Decarbonization often comes with a difficult compromise – lowering carbon emissions can drive up costs, making sustainable solutions harder to scale. This tension was at the heart of Visiting Professor Michael Raynor’s address to Ivey HBA1 students, where he explored ways to break the link between economic growth and environmental harm.
Raynor, MBA ’94, was the keynote speaker for the 2025 capstone event for the HBA1 Leveraging Information Technology course, which focused on artificial intelligence (AI) and sustainability. The event culminated with a project where students were challenged to use design thinking to create a digital solution that leverages AI to address a sustainability problem.
Raynor’s presentation, titled The Decarbonizer’s Dilemma: Breaking the Tradeoff Between Carbon and Cost, delivered a sobering yet hopeful perspective on the urgent need to rethink how industries approach decarbonization. The challenge, he explained, is not just to reduce emissions, but to do so in a way that does not make sustainable solutions prohibitively expensive.
“Life is about trade-offs. When it comes to the carbon-cost equation … we find ourselves trying to optimize many of our systems for cost. Unfortunately, that comes at the expense of massive increases in carbon emissions,” said Raynor. “We have to break that dilemma.”
The financial reality of carbon reduction
In addition to the environmental argument, Raynor illustrated the economic challenge of decarbonization. He says a relatively small number of industries create the most carbon emissions, yet they contribute to a much lower proportion of GDP.
“If it costs money to get rid of the carbon, but the folks generating the carbon don’t have the money, you’ve got a bit of a dilemma on your hands,” he said.
This imbalance, Raynor explained, is at the core of the decarbonization dilemma. Without financial incentives or systemic changes, high-emission industries struggle to invest in sustainable alternatives.
Learning from the electric vehicle revolution
Raynor highlighted Tesla’s trajectory as an example of how to disrupt high-carbon industries without sacrificing cost competitiveness. When Tesla first entered the market, it was easy to dismiss the company.
Yet, Tesla’s success in scaling electric vehicles proved that real progress comes from changing entire systems, rather than making incremental improvements. Rather than just making existing vehicles more efficient, Tesla transformed the personal transportation system, making its product attractive to more people.
“As a consequence, it became pretty clear that Tesla was in a position not just to create a new frontier, but, to expand its frontier faster and in ways that more of the auto-buying public would find more attractive,” he said.
System change, not just fuel change
Raynor argued that too many decarbonization efforts focus solely on changing the fuel source while leaving the underlying system unchanged.
For real progress, he said industries and their systems need to be redesigned from the ground up. In mining, for example, rather than simply replacing diesel trucks with battery-powered ones, operations could shift to electric conveyor belts powered by renewables, further reducing emissions.
The path forward: scope before scale
Raynor emphasized that achieving large-scale decarbonization requires focusing on scope before scale.
“The thing that can solve the problem is taking the time and effort to build a small-scale, broad-scope solution that shows the way to what is possible and then allowing market forces to embrace that superior low-cost low-carbon solution and scale it far more naturally than we can achieve otherwise,” he said.
For students looking to make an impact, Raynor’s message was clear: The future belongs to those who rethink entire industries, not just their fuel sources. As the next generation of business leaders, they have the opportunity – and responsibility – to break the carbon-cost tradeoff once and for all.
Insights from the frontline of systems change
Following Raynor’s keynote, students heard from a panel of leaders on how to leverage AI to create opportunities for systems-wide change. The panel featured:
- Bryn Davis Williams, HBA ’18, Co-Founder, DOUBL;
- Latif Abid, HBA ’10, President & Co-Founder, AIP Labs; and,
- Yomi Odedeyi, Director, ERPAdvisors.
The panellists encouraged the students to define a problem and deeply understand the market before jumping directly to a solution. When leveraging AI in the solution, know that AI alone isn’t a business model, it needs to provide value.
And lastly, don’t stifle creativity – innovations once thought impossible are now becoming reality.
The panellists (l-r): Yomi Odedeyi, Bryn Davis Williams, and Latif Abid
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