Week 45: The blank empty + one word that describes the COP 🎪

In this issue: ▸ Clueless on the pavement ▸ Meet Growth and Consumption ▸ Are the ‘net zero’ plans credible? ▸ What has the COP achieved? ▸ And much more...

Dear all,

Two days ago I found myself getting off the bus and standing clueless on the pavement on a big wide street in Stockholm. I did not know where I was or why I was getting off that bus.

But I remembered that I was, like most of the people on the bus, looking at my phone, reading news and briefs from Glasgow, looking for traces of something that I could cling to. A rainy morning, semi-cold, a chill that creeps but don’t bite yet.

On the pavement in the morning, off the bus. Completely blank. I was thinking about one word that would summarize that blank empty in me. I was standing there wondering where I was going and trying to remember what I was about to do. Early dementia crossed my mind. I was still holding my phone in my hand. One word to summarize it all. I started walking towards some lights gleaming low from afar. Wide empty streets, slow pace.

That blank empty in me started talking with an innocent edgy voice. Come on, Sasja, it is not so bad, at least people in Glasgow are trying to get this to move. Yeah, it is not perfect and far from completed, but there is engagement and there is a sense of urgency.

I was walking, listening to the blank empty me. Well, maybe I don’t see the forest for all the trees and maybe I got bogged down in endless analysis over the current state of the system and missed the next chapter of the development of this beautiful world of ours. Yeah, the blank empty in me was clapping its hand and shouting out, optimism not anxiety will lead us. I kept walking for hours that morning listening to the blank empty in me, and I finally understood where I was going.

Meet Growth and Consumption

Reports, news items, the occasional interviews about how things are going in this year’s showbiz edition of the climate negotiations in Glasgow.

The funny thing is that we humans somehow always seek dramaturgy, perhaps mostly to feel that we finally succeeded and that we are, after all, bigger than ourselves. Words like “together”, “we are in the same boat”, “this is our last chance”, “we only have a few years left”. Fate-saturated. Heavy. Important.

But here’s a spoiler. Climate negotiations in Glasgow may be hot, but is in fact a conference about who should pay for our unsustainable economic system. The rich countries want to protect what they have and the poor countries want to get paid for the burden of adjustment. They will have to bear the greatest economic strains for decades to come.

After all, we live in a market economy system that has promised the eradication of poverty and a better life for billions of people in the world. A system based on two distinct parameters: Growth and Consumption.

These two parameters sit cross-legged at each table in Glasgow. They are neither drowsy nor tired, rather curious and sometimes quite cursed. Will the poor countries be able to switch to something a little more climate-smart – and at the same time grow and consume? Will the rich countries be able to continue to plunder and continue to grow and consume? Yes, they have been around for a while and know that the Climate will eventually step off the stage, the lights will go out and everyone will go home.

They sit there, Growth and Consumption, rarely silent, more low-frequent and intense. With their eyes tense at every suggestion put forward. Sometimes they just stare at the ceiling and yawn. They know that ten percent of the world’s richest will consume our remaining global carbon budget by 2030.

They know, because they have been around for a such a long time and they know the drill.

Sometimes they have fun thinking about how it could be if developed countries, which already have most of it, would choose to include their cousin Economic Development in these negotiations and if it would change the dramaturgy.

Then they laugh a little when that cousin for a long time, toothless and lost, lives as an outsider in various poor countries on the streets and squares as a deserted bum. A cousin that is seldom invited to family parties because it ruins the atmosphere and because it constantly questions the menu on the table. The same menu as our friends growth and consumption served humanity for quite some time.

So what am I trying to say? Essentially, I think it’s time for us to stop talking about the climate crisis and climate change. They’re just props on stage.

Here’s the original article I wrote (in Swedish).

Big business and COP26: are the ‘net zero’ plans credible?

Companies are not formally part of the Conference of the Parties meetings, which are reunions of countries that signed the 1994 UN Framework Convention on Climate Change.

But this year’s summit was swarming with executives and their consultants, crowding out campaigners and even national delegates from Glasgow’s overfull hotels. The corporate crowd jetted in with a self-assured message for politicians: that business has been leading the way on climate action and it is high time that governments catch up.

The International Chamber of Commerce told governments to “wake up” to the risk that their patchwork of carbon pricing regimes could slow progress on cutting emissions.

The message from some politicians at COP26 was not much different. “It’s bankers that are now deciding. You have major corporate America factoring in the price of carbon. It matters,” US president Joe Biden said.

Well, the flood of pledges before and during COP26 suggests that the pace of corporate climate action is accelerating. One in three of the largest public companies in G20 countries now has a net zero target, up from one in five last year, according to an international research initiative called the Net Zero Tracker.

Behind the marketing materials, though, some of those pledges are less promising than they seem. Just one in five of the G20-based companies which have set emissions-cutting goals have aligned them with keeping temperatures to within 1.5C of pre-industrial levels by 2050, according to the non-profit Science Based Targets initiative (SBTi), and the rate falls to just 6 per cent outside G7 countries.

Similarly, of the 412 US companies in the US Russell 1000 index which have pledged to emit less, just 65 have set goals in line with that 1.5C target, according to Just Capital, which tracks businesses’ impact on society. According to a new MSCI report, companies’ current emissions plans are still putting the globe on track for warming of 3C. Read more here.

So how do corporates move beyond pledges and hot air? One very important tool and solution is to link senior management pay to sustainability targets. You can do it in many different ways, but the point is that without this there will be no progress.

Here’s a good read from FT on this which came out this morning.

What has the COP achieved?

So blank empty looks me in the eye. The annual two weeks of the climate showbiz are over when you read this.

Here’s a short summary of progress since the COPs started some decades ago: 

  • Do we have a global price on CO2? No

  • Have we agreed to phase out fossil energy? Not really

  • Have we agreed to phase out coal? Not really

  • Have we agreed how to finance the transition for all developing countries? Not really

  • Have the NDC’s been strengthened to support the 1.5C target as set out in Paris? No

  • Have we agreed who will pay the bill for the costs of the transition? No

Maybe I missed something that participants really have agreed on in Glasgow, something that has a real global importance. If so, I apologise for that miss.

Anyway, one thing seems abundantly clear: The COP was, is and will always be only about money.

Paradigms and finance

One word that kept hitting me on that walk during that morning was “paradigm”.

Paradigms are the shared ideas in the minds of the members of a community, the deepest and most commonly accepted beliefs about how the world works. They are the foundations of a system, defining its goals, information flows, feedback loops, material stocks and flows, and indeed everything else.

Paradigms exert the greatest leverage on a system’s behavior and are thus a potent place for intervention. 

In the world of finance, the paradigms of capital markets underpin the mindsets of investors, determine their priorities, and influence which frameworks and tools they use to analyse and make sense of the investment world.

A central paradigm of today’s finance industry is that valuable is only what can be measured in monetary terms and captured through transactions. This means that capital markets cannot relate to sources of value outside this narrow definition.

As a result, traditional investors consider public goods (such as political stability, social equality, and ecological sustainability) as exogenous factors, i.e. aspects that sit outside their sphere of influence and thus outside their sphere of responsibility. 

They feel little obligation to foster intrinsic societal values that exist beyond the “money in/money out” logic. This is a moral issue to start with and since we know that now Bankers and not politicians call the shoots on climate emergency…. well, brace yourselves!

The economy must yield to human values. The traditional drivers of value are not valid anymore. We need new ones. Today.

One word to describe the COP… 🎪

I asked a number of dear friends to give me one word to describe their experience of what is going on at COP.

Of the different words I got, “circus” was the most common one.

That’s all for this week.

Best regards,
Sasja