The Great Disruption: Why the Climate Crisis Will Bring On the End of Shopping and the Birth of a New World - Paul Gilding (2011)

Chapter 7. The Road Ahead-Our Planetary Sat Nav

Before we take our story completely into the future, a few comments about that process are in order.

I have spent most of my life talking about the future; in fact, both as an activist and as a business strategy adviser, I could consider this to be my core trade. By its nature, forecasting is uncertain. Unlike the present, the future is hard to measure. The key to success is to be clear on what you can know and what you can’t, and to focus on broad strategic direction. It is important to remember this is a game of probabilities, with the objective being to reduce risk and build the resilience required to cope with the range of most likely outcomes.

In the case of the questions we’re covering here, this is an important and practical process, not one of intellectual entertainment. We face an unstable future, and our capacity to be ready for that, physically and psychologically, could well determine our success in navigating these troubled waters. Having a reasonably accurate view of what conditions we can expect is therefore a powerful tool.

The future is, after all, something we create, not something that just happens.

So what do we know? What roads are mapped and which ones are unexplored? The underpinning drivers of change here are unusually clear, compared with, say, business strategy for a technology company, where the myriad complexities of the market, technology, and consumer behavior are subject to many unpredictable, game-changing developments.

The situation with sustainability, particularly climate change, is much simpler. As we covered earlier in some detail, there will certainly be surprises in technology, politics, and events. But when it comes to thinking through strategy for business or society, the core drivers of change have negligible uncertainty. The underlying processes at work are simple, reliable, and entirely predictable. Blind hope for some surprisingly different outcome is just avoidance.

This is not to say these questions don’t contain many uncertainties. They do, and we can divide them into two categories: natural and human. The natural ones are about how the environment behaves as a system, with interconnectedness, tipping points, and feedback loops. Examples are issues like the ocean’s absorption of CO2 emissions causing acidification, which can undermine marine life, then accelerating the collapse of fisheries.

The human ones include linkages between the ecosystem and the economy, as in our earlier example of the food system, where higher oil prices and subsidies for corn-based ethanol in the United States led to deforestation in Brazil, which worsens climate impacts, which drives up food prices. The other key human uncertainty is technology. There is always the possibility of some extraordinary technological breakthrough, for example, in very cheap renewable energy or in removing CO2 from the atmosphere. The likelihood of these preventing the crisis is minuscule in my view because of the late start and the time it takes to get technology to mass global scale. However, such breakthroughs could have a major influence on the speed of our recovery.

These uncertainties remind us of the complexity we need to deal with. A valuable tool in analyzing complex systems is considering how other systems behave. While this has considerably less certainty than the physical processes referred to earlier, it still provides some useful lessons.

One of these is that when systems hit their physical limits, they tend not to do so smoothly but are volatile and chaotic. They bounce against them, falling back and then growing until they hit them again. These are periods of great activity and increasing intensity. The system keeps hitting up against the limits in different places, in different ways, trying to break through, until it gives up, recognizes the limits are immovable, and changes. Then there are two ways to go. The system can stop growing and stabilize, usually evolving to a higher state, or it can break down into a simpler system with less complexity (that is, collapse).

Another way of seeing the same issue of system behavior is through medical science. My friend Dr. John Collee, a medical doctor and Hollywood screenwriter (Master and Commander, Happy Feet, Creation), says the right comparison for the global ecosystem is the human body:

Every patient with an incurable illness will ask how long they have to live. The answer goes something like this: “No one can say how long you may live, because every individual is different, but focus on the changes you observe and be guided by those. When things start changing for the worse, expect these changes to accelerate. So the changes that have occurred over a year may advance by the same degree in a few months, then in weeks. And that is how you can judge when the end is coming.”

Planet Earth, being a web of complex self-regulating systems, operates very much like a human body. Terminal illness gives us the template for most forms of ecological collapse. One set of changes initiates another, and so on in a downward cascade of negative feedback until the whole system falls apart.

As with all such theories, I approach this one through the screen of common sense. As argued earlier, it’s not possible to analytically determine the precise path forward in a process with the level of complexity of human society within the ecosystem. What we can do instead is observe what we see and hear around us, consider the theories put forward, and make a judgment as to whether it makes sense. Using this approach both the comparison to other systems and the medical analogy are helpful. What they both say is that change will accelerate, that the impacts will get greater and closer together, and then the time for decision, to avoid collapse, will suddenly be upon us.

The simple conclusion is that we need to get ready for this point, which is the core reason for this book.

So how can we imagine this will unfold? How would these theories apply in the real world, and what are the types of actual impacts we can expect? What do we know from the science that can guide us? The “Great Disruption” letter I wrote in 2008 imagined that world and described it like this:

As our system hits its limits, the following pressures will combine, in varied and unpredictable ways, to trigger a system breakdown and a major economic crisis (or series of smaller crises) that will see us slide into a sustained economic downturn and a global emergency lasting decades.

•  A series of ecological, social and economic shocks driven by climate change, particularly melting polar regions, extreme weather events and changes to agricultural output, will generate severe economic stresses, along with deep concern in the public and the global elites. This will lead to strong government intervention and generate a sense of global crisis.

•  The combined pressures of increasing demand and lower agricultural output driven by climate change will lead to sustained increases in food prices—triggering economic and geopolitical instability and tension, with developing countries blaming the West for causing climate change.

•  A deeply degraded global ecosystem will further reduce the capacity of key ecosystem services—water, fisheries and agricultural land. This will again impact food and water supply, political stability and global security.

•  We will see even further sustained and rapid increases in oil prices as peak oil is breached. Yes, it will go up and down, but the trend will be clear. This will create enormous systemwide economic and political pressure, as well as a great conflict between expanding dirtier supply and cutting CO2 emissions.

•  As always in predicting the future, there will be surprises. These could be, for example, a serious global terrorist attack wiping out a major city or a pandemic shutting down global travel. Shocks upon shocks upon shocks.

•  As this unfolds, our deeply intertwined and complex global financial market, prone to panic driven by fear and uncertainty, will suddenly wake up to the long-term implications of all of this. Perhaps driven by a series of major corporate collapses or national economic crises, they will then simply reprice risk in global share markets. This will lead to a dramatic drop in global share markets and a tightening of capital supply.

Over she goes.

The resulting series of economic and political crises will be massive in scale and decades long. They will last this long simply because fixing the causes while dealing with the consequences—a declining economy, political instability and accelerating climate change driven by earlier emissions—will take decades. With this level of crisis and change, the future becomes quite unpredictable and anything is possible, including some very exciting transformational shifts.

Why do I see this starting now? The system is too complex for analytically based certain predictions. We can’t even predict the oil price, let alone the behaviour of the whole system. However, my intuition is screaming at me that now is the time, and the data I see confirms my intuition. If we go back to basics, the two key challenges we face—the availability of cheap resources to feed the economy and the ability of the earth’s ecosystem to absorb our impacts—both have very clear indicators. So as the system hits the wall we should see a significant non-cyclical rise in commodity prices—especially food and energy—and significant evidence of accelerating ecosystem breakdown. These have for several years been my canaries in the “end of growth” coal-mine.

We see these indicators hitting hard now and the drivers behind them are profound, well embedded and have significant lags in them. So it’s game on. From this point forward, the slide into crisis will define our political and economic world.

Is this all too pessimistic? I’m actually by nature a strongly optimistic person. I just look at the numbers and the science, and I see it coming.

I want to be clear, though, that this is not about the “end of the world” or an inevitable slide into collapse. It does, however, herald an unparalleled era of system stress, economic stagnation, and social tension—a global emergency during which we’ll evolve a new economic model and then rebuild. I call it the Great Disruption because I believe it is far more likely to be a disruption in humanity’s evolutionary process rather than the collapse of civilization.

This disruption will drive a transformation of extraordinary speed and scale. It will leave in the dust all other major global changes we’ve faced—those driven by war, technology, or globalizing markets. It will be an exciting and ultimately positive transformation, with great innovation and change in technology, business, and economic models alongside a parallel shift in human development. It could well be, in a nonbiological sense, a move to a higher stage of evolution and consciousness.

We’re slow, but not stupid. I have no doubt we will respond—with intensity matching the crisis as it emerges—when we end our denial of the obvious logic we can all see if we choose to look.

Some who agree with my argument in general don’t believe the economic crisis will be so severe. They argue, as the CEO I quoted earlier did, that we will respond more rapidly and avoid a full-scale economic and social crisis.

My response is that the economic challenge of leaving it so late to respond means we will get stuck for a while in a transition phase. There will certainly be a great push to build the new, but the old—the sheer scale of the old economy and the systemwide impacts of earlier pollution and environmental degradation—will drag us down and prevent us from transitioning quickly. This will bring us close to zero if not negative global economic growth for several decades as the old economy crashes and a new one is built. Volatility will see it rise and fall around that zero, and vary by country and region, but the general direction will be clear.

Why can’t we respond faster? Why won’t the boom of the new carry us through? The problem is in the pace and scale of change required. We will certainly see spectacular growth in many new industries, particularly energy technologies. But these start from a very low base, so even the large growth rates we can expect will take a while to have an impact on the whole economy. Until that happens, the great bulk of our current economy will be defined by a range of old technologies and industries, such as coal and oil. These will not be allowed to grow—because their growth would threaten the whole economy through worsening the ecological causes of the crisis. This in turn means many of these old industries will enter rapid decline, particularly in market valuation.

So while a rapid growth in solutions will certainly occur, this decline of the old, along with the considerable sunk capital such as functioning power stations that will need to be shut down, will create a significant deadweight on the economy while it’s in transition.

Perhaps this by itself would be manageable with massive, warlike intervention by government and mass mobilization of the public. The challenge is that many companies and sectors depend directly on the ecosystem behaving in a certain way that can no longer be assumed. This will range from insurance companies that will struggle under the weight of climate disasters, risking insolvency, to tourism-based companies whose key attractions like snow or coral reefs will be gone or degraded, to food companies whose supply will be threatened or at least suffer enormous price volatility. And all the while people generally, including investors, will be feeling fearful and uncertain, undermining confidence and creating political and market volatility.

So without in any way ignoring the spectacular opportunities coming—in fact, we will go into them in some detail over the rest of the book—we should not be blind to the economic challenge of transition. I am confident we will get through this period successfully, but it will be hard work, it will not be smooth, and it will take time.

This reinforces the key conclusion all my work brings me to. This is a crisis we can no longer avoid. We’ve left it too late for that.

It is what it is. The sooner we accept it and the better we prepare, the less suffering there will be and the faster we will come out the other side.