We don’t have a climate change problem

We don’t have a climate change problem, we have an economics problem. While working as Director of Renewable Energy for the South African government almost 20 years ago I came to the conclusion that the primary reason we had a climate change problem was not that there weren’t technical solutions but because there was something wrong with the way that the conventions of dominant economics thinking disempowered the solutions from being implemented.

I realised that no amount of technical brilliance was going to solve the problem – what we needed was a different approach to economics that took the problems and the changing priorities into account. In my opinion, the solution lies with the economists.

While travelling back home from work in London one evening on an overcrowded train I was jam-packed into the standing space with a charming gentleman who turned out to be an economist. I described the predicament I had discovered while working in government and asked him why economists weren’t gathering in conferences to solve the climate change economics problem. His reply was that he didn’t know. He hadn’t really thought about it in that way before. This tells me how deeply ingrained the current thinking is, where a choice about the way economics works is taken for granted and assumed that it’s the only option and the only convention that can work.

The ideology that has dominated economics thinking for just over half a century is something that some call neoliberalism. It has worked very well in the past and solved ‘yesterday’s problems’ but things have changed and it is no longer fit for purpose. Fortunately, I am not the only one thinking about this problem.

George Monbiot, a well-respected British journalist, environmental and political activist and author of several thought-provoking books is not afraid to talk about the elephant in the room. In an article on neoliberalism, he stated the obvious: “Consumer demand and economic growth are the motors of environmental destruction.” 

He then suggested that it’s not good enough to poke sticks at the beast that is causing harm and suggested, correctly, that we need to come up with an alternative: “What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed… the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century.” This is what I was asking the economist on the train – why aren’t you all getting together to discuss the problem and come up with solutions?

In my opinion, current economic philosophy, assumptions and beliefs need to be challenged. As a futurist, I am concerned about the trend towards

• growing inequality and exclusion,
• significant dependency on long-distance supply chains,
• systemic instability associated with a lack of diversity, where there are single points of failure associated with monopolies or dominant producers,
• unsustainable environmental degradation and well-being.

I’ve been thinking about how economics can be reengineered for years, especially within the context of climate change where we have all the technical solutions but it’s the economics that prevents systemic and widespread adoption of these solutions.

This TED talk by Nick Hanauer on the dirty secret of capitalism is the best example I have seen about how to rethink economics.

He makes some intuitively reasonable points:

• -> Economic activity is produced by human activity
• -> Prosperity arises from collaboration and the more people are included the more prosperous everyone becomes
• -> Cooperation and reciprocity are humanity’s superpowers
• -> Economics is based on social norms and constructed narratives.
• -> Economics is a choice
• -> Prosperity arises through the evolution of markets based on innovation and demand for the products of innovation
• -> As we become more prosperous our problems and solutions become more complex and this drives more innovation and solutions, which drives economic cooperation and thus prosperity

Furthermore, he proposes five guiding principles (he calls them rules of thumb) for a new approach to economics:

1. Successful economies need to be nurtured like gardens not left wild like jungles (the latter being the neo-liberal approach)
2. Inclusion creates economic growth
3. The purpose of companies and organisations should be to improve the welfare of all stakeholders (not only shareholders and managers)
4. Acting exclusively out of self-interest is not beneficial to all stakeholders (greed is not good)
5. The laws of economics are a choice (unlike the laws of physics). Considering this, I’d say that economics is guided by principles (not laws) and these principles are a choice. The current choice to maximise profit for shareholders at the expense of everything else is corrosive, unsustainable and destructive in the long term.

In my opinion, it’s time to start thinking about alternatives and different solutions to relatively new problems associated with the incompatibility of economic behaviour and environmental well-being. It defies logic and reason that we tolerate a way of doing things that systematically destroys our medium to long-term survival by ignoring the interdependency that we and our businesses have with nature and the environment.  

We need to start opening up conversations, listening to different opinions, evaluating ideas, embracing diversity and tolerating a bit of dissent. We need some creative and normative design thinking and lots of pilot projects to test ideas in an agile manner. Leaning on the Ancient Greek poet Archilochus’s reference and the philosopher Isaiah Berlin’s thinking, we need more foxy experiments and less hedgehog economic hegemony.

#economics #market #laws #principles #inequality #exclusion #instability #sustainability #climatechange #economics #climatechange #climateaction #neoliberalism #renewableenergy #decentralisation #designthinking #agile #experiment #growth

“The current economics ideology is no longer fit for purpose.

We need to start opening up conversations, listening to different opinions, evaluating ideas, embracing diversity and tolerating a bit of dissent. We need some creative and normative design thinking and lots of pilot projects to test ideas in an agile manner.”