Wednesday, 23 December 2009

The Hammer And The Screw

The recent meeting of the UN climate talks in Copenhagen appears to have been something of a disappointment. We might ask if we could have expected much more from the meeting. It was billed as our last best hope of addressing climate change before we reach a point at which we are locked into global temperatures rising to a point where we have really ruined our own habitat. This is likely to prove in time to be hyperbola – climate change and global warming are incremental issues that aren’t really given to deadlines. However, the meeting has demonstrated how far we need to go in order to reach a common agreement to tackle global warming and climate change.

As part of our recent project that looked at the issue of creating a sustainable future (see below for link to the final report), we specifically reviewed the possibility of reaching an international agreement to address climate change. Climate change is one of a number of key problems that are arising in the world where the traditional methods of solving them – a framework of international agreements - are unlikely to work. Those problems include, obviously, global warming and climate change, but also include issues such as the regulation of global trade, the globalisation of crime, the relief of global poverty, and global security. It is instructive to consider what attributes these issues have, that makes it difficult for the present arrangements to solve them.

Perhaps the issue of global security might be instructive. The infrastructure of globalisation (the Internet, global communications, the ease of global travel) have assisted the development of non-national agents of insecurity. These agents might be labelled as ‘terrorist’ (e.g. Al Qaeda) or they might be organised trans-national criminal gangs (the global networks of people smugglers spring to mind here). Either way, they present a problem that no single nation can solve on its own. Indeed, they present a problem that groups of nations in concert cannot solve. In order to resolve the problems of global security, national agents have to globalise in order to resolve them.

When national agents globalise, they pool part of their national sovereignty in return for a greater benefit. This is a process of moving from modernity to post-modernity. The architecture of modernity is the international agreement, where a group of nations commonly agree a course of action that is to their mutual benefit. The problem with this is that there is a large incentive to cheat upon the agreement if the benefits are shared by all, but the costs are borne individually. The architecture of post-modernity is something different. In this case, the parties to the agreement pool their sovereignty and commonly meet the costs of the agreement – which are detached from the potential benefits received - in order to share the benefits which are received jointly (end equally) by all.

This model explains why it has been so difficult to reach a common agreement on global trade and why the Doha Round of trade talks is likely to be stuck for some time to come. The benefits of general tariff reductions are enjoyed by all. However, in order to achieve those tariff reductions, some nations will have to sacrifice part of their key interests in reaching that agreement. This is a price that those nations are not willing to pay. And yet the EU has managed to achieve a general tariff reduction between member states. It has done so by embracing the architecture of post-modernity, where the nation states pool their sovereignty to achieve a result that is better than they could have achieved on their own.

When we apply this model to the issues of global warming and climate change, three conclusions become immediately apparent. First, the UN is using the modern architecture of the international agreement to approach the problem. Second, this is the wrong tool for the job because global warming and climate change are post-modern problems. And third, it is not surprising that those nations which are proving to be the most obstructive to the process are those which are highly nationalistic actors in the international arena (nationalism being a trait much associated with modernity).

It is no surprise that three of the most nationalistic actors – the United States (“we don’t want to pay for it!”), China (“we don’t want any limits placed upon us!”), and India (“surrendering our sovereignty is a form of neo-colonialism!”) – along with South Africa have reached an accord on carbon emissions. The rest of the world ought not to be perturbed by this because the accord is unlikely to survive the first speed bump. Like all vestiges of modernity, it is not built to last. A lasting solution would realise that national sovereignty is incompatible with finding a solution to the post-modern problems of global warming and climate change. A more lasting solution would need a post-modern agreement. To try to do otherwise is to use the wrong tool for the job, which is what happened in Copenhagen.

In Copenhagen world leaders failed by trying to use a hammer to fix some screws.


Creating A Sustainable Future:

© The European Futures Observatory 2009

Friday, 18 December 2009

The Southward March Of Europe

A few weeks ago, I made in passing a comment that I believed that the next phase of European expansion would be in a southerly rather than an easterly direction. One of my correspondents asked me to expand on this, so I am. If we review the development of the European Union over the last fifty years, we see a pattern of expansion that is both geographic and functional.

The original geographical heart of the EU was France, Germany, Italy and the three Benelux countries. Expansions in the 1970s and 1980s were primarily westwards to the Atlantic Ocean, to include the UK, Ireland, Spain, and Portugal (as well as Denmark and Greece). For the following two decades the EU has expanded northwards to include the Nordic countries (except Norway) and eastwards to include many of the former Warsaw Pact nations, along with a number of former Soviet Republics. In recent years the locus has been towards the south east corner of Europe to include some of the former Yugoslav Republics and to consider the question of the thorniest of all problems – the membership of Turkey.

Turkey may or may not eventually join the EU. The point is that some form of limit to the eastern expansion of the EU has been met. In many respects, this reflects a set of geopolitical circumstances today which are very different to those of the 1990s. The biggest difference is that the world is currently seeing a resurgence of Russia, which is very aggressively mapping out its interests in its ‘near abroad’. A more assertive Russia is unlikely to acquiesce quietly to Ukraine and the nations of the Caucasus joining the EU, which suggests a natural eastern boundary to the the EU. Ukraine is likely to be a key arena in the struggle for influence between the EU and Russia in the years to come.

That a natural boundary to the EU has been reached (the Atlantic Ocean in the 1980s, a resurgent Russia in the 2000s) does not necessarily mean that the EU has reached the limits to its future expansion. To understand this, we need to look at the functional expansion of Europe. The six founding members originally came together to form a coal and steel community. This purpose was then expanded to include wider trade matters. A pivotal moment came in 1991 with the Maastricht Treaty, which led to the creation of the EU as we now know it and a significant increase in the functions undertaken by the EU. This process was further accelerated by the recent adoption of the Lisbon Treaty.

As we move to a new phase in the development of Europe, the locus of attention is likely to swing away from the east and towards the south. Europe faces two structural problems at present – an ageing population and energy dependence upon Russia. To the south lies the potential solution to both of these problems. North Africa has a large and growing young population. Many of these youngsters aspire to European lifestyles and take enormous personal risks to enter the EU illegally across the Mediterranean. One natural solution to the ageing population in Europe would be to harness the youth of North Africa to enhance the productive capacity of Europe. Indeed, this process has taken its first steps with the ‘Blue Card’ system within Europe.

North Africa also has large oil and natural gas reserves, upon which Europe could draw more than it presently does. However, the key advantage of North Africa is not its fossil fuel reserves but its potential for photovoltaic electricity generation. The technology that is currently being developed in the south of Europe could be used to harness far greater sunlight resources in North Africa, to be relayed into Europe in a future that is looking energy poor.

This suggests a future relationship between Europe and North Africa that has the potential to be of great benefit to both parties. This is not to play down the immense difficulties of the legacy of colonialism between the North African countries and their former European colonists, but it does suggest that, if the focus is on the future rather than the past, then there is no reason why Europe and North Africa could not become more closely integrated. If that were to happen, it would follow a ‘European’ path where joint economic development eventually gave way to joint political development.

If that were to happen, then Europe would truly have marched southwards.

© The European Futures Observatory 2009

Saturday, 12 December 2009

The Probable –vs- The Possible

Our recent post on climate change and poverty reduction (see post) stimulated a great deal of comment and debate. One of our private correspondents asked an interesting question, one that is worth dwelling on. I was asked if futurists ought to be concerned with probable futures rather than a range of possible futures. Instinctively, I reached for the dogma that says that, as we are uncertain of which of the many alternative future states might come into being, we ought to focus on the range of possible futures rather than concentrate upon a single future, irrespective of how probable that future might be. And yet, as I reached for the party line, a nagging doubt entered into my mind: what do we know about the probable future?

Probability is a funny thing. It looks objective and scientific, it crunches a large volume of numbers, but in reality it is quite fuzzy and subjective. If we look closely at a scientific forecast, then usually an honest one will establish two things – a forecast range and the degree of certainty that is expressed within that range. For example, the Bank of England publishes its economic forecasts that inform the decisions about setting the levels of interest rates. These are quite instructive because they have a range of predictive possibility (the Bank of England calls it a ‘fan’ because it looks like a fan graphically) and a probability of outcome.

Chart 1 of the current economic overview (November 2009 – see review) highlights a forecast for UK GDP growth out to 2012. It is interesting to note that there is a 10% chance that UK GDP will be growing at about 3.0% to 3.5% by 2012. No doubt this has informed the Chancellor in his predictions of GDP growth in the Pre-Budget Report this week. It is also interesting to note that there is a 10% chance that UK GDP growth in 2012 will be in excess of 5%. This is a growth level that the UK has rarely achieved – a once in a century event. There is also a 10% chance that the UK economy will not have come out of recession by 2012, which gives some comfort to the habitual pessimists and opponents of the government.

The same data set, the same ‘scientific evidence’, supports estimates that the UK will experience unprecedented GDP growth rates of over 5%, 'the restoration of ‘normal’ GDP growth rates of 3.0% to 3.5 %, and continued recession, where the GDP growth rate continues to be negative. There is an equal likelihood of each probable outcome. As a futurist, I would counsel to prepare for each possible future because they are all equally as probable. The ‘scientific evidence’ has given rise to three contradictory and mutually exclusive futures that could come into being. What we don’t know is which one will actually prevail.

This uncertainty opens the door to the manipulation of the forecasts. I have already alluded to it in that the core forecast of GDP growth that was contained in the Pre-Budget Report this week was at the upper end of the central forecast. What this means is that the Chancellor has been unduly optimistic in his calculations. But then, he would wouldn’t he? The Chancellor is a politician rather than a technocrat and politics is all about presentation. We shouldn’t be surprised that he has used the best credible figure that supports his case. His opponents would argue differently – some to the point that the UK may stay in recession until 2012. As we head for the General Election next year, the issue will boil down to which politician appears the most trustworthy. Which ‘scenario’ we find the more compelling. It is no accident that the art of story-telling is central to the construction of scenarios, the stock in trade of futurists.

Which brings us back to the original question. It is worth pointing out that the ‘scientific evidence’ establishes three mutually exclusive and equally probable future states. And that is only looking out for 2 years. The science of climate change is far less trustworthy. It is looking out about a century, with all of the hazards that long term forecasting has, it is using less well established models, it is using a restricted data set, and it has all sorts of political interpretations to the evidence. It is no wonder that so many possible future states have been ‘predicted’ by climate science.

For example, global warming could lead to colder winters in the UK, as the melting Arctic ice cap leads to the de-salination of the North Atlantic, thus switching off the Atlantic Conveyor that keeps UK winters unduly warm. Or it could mean that UK winters actually become warmer, wetter, and a lot more stormy as global warming heats the Caribbean in the winter, thus intensifying the Atlantic Conveyor. Both future end states are plausible, both are supported by credible climate models, and both are supported by the data. However, each has a very different policy implication. This is why futurists focus on possibility rather than probability. Probability, when we drill into it, is just not precise enough for policy formulation.

After all this is how we earn our keep - by being useful!


© The European Futures Observatory 2009

Sunday, 6 December 2009

A World Without Bananas

One of the recurring issues within the discussion about achieving a low carbon sustainable economy is the question of ‘Food Miles’. It is generally taken as self-evident that the shipment of food commodities, such as apples, half way around the world from, say, South Africa is evidence that ours is a high carbon and unsustainable economy. Indeed, the Transition Movement ( have as a key metric of sustainability the percentage of apples sold within a community that are sourced locally.

This is an approach that has started to enter into the mainstream of futurist thinking. For example, at the European Futurists Conference in Lucerne this year, Professor Stuart Walker from Lancaster University repeated the view that food miles are unlikely to be sustainable in the next few decades (click here to access the slides and a video of the presentation), and treated as axiomatic that a sustainable solution was one of local production. As I was watching the presentation, I was wondering why it was that I was finding it unconvincing. I think that the lack of conviction comes from my love of bananas.

We could grow bananas in Ipswich, but we don’t. Why we don’t is worth a bit of reflection because it says a lot about the sustainability agenda. To grow bananas in Ipswich, we would need to create an artificial climate that would allow bananas to grow. Ipswich lacks the warmth and sunlight to grow the crop naturally, but this could be overcome with sufficient heating and lighting. A banana grown in Ipswich would have a huge carbon footprint – much larger than one grown in the Caribbean and shipped to Ipswich.

Drilling further into this story, why is that so? It’s all to do with comparative advantage – an economic theory developed at the dawn of the Industrial Revolution by David Ricardo. This theory states that when an area does what it does best and imports those things which are best produced elsewhere, the welfare of all areas is increased globally. This is quite a significant statement when taken in the context of the sustainability debate. It implies that a move towards more local production is likely to lead to a sub-optimal global solution (that’s economist speak for everyone being worse off).

What does that mean in practice? In the context of bananas, it means one of two things. First, it could simply mean that I am no longer able to eat bananas, in which case my quality of life will be reduced because of my reduced choice and the reduced access to something that I like to have. Second, it could mean that bananas are grown locally in Ipswich, in which case their monetary and carbon cost would be much higher than if they were imported into the UK. Again, I would suffer a welfare loss as I would be compelled to pay more than I otherwise would have to pay for my bananas.

Without knowing why, people appear to have grasped this concept intuitively. According to Gallup, about 40% of the population believe that the environment should be protected, even at the cost of a reduced living standard. However, just over 50% believe that economic growth should be a priority, even if it entailed a degree of environmental damage. As we prepare for the meeting of the IPCC in Copenhagen, it is worth dwelling on these thoughts. Even if man-made climate change were to occur in the future (as futurists we have to accept the possibility that the climate-sceptics might be right), even in those changes were to be catastrophic (there is only scientific speculation here), even if the need for action is immediate (we might have more or less time than we think – we don’t know), then it still does not follow that we should do something about it.

The cost of climate action will fall upon present generations disproportionately, and upon the poorer nations disproportionately. If we value the present to the future, then it would be inconsistent to act now for future benefits that we are unlikely to see. If we act now, then we have to accept the consequence that the poorer nations will be kept poorer for longer than they otherwise would have been because they would be denied the access to trade that has been such a powerful force in poverty reduction over the last couple of decades. When it comes to a choice between prosperity and the environment, prosperity has always won the argument, which is one of the reasons why I am not hopeful for Copenhagen.

And it’s all my fault for liking bananas!


© The European Futures Observatory 2009