Johanna Hoffman, a member of our Emerging Fellows program detects the effect of climate change on global institutions. The views expressed are those of the author and not necessarily those of the APF or its other members.
Climate change increases stress on governmental structures, intensifying vulnerabilities present within. The more taxing a situation turns, the more difficult collaboration and communication often become, creating a vicious cycle that brings cultural and political tensions to the fore. It’s the rare event when one country is effectively able to coordinate with another during times of crisis. Take the current coronavirus pandemic and its wide reaching economic impacts. The international economy is reeling as a result of the virus’ spread, yet there remains little consultation between governments, with plans for stimulus cropping up incrementally and separately across the globe.
As climate change progresses, the scale, scope and speed of difficulty will deepen around the world, testing the strength of international institutions to greater degrees. Indeed, climate issues are already showing both how difficult negotiation between countries is, and how insufficient our existing international institutions are to addressing issues of serious concern. When it comes to climate change, the authoritative limits of organizations like the United Nations or the World Bank are progressively highlighted and undermined. All international agreements made since the first COP (Conference of Parties) Climate Change Convention in 1995 have been non-binding, with participating countries left to follow its recommendations via voluntary interpretation. Many global leaders, such as the United States, have pulled out of agreements entirely.
Our international institutions, from the World Health Organization to the International Monetary Fund, retain only the power to recommend, pressure or sanction. They do not enforce. In times of strife, following recommendations that have less directly calculable benefit, such as recommendations from the 2016 Paris Climate Agreement that participating countries support sustainable development and enhance adaptive capacity, can become political liabilities. Making moves towards measures that require longer periods of time to show results is all to often a harder move to sell.
Again, the coronavirus crisis currently gripping the planet is a useful reference to assess where our international systems might be heading. While not directly caused by climate issues, coronavirus and its devastations are imprints of what is likely to come. As climate change brings warmer temperatures and glacial melt, researchers anticipate that new infectious diseases will arise, to which modern humans have little to no immunity. Coronavirus has shown that sequestering such diseases can be near impossible. In our modern world of global supply chains and constant travel, what affects one part of the globe affects us all.
Sadly, our existing international bodies are not up to the task of managing such outbreaks. In the early days of coronavirus’ reach, the World Health Organization sent out warnings, letting governments know that the virus required serious preventative measures. Some countries, like Singapore and South Korea, places where more recent outbreaks of SARS and MERS have left lasting impacts, took the recommendations to heart. Others, like the United States, Brazil and Italy, did not. The WHO has no authority to manage how international governments follow its recommendations, creating conditions where diseases and infections that might have been effectively regulated with cross governmental coordination go on rampant, causing widespread loss of life, economic fallout and social decay.
Researchers are certain that climate change will bring more and stranger viruses than we have experienced in living memory. With the conditions of scarcity, uncertainty and fear that come with such pandemics, many leaders may well work to strengthen their respective states and reinforce feelings of nationalism. Governments across the board could enact emergency restrictions and policies to navigate the mounting crises, restrictions that, when those crises abate, leaders may not readily relinquish. Such concentration of power often leads to diminished reliance on international governance and a weakened belief in the power of multilateral cooperation.
As the diseases, conflicts and extreme weather events that come with climate change increase, the inefficiencies and ineffectiveness of current global institutions will continue to show. The amount and frequency of refugee movements will only spike, bringing more conflict and spurring greater demands on existing resources, challenging the ability of global institutions to manage and guide the flows. Only direct support, coordinated reimagining and international investment, can prevent the already present cracks in our institutions from breaking.
Esmee Wilcox inspects the usefulness of education in her ninth blog post for our Emerging Fellows program. The views expressed are those of the author and not necessarily those of the APF or its other members.
A simplistic, causal relationship between success in work and learning falls down in our mid-21st century globally connected, digitally enhanced, rapidly automating world. The institutions, corporations and capital that determine whose work we are preparing people for, risk the perpetuation of global skills shortages and rising income inequality. In the latter half of this century, what might the purpose of education become, that more effectively addresses the issues we face and the modes of work we are choosing? Should we attempt to create such a system that spreads the risk, or accept unevenly distributed effects of enviro-economic disruptions?
We face a conundrum: complex issues such as moving to zero-carbon cities by 2030 require a level of critical thinking and innovation that will disrupt the modes of operating of government and the corporations that fund education. They will require longer periods of education – lifelong and life-wide – that may reduce short-term economic output. That disrupts the balance in the funding relationship between the young, the workers, and pension beneficiaries. Governments intervene to equalise access on the basis of accepted social norms. Yet are increasingly ineffective at reducing the polarising impact of parent income on childhood attainment.
We might imagine a system that redefines the purpose of work first. Where the norm becomes dynamic self-managed teams within organisations, and self-organised networks of freelancers without, which rebalance our ambition for individual status with collective value. Our need to travel, to eat, to care for our families is dependent upon our ability to align paid work with the rhythms of community co-operation. We might – looking to millennials now in the gig economy - see paid work as essential but secondary to the roles we take on in exchange not for currency but usable commodities.
A more efficient system – that educates more of the population to be capable of tackling tomorrow’s problems – would alter the balance of power away from near-term beneficiaries. Educational returns on investment no longer felt solely by profitability or tax revenues: but also by longer term, distributed social and community gains. Financing mechanisms no longer the preserve of government and corporations, but flourishing community interest bonds. Lifelong learning the norm, and not dependent on personal wealth, fit with government strategy, or sponsorship by large employers. Accessible through communities prepared to invest in long-term resilience, understanding the purpose of work as aligned with community impact.
Or corporations may continue to sponsor and polarise the deployment of mobile elite labour as effective in addressing their need for innovation and profitability. Governments may be less able to equalise access to education, with greater dependence on risky private financing, and a reduced democratic mandate to intervene. Even in highly planned, nationalist economies governments may justify focussing on elite education for the ‘greater good’. Or to diminish the impact of disposable income in exacerbating socio-economic advantages and access to learning.
Enviro-economic disruptions may force many of us to redefine the purpose of work and the values that we ascribe to it. Such that learning systems satisfy the requirements of the innovation, collaboration and community we need to succeed in the 2050s and beyond. We can look to communities and work organisations that are developing collaborative learning networks. Yet these are still an, albeit plausible, step-change away from funding mechanisms that achieve longer-term, distributed social and community outcomes. These may emerge through necessity in the development of closed-loop zero carbon systems in the 2030s. This could enable the purpose of education to shift away from the requirements of work to solving the issues raised by the complex problems we’re increasingly facing.
Alex Floate,a member of our Emerging Fellows program examines the governments’ potency in leading finance futures through his fourth blog post. The views expressed are those of the author and not necessarily those of the APF or its other members.
Solving big problems has never evaded the human spirit. Ferocious tigers and bears led to spears and group tactics. Episodes of famine led to granaries for storing against future hunger. Following that came the domestication of the cat to protect against rodents feasting on the stockpiled bounty. In just the last century we have overcome distance with advances in communications, heavier than air flight, and even leaving earth’s atmosphere. As problems have become bigger in scale and cost, we look to our governments to take the lead on solving them. That we can solve big problems and overcome the constraints of our environment is not in doubt; that we have the will to do so is.
Continued financialization may create a dystopian-tinged future of financial feudalistic lords, while nationalistic oriented systems may reverse global gains and destroy the value of national currencies. Fortunately, neither future is set in stone and the opportunity to create a different one is possible, but dependent on current governments choosing a different direction and using the tools at their disposal. The mechanisms available include monetary policy for expanding and contracting money supply, fiscal policy to set taxing and spending priorities, and regulations on financial investment and exchange.
How should they deploy these mechanisms, and for what end? Should the government pursue a policy of continued economic growth, or one that favors renewing the social contract to favor all citizens? Should we create rewards for sustainability and disincentivize consumption? What system best emphasizes personal initiative and innovation, while caring for the least of us? Although this is a political exercise more than a financial one, the answer will determine which mechanisms are put forward as solutions.
If we decide that economic growth and consumption is not as important as sustainability of resources, then systems that favor labor and saving over those that promote investment churn and profit will be needed. However, just as this will call for increased taxes on investment and capital, higher taxes on consumption, which disproportionally affect the poorest, will also be required. Should we decide that social programs, especially in a possible future of large-scale human obsolescence, to ensure an economic floor for all citizens is vitally important, then investment and tax mechanisms will need to be balanced to provide revenue while maintaining risk incentives for growth of capital.
Before we can fully and rationally answer those questions as a society, the greater challenge is confronting the myths of both capitalism and socialism. Believing that free markets and privatization are always the best method for delivery of goods and services ignores that many needs are basic for life, and costs are not always inherent in the price. Conversely, believing that governments are always honest managers that efficiently gauge the needs and wants of their citizens and deliver accordingly is also not supported by history. The answer lies somewhere in between with a need for a new folklore and heroes to provide a basis for a future that tempers the worst of these extremes while balancing the best of them. The question to be answered is whether governments will work to balance these needs and forge a new story for the future, or abjectly acquiesce to the myths of the money changers.
Posted By Administration,
Tuesday, September 25, 2018
Updated: Tuesday, February 26, 2019
Daniel Bonin has written his seventh installment in our Emerging Fellows program. Here, he explores infrastructures in the light of monopolies. The views expressed are those of the author and not necessarily those of the APF or its other members.
Monopolies have a long and varied history. As regulators start to fear the misuse of market power by monopolistic companies they develop policy tools to regulate and unbundle markets. Still different types of monopolies like natural or geographic monopolies continue to exist. What will their future look like and could it be that new infrastructure monopolies and even outright state monopolies emerge by 2050?
Monopolies are not bad per se, they can help to cope with the problems which a free market economy fails to deliver. Until 2050, more and more governments may decide to tolerate a monopoly to ensure equal access to vital infrastructures in their depopulating rural areas. A monopoly provides also a certain amount of security, an environment in which the issue of costly upfront costs in new infrastructures could be solved. There is another argument for infrastructure monopolies that stems from technological change.
The past showed that monopolies have been responsible for miss-allocation in the economy. But what if new monopolies are the only way to allocate resources amid increasing connectivity and complexity by 2050? Artificial intelligence provides us a tool to handle complex systems like the supply and demand of infrastructures. However, it could work best if the monopolistic infrastructure operator has access, power and authority to change all of the variables that are relevant to the system. Think of an intelligent transport network that balances different modes of transport and movement of freight. With full access to real-time data and relevant infrastructures, such a network could even adjust traffic management systems and even the width of traffic lanes to accommodate the different users like humans, trams, autonomous vehicles and drones alike. Would a country be able to resist the tender of a monopolistic company that promises to provide such a smooth and cheap infrastructure or would it drawback and tolerate or even nurture new monopolies?
Would countries even have an incentive to create state monopolies? Governments are always concerned about the interference of other countries in their domestic affairs. Considering the growing connectivity of infrastructures and the role of data. It seems that concerns over interference of other countries in domestic affairs could provide such a reason. Countries would otherwise risk foreign competitors gaining access to vital information and the ability to manipulate infrastructures.
It is not only about the access to data, but the risk of the manipulation of data and news. Caught in this crossfire of threats, a state controlled telecommunication infrastructure monopoly could be a rational move for a liberal country to clear the situation. One strong state monopoly could also allow a country to strongly influence global infrastructure standards and win the race for new key enabling technologies like 5G. Thinking further ahead until 2050, a state monopoly for satellite operation becomes a first step to monopolise space and exercise geopolitical power. Earlier than one thinks, owning world’s first space debris management infrastructure might become of importance for the balance of power in space.
If countries decide to accept or even promote infrastructure monopolies, they need to develop a toolkit to regulate private infrastructure monopolies before it is too late. Financial institutions became too big to fail and monopoly-like platforms became too big to be regulated. In a similar way, private infrastructure monopolies could become too efficient to be regulated and too security-related to be not nationalised. To prevent some of this risk, state monopolies could be considered. However, as politics becomes more and more involved, it needs to be critically reflected that political interests and cycles are at odds with the life-cycle of infrastructures and the speed of innovation. Could state monopolies become the grit in the gears of future-proof infrastructures?
Posted By Administration,
Thursday, April 12, 2018
Updated: Monday, February 25, 2019
Polina Silakova‘s fourth post in our Emerging Fellows program explores sustainability and the wicked problem of the limits to growth. The views expressed are those of the author and not necessarily those of the APF or its other members.
Grow not stop. Where shall we put the comma in this sentence? For a long time, growth has been the key focus of countries’ GDPs, business plans, and individual’s bonus schemes. But is it really a good way to measure our progress towards a better life? What is a “good life” anyway? And what does our good life mean for its key enabler – the Earth?
A group of British scientists recently tried to answer some of these questions, namely: is it possible for everyone to live a good life within our planet’s limits? They defined a good life very modestly – the satisfaction of basic needs – yet the result of their analysis of 150 countries is quite disheartening. Put on a map, the countries we know as well developed (Germany, Australia, Sweden, US, Japan) are clustered in the dangerous corner, having surpassed multiple biophysical boundaries. Moreover, if we were to try to equally distribute this modest standard of living for every person on the planet – without putting the very planet in danger – we would need to use up to six times more resources than what we currently consume. Quite a sobering calculation, isn’t it?
This study is not the first to address issues concerning our growth-oriented society. Back in 1987, the Brundtland Report called for changing the quality of growth. It stated: “Sustainable development involves more than growth. It requires a change in the content of growth, to make it less material and energy-intensive, and more equitable in its impact.” The report alerted that growth combined with acute inequality can be worse for a country’s development than the lack of growth. Currently, in 2018, we are obviously a long way from either reducing inequality or growing sustainably.
A contemporary economist, Kate Raworth addresses the same growth-related issues and warns about the obsolescence of the economic theory taught in schools and universities. In her book “Doughnut Economics” she urges us to shift the focus from the growth in GDP towards creating a more just society instead. To treat natural resources as an integral part of economics, not some loosely related externality. Although her book was shortlisted by the Financial Times as one of the best business books of 2017, Ms. Raworth points to the challenges of getting outdated academic views replaced by a more accurate and holistic understanding of economics. In an attempt to make this change happen, Ms. Raworth invites us to start a guerrilla campaign to fight against the invalid economic dogmas in a non-traditional way.
At the same time, students in Oregon, US have chosen to act even more radically to ensure their voices are heard. They took the federal government to court for “profoundly damaging our home planet by subsidizing fossil-fuel production which violated [the government’s] public-trust responsibility and threatens the plaintiffs’ fundamental constitutional rights to life and liberty”. This accusation probably goes beyond any other environmental case so far. The outcome of this case is still pending, but other similar cases initiated by plaintiffs between 10 and 20 years old may start to see some success around the world.
What is an appropriate response when the traditional structures are so imperfect? When teens who compete to study in the best universities, hoping to get the knowledge they need to change the world, graduate from their courses to be disappointed by the obsolete theory they were taught. When representatives we elect to act on our behalf go astray, blinded by the short-term goals linked to their terms of power; is it a revolt like the one in 2014 organised by economics students in 30 countries against a curriculum disconnected from reality? Is it a guerrilla campaign to stealthily re-draw diagrams in university books like Kate Raworth proposes? Do we have to go as far as taking to court the very government we elected, like the boys and girls from iMatter and other environmental groups do? What actions should citizens take to make sure that the voices of future generations are heard at the tables where big decisions are made?
Something that each of us could do is at least to make sure that our own children get a systemic, big picture view of the world, as opposed to narrow opinions dictated by short-term capitalistic values. Knowing what the choice actually means of a comma’s position in the “grow not stop” sentence might become a much more important knowledge in our kids’ life than many other things in their curriculum. The question remains though – is it enough?
Posted By Administration,
Thursday, December 28, 2017
Updated: Sunday, February 24, 2019
Daniel Bonin is one of our Emerging Fellows. He and our other Emerging Fellows will be posting throughout the year. His first article discusses the importance of futures thinking for building infrastructure.
By 2050 the face of our built environment will have changed. While this seems to be a long way off, there is good reason to start thinking about tomorrow’s infrastructure today.
Infrastructures outlive civilizations, country borders, and governments. It can take years until they are up and running. Infrastructures have been symbols and indicators of power: from the Egyptian Pyramids to the Golden Gate Bridge in the U.S. or the One Belt One Road Initiative of China. Infrastructures are physical legacies for the generations to come and constitute the framework conditions we innovate around. In some sense, our thinking is not only shaped by bounded rationality but bounded by the existing infrastructure. We tend to think of new ways to use streets, but not about alternatives to streets. As a part of a complex system, partially aged infrastructures cannot be simply removed and re-inserted without risking disruptions. The inert nature of infrastructures is also at odds with faster innovation cycles in technology. These characteristics are at stark contrast with the evolving needs of people and business and the global challenges on our way to 2050.
Depending on whom you ask, you will get different answers to the question of what infrastructures are. Some will spontaneously name airports, high-speed trains or broadband internet access, while you can hear the dreaming in the voice of others when they say wastewater disposal, uninterrupted power supply or well-equipped hospitals. Infrastructures are the physical backbone that allows people and businesses to fulfill their needs and desires. And even a fully digitized world with telecommuting or tele-education would still require some sort of physical infrastructure. The access to infrastructures means somehow destiny – reducing or exacerbating social inequalities. It is evident we need to think about infrastructures in order to meet the UN’s Sustainable Development Goals in areas like health, education, renewable energy, environmental protection, justice, and peace. A more sustainable world would ultimately be a world where infrastructure converges both between and within countries.
This is clearly an ambitious goal, considering a perfect storm of weaker economic growth, growing governmental debt, workforce ageing and a reduced taxpayer base due to labor automation. These factors will greatly reduce the ability of governments to fund and maintain infrastructures up to the year 2050 and beyond. At the same time, less developed countries and their energy and resource hungry middle classes will grow. Besides the unprecedented demand for expansion in less developed countries, developed countries are starting to fall behind in infrastructure quality as their century-old infrastructures continue to age.
The resulting infrastructure investment gap could be even larger than previously thought, given that economic growth forecasts have shown to be way too optimistic in the past. But infrastructure development comes not only at an easy measurable monetary cost. Each additional square meter of sealed surface, deforestation and land grab of the world’s most fertile soils puts our ecosystem under more and more pressure. Yet the irony is that we will need to expand and adapt our infrastructure to tackle challenges like climate change and push decarbonization efforts. With tighter governmental budgets, economic costs might well trump environmental impacts. It is all the more urgent to develop business models for sustainable infrastructures that are attractive for private investors. On the positive side, higher efficiency technologies and decentralization of knowledge, power, and production might reduce some of the expansionary demand.
The overwhelming majority of our infrastructure for the year 2050 has yet to be built. Each additional infrastructure must be well planned as it adds complexity to the inert infrastructure systems. We have to anticipate tomorrow’s needs to understand future investment requirements. Moreover, we need to design infrastructures in a way that they can be adapted over their lifetime to keep up with the changes ahead and beyond 2050. Otherwise, we will find ourselves drawing upon yesterday’s infrastructure to cope with the challenges of tomorrow.