Finance, politics, climate: three crises in one

John Elkington Mark Lee
17 October 2008

Many observers describe the turmoil in financial markets in 2007-08 in terms of a "domino effect"; others find metaphors drawn from "chaos theory" more appropriate. The chain-reaction element of the first and the patterned disorder of the second offer some grounds for making sense of these extraordinary and still-unfolding events. They are also useful in suggesting that since what is happening goes far wider than the financial sphere, so must the "imaginative" ways of capturing it.

John Elkington is co-founder of SustainAbility and Volans

Mark Lee is CEO of SustainAbility

Among John Elkington's articles in openDemocracy:

"Brundtland and sustainability: history's balance-sheet" (12 April 2007)

"India's third liberation" (21 August 2007)

"Anita Roddick: outsider rules" (24 September 2007)

"Davos 2008: ends and beginnings" (31 January 2008)

"Can democracy save the planet?" (21 April 2008) - with John LotheringtonIndeed, a crisis that is so important and wide-ranging - even systemic - is every citizen's concern, and efforts to think through (far less to solve) it cannot be left to the bankers, traders and politicians who did so much to create it. If this is so, a good way to imagine the current near-collapse must also relate the financial hurricane of 2007-08 to other, concurrent troubles: in democracy and sustainability, for example. This brief article considers this theme by employing another metaphor: the "suit of cards".

The metaphor started life in a set of scenarios for the future of the planet in SustainAbility's report Raising Our Game (2007). The first three depict outcomes in which society and the environment either win or lose:

▪ diamonds, which we describe as "a domino-effect world, in which, instead of Adam Smith's invisible hand, our invisible elbows knock over a series of economic, social and environmental dominoes"

▪ clubs, where we foresee "a world [where] elites learn how to use environmental sustainability as an excuse for denying the poor access to their fair share of natural resources"

▪ spades, where "(democratic) societies open out higher living standards to growing populations" but where "ecosystems are progressively undermined, with most governments unwilling to take the political risks of asking voters to make sacrifices in favour of the common good"

▪ hearts, a world in which "demography, politics, economics and sustainability gel. It is the future that the Brundtland commission pointed us towards way back in 1987".   

The systemic signs

This framework leads us to ask questions of democracy itself:

▪ can it drive the transition towards more sustainable patterns of production and consumption?

▪ are growing democracy vs sustainability tensions in prospect? 

▪ can the peoples of the world (soon to be 9-10 billion) vote their way to a sustainable future? 

▪ are the time-scales of democratically elected governments appropriate for delivering sustainable development?

The political world is full of evidence that can be used to argue both for and against the notion that democracy is necessary (or better than other systems) for sustainable development. The lengthy and lively United States presidential competition, for example, has offered the unprecedented and hopeful spectacle of the three main candidates for the presidency (Hillary Clinton, John McCain and Barack Obama) left in the race engaging an unusually high proportion of citizens in debate on some of the great issues of the day - and in acknowledging the vital importance of global climate change. 

At the same time, much of the overall campaign has been conducted via point-scoring, attack ads, media and campaign concentration on stray remarks and surface details - reflecting how modern democratic conduct can sideline environmental issues at the very moment when they should be central to the debate (see David Shearman, "Democracy and climate change: a story of failure", 7 November 2007). 

In such contradictions, democracy - as it currently works - and the financial turmoil of 2007-08 share more in common than it might first appear; in particular, the underlying problem of what might be called connecting system-crisis to system-change.

The credit-crunch and the broader financial seizure the world is living through have parallels with the constriction of democracy. There were almost too many early-warning signs to count - from past experience of asset-bubbles and the sudden collapse of once-venerable institutions to the sheer opacity of new instruments of "casino capitalism" and the vast sums of debt they involve.

The record of democracy's surface messiness and superficiality, and of the financial world's poor credit-ratings and oversight reveals the difficulty society has at addressing large-scale, serious, systemic problems that operate often in an imperceptible and gradual way (see John Elkington & John Lotherington, "Can democracy save the planet?", 21 April 2008). This is equally relevant to what might be happening in relation to climate change and to the cascade of environmental, economic and social impacts likely to follow in its wake. 

It could be that climate change will present the ultimate test in this respect. Will the response to this emergency replicate the pattern of delayed and incoherent response to political and economic difficulties?

There have been many early-warnings: the international scientific community is almost unanimous in its assessment of the risks of accumulated greenhouse-gas emissions in the atmosphere and humankind's role in putting them there. The conclusion - that it is vital to avoid a 2 degrees Celsius increase in global mean temperatures, for the developed world to move towards a zero-carbon economy, and to make big cuts in CO2e emissions beginning no later than 2015 - is settled and inexorable. The signs of movement towards these goals are, at best, mixed; in the sustainability arena as much as in the political and financial, awareness of system-crisis does not translate easily into a momentum for system-change.

Three in one 

The fourth scenario in SustainAbility's Raising Our Game report - one where politics, economics and sustainability and demography come together in the most viable and equitable way possible - seems in its system-wide elements the only coherent foundation for moving towards this urgently needed breakthrough.

The process, as we envisage it, will be rough and difficult, especially in its early stages. It will need the rich world to develop a much greater sense of accountability and urgency than it has displayed to date - and that includes finding greener ways to help emerging markets increase the health and economic security offered their citizens, or leave them to trade short-term development needs against long-term planetary health. 

The dilemmas of environmental sustainability, as of political democracy, will remain whatever solutions are reached to the current financial breakdown. The world's leaders even at this stage do not yet see the economic troubles as so deep a crisis as to force them to reach for a new framework, to do the completely unexpected. The way forward is to seek creative and intelligent ways to ameliorate current problems; see this crisis in relation to concurrent democratic and climate-change ones; invest in the future as if every global citizen depended on it; and formulate a strategy to reshape economic life in the direction of political and environmental sustainability.  

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