would need to navigate those. We talk about 75 percent electric-vehicle [EV] sales by the end of the decade as a floor. Honestly, many would argue that it could be more and faster than that.
We talk about operational efficiency as a big theme that needs to happen here across the economy. How do we do the things we’re doing today, just more efficiently and with less energy consumption? We say you’d need to increase the speed of building retrofits by two to three times, for instance—full envelope reduction in the usage of energy in buildings. What better way to save emissions than not to do it in the first place, if you can actually be more efficient?
The two other big ones we talk about in the report are clean fuels, and we talk about double-digit growth rates in the next few years for hydrogen. We highlight a couple of areas in the country, like the Gulf Coast, for instance, that could become a really promising hub for that. And carbon capture—I think there’s a growing recognition that that will play a role.
There’s increasing funding and pilots and things we’re seeing around the country. Those are some of the really big and really near-term changes to the economy.
André Dua: I have a follow-up question about that, which is what are some of the enablers that are required to make these transformations you just talked about happen? In other words, how significantly do they rely on technological breakthroughs that we haven’t yet accomplished? What will be required from a funding perspective?
Kimberly Henderson: On the technology side, this is actually a good-news story, because most of the technology we need we have. A lot of it’s pretty mature. Much of it is in early adoption.
There’s a little bit that really does need more R&D. And everything, of course, can use more innovation. Because as we scale, and as we innovate, we bring the costs down, which makes this easier.
But this is not about breakthrough technologies in a lab to get there. It is really about fast deployment. So we continue to need innovation, and that will be important. But we’re not held hostage to some breakthrough that we don’t know whether it’ll come. We can do this with technologies we know.
Rory Clune: Totally agree. There’s a host of enablers that are required across the board. Financing and investment is a big one. We lay out the work—roughly $1 trillion a year in capital investment to make this happen over the course of the next 20, 28 years through 2050. It’s about 4 percent of our total GDP on average. And it’s about 14 percent of the current capital expenditure across the public and private sector in the country.
It’s a large number, but also a very large investment opportunity. When we look at the range of what’s going to be required by 2030, about 40 percent of the interventions are “in the money” today if you take a lifetime view of those investments and the payback over their lives.
Things like renewable power, electric vehicles—many of those, in the right parts of the country, are in the money. So we look at this and say, “Yes, it’s a very large capital number, but it’s also a very large investment opportunity for businesses.”
That’s a lot of what we’re emphasizing here. Now we will need a host of different financing mechanisms to make that happen, and then to be able to invest up front. So that whole financing and investment piece is one important enabler.
The second one is probably on the human and workforce side. If you look at the scale of change and disruption that’s happening already today, whether it’s people shifting from employment in coal plants to renewable facilities, the shift that we will see will be on the mobility side and to the electric-vehicle industry. There’s a huge kind of repurposing and reskilling of folks that needs to happen. And that’s not straightforward at all. And we’re only at the outset of starting on that.
Role of the private sector
André Dua: Let’s turn to the specific role of the private sector. Some 350 large US-based companies have set emissions reduction targets of their own. And these often go beyond the federal targets of halving greenhouse-gas emissions by 2030 or reaching net zero by 2050. Kimberly, I’m really interested in your perspective on why it’s vital for businesses to play a role in the transition to net zero.
Kimberly Henderson: Well, André, we don’t get to net zero without businesses playing a major role, because, fundamentally, businesses are the source of most emissions. So those businesses will have to act. They’re also the source of most of the solutions that we need. It will be businesses that deploy the technologies that we need to decarbonize.
So the role of businesses is critical here. And I think about it in a couple forms. One is what you mentioned on targets—decarbonization of operations itself. If you’re a business today, how do you decarbonize both your own operations and your supply chain?
And then, second, it’s a strategic question about your portfolio and how do you play in a market that is seeing all these decarbonization trends? And, as Rory mentioned, all of this capital being deployed to decarbonize—where are there opportunities, and where are there risks to your business given this massive transition that society is going through?
André Dua: How are you seeing business leaders thinking about adjusting their business plan? Maybe give an example of a company and how they’ve wrestled with this particular issue.
Kimberly Henderson: One challenge that many companies wrestle with is status quo bias—I think it’s very hard for many people to imagine a world or a market that is very different from today and different from the one that they’ve been operating in for years or decades.
What we’ve seen is that, even as markets start to be reshaped—power is one, with renewables becoming mainstream, and then electric vehicles now within the automotive market—many companies in older industries still look at this problem and think, “Oh gosh, is this really going to change that dramatically?”
This is hard to do—the technologies we need are not at scale, for example, or it costs money or we don’t have a business case. How significant will this be, and how fast will this come? I’ve seen this in multiple sectors, where people underestimate the pace of change. And that is one of the biggest risks for companies today looking at this transition and trying to position themselves.
André Dua: Kimberly, I want to come back to one thing you said earlier, which is that businesses are thinking of decarbonizing their own operations. But you also mentioned supply chains. We hear this language of scope 1, 2, and 3 emissions. Can you explain what that means and how business leaders are tackling the challenge of reducing scope 1, 2, and 3 emissions?
Kimberly Henderson: Scope 1 emissions are the direct emissions from your corporate operation. For instance, if you’re a retail company and you operate a trucking fleet to transport goods across the country, the emissions from those trucks are your scope 1.
Scope 2 is emissions from the power that you buy. So if you have stores that use electricity, the emissions from that electricity, if it’s coal or gas generated, that’s your scope 2.
And scope 3 are emissions that are either upstream or downstream from you in the value chain. So it’s actually outside your gates. It’s your suppliers or your customers that are emitting your scope 3 emissions. And in recent years, just the last couple of years, we’ve seen much more focus on scope 3 emissions, and a number of companies are setting targets for scope 3 even though they often don’t have full control [of these emissions].
So that’s a huge shift, and this is something that McKinsey is seeing a lot of momentum on around the world. Because as companies try to decarbonize their supply chain, you often find they don’t even fully understand the emissions in their supply chain.
Understanding what is causing the emissions, where are they, what can be done about them technically in the real world, what’s the engineering required, and then how do I as a customer influence that—it’s a real challenge for companies, but it’s a major catalyst for decarbonization.
What we’re seeing with the regulatory disclosures that are coming out, the SEC-proposed rule and the IFRS standards that came out, there is an emphasis on an inclusion of scope 3 there. So it will be interesting to see how this evolves as more and more companies disclose their scope 3 emissions and look back at their supply chain and say, “How are you reducing these?”
Rory Clune: And all of that is coming at a time when we haven’t seen an era of supply chain challenges like this in a generation, if you look at the levels of global inflationary pressures, material availability across a whole host of supply chains.
I mentioned earlier the example of solar. Trying to get your hands on solar modules today at whatever price is a challenge, just to draw the link to perhaps one of the greener sectors. So I agree with Kimberly, the question of traceability that you’re alluding to is a real challenge to solve.
We’re really going to see where folks stand on this in the next year, when, at the moment, many organizations are scrambling just to be able to fulfill their requirements and their supply chain, let alone intervene to decarbonize. So it’s going to be tricky.
Challenges and opportunities in the current macroeconomic environment
André Dua: I want to step back for a minute, because in addition to everything you’re talking about, there are a few things going on in the world right now which complicate things. Rory, perhaps you want to start, but I think there are two issues.
One is obviously the turmoil in the global energy markets driven, for example, by the conflict in Ukraine. My question there is how can companies act in this landscape, and how do they navigate this turbulence in the market for energy overall, and which I assume has impact on the market for renewables?
Rory Clune: It’s the defining topic of the day, the month, and the year for many companies. What it has done is highlighted the energy security and energy resilience dimension of all of this, which has been in focus but underplayed and sort of underemphasized in the last few years.
Energy security for many countries, but particularly those with substantial dependence on Russian fossil fuels, is clearly a threat. And for all the companies operating within them. I think it has really pushed folks to start looking at alternatives to that, which could be different forms of on-site generation, be it solar storage or, honestly, be it fossil-based on-site generation too.
But it’s also put into perspective for companies that energy, and the provision of energy in a kind of secure and resilient way, is not guaranteed. So it is important to take steps now, whether it’s securing long-term contracts and offtake.
It could be for renewables. Whether it’s doing things that are giving you a backup to the grid, installations of microgrids and batteries and all those things. I’ve seen a remarkable uptick, even prior to the latest conflict and crisis.
All of that was up and is up even more in the last few months. I think that comes into focus for companies. Getting there in a way that is resilient and reliable and secure is every bit as important as getting there in a way that is zero carbon. And then affordable too. Because the inflationary pressures are becoming a real challenge.
Kimberly Henderson: I fully agree with everything Rory said, and particularly that energy security has skyrocketed up the agenda. But even beyond the security issues, the sheer price volatility and high prices are driving other decarbonized options into the money, particularly in Europe.
Even beyond the security issues, the sheer price volatility and high prices are driving other decarbonized options into the money, particularly in Europe.
So a lot of things that might not have had a positive business case or a fast enough payback period before the crisis now look very attractive for many companies, particularly in Europe. But this could be the case around the world. This could drive some rapid acceleration of adoption of efficiency solutions and other low-carbon solutions that reduce reliance on fossil fuels.
André Dua: How does the current inflationary environment impact our path to net zero? How is it complicating companies’ plans to move forward?
Rory Clune: It’s too early to call it in one definite direction, André. It’s accelerating in many ways, and it’s creating headwinds in others. Clearly, the parts of Central and Western Europe that, as I mentioned, have that exposure to fossil fuels coming from the east are, at the moment, accelerating their transition quite aggressively to renewables.
If I think about the inflationary pressure specifically, it’s enormous, even in the US, which is the country that ought to be the most insulated from this. We are seeing gas futures trade at over $8 per MMBtu [million British thermal units]. And those numbers were $3 or below six months ago.
That really shifts the economics in favor of renewable installations. You could say the same thing with gas trading close to $5 a gallon and EVs. At the same time, though, a lot of the inflationary pressure is showing up on those alternatives.
The price of just about everything in a solar panel, just about everything in a wind turbine, is up. So that’s why it’s a bit of put-and-take. It creates both headwinds and tailwinds, and you really have to look at the segment and the technology to understand which direction that nets out in.
Example opportunities for regional leadership
André Dua: In the report that we’ve talked about, Rory and Kimberly, you dive into a few regions across the US that have the opportunity to lead in different facets of the path to net zero. Rory, what do you think are some of the most exciting opportunities that you see for regional leadership on this net-zero journey?
Rory Clune: There are many. The Gulf Coast jumps out right away. It’s been the nexus of oil and gas production in the country and will continue to be for quite some time. If you look at everything that’s happening around hydrogen and biofuels and the opportunity to take a leadership there, there’s so much infrastructure.
And so much of the country’s hydrogen is already linked to industrial production in the Gulf Coast. There’s a tremendous opportunity to take leadership. And this is happening at the same time that Louisiana has announced offshore wind targets.
West Texas and the Oklahoma Panhandle have always been the best renewable resources in the country. There’s just a really exciting story there. I think the Northeast and mid-Atlantic Coasts and the acceleration we’ve seen in offshore wind with the various federal leases and everything that has happened over the last six months is incredibly exciting and is a chance to sort of set the stake in the ground for what the country can do there, a decade after we saw the first big wave of momentum in Europe.
The industrial Midwest and everything there—there is potential for us to do something pretty special and exciting around decarbonizing industry through a combination of some of the operational-efficiency levers we’ve been talking about, some of the alternative fuels we’ve been talking about. There’s a real potential to have a sustainable aviation fuel hub there that could set the way for a lot of the world.
You can never go through a list like this without highlighting what could happen on the Pacific Coast as well. There’s just such potential for and such need for us to address that through accelerated deployment and scale of renewables, new ways of forming grids through storage and other dimensions. Those are some of the most promising and exciting ones that come to mind for me.
Kimberly Henderson: André, maybe one add to that is, just looking across the whole country, the US is very blessed with the resources needed for this transition. Rory mentioned the solar and wind resource, sequestration resource, etcetera. And I think people often don’t realize that sitting within the US. They think, “Oh, this is really hard.” But compared to many countries, the US is in a great position with our resource base.
André Dua: I want to turn to the flip side of that, which is there is opportunity and assets and resources, and then on the other hand, there’s the potential for different communities to be impacted differentially by this transition. I want to touch on the equity dimension of the energy transition and the pathway to net zero.
Because we do know that the adverse effects of climate change often do disproportionately impact underserved or marginalized communities, whether that be public-health impacts, housing impacts, or other impacts.
Kimberly, how does the path to net zero fit with the push to create a more inclusive economy? And how can businesses help address some of those issues?
Kimberly Henderson: This is a very important question, and it’s a topic I’m working on now, what we’d call environmental justice. The good news is that transitioning to a net-zero economy would inherently reduce some of the environmental burdens that disadvantaged communities face today—most notably, air pollution. A lot of it comes from fossil fuel use, such as tailpipe emissions in urban environments or major industrial sites. So there are air pollution benefits from decarbonizing that will help some of these communities.
Clean energy can also help with resilience to climate change and extreme weather events. If we build out microgrids, distributed solar, fuel cells for backup power—you know, many of these decarbonization technologies also improve resilience to communities as we face more and more climate risks.
But how we build this infrastructure is also very important, and this comes down to decisions that businesses and policy makers make today in terms of how to do this. One example is public transport. We can reduce our transport emissions through electrification of vehicles. But you can also reduce the number of vehicles by having better public transport for the people who need it. So that’s an example of one area where you could take a solution that’s better for poorer communities.
Workforce development is another really important point. Are you training up the people who most need these new clean-energy jobs? How are you prioritizing creating the right training programs and workforce development programs? Who are you targeting with those?
Rory Clune: Those are great points. There’s huge opportunity, as Kimberly says, to use this as an opportunity to have equity and decarbonization work hand in hand and move together. I would highlight three things that we have to be careful of as well and that we have to navigate around, which could go wrong.
There’s huge opportunity to have equity and decarbonization work hand in hand and move together.
We talked about affordability earlier. This transition will cost money, and it does bring real risk of volatility in pricing. How businesses and how society and government allocate those costs and how we manage against volatility really matters. Because, of course, the cost of energy is a disproportionate part of the household expenditure for many lower-income people. So getting affordability right matters.
Second, the workforce transition really, really matters. If you look at the workforce employed in a lot of the industries that have a good chance of being displaced in the near term in different parts of the fossil fuel economy and all that, it is really important to get that right. Because there’s a recipe there—much like the kind of industrial decline 30 years ago, and all the communities that got left behind there—that we can’t repeat.
And the third thing is, it’s become really clear and visceral to us in the last few months that a lot of the resources required to make the transition happen, whether it’s rare-earth metals of different types or even just lithium, an abundant supply for storage, for instance, or copper—those supply chains are not set up today to supply the volumes we’re going to need to make this transition at pace.
So, again, the way we do that—you know, you look to the past, and a lot of the siting decisions that were made on large assets that affected certain communities disproportionately, that’s a mistake we have to make sure not to make again. Because if you look at where the resource seams are and the communities that are living on or around those, that’s a pretty thorny issue to think through as well from an equity perspective.
Sustainability and growth
André Dua: One last issue I want to touch on as it relates to these topics is this notion that sustainability is somehow at odds with growth. And there are often people who say, “Well, if we invest in this, it will reduce or inhibit growth,” and so on.
But there is also some emerging thinking that sustainability and growth and, frankly, inclusion can be mutually reinforcing. Rory and Kimberly, help explain the positive-feedback loop between sustainability and growth. What does that look like?
Rory Clune: In our report, we show that over the next decade just about half of what we need to happen not only is technologically feasible, as we said earlier, but actually is NPV [net-present-value] positive where it creates value.
For a lot of these interventions, the benefits you can create through lower cost, through more efficient operations, really stimulate growth. It’s a big cost to do this, but it’s a tremendous investment opportunity if we do it right.
And there are plenty of examples of how we could do it wrong. There are many ways where we could, in the press toward sustainability, make irrational investment decisions. There are fair critiques out there. But if we get this right, there’s so much of the opportunity in front of us.
Kimberly Henderson: I do think, André, you hit the nail on the head with this idea of mutually reinforcing, that sustainability and growth have to go hand in hand. Because in a world that does not address climate change, that does not track anything close to net zero, that’s a world that also has dramatic climate risks that would pose major challenges for society in terms of growth and just general welfare, poverty, etcetera.
It’s hard to imagine an economy that has healthy growth that’s not addressing climate change. And, equally, it’s hard to imagine addressing climate change in an economy that doesn’t have growth. So you need the two to go hand in hand to really see the world tackle the climate challenge.
André Dua: Well said. Rory and Kimberly, thanks for sharing your insights with us today. I really took away a couple of things.
The first is just the sheer scale and scope of the transition we’re talking about. I’m still struggling to wrap my head around the $1 trillion annually that Rory mentioned. We don’t throw around $1 trillion easily, so it truly is an unprecedented annual investment in achieving this transition.
Second, I took away the critical role of the private sector as the source of most of these emissions, and as being the source of most of these solutions.
And, third, I think it’s important to think about all these issues in the context of the turbulence in the broader global economic and geopolitical context. This transition to net zero is significant and difficult in its own right, but it’s going to happen in the context of some significantly complicated issues.
But, with that said, before we wrap up our episode today on this Future of America podcast, I had a few rapid-fire questions that I wanted to ask each of you. Kimberly, you’re up first, and then we’ll go to Rory. Kimberly, is there a book or article that you’ve recently read that excites you about a more sustainable and inclusive future?
Kimberly Henderson: It’d be Bill Gates’s How to Avoid a Climate Disaster.1 I think it’s a great summary of everything that would have to happen.
André Dua: All right, so what makes you optimistic that we can achieve a sustainable and inclusive growth in our economy?
Kimberly Henderson: What makes me optimistic is seeing how the financial sector is moving. Investors and banks, they’re really taking this climate topic seriously and driving change.
André Dua: And, finally, what’s the one thing that listeners can do today to help promote sustainable and inclusive growth?
Kimberly Henderson: I think everyone can use their voice on this topic in whatever context you operate in, be it the company that you’re working at or how you engage in your local communities or with policy makers. This is a topic that matters. It will impact people. Both climate change itself and the transition to a low-carbon economy will impact people. And we need everyone in our economy to be engaging in that discussion.
André Dua: Great. Rory, your turn now. What’s the book or article that you’ve recently read that excites you about a more sustainable and inclusive future?
Rory Clune: Daniel Yergin writes these fantastic tomes on energy. His latest book, The New Map, is about just how far we’ve come in transitions in energy and how quickly some of those have happened.2 The US shale revolution, for instance. If we could pull off that magnitude of change but toward the kind of things we’re talking about here, that would be extraordinary.
André Dua: What makes you optimistic, then, that we can achieve this transition?
Rory Clune: My optimism—and I have optimism and pessimism depending on the day, because it is such a daunting thing—comes from the fact that so much of this is better economically, a better experience for customers. So much of the transformation is led by forces that aren’t an obligation; they’re an opportunity.
André Dua: Dare I ask what’s the source of your pessimism?
Rory Clune: The source of my pessimism is usually how complicated some of the systems and procedures and rules that we need to work through are—these policies and laws and red tape. And it’s pretty daunting. It’s one thing to look at this as a set of technologies rolled out on paper in a model. To get these things permitted and built and approved in the real world is tough.
Kimberly Henderson: André, if you don’t mind, I’d echo that. There’s an enormous amount of implementation challenge. There are chicken-and-egg issues across sectors where you need infrastructure to deploy the technologies, and neither will happen without the other in parallel. And there’s a lot of inertia in the system—inertia and legacy assets.
André Dua: Rory, I want to come to this last question on a positive note. What do you think the one thing is that listeners can do to help promote this transition?
Rory Clune: I think the most important thing that listeners can do is try to step beyond a lot of the quite intense, political-type dynamic that’s grown up around this issue, and the two sides of this really are very heated.
But engaging in a sort of a fact-based way—what is it that needs to happen? What are the benefits? What are the risks versus a total black-and-white view of the world? For listeners engaging in that, beginning that dialogue in whatever walk of life you’re in, whether it’s in business, in politics, in your public advocacy, whatever it is, I think it will be a big one.
André Dua: Well, thank you, Rory and Kimberly. That was Kimberly Henderson, a partner in our Washington, DC, office, and Rory Clune, a partner in our Boston office. I’m André Dua. You’ve been listening to McKinsey’s Future of America podcast series. Thanks for joining us.