Shuffling toward Sustainability

by Paul Hohnen

Paul Hohnen (Australian, 1950) is a consultant on sustainable development living in Europe. A former Australian diplomat, his career included periods as political director of Greenpeace International and strategic development director of the Global Reporting Initiative (GRI), which he helped found.

Historians writing in 2052 will remark on three distinctive features of the first half of the twenty-first century.

The first will be in relation to the physical environment. They will note, with all the wisdom that hindsight and modern sensing and measurement technology offer, that profound changes occurred in the earth’s biophysical systems over the previous four to five decades. These will include changes in the chemistry of the planet’s atmosphere and weather systems; in the diversity and regenerative capacity of terrestrial, freshwater, and marine systems; and in the quantity and quality of natural capital, both nonrenewable and renewable. The combined consequence of these developments, they will note, had not only resulted in the greatest reduction the planet’s capacity to provide ecosystem services since Homo sapiens began spreading out of Africa, but also precipitated a new era of climatic instability characterized by increased warming. They will conclude that the capacity of the species to adapt to the changing environment will increasingly determine what life on earth might look like by the end of the twenty-first century and beyond.

The second will concern the scientific and sociological environments. Future historians’ review of scientific literature from 2012 onward will show that many of the trends noted above were well documented, understood, and discussed at a surprisingly early point in time. Examples will include declines (or even commercial disappearance) of stocks of many species of fish, increases in atmospheric concentrations of greenhouse gases and other pollutants, and the peak and decline in production of several important raw materials, such as oil. In many cases, the rate of change on the ground will be seen to have been seriously under- (and sometimes over-) estimated. Sociological studies will highlight wide differences (and even sharp disagreements) over the underlying scientific data and their implications. Sociologists and anthropologists will develop taxonomies to distinguish between social groups that, variously, denied there was a problem, thought there was a problem and tried to do something about it, or thought there was a problem but that it was ultimately intractable.

The third will concern the policy environment. Here future analyses will consider how systems of organizational governance—both state and private sector—responded to the information as it became available. By 2052, the changes in the biophysical environment will have forced decisions on a range of policy choices. Here are the policy issues that historians will document, and the conclusions they will draw in 2052:

• The level of decision making. Decisions had to be taken on global policy issues such as setting a price for carbon, commissioning large-scale projects to adapt to climate change, and reforming the international financial system. Options included collective decisions by nation-states in existing or new intergovernmental forums, decisions by individual nations or regions, or not doing anything at all. The historians will record that an intergovernmental approach was adopted because it was finally recognized that an “every country for itself ” strategy was ineffective and counterproductive. Local wars over competition for resources had underlined this point.

• The role of the state. It was clear already in 2012 that governments— particularly when operating in groups of more than ten—were unable to make decisions at the speed needed to respond to many of the adverse trends mentioned above. Future historians will conclude that it became increasingly imperative to regionalize decision making. It proved impossible for 193 countries to agree on anything, as exemplified in the post-Kyoto negotiations. But smaller groups of countries proved able to move collectively. And there was progress in public-private partnerships. A blended model was chosen, with governments increasing state control over business (similar to China’s managed capitalism), but at the same time including business leaders in governmental decision making and implementation.

• The role of the market. In the decade 2010–20, future historians will note, it became apparent that development paths were taking the world further away from sustainable development, rather than closer. Capitalism was recognized to be undermining its own future. A debate ensued about just how “free” the free market should be in a resource- and pollution-constrained world. By 2022, the thirtieth anniversary of the Earth Summit, a series of weather-related commodity crises had convinced governments and businesses that adaptation to climate change was a permanent national security issue. Governments increased regulations and policies promoting investment in low-carbon, resource-efficient technologies and infrastructure—that is, a “green” economy. A decade after the failed 2012 Rio+20 conference, it was decided to prioritize the rapid transition from the old to the new economy, even when it required state interference with the working of the free market.

At a more detailed level, historians will also note that the business literature available in 2012 indicated that:

• “Business as usual” could not deliver sustainable development.

• Business was an important part of the solution, but needed help to prioritize the common good.

• Business leaders recognized that they needed a healthy ecosystem and a reasonably stable climate.

• Sustainable business practices were far from being mainstream.

Delving deeper, historians in 2052 will identify a complex set of issues that were identified already in 2012–22 as preventing efforts to put the global economy on a sustainable footing. They will conclude as follows:

• Short-termism. The need for quick returns, the rise of share-trading technologies that encouraged churning, and the expansion of the virtual economy meant that financial markets were shifting away from long-term perspectives and investments. To ensure the sustained growth of renewable energy and clean technologies, in the period 2012 to 2052 governments used a mix of instruments to encourage long-term investment in key sectors and domestic industries. A series of financial crises before 2020 eroded trust in the ability of existing financial models to ensure the public good.

• Valuation methods. By 2012, research had demonstrated that the commonly used national and business accounting tools presented a grossly distorted picture. In many cases, national “development” was in fact destroying economic value. The following decade saw concerted policy efforts to define and adopt indicators of human and ecosystem well-being and give these an economic value. By 2022, new definitions of societal value and company assets emerged, supplementing the old GDP, and a standard was developed for integration of corporate financial and sustainability reports.

• Consumer inertia. From the emergence of environmental concerns as political issues after the 1960s, a small and growing proportion of consumers helped drive the growth of “green” markets. By 2012, however, it was clear that the green consumer movement was still far from mainstream. This forced governments and business to reassess the mix of carrots and sticks needed to harness the power of consumer behavior. Despite opposition from trading partners and the World Trade Organization, many countries introduced policies before 2030 that favored the growth of domestic “green” markets, especially in the energy, agriculture, and waste sectors.

Technological innovation. Responding to the realization that needed technologies were either not available or not sufficiently profitable, governments began intervening more directly to stimulate domestic strategic industries. Energy (including transportation), water, agriculture, waste treatment, and health were prioritized, along with infrastructure. Countries unable or unwilling to take this state-led approach continued to be reliant on resource-extractive industries. This led to a new global divide, based on access to clean technology.

Transition pain. All developed countries suffered sharp social and economic pains as a result of the evolving shift from fossil-fueled growth toward sustainable development. Seen from 2052, it will be clear that those that transitioned most successfully to a green economy had used a combination of legislation and pollution taxes to subsidize and build support for the new economy. It had also proved important to confront noisy minorities pursuing their own short-term interests.

By 2052, it will be widely accepted that the second half of the twenty-first century will require even more adaptation to a changing planet. Much governance will be geared to that end.