Week 31: Democracy and climate change

Liberal democracy and the transition to a sustainable future. Global GDP could fall by 20% as the world heats up. We never won the fight against poverty. And in Japan and Pakistan coal is on the rise.

Dear all,

I hope you are well and safe and ready for ‘ESG on a Sunday’!

Democracy and climate change

This week we start with democracy. Just writing this first sentence is a bit of a bummer, since we take so much of what we have for granted.

When we discuss climate change challenges and solutions we often forget the prerequisite for the positive development we all, or most of us, hope for.

And yes, well-functioning democratic societies are the prerequisite for this.

Democracy is, despite its own challenges, still a framework that enables the transition to sustainable future. A future that is also a bit more just, and a bit more human.

But is liberal democracy under threat? Can democracy be saved from populism and anti-democratic challengers? Is the China model an alternative to Western democracy? What happened to American global leadership? Can the European Union be an example to the world?

In general terms, democracy seems like an ideal system for tackling complex issues like climate change. Democracy, we tell ourselves, enables cooperation. A free press supports political learning and democracies encourage the critical assessment of policy, meaning major challenges can be overcome through experimentation and adaptation.

The problem is that this iterative process requires time – a luxury we lack, given the urgency of the situation. An emerging argument, popular in some environmentalism circles, asks whether there are systemic flaws in our democracies which prevent us acting fast enough to prevent irreversible climate change.

Political leaders in democracies, the argument goes, are short-sighted. Electoral cycles create biases in favour of the short-term which discourages the adoption of far-sighted policies to capture distant benefits. In a democracy, the will of the people generally trumps technical expertise, so decisions reflect the short-termism, naivety and prejudices of voters regardless of what climate scientists say.

Also, misinformation is stoked by lobbyists and industries with an economic stake in the status quo (not least fossil fuel industries themselves) and money distorts the incentives of politicians seeking re-election.

The urgent challenge of climate change poses a critical test for modern democracy and rules-based international politics.

Democracies need to shift from loose policy commitments, to real and binding action. Yet, there are enormous collective action problems in combating climate change.

Can democratic systems evolve to confront the challenge? At global governance level there has so far been a failure to generate a sound and effective international framework for managing global climate change. And at state level solutions are weak and struggle to transcend the normal push and pull of partisan politics.

In order to coherently combine democracy, markets and universal standards, global governance systems need to develop into inclusive and representative institutions with the legitimacy and capacity to translate policy commitments into real world outcomes. This will require the wealthy industrialised states to shoulder a significant part of the cost of the transformation.

Some of the pressing democracy, development and climate questions are answered on this page in a series of interviews with some of the world’s greatest contemporary political theorists, philosophers and political leaders.

Global GDP could fall by 20% as the world heats up

As we well know, most of the global meta-developments are interconnected. What happens when economic models absorb climate projections? Well, global GDP drops by 20% over the next 80 years.

This is a huge question and next one would be what will happen with our democratic framework?

A new analysis of the relationship between heat and economic performance released this week by Oxford Economics, a global forecasting firm, identified a divide between nations on either side of 15° Celsius (59° Fahrenheit), the “global sweet spot” for economic activity.

A country whose average annual temperatures today are cooler than 15°C, including those in North America and Europe, stand to benefit slightly in the short term from rising temperatures.

Tropical and subtropical countries whose average temperatures are already warmer than 15°C today, including the entire global South, face catastrophic economic degradation.

This article is not jolly reading at all, but it puts things into perspective. I would also recommend a thorough reading of a report published back in 2015 in Nature where you can get an in-depth feel for what could happen.

As it turns out, we never won the fight against poverty

Usually, one plus one is two, and we know that things add up. When you look around the world and think about the state of it, you can always see what you want to see.

Some of the things are thus not as you like them to be and it is very much connected to our ability to shift our societies towards more sustainable path of development.

For 10 years, economists, the United Nations, and world leaders have celebrated a reduction in global poverty, heralded as “one of the greatest human achievements of our time” by then-World Bank Group President Jim Yong Kim in 2018.

Those claims of victory appear to be misleading, at best.

A scathing new report published on Monday by Philip Alston in his parting shot as the United Nations special rapporteur on extreme poverty and human rights paints a world where poverty is rampant—yet undercounted, due to the World Bank’s reliance on outdated metrics.

The report comes at a critical juncture, as the coronavirus pandemic is set to push half a billion people into poverty and is expected to double the number of people facing acute hunger to 265 million.

In Japan and Pakistan, coal is on the rise

Most of us think that the coal era is over. Well, that’s not really the case, at least not in some Asian countries. The latest example comes from Japan, a country otherwise known for its technological advances and forward looking approach.

Despite growing international pressure, Japan has yet to kick its reliance on coal, which is still expected to account for 26% of the country’s power generation in 2030, down from 32% in 2019.

A plan to shut 100 inefficient coal-fired power units won’t cut emissions enough to meet the country’s 2050 reduction target.

You might think, India or Pakistan, well ok. But Japan? It’s one of the most developed nations in the world, and they won’t meet their CO2 emission targets signed in Paris?

Speaking of Pakistan, why should they not be on the right path? The answer is… China. As developed nations turn away from coal-fired power, Chinese funding has helped the dirtiest fossil fuel take off in Pakistan. Have a look at this.

That’s it for now. Happy Sunday reading everyone!

Best regards, Sasja