OECD Environmental Outlook 2050--Action Needed NOW!

A new OECD Outlook report: OECD Environmental Outlook to 2050--The Consequences of Inaction, provides a credible and sobering understanding of the inhospitable world of 2050 that we, humanity, will face if we do not choose to reverse our present business as usual (BAU) trajectory. The report presents policy recommendations to reverse course, but leaves implementation to enlightened national leaders and citizens, thereby concluding on the traditional simultaneously hopeful and unlikely note.

Following the summary of the Outlook report, the implications for an effective response based on an arena of emerging, leading-edge, "just-in-time," whole systems strategic sustainability knowledge and practice is presented as an extension of the Outlook report. The smartest businesses and communities on the planet have been using strategic sustainabilty for the past 20+ years. It should be included in any understanding and formulation of an effective response within the limited few years of time remaining to begin and avoid critical systems tipping points of no return.

The OECD Outlookreport is "Based on joint modelling by the OECD and the PBL Netherlands Environmental Assessment Agency. . . . [It] looks forward to the year 2050 to find out what demographic and economic trends might mean for the environment [and the human economy, society, and well being]."

Overview Trends Shaping Life Challenges in 2050

"Humanity has witnessed unprecedented growth and prosperity in the past [four] decades, with the size of the world economy more than tripling and population increasing by over 3 billion people (75%) since 1970. This growth, however, has been accompanied by environmental pollution and natural resource depletion [and natural system/ecosystem services destruction]. The [extrapolation of BAU trends from the] current growth model and the mismanagement of natural assets could ultimately undermine human development."

What could the environment look like by 2050 without beginning now to reverse our BAU course with transformative sustainability strategy and policies? By 2050, in 38 short years, with the addition of another 2B people, a total addition of 5B people and increase of 125%, and a quadrupling of the world economy, the biosphere will likely be inhospitable. However, one must read between the lines of the "neutral" academic policy language to fully comprehend the meaning of the facts. The Outlook summarizes key drivers and conditions as follows.

The world of 2050 will be shaped by BAU forces and trends, including the following: (1) the addition of 2B more people for a total of 9B; (2) a quadrupling of the world economy (GDP); (3) an aging population; (4) cities absorbing most of the 2B population growth over the next 40 years at growth rates far outstripping public and private sector capacities to produce needed infrastructure and services; (5) 70% of the total population living in highly degraded city-suburb conurbations.

The report concludes that environmental degradation associated with the BAU Baseline Scenario's population growth and rising living standards will substantially outpace progress on pollution abatement and resource efficiency. The resulting natural capital liquidation by 2050 (or sooner) risks irreversible biospheric change that could destroy two centuries of rising human living standards and development. The report finds that the current outlook in four key areas of environmental natural capital production and the human economy is the more"alarming" than ever compared to past assessments.

Said differently, the now-accelerating tsunami of population growth and associated economic production and consumption will use up a substantial quantity of the remaining finite environmental resources and continue to destroy natural capital ecosystem services production. Doing so will reduce available environmental resources and services in absolute terms (think substantial and accelerating decrease in economic production), thereby severely degrading the earth's life support capacity, that is, the foundational economy of the planet (think locust infestation or grazing goats in a meadow).

Key Effects of Our Business as Usual (BAU) Trajectory

Some of the main "alarming" prospects of no change to BAU are as follows:

1. Disruptive, [even catastrophic] climate change will be "locked in." GHG emissions will increase by 50% from a 70% growth in CO2 emissions from energy use alone, reaching 685 parts per million(ppm) and global average temperature increases of between 3-6 degrees C, much higher than the marginally "safe" level of a 2 degree increase above pre-industrial levels (many scientists put the safe level at 1 degree and 350 ppm CO2 or less). Increases above 2 degrees cause the normalization of extreme weather events, undermining biodiversity and agriculture and destroying the built environment. The report leaves unsaid that such conditions will undermine the fundamental conditions and capacity for insurance, self or otherwise. Thus, local area socio-economic recovery from catastrophic events will become increasingly difficult if not impossible. This will put a premium on yet to be widely articulated "hardening" policies and practices against extreme climactic conditions and variation for everything from the built environment and manufacturing facilities, to transportation, agriculture, and the rest of the economy. This would be one of humanities "adaptation" strategies whose efficacy will be as short-lived as our climate change reversal mitigation is absent and ineffective.

2. Biodiversity and ecosystem service loss will threaten human welfare, amounting to a cost of between $2-$5 TRILLION dollars (US) per year (world GDP=79T in 2011; US GDP=$15T; only 9 countries in the world have GDP greater than $2T and 2 greater than $5T). Of course, human substitutes for much of the dollar-valued services cannot be produced and therefore represent a dramatic decrease in economic production, life support capacity, and welfare.

3. Approximately 3.6B people (2.3B increase) will be living in severely water-stressed areas (40% of the 2050 population). Overall water demand will increase by 55%, with a likely reduction in water available for irrigation. Approximately 1.4 billion people will be without access to basic sanitation. If one reads between the lines of these "facts," given that people cannot live for more than 3 days without water, on average, 2 days with daily maximum temperatures of 120F/49C and up to 10 days at 50F/10C degrees, and the limited capacity to move water over from one watershed area to another, 2050 water conditions will likely cause widespread and severe suffering and deaths during peak drought events and for some, with limited access, even during times of normal water supply (if there will even be the concept of "normal" in the destabilized climate of extreme weather events and hydrologic regimes by 2050).

4. Compromises in human health and premature deaths will increase from air pollution and exposure to hazardous chemicals.Particulate matter, ground-level ozone, unsafe water, and indoor air pollution will likely cause 3.5, 0.7, 0.5,and 1.9 million premature deaths per year, respectively, in 2050. These rates are declines for unsafe drinking water and indoor air pollution. However, these projections are still based on limited knowledge of the full effects and risks.

Limited Knowledge, The Systems Wild Card, and the Need to Act NOW Under Conditions of Uncertainty

The above assessment arises from traditional disciplinary methods that are not rooted in complex natural and human system dynamics. "Change in natural systems is not linear. There is compelling scientific evidence that natural systems have "tipping points" or biophysical boundaries beyond which rapid and damaging change becomes irreversible (e.g., for species loss, climate change, groundwater depletion, land and soil degradation). However, these tipping points or thresholds are in many case not fully understood, nor are the environmental, social, and economic consequences of crossing them. The scientific community is expanding the knowledge based needed for evidence-based policy making, but in the meantime, policy makers mush weigh up the costs of action and inaction in the face of significant uncertainty [and potentially catastrophic consequences within potentially short time periods]." Use of the Precautionary Principle for economic and social policy making and business strategy might be prudent under these conditions.

Further, the Outlook highlights the "linkages between environmental issues and functions." Climate change can affect hydrological cycles and exacerbate pressures on biodiversity and human health. Biodiversity and ecosystem services are intimately linked to water, climate and human health: marshlands purify water, mangroves protects against coastal flooding, forests [are the lungs of the planet and] contribute to climate regulation, and genetic diversity provides for pharmaceutical discoveries [not to mention to the 4.5 billion years of accumulated genetic intelligence for species adaptation to environmental change and enhancing ecosystem productivity]. These cross-cutting environmental functions must be carefully considered as they have wider economic and social implications [than this Outlook identifies], and point to the need to improve resource efficiency and land use."

Policies for Action Now

The Outlook goes on to point out the obvious, "the need to act now is not only environmentally rational but economically rational" too. The report also develops well-designed polices to reverse the BAU trends with the potential to "safeguard long-term economic growth and future well being." In brief, the Outlook recommends the following policies:

1. Make pollution an expensive business.

2. Ensure prices better reflect the true value of natural assets and ecosystem services.

3. Devise proactive and effective regulations and standards.

4. Remove environmentally harmful subsidies.

5. Encourage innovation.

Making it Happen

The Outlook recommends the following approaches for making reform happen and for "main-streaming" green growth:

1. Encourage policy coherence across sectors.

2. Maximize policy synergies.

3. Work in partnerships.

4. Gear up international co-operation.

5. Improve our knowledge.

Conclusion

The Outlook concludes with a characteristically mainstream approach: that success in reversing the BAU scenario will depend on political leadership [for which there is limited supply absent popular support, of which in turn there is little] and on the widespread public acceptance that changes are both necessary and affordable [a view that will likely not emerge without the effective public leadership that typically lags behind need and simply reflects existing public views--a pernicious vicious cycle]. Thus, the Outlook's conclusion regarding successfully reversing our BAU scenario is simultaneously hopeful and unlikely.

Going Further [working draft 031712]

The OECD Outlook is an excellent objective presentation of the BAU scenario facts that humanity faces and the policies and approaches for reversing them. This assessment has been developed within humanity's mainstream knowledge base of atomistic, linear, non-systems understanding. The Outlook even goes so far as to integrate the wild card of complex system dynamics. Yet, it remains in the paradigmatic trap of incrementalist neoclassical economics, or at least current business ideology, that of the environment / jobs tradeoff. In a BAU world, spending on pollution reduction and environmental quality is viewed simply as an increased cost to production not as a business investment with real business returns. It is seen only as a decrease in competitiveness, a loss of jobs, and interference in the market. What is not evident in the BAU world, is that the saved jobs from avoided environmental mitigation will themselves only have a limited life and will hasten the forecast environmental-economic catastrophe. In that world, predicted to be as close as 2050 in the OECD Outlook (or closer), those saved jobs will evaporate along with much of the associated supply chain connected to those jobs. 

The environment/jobs tradeoff is ultimately a lose/lose paradigm for business strategy and national/ international economic policy. Further, the OECD Outlook indicates that the long run to which Keynes refers in his often quoted quip to monetarists arguing against short-run fiscal stimulus, the one in which "we will all be dead," may be right around the corner in 2050 or sooner. In this case, that long run is becoming the short run and is not due to short-term fiscal policy, Instead it is arising from the cumulative effects of 200 years of the short-sighted machinations of an imperfect market. We thought the market and the Invisible Hand "had our backs," but it does not apparently, otherwise sustainability and climate change would not be becoming the increasingly "short-term" survival challenges that humanity presently faces. However, we can still make a difference, choose a different future, and reverse course if we act now.

Unfortunately, the OECD Outlook(and mainstream economic and environmental policy) excludes understanding and practices from the most promising emerging arena for empowering the sustainability transition, the leading-edge knowledge base of what could be termed whole systems strategic sustainability. This emerging knowledge/practice arena could be seen as "just-in-time" knowledge production to avert humanity's ultimate global crisis. This knowledge base has simultaneously emerged with and been developed by the smartest businesses and communities on the planet beginning around 1990, before the first Earth Summitin Rio in 1992. Of course, the roots of whole systems strategic sustainability go further back into the first-generation environmentalism of the early 1960s, Rachel Carson, etc. It's roots academically and in practice go further back through the lineage and literature of systems theorists, innovators, and "design scientists" such as Buckminster Fuller. Fuller's comprehensive anticipatory design science and it's wider and accelerating innovative impulse in society developed into some of the motivational concepts underlying the 1960s' communes and back-to-the-earth movement. Subsequently they would be scaled up to the ecological city, eco-districts, eco-municipal and eco-city planning, sustainable communities, and sustainable cities, and sustainable urban development.

At the root of Buckminster Fuller's work--and that of society's emerging larger ecological-design/strategic sustainability impulse--is the ultimate vision of a world that works for 100% of humanity with 100% ecological integrity and social justice attained through the principles, knowledge, and practice of comprehensive anticipatory design science. Fundamentally, design science is ecological-economic innovation to align the materials and processes of the human economy with the wealth producing principles of the time-tested, 4.5 billion years of evolutionary trial and error eternally regenerative biological life support system that we informally know as the environment. One formulation of this approach is presently known as Biomimicry. Doing so accomplishes two changes. First, it transforms our economy's systematically destructive and negative environmental impacts into at least neutral, benign impacts, but more often into restorative and enhancing impacts that expand the regenerative capacity of natural systems and capital. Second, it expands the productivity of the human economy from being able to support 40% of humanity in an environmentally destructive way to 100% of humanity in an ecologically restorative way--what one might term perpetual prosperity and well being of people and the planet.

The most powerful access to the current incarnation of humanity's emerging arena of whole systems strategic sustainability knowledge can be found in the works and practices of The Natural Step (and here) and the Framework for Strategic Sustainability (FSSD), Peter Senge and learning organizations (see The Necessary Revolution), Lovins' and Hawken's Natural Capitalism, Amory Lovins and the Rocky Mountain Institute's Reinventing Fire initiative and their whole systems thinking, design, and engineering, Thomas Friedman's Hot, Flat, and Crowded, Lester Brown's Plan B: Rescuing a Planet Under Stress and a Civilization in Trouble, and of course the associated literature. Embedded in this work is the observation that humanity is at an historic crossroads of understanding needed to shift from an economy and society organized around the finite resources and pure force of an oversimplified physics-dominated world that is systematically destroying the larger biosphere, to a biologically-inspired and empowered world that restores the regenerative life support processes of nature and leverages them in the creation of a human economy that has the productive capacity to support 100% of humanity with 100% ecological integrity and social justice.

The brilliance of a strategic sustainability approach is that it illuminates the keystone concept and practice missing from mainstream economic and environmental approaches (fixing externalities, etc.)--the shift from incremental problem-solving to creation of a world that works for everyone through an on-going process of ecological-economic innovation that drives economic and societal transformation to a systems condition of sustainability. The missing keystone from our mainstream world view is understanding the profit path and innovation vehicle to sustainability transformation that also is the best business strategy. The profit path from implementing the easy to the increasingly more difficult changes arises from innovation to eliminate a firm's and economy's negative environmental impacts. This approach transforms environmental costs into the best business investments now. Initially, firms find hidden current profits from radical resource productivity, that is, savings from reducing material and energy waste per unit of production. Over time, substitute materials, processes, and services are developed and employed to eliminate pollution and destruction of natural capital. Over a longer period of time, new business models and concepts for core value-added typically arise. All of these developments increase real current profits and increasingly avoid a range of presently invisible but nonetheless real, increasing, and inevitable business risks associated with our firms' and economy's current violations of ecological systems conditions, in other words, BAU. These in turn have bottom line profit value as well as the strategic and insurance value associated with avoiding the costs of increasing BAU risk. Finally, they position firms to understand the value demanded in a sustainable economy and to reap the benefits of being first-to-market. Thus, a strategic sustainability approach constitutes the best profit path for business and for sustainability, thereby supplying the energy to fuel the transition for an organization, for a community, and for the whole economy.

In addition, this keystone is not only the best business model, but includes a motivational shared vision of the future that will elicit collaboration, alignment, and draw us forward together--that will be individual variations on the theme of a world that works for 100% of humanity within the parameters of 100% environmental integrity and social justice. Such a shared vision, one that is more than simply the absence of solved problems, is a critical requirement of sustainability success. It represents a shift from simple acquiescence and participation in others' agendas to collaborative creation of shared value. Doing so taps a tremendous amount of typically untapped  innovation, creativity, and motivation that has been noted in the management literature as the secret source of success for high-performing teams and organizations.

This sustainability profit path is the short-run fuel driving the on-going innovation that is the transition to ultimate sustainability. This point is saliently presented by Amory Lovins and RMI in the Reinventing Fire initiative. This initiative is designed to profitably wean the U.S. economy from fossil fuel by 2050--a feat that mainstream policy, business, and society view  as impossible. It is also cogently made by Hunter Lovins in a new book called Climate Capitalism, as follows:

Believe in climate change. Or don’t. It doesn’t matter. But you’d better understand this: the best route to rebuilding our economy, our cities, and our job markets, as well as assuring national security, is doing precisely what you would do if you were scared to death about climate change. Whether you’re a head of household or CEO of a multinational, embracing efficiency, innovation, renewables, carbon markets, and new technologies is the smartest decision you can make. It is the most profitable, too. And, oh yes, you’ll help save the planet.

In this book, Hunter illuminates why and how one need not even believe in climate change to make it the best basis for your business decisions. Doing so earns profits presently hidden from view within current business practices and does so in ways that simultaneously also reverse climate change. The combination creates a more prosperous business, economy, and community than BAU ever could even if it did not now have economy-destroying effects. This type of win/win is ultimately what Adam Smith likely had in mind for the Invisible Hand of the economy. It does not make sense to enshrine an invisible hand that leads to ruin. That is a contradiction in terms.

Of course, the transition and application of sustainability as the conceptual DNA for perpetual economic prosperity and community well being will be more complicated than the preceding high-level description. Among other things, the full transition would need supportive government policies to reset the system parameters within which the free market operates to accurately reflect the realities of the ultimate system (actually the planet's primary economy) in which it operates, the environment and biosphere, so that the Invisible Hand can works it magic successfully. However, much can be accomplished by individual actors, citizens and firms, until those policies are forthcoming. Yet, we have no time to lose.

Without understanding the possibilities, and without understanding the mechanics of how we get there in ways that are the best business investments of the day instead of environmental mitigation that simply reduces the pace of environmental destruction slightly and adds to the cost of production, we will never mount the required effective response. This is the cost of not integrating the emerging arena of strategic sustainability into mainstream enviro-economic forecasting, policy development, and response at all levels and spheres of activity by all actors. Humanity, that is we, need to now mount the effective response. That response is rooted in the non-exclusionary strategic sustainability planning method of on-going ecological-economic business (organizational, societal) innovation. By so doing, humanity will avoid the tipping points or no return, shift to a biologically-based collaborative creative mode with a shared vision of success for all, and ultimately create through an on-going process of ecologic-economic and -societal innovation using ecological and social justice constraints as design parameters, the sustainable economy and society that meets the needs of 100% of humanity with full ecological integrity and social justice. This is a world towards which it is worth hoping, working, understanding, innovating, dreaming, designing, inventing, and collaborating NOW, yesterday, ASAP. Onwards!