Can an SEC ruling reverse climate change?
Mary: Let me stick with this topic for a second. On the question of how does broad cultural change usually happen, Sara, who and what are the reliable agents for this kind of change? You mentioned religious and educational institutions. Is it ever business? In this SEC instance, could the corporate community actually be a leader in this cultural shift toward a more strategic long-term approach?
Sara: They’re not a leader, but they’re an important follower. Change usually happens on a lot of levels at once, but it always starts with a fundamental shift in our assumptions and our visions about how the world should work. So the first thing, you have to change the world, change the story. Most of us are aware that our foundational assumptions about economics don’t work anymore, and we’re actively looking for new paradigms. So, for the last 20 years, our documented storytellers in religion, media and education, have been telling us that we need to change our views around this, meaning our priorities around climate change. And this is why 70% of us now get it; most of us are on board. But that’s the talking stage; doing is harder, and doing only really happens when you get business and government involved in actively taking these new values and basing their decisionmaking process on them. I think that’s what we’re seeing now. It’is that inflection point where business and government begin to get on the side of change and that’s when we really start to see those changes taking place on the ground.
Mary: Kristen, let’s say that in the wake of this SEC ruling, American corporations stand up and embrace climate-change related planning in a big way. What can we expect the U.S. to look like in say, 30 or 50 years? What businesses will dominate? Which will decline or disappear? Can you read the tea leaves a little on that?
Kristen: Well, it’s hard to say for sure. One of the challenges all along in thinking about the post-fossil fuel economy is that fossil fuels provided such a quick and easy and cheap energy source and there’s likely not going to be a single silver bullet that comes along and replaces that. So we’re going to have an energy system based on massive advances in energy-efficiency, as well as different renewables — geothermal, solar, wind, etc. So we’re likely to see a mixed of different energy sources and we may see a more decentralized, more community-based energy production.
When you think about what’s actually going to have to happen in the U.S. economy, say by the year 2050, to really get us on track for making a dent in the climate problem, for doing what the scientists say we have to do to minimize the worst risks from climate change, we’re looking at some pretty significant transformations. By 2050, we need a minimum of 80% reduction in our greenhouse gasses, and to achieve that we’re either going to have to convert most of our energy system over to a mix of different renewables, or make some really quick advances in carbon capture and storage by the midpoint of the next century. We’re going to be investing in reforestation and prevention of deforestation. Our companies are going to have to take a leadership role in both developing the new technologies, but then also exporting and sharing the technologies for renewable energy production with the developing world. These are huge changes that have to take place in a relatively short period of time. But the good news on the climate front is that it’s economically and technically possible. What we really need is the political will and the public will to do it at this point.
Sara: And if I could add something here, one of the great things here about this ruling is that it should, in the long-run, make our businesses stronger and more innovative. Whenever we step outside of our usual assumptions to look for new risks and threats, we also very often notice the new opportunities that we would have never seen if we hadn’t been pushed out there. So by forcing businesses to get real about their risk exposure, we’re also pushing them to where they’ll be able to see and position themselves for new opportunities as well. So this is a competitiveness issue and investors hopefully reward that.
Mary: Sara, when you talked before about how we’ve done this before when America geared up for World War II, for instance, with phenomenal results. Did that experience in World War II translate into a planning culture, post-World War II? And again, how did we lose that ability?
Sara: We’d always been good at planning, but World War II forced us to get good, fast. And what you found was, throughout the military, from the highest general down to the supply clerk, everybody had to learn to think strategically, three-steps ahead. ‘What am I gong to need down the road?’ All of America went through this process, and when the boys came home, these same skills got applied into creating post-war America. You saw this in the way wives ran their households, and in the way bureaucrats ran city governments. Suddenly, you had these planning departments, at the county level mostly, that were planning out 10, 20 years. What schools are we going to need? Where are we going to get our water? What kind of roads are we going to need? People were thinking ahead.
The G.I. generation was amazing at that. It’s what enabled them to put a man on the moon. Just sticking it out there, as JFK did in 1960, and saying ‘we’re going to do this in ten years,’ with technologies that didn’t even exist at the time. He said, ‘we’re going to put a marker out and in 10 years we’re going to do this.’ And there was a tremendous confidence in their own ability to hit that mark.
That was our parents and grandparents. It’s still in us. It’s still there in our culture. We’ve gotten away from it because we’ve been living off the fat of the prosperity that all that planning created. So we’ve had a wide margin for error. If we get something wrong, it’s not that big a deal; the consequences aren’t that severe.
Buit we’re at a point now where Gallup is telling us the number one concern of American families is paying off debt and saving for the future. Families are starting to hunker down and come back together and get serious because we don’t have that margin for error anymore. The consequences for failure are high and getting higher. We have proven in the past that we can focus wonderfully well under those circumstances, and I have faith that we can do it again.