30 November 2012

Systematic short-termism: Climate, capitalism and democracy

by Jorgen Randers

[Third of three parts]
I am a climate pessimist. I believe (regrettably) that humanity will not meet the climate challenge with sufficient strength to save our grandchildren from living in a climate-damaged world. Humanity (regrettably) will not make what sacrifice is necessary today in order to ensure a better life for our ancestors forty years hence. The reason is that we are narrowly focused on maximum well-being in the short term. This short-termism is reflected in the systems of governance that we have chosen to dominate our lives: Both democracy and capitalism place more emphasis on costs today that on benefits forty years in the future.
     The global result of this human myopia is described in my book 2052 – A Global Forecast for the Next Forty Years, a report to the Club of Rome commemorating the forty year anniversary of The Limits to Growth. The 2052 book forecasts a world of plus 2°C in 2050, and the likelihood of run-away climate change in the second half of the 21st century. Its website www.2052.info gives the statistical detail.
     Furthermore, I am a bitter climate pessimist, because the coming drama is absolutely unnecessary. It is neither technically difficult nor prohibitively expensive to solve the climate problem. If humanity chose to use available technology to reduce the emission of greenhouse gases, the cost would amount to 1 – 2 % of GDP. In other words, a decision to act would postpone income growth in the rich world by half year or so. If we chose to solve the climate problem, we would be as rich in July 2022 as we will now be in January 2022.
     So the climate problem will not be solved simply because we will choose not to solve it. Humanity is in the process of postponing action until it is too late. Not so late that the world will come to an end. But so late that our grandchildren will have a harder life than if we acted decisively today.
     Why this deliberate procrastination? Because it is cheaper. It costs less – in the short term – to postpone than to act. Not much less, but nevertheless less. And what we are deliberately postponing is a small reorientation of societal investment flows. Away from what is most profitable and towards what is more climate-friendly. We should have directed more money into more insulation of buildings, more electric vehicles, more public transport, more renewable electricity and heat, and more CCS, in spite of the fact that these solutions are more expensive than the fossil based alternative.
     Capitalism – the “free” market – is unable to help. Capitalism is designed to allocate investment funds to the cheapest solution, and we currently need capital for slightly more expensive solutions. But can’t we regulate the market, to make it more profitable to invest in what are socially beneficial – in this case less polluting - solutions? Yes, we can. But only in principle. In practice we have been talking in vain for 20 years, since the Rio summit in 1992, to establish a meaningful price on climate gas emissions.
     What then about political leadership? Can’t we evolve leaders that are able to convince democratic society to act now. Well, I believed so until I saw the fate of Al Gore. Once the voters understood that his crusade for our grandchildren’s climate would lead to change – however small – in current ways, his political support evaporated in two short years. The typical rich-world voter is not in favour of more restructuring, more expensive gasoline and higher cost of power, even for a good cause. But can’t the voter be educated? I don’t believe so, after having spent forty years trying to promote the happy gospel of sustainability, and living now in a country (Norway) where all education has been free for two generations – and one third of the population still does not believe in man-made climate change, and much fewer support higher costs today to give future Norwegians a better climate.
     In sum, I don’t believe that the free market, regulation, political leadership, or public education will solve the climate problem in time. Capitalism is unable to handle this long term challenge, and democratic society is unwilling to modify the market. In my view, we need something stronger, something that can counter the root problem: Man’s short-term nature. His tendency to disregard the long term consequences of current action.
     What can be done? Can democratic society be modified to solve the climate challenge? Eco-dictatorship may be to go too far. But something is needed to temper the short-termism of the nation state, probably something at the supranational level. For example a global central bank for climate gas emissions, introduced through democratic means – like the normal central banks. This is easier said than done. But still necessary.
     Otherwise, I predict, it will be the Chinese who solve the global climate challenge - singlehandedly. Through a sequence of 5-year plans established with a clear long term vision, and executed without asking regular support from the Chinese. They are already well on the way, for the benefit of our grandchildren.

Jorgen Randers is professor at the Norwegian Business School BI and co-author of The Limits to Growth in 1972, the Report to the Club of Rome, and its two sequels. His most recent book, published in May 2012, is 2052 - A Global Forecast for the Next Forty Years, also a report to The Club of Rome.

2 comments:

  1. Jorgen, We met at the 40 yr Anniversary talk in DC on May 1 last year. I'm one of those who has studied our natural "short-termism" for years, as you describe it "Man’s short-term nature. His tendency to disregard the long term consequences of current action."

    From a natural systems science view the problem really appears to be that "humans don't have the information needed". People behave as if completely ignorant of the kinds of generally available information that thriving diversity in natural systems displays. We're missing the kind of information needed for cultures having rather different languages to "get along" in a most creative way, i.e. recognition of each other.

    I think we can sift the evidence to see the real reason human cultures don't acknowledge other cultures, and start to identify exactly what information it blinds us to. I think the culprit is that **we think of reality as our information** (i.e. located in our minds). Our information is naturally missing ALL the information about how anything we don't see from the inside works. That makes it appear as if other independently behaving systems in nature don't really have behaviors and organization of their own, or... even exist as independent systems, except as external pushes and pulls.

    How we can begin to correct that is shown in my method of whole system accounting for the energy used by businesses, Systems Energy Assessment (SEA). It shows that the energy consumed in operating businesses by the self-managing business services (that we don't count), is commonly 80%, "dark energy" to us because the way we collect information about self-managing business services leaves us totally in the dark.

    The research and the related policy studies are linked on the resource page for the long paper, "Systems Energy Assessment(SEA), Defining a Standard Measure of EROI for Energy Businesses as Whole Systems". at http://synapse9.com/SEA

    The bottom line is that, "...trimming our money is the main real challenge, *not* just trimming our technology."

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  2. I am also pessimistic based on the inaction of so-called political leaders. Rather than driving public opinion, they let public opinion drive them. Nevertheless, we must continue the fight.

    A more optimistic approach is expressed in this 2nd January 2013 Huffington Post article by Auden Schendler "On the Climate Road" at http://www.huffingtonpost.com/auden-schendler/2013-climate-change-_b_2392812.html?ncid=edlinkusaolp00000003. It includes the following comment: "Her unbridled enthusiasm, her absolute sense that her future was bright -- these are things we have lost in the climate fight; they are things we absolutely must reclaim. The narrative of our struggle on climate should be one of American elation, transcendence, epiphany, euphoria. It is not a long defeat, but instead the great opportunity of a species, the chance to save the world."

    In regard to political systems, I found this "Late Night Live", discussion 20 Feb 2008 interesting: http://www.abc.net.au/radionational/programs/latenightlive/climate-change-and-democracy/3287860. It's between host Phillip Adams and David Shearman, co-author of "The Climate Change Challenge and the Failure of Democracy".

    Finally, please don't forget the impact of animal agriculture on climate. Inter-related factors such as inherent and gross inefficiencies, greenhouse gases (incl. CO2, methane, nitrous oxide and tropospheric ozone), other warming agents (e.g. black carbon) and land clearing are having a massive impact. A meaningful change in that regard would not require massive investments, and would buy us time while our energy infrastructure was transformed.

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