The world’s sustainability community has advanced a number of important proposals in recent decades to forestall accelerating climate change, slow deforestation, provide clean water and sanitation, generate clean energy and practice responsible consumption and production. Limited progress has occurred as measured by concrete outcomes rather than aspirational statements and pledges at international conferences and by corporations.
While opposition from the fossil-fuel industry and its political supporters are primarily responsible for this result, the inability of global sustainability proponents to persuade enough people to support their agenda merits a re-examination of their arguments and strategies. A look back at the recent COP26 gathering and its inability to galvanize world leaders into making substantive, verifiable commitments to protect the planet leads to a conclusion that the current sustainability narrative and its coalition of supporters have already reached their peak influence.
The current narrative
Since the 1970s, an environmental sustainability narrative has shaped a global agenda as embodied in a suite of global treaties, negotiations and declarations. This narrative consists of five major elements. They include:
A reformulated narrative and a bigger, more diverse coalition will be necessary to move the sustainability agenda forward.
1. The world has become a riskier place with limited time to fix things. At times, whether through the mouths of Al Gore or Greta Thunberg, an apocalyptic “the end is getting near” message has emerged to galvanize the sustainability community into greater efforts or instill fear into the minds of wavering citizens. Admittedly, there is convincing scientific evidence of worsening conditions for a variety of health, environmental and societal metrics. However, fear and risk have not provided a sufficiently powerful motivator for the world’s many publics to embrace the broader sustainability agenda. Wall Street and Fleet Street asset managers may break out in hives at the thought of stranded assets from climate risk, but most citizens remain passive bystanders.
2. The most knowledgeable and experienced people are the best-suited to make decisions for the rest of humanity. “Follow the science” is the near-universal mantra of the skilled group of professionals that have emerged from the world’s most elite universities and occupy senior-level positions in governments, corporations, nongovernmental organizations, multilateral institutions and academia. While not all participants from this elite, largely white group agree on the exact policy and market remedies, they do converge in their embrace of science-based diagnostics and solutions. The majority of humanity is not part of this conversation and science, policy and business elites have made little effort to engage them.
3. Capitalism is the best economic model to address global-scale sustainability problems. Despite its many limitations, capitalism has proven enormously adaptive irrespective of its host’s political system — state capitalism (China), crony oligarch capitalism (Russia), social capitalism (European Union) and investor capitalism for the 1 to 10 percent (United States). The fact that hedge funds, investment banks and other financial institutions — enabled by such stellar nongovernmental organizations such as Ceres — are assuming an increasingly prominent role in sustainability forums such as COP26 only ensures that proposals for addressing climate change and other sustainability problems will not make capitalism’s powerful adherents and beneficiaries too uncomfortable.
4. Public policies should subsidize the many transitions necessary to avoid economically and politically disruptive changes. Whether through the European Union’s Green Deal program or the Biden administration’s Build Back Better initiative, hundreds of billions of euros and dollars, respectively, will be allocated to decarbonizing such economic sectors as agriculture, energy, transportation and other manufacturing and services industries. Whether these investments can be effectively implemented to achieve their 2030 interim climate-reduction goals at this level of economic scale is a soon-to-be-conducted experiment. The ability of such massive spending to rebuild the economic confidence and security of lower- and middle-income families, at relatively low inflation rates, will determine the longer-term political support and staying power of this Keynes-on-steroids strategy.
5. Economic winners and losers should be explicitly identified and clearly rewarded or punished. At first glance, the emerging winners in the sustainability sweepstakes range from electric vehicle manufacturers, public transport agencies, renewable energy providers, building efficiency service firms, data management enterprises, and large infrastructure construction companies. Many of their most important development costs — investment in new manufacturing facilities, value chain infrastructure (electric vehicle recharging stations), research and development and generous subsidies and tax credits are directly provided for in existing or proposed legislation. Conversely, sustainability proponents plan to significantly dis-invest in coal, oil and natural gas companies by removing subsidies and by blocking permitting and regulatory authorizations.
There are major shortcomings in the existing sustainability narrative. In part, these shortcomings emerge from the great sense of urgency and the “will-to-hope” that is characteristic of change advocates. Time is of the essence, so the argument goes, and the details and fixes will sort themselves out in the future. Regardless of whether that happens, the soft underbelly of the sustainability narrative consists of several major factors:
There are significant contradictions in a number of sustainability proposals. Simultaneous with the Biden administration’s intense lobbying of Congress to enact its initiatives to reduce greenhouse gas emissions, it is also beseeching the oil industry and the OPEC cartel to turn the spigot of petroleum production to dampen gasoline prices at the pump. Similarly, the California Public Utilities Commission, trying to keep the lights on in 2022 and 2023 following severe droughts and heat waves that led the state’s grid operator to impose rolling blackouts this year, has increasingly turned to the natural gas industry as a source of stable power generation.
In the race to advance the electric vehicle production market to displace the internal combustion engine and fossil fuels, there is insufficient attention being paid to environmental and social destruction that is likely to emanate from the mining of cobalt, lithium and nickel necessary for battery and other electronic components (annual lithium demand from electric vehicles and energy storage is expected to rise by a factor of 20 by 2030 from 2020 levels). Whether it’s the exploitation of child labor associated with cobalt extraction in the Democratic Republic of Congo, the use of scarce water resources at South American lithium mines, or the coal burning used to power battery grade nickel production in Indonesia, extensive and unresolved trade-offs currently exist in the transition to more “sustainable” technologies.
There is no back-up plan for market or technology failures during the transition to decarbonized economic sectors. The most prominent example to date of planning deficiencies was the explosion of electricity prices in the United Kingdom this year as accelerated coal closures, reduced nuclear availability and low wind generation exposed the market — the most expensive in Europe — to rising gas prices. The pandemic-related global supply-chain crisis has created numerous challenges for businesses importing parts or products from the Asia-Pacific region. What, then, is the most likely back-up plan in an era of inflation concerns, supply-chain disruptions and the absence of full market penetration and reliability of decarbonized technologies? Most likely, policymakers will decide to fire up the coal boilers, ramp up natural gas production and keep the oil flowing. The sustainability narrative has not planned for this scenario.
Communication for the transition to sustainability misses the mark. Within the United States, sustainability policy-driven messages are largely detached from the daily lifestyles, experiences and values of most voters and consumers. Their priorities focus on such issues as the costs of food, housing, energy, children’s education and child care and how to best manage the disruptions of daily life from the pandemic. The Biden administration and its allies in the sustainability community have largely chosen to focus on more abstract policy-related messages on climate change, infrastructure and the financing of major projects. Numerous public opinion polls confirm that the American public is largely unaware of what the Biden administration is trying to accomplish.
The advancement of the sustainability agenda has been impressive but limited. Nowhere was this more clearly illustrated than the inability at COP26 to persuade major emitting nations to make the necessary level of commitments to constrain a planetary warming increase to 1.5 degrees C (or even 2 degrees C) by 2050.
The existing sustainability narrative and the coalition that supports it — in Glasgow, or the halls of the U.S. Congress, or in Brussels or Beijing — is fragile and has reached its political highwater mark. In America, the political coalition supporting the Biden administration’s initiatives is quite fragile. If its opponents gain control of Congress in 2022, they will apply a wrecking ball to the sustainability agenda.
A reformulated narrative and a bigger, more diverse coalition will be necessary to move the sustainability agenda forward. That will be the subject of next month’s column.