“Owing to past neglect, in the face of the plainest warnings, we have entered upon a period of danger. The era of procrastination, of half measures, of soothing and baffling expedients of delays, is coming to its close. In its place we are entering a period of consequences …We cannot avoid this period, we are in it now…”Winston Churchill, November 12, 1936
COVID 19 is not a ‘black swan’ – a singular, unexpected event. It is the first in a series of what NYT’s Tom Friedman referred to as a ‘herd of stampeding black elephants’ – multiple, predictable and economically catastrophic events. Events that everyone knows are coming but our political and business leaders have consciously chosen not to deal with.
Choices have consequences….
On top of the countless human tragedies, there will be many long-lasting social and economic impacts of the COVID-19 pandemic. Perhaps none will be more profound though, than the death of free market fundamentalism and the return of the State.
Why now? After all, there have long been moral, social and environmental risks posed by an unfettered market. Risks that present a strong case for action by the State – with inequality and climate change being the two most glaring examples. It didn’t help.
This is different. COVID-19 presents a blindingly powerful economic case for change. It shows that an ideological, quasi-religious approach to regulating markets, sometimes called neo-liberalism and, until the virus, the dominant political approach in the west, is fatally flawed. It creates a weak and unstable economy, which magnifies risks and is unable to manage shocks. It threatens itself.
“The last global crisis didn’t change the world. But this one could”William Davies
It was always going to come to this. Whether it was a pandemic triggering a shutdown, a climate emergency bursting the carbon bubble, a populist backlash against inequality, wars over water or countless other possible triggers, this moment has long been inevitable.
COVID-19 is just like a match thrown on a tinder dry forest floor on a hot windy day and starting a wildfire. The match isn’t the key – it’s where it lands.
While of course a pandemic would always be an enormous economic and health challenge, the context in which it lands is the key to our ability to manage it. Thus, we now see our economic system’s inherent instabilities clearly exposed. The house of cards is collapsing.
Wall Street’s denial of climate dangers is setting us up for a 2008-style financial explosion where “risk spreads in a way that cannot be contained or isolated”. Graham Steele, Stanford Graduate School of Business, December 2019
You can pretty much hear it now. It’s like being in a forest and hearing the leaves rustling in the tops of trees, just before the storm hits. Then it comes with a roar, everything shakes, and we look around wondering what will fall – and will it fall on us.
This is how I see the global economy and climate change. Everything is ready, everyone knows it’s coming, we’re just waiting for the storm to hit.
When it does, it will be the climate emergency meets financial contagion. When the global market flips to FOMO – from fear of acting too early, to fear of being left behind as everyone races for the exits.
The climate strikes over the coming weeks will focus a great deal of attention on government and the urgent need for policy action. Rightly so. But it’s also a good time to reflect on the bigger context, as this is not anything like protests of the past. There has in fact, never been a point like this in all of human history.
I called this column ‘choosing extinction’ because that is the path we are on today. There is considerable debate whether that extinction applies to us humans, or ‘just’ to millions of other species. But either way a mass extinction event is on the way, unless we choose to stop it.
What we now know, is that we are facing a time sensitive, existential risk. Failing to respond adequately, could commit humanity to widespread misery for hundreds and possibly thousands of years. It could literally change the course of evolution and human history.
It has always been clear that fixing climate change would require a massive industrial and technological transformation, with widespread social and economic consequences. The recent the UN Intergovernmental Panel on Climate Change (IPCC) Special Report on 1.5 degrees however deeply challenges dominant assumptions about the speed and scale involved.
This has profound implications for many industries and policy makers, but perhaps most dramatically for the future of the multi-trillion-dollar fossil fuel industry, particularly the oil and gas majors (the coal industry now being in terminal decline regardless).
For the last few years, I have been examining what to expect in such major economic transformations – from both large incumbents and disruptive new players.
The evidence suggests that when business models are overturned, the dominant tendency of large incumbent companies is to fail. That led me to question the assumption that these giant oil and gas companies would transition to become the giant energy companies of the future. Continue reading
The only rational response to the scientific evidence on climate change, is to declare a global emergency – to mobilise all of society to do whatever it takes to fix it. As the UN Secretary General Guterres recently stated: “We face a direct existential threat”.
Failure is really not an option when “failure” means we could “annihilate intelligent life or permanently and drastically curtail its potential” This is now a war for civilisation’s survival. 
Meanwhile we blunder on…. Deeply committed to making verbal commitments, while delivering pathetically inadequate actual responses. Responses that treat the clear and urgent advice of the world’s top scientists – that we face the risk of global collapse – as merely passing thoughts to be casually contemplated.
Well, time’s up. To quote Winston Churchill: “Owing to past neglect, in the face of the plainest warnings, we have entered upon a period of danger. The era of procrastination, of half measures, of soothing and baffling expedients of delays, is coming to its close. In its place we are entering a period of consequences …We cannot avoid this period, we are in it now…”
Enter the Extinction Rebellion. Continue reading
The core assumption and focus of people who work to drive sustainability through markets – as corporate leaders, investors, NGOs or thought leaders – is that we need to convince existing companies and their shareholders that sustainability is first good for their business, and secondly, they can successfully transition to a sustainable business model.
But what if both of these are wrong? As someone who has spent over 25 years in that world, I’m starting to think they both might be. If so, it calls into question the very basis of the work literally millions of us are engaged in. So, it is at least worth a discussion!
Many look around at today’s crises – climate change spinning out of control, inequality driving political instability and our oceans filling with plastic – and despair at the prospects for serious change. Most then try to apportion blame or at least seek to understand why. Business blames consumers. NGOs blame business. Everyone blames politicians.
Almost everyone who is engaged and thoughtful on this, even inside companies, at some level blame capitalism, markets and big business. This is well justified given, after all, it has been the delivery vehicle for all these crises.
But where does that leave us? As a campaigner who has spent 40+ years on these issues, I’m not satisfied with just a problem diagnosis, I need a way forward, a credible path to success. When talking about risks to the future of civilisation, accepting failure is not really a strategic option.
We’re all focused on the drama and entertainment of Trump’s takeover of the world’s centre of military, security and economic power. For some it’s exciting and entertaining, for others terrifying and apocalyptic. I too have been glued to the news – at various times having each of those responses! But now I’ve come back to earth, recognising it all for what it is. Important, but a sideshow to a much bigger and more important game. And on reflection, I’m glad he got elected.
How can a Trump Presidency be positive? Surely this is a major setback – to action on climate change, to addressing inequality, to human rights and global security. Doesn’t it make the world a scarier and less stable place? In isolation, all true, but in context, not so much. The context is the key.