Just discovered the work of Anna Rosling on "Dollar Street" - a visualisation of people's lives around the world, enabling us to see how people on a spectrum by income really live.
Here's the link: https://www.gapminder.org/dollar-street/matrix?thing=Homes&countries=World®ions=World&zoom=4&row=1&lowIncome=481&highIncome=843&lang=en The website also includes a TED talk by Anna, which explains how the material was collected and how it helps us to understand the similarities and differences generated by income and geography.
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Global sustainability will only happen if the mainstream of the population live lives that are sustainable. That might seem like a trivial statement. But it has some fundamental questions underneath it. How and when will the mainstream accelerate the necessary shift from an unsustainable trajectory to a sustainable one?
The transition has started, but is not happening fast enough, as highlighted by Lord Stern in many talks and publications in the last few years, on the issue of Climate Change alone. And yet it goes much further than Climate Change. It is an issue of water, food, land use, consumerism. All these aspects require major shifts globally to achieve a just and sustainable future for all global citizens. The mainstream is the place where this shift will really happen. And if the mainstream doesn't "move" in the sense of changing its ways of living, travelling, earning, using energy, consuming, recycling, then the mainstream might have to "move" in a different sense - to physically move to find different places to sustain itself as increasingly dramatic deterioration happens in the places they currently live - resulting in mass migration on an unprecedented scale. The Global Commons (eg the air we breathe, the rain water, the oceans) are too important in sustaining all the global population to let their management be left to any one political party. Climate change and other challenges are best solved by cross-party working.
It could be a mistake to attach hope for sustainability solutions to one particular party. That lends itself to people taking the view that, because they don't support that particular party, they should give up on sustainability altogether in order to demonstrate loyalty to their chosen party. Best to make sustainability non-partisan, and to work to weave it into the fibre of all political parties. Our joint future on the planet is too big a thing to be left to become a political football. In the December 2017 issue of Economia, the magazine for finance professionals, there's news about the findings of an online survey of 10,000 people across Europe by the Institute of Chartered Accountants in England and Wales (ICAEW).
Here's a link to the article. This confirms that there are signs that the baby-boom generation currently approaching retirement or already retired may have achieved "peak prosperity" as a result of the economic boom between the end of the second world war and the early 21st Century. Life is tougher for the following generations. The gap in prospects between the generations is called "intergenerational equity". After innumerable improvements from one generation to the next through history, we seem to be on the cusp of a reversal in that trend. The answer to this, however, is not to look to accelerate economic growth to make everyone richer, in the hope that this will trickle through the younger generations as well as the older ones. In the context of limits to growth, reviewing and altering the things that disadvantage young generations is a better option. Student debts, high rent, stagnant wages, high property prices are all examples of where we could look to make changes. I wasn't able to attend this talk in person in Oxford earlier this month, but I caught the tail-end via the livestream video, and watched the whole of it later (link here). Lord Stern is optimistic, and points out that this is a topic where there is massive potential for cross-party support. He paints a picture of short-term investment in sustainable infrastructure to provide economic growth while moving to a net zero carbon economy in the next 40 - 50 years, supported by the Sustainable Development Goals. Urgency and scale of the transition were key emphases in his talk. We're moving much too slowly on this, and we need to speed up.
Here is a pdf (opens in new window) of about 40 questions and answers from an exercise I did this month by allowing a group of about twenty 10 to 15 year olds to text me their questions about the environment. As you'll see, some of them didn't keep strictly on-topic. However, I managed to weave most of the answers back onto the subject.
Look for long-term trends rather than individual weather events as evidence of climate change8/9/2017 Hurricane Irma is wreaking devastation in the Caribbean this month. Deplorable as it is as a single extreme weather event, let's not forget that the evidence for climate change is not based on a single event such as this, but rather on a large body of evidence over long timescales.
When asked if a single weather event proves climate change, I point to the long-term data trends. That way, I can't be accused of being inconsistent when someone points to a particularly cold Winter weather event and I say "that doesn't disprove climate change - look at the long-term trends". I've been musing on how to classify various assets on the World Balance Sheet, and whether collecting assets under headings of "Regenerative" and its opposite "Depreciating" would be helpful. And even whether some things should be on the Asset side of the World Balance Sheet or on the Liabilities/Commitments side, or should be excluded from the Balance Sheet altogether. Some things are obvious. For example, Natural Capital is a Regenerative Asset and almost all buildings are Depreciating Assets. But some things are less obvious.
Military hardware? If it is capable of being used for humanitarian purposes, or for 'keeping the peace', then it can be an Asset, albeit a Depreciating Asset. But if it's used in an actual conflict where it facilitates death, injury and destruction of other assets? If it is used in such a way, then this is a sign of failure (of measures to secure peace) and should be considered a cost of failure, not an asset delivering value. Not easy to work out what to put in the Balance Sheet for that one. People? Certainly a Regenerative Asset. But also, we need to put on the Commitments side of the Balance Sheet a commitment to provide for the basic needs of all of humanity. Money? I see money, in this context, as a unit of measurement, not an asset in its own right. This is because money instruments used as savings (a store of wealth) are actually promissory notes between two parties - with a national bank (eg the Bank of England as a UK example) being one party and the saver being the other. The promissory note could be included on the Balance Sheet of the saver as an asset, but on the Balance Sheet of the bank, it would be a liability of equal amount. Therefore, if we were to combine the Balance Sheets of all savers and all national banks, as part of the process of compiling the World Balance Sheet, all the promissory notes would cancel each other out. The total of the notes recorded as assets would equal the total of all the liabilities of notes, and so all notes could be removed from the combined World Balance Sheet without affecting its 'bottom line' meaningfulness. Robots combined with AI (Artificial Intelligence)? Possibly Regenerative Assets (depending on their programming, learning and tool- and material-using capabilities). Great potential here, to help humanity with some of the work of transitioning to a sustainable future. Imagine self-repairing and self-reproducing robots, built from sustainable materials, that could be set to work maintaining and enhancing the biosphere and reducing carbon emissions. On the other hand, Such robots could do untold damage if control of their programming fell into the wrong hands, or "went wrong", or they "escaped" human control altogether ... (anyone seen the film "Ex-machina" or the series "Westworld"?). I heard or saw a quote the other day - "there is no better place to start than where you are right now". Someone's response to this is very dependent on their context when they hear or see that quote.
Yes - we can always start from where we are. There are always things we can do to make the future more just and sustainable for those around us. But the context we find ourselves in places constraints on that ability. For example, today the UK Government announced a ban on new petrol or diesel cars by 2040. Two of the barriers to personal action to switch to Electric Vehicles are the price of EVs and the limited availability of effective public charging infrastructure. That's the context. The context also varies by region. There are EV charging 'hotspots', eg in Oxford and Milton Keynes, so the charging infrastructure is much better in those areas than in vast tracts of the North of England and Scotland. Affordability of EV's will improve as manufacturing volumes increase, and with availability of finance on Hire Purchase or PCP packages, but not all drivers have good enough credit rating and income to be able to be able to secure financing for an EV. More context. And on a wider scale, action on carbon emissions by many Governments is already in progress. Activists used to bemoan 'business as usual' and rightly so, in order to spur Governments to act to avoid runaway unsustainable outcomes. That was the old context. But now, we've started a transition to a lower carbon, more sustainable economy, and I question whether "business as usual" is any longer a relevant concept. That is our new context - a context of existing within a period of dramatic change (in historical terms). We will probably not actually realise or know we've emerged from the other side of this era of change until a long time afterwards, when a new stable system of systems becomes apparent. So we need new ways of describing progress in a new, changing context. Context, so often taken for granted, becomes an important part of the description of the journey. Without making it explicit in some way, we're even more likely to talk to each other at cross purposes or with lack of understanding. Context is so important. Amory Lovins gave an excellent talk about disruptive energy technologies at the Oxford Martin School earlier this week. I wasn't able to make it in person, but the talk, and the Q and A that followed it, can be seen here. After watching it, I'm more than ever convinced that we're witnessing a historic paradigm shift in the ways we produce, distribute and use energy, a shift away from carbon-emitting energy and towards a low-carbon energy future. Anyone who doesn't engage positively with this change will be swept away by it.
According to the UK Committee on Climate Change, the UK Government has a policy gap on meeting its climate change obligations. My interpretation of the following two charts from its 2016 report is that the UK Government has 'picked the low-hanging fruit' by providing a good rate of progress in shifting towards renewable energy generation, but has not yet made difficult but necessary decisions on other aspects of our systems that generate carbon emissions. One of these that is particularly difficult but also particularly important is the embedded carbon emissions in goods and services imported from other countries. This is one of the ways we currently "export" our carbon emissions, essentially by getting other countries to emit on our behalf, so that it looks like they are the emitters, for many of the goods we consume in the UK.
The UK snap General Election, and the forthcoming Brexit, is a massive distraction from global sustainability challenges. These challenges will still be there when the political dust has settled on the next two years of change (or is it lack of change of any relevance). Meanwhile, during that time I'll probably upgrade to a new Electric Vehicle with bigger range per battery charge and use my newly recycled greenhouse to grow more local food. Mundane things that help keep me sane when political developments in the UK and elsewhere look threatening, disturbing, and fail to provide the right kind of leadership on matters of social justice and sustainability.
I don't see it as being contradictory to any significant extent to have multiple identities, each of which comes to the fore in different strengths at different times depending on the circumstances. I'll say a little about my identities as an example.
Mostly, my identity as a worker comes to the fore during the working day, and my identity as a family member and carer come to the fore when at home or out and about with my family. But at other times (such as when writing this blog) my identity as a global citizen comes naturally to the fore. It also appears at other times, for example when with work colleagues who have similar dreams for a better future for global humanity. I also have an identity as a financial professional - the sort of person who many people look to for advice on the state of the organisation's finances. The Planetary CFO role holds a particular fascination for me because it lies at the intersection of almost all these identities. And where there are minor conflicts between identities, I find it leads to a creative process, and a source of diverse thoughts in trying to reconcile the interests of each identity in conflict. Some might see a risk here of lacking stability, of becoming a chameleon and changing to suit each circumstance, through resolving the identities in favour of the one that most effectively blends into the surroundings it finds itself in. However, I prefer to see it as learning to change and adapt, through one's experiences and responses to those experiences. We need more change in human systems if we're to solve the massive environmental and social justice challenges we all face. We can do a lot worse than reflect on our own capacity to change and to challenge the status quo in our own lives. In the mythological battle between the immovable object and the irresistible force, my money's on the irresistible force, every time. Looking back from 2200, I can see some of the milestones along the path to global sustainability.
One of the things that helped us to get to a sustainable 2200 was that in the mid 2100's we worked out that we didn't need the fundamentally flawed and much discredited GDP as a measure of humanity's economic success. We have an alternative. As any student of accountancy can explain, there are two ways to calculate profit or loss (or, in other language, surplus or deficit). One is to add up the income over a period of time (an accounting period) and deduct the expenditure over the same accounting period. The second, which is much less commonly used but is equally as effective (or more so if there is little confidence in the first method), is to compare the Balance Sheets at the start and end of the accounting period. The difference between the net assets at those two points in time is the profit or loss (surplus or deficit). This is because the profit/surplus is added to the net assets at the start of the accounting period to get the net assets at the end of the accounting period. What it offers is a way to use World Balance Sheets to calculate the surplus or deficit. For example, if the Natural Capital (an asset category in the World Balance Sheet) is worse at the end of year2050 than it was at the end of year 2049 then, all other things being equal, there has been a deficit in year 2050. This makes intuitive sense because at the end of year 2050, in this example, there was less Natural Capital than there was at the start of the year, so in a very real sense the world is poorer because there would be less output possible from Natural Capital assets in 2051 to provide for the needs of the global population. Contrast this with GDP, the popular measure of economic success invented in the 20th Century. GDP counts as productive output (ie a plus) many types of activities that use up or damage Natural Capital, for example through the use of industrial processes that damage the atmosphere and the oceans that we and plants depend on. This is because someone earns an income from these processes, but the costs to the environment are not recorded to set against that income in GDP. Using the difference-between-Balance-Sheets method of calculating surplus or deficit enables us to see the effects of these negatives that are invisible in GDP, bringing us closer to a real appreciation of the true value of the assets that sustain all life and the effects of our activities on either enhancing them for future generations or damaging them for short-term gain but long-term pain. Video of an excellent summary about Natural Capital by Dieter Helm at Irish Natural Capital Forum October 2016 here.
I didn't attend myself, but the video records Professor Helm's 30-min talk and Q&A. Prof Helm is Chair of the UK's Natural Capital Committee. Some wonderful soundbites, eg "No country in Europe currently has a Balance Sheet" (9mins 30). and "better to be roughly right than precisely wrong" (11 mins 45 to 12 mins 15). Accountancy isn't just for business, it's for the environment" (About 20 mins). The UK's Natural Capital Committee continues to advise Government on how the 25 Year Environment Plan can be created in such a way that the environment we leave to our children is no worse than the one we inherited ourselves.
The Committee's 2017 report on this can be found here. The Planetary CFO will be keeping an eye on how the 25 year plan shapes up, because merely stopping the decline is not going to be good enough in the longer-term. We will need a co-ordinated world-wide plan for the environment globally, for a sustainable environment to provide well for peak global population of, perhaps, 10 billion. Just to signpost, some of the key elements of this debate are at: http://www.carbonbrief.org/the-35-countries-cutting-the-link-between-economic-growth-and-emissions and: https://steadystatemanchester.net/2016/04/15/new-evidence-on-decoupling-carbon-emissions-from-gdp-growth-what-does-it-mean/ Much of the debate was triggered by the following infographic from Carbon Brief. The core of the debate is about the accuracy of the data and the extent to which it might suggest causality, or just correlation without causality (instead). Also, more detailed analysis of the data might suggest that there are other factors involved rather than a simplistic, direct link between carbon emissions and the carbon-intensity of production and consumption patterns in the listed countries. For example some offshoring of carbon-emitting production processes would tend to reduce the territorial carbon emissions of the listed countries but increase the carbon emissions of other countries not listed without affecting GDP per se. This offshoring might represent a significant part of the explanation of the headline trends, throwing doubt on the headline suggestion that carbon emissions are decoupling from GDP. To allow for these effects, it would be good to see the global total GDP trends and carbon emission trends, rather than just data on each of these for a few selected countries. There is some global data reported in the Guardian at:
https://www.theguardian.com/environment/2016/apr/14/is-it-possible-to-reduce-co2-emissions-and-grow-the-global-economy and this suggests that one factor is that Chinese energy production from coal has recently been growing less rapidly than in the past, and so there is some hope for a green revolution in China. But it appears to be quite difficult to get a comprehensive picture of all the various factors linking carbon and GDP and the cause-and-effect relationships between all of them. Perhaps, also, longer-term data needs to be collected and analysed before more confidence can be built in any conclusions reached. A starting point for this might be an IEA article at: https://www.iea.org/newsroom/news/2016/march/decoupling-of-global-emissions-and-economic-growth-confirmed.html and, in particular, the following highlights, albeit discussing only the most recent two year period when there appears to have been global GDP growth but without much increase in global carbon emissions: "Global emissions of carbon dioxide stood at 32.1 billion tonnes in 2015, having remained essentially flat since 2013. ... In parallel, the global economy continued to grow by more than 3%, offering further evidence that the link between economic growth and emissions growth is weakening." Of course, a trend over two years is not very conclusive in this complex area, which is why I make the comment above about the need to look at trends over much longer timeframes, perhaps even decades. Creating a sustainable future for all global citizens is too important a matter to be derailed by political point scoring. It transcends political ideologies. Global Climate Change doesn't care about the political persuations of the people it kills. The challenge is to ensure that the transition to sustainability proceeds without undue political interference. It would help if all political parties would agree on some of the key elements, eg decarbonisation, water and food security and enhancement of Natural Capital. That way, no party could use these matters to try to make their manifestos different from those of other parties and win votes from them.
The diagram above is from "World Economic Situation and Prospects 2016" published by the UN. On the face of it, this provides some hope about the state of decoupling of carbon emissions from per capita GDP. If sufficient decoupling can be achieved, then an amount of aggregate global GDP growth could be achieved while keeping global warming below 1.5 degrees above pre-industrial levels.
However, there is one aspect of this which is of some concern. There is a nagging question on my mind. What if the reduction in per capita carbon emissions in high-GDP countries is largely achieved by 'exporting' carbon emissions, ie by consuming products and services imported from parts of the world which have much higher per capita carbon emissions? If this was the case, then, all other things being equal, it wouldn't be possible for all countries to be moved, over the years and decades, from bottom left of the diagram to the bottom right. This is because there wouldn't be any countries remaining in the bottom left to "export" carbon emissions to. I'd be happy if anyone can point me in the direction of evidence that can put my mind at rest on this point. And perhaps one of the most important questions following on from that is: "what would be the distribution of countries on the above curve at a sustainable equilibrium, and would that equilibrium be consistent with operating within sustainable and safe planetary limits (as per the Oxfam sustainability "doughnut" model)?" Achim Steiner (above), new Director of the Oxford Martin School, gave an absorbing and curiously upbeat talk in Oxford on 29th November about many of the dimensions of the current global challenges in creating a sustainable, fair existence for humanity on the planet.
He argues not for throwing away the existing systems, such as global economic ones, but rather for tweaking them in ways that incentivise right behaviours that take us closer to sustainability for the common good. His most impassioned plea was for members of the audience to consider the degree of pressure currently faced by farmers, especially smallholders, within the agricultural economy. He pointed out that we need that sector to thrive if we are to feed a human population that might grow to 10 billion people. he also emphasised that automation is a threat to employment, yet within a few decades we will need about 600 million new jobs if we are to continue to use employment as an important means for people to provide for themselves. Although this was one of the best, most integrative talks I've ever attended, I'm left with one question that bugs me - how to turn the fine words into fine actions. Indeed, that's a question I ask of myself as well as wonder about others. The video of the talk can be accessed at: https://www.youtube.com/watch?v=eiXHz8tOXfM |
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